Kentucky First Federal Bancorp Reports Earnings

Kentucky First Federal Bancorp (Nasdaq: KFFB), the holding company (the “Company”) for First Federal Savings and Loan Association of Hazard and First Federal Savings Bank of Kentucky, Frankfort, Kentucky, announced net income of $680,000 or $0.08 diluted earnings per share for the three months ended June 30, 2026, compared to net income of $176,000 or $0.02 diluted earnings per share for the three months ended June 30, 2025, an increase of $504,000. Net earnings were $1.9 million or $0.24 diluted earnings per share for the twelve months ended June 30, 2026 compared to net earnings of $181,000 or $0.02 diluted earnings per share for the twelve months ended June 30, 2025, an increase of $1.7 million.

The increase in net earnings for the quarter ended June 30, 2026 was primarily attributable to higher net interest income. Net interest income increased $780,000 or 33.9% to $3.1 million due to increased interest income and decreased interest expense from period to period. Interest income increased $319,000 or 6.4% to $5.3 million, while interest expense decreased $461,000 or 17.2% to $2.2 million for the recently-ended quarter. Somewhat offsetting the higher net interest income was an increase in provision for losses on loans of $183,000, which was partially in response to estimated loss on foreclosure of a residential real estate loan and partially the result of management’s decision that an increase in the company’s overall provision for loan loss was prudent at the time due to overall upward repricing of loans, which may place pressure on borrowers, inflation in the marketplace, a slight downturn in real estate prices in our markets, and overall uncertainty in the economy.

Interest income increased for the comparable quarterly periods due to an increase in the average rate earned on interest-earning assets, which increased 62 basis points to 5.90%. An increase in the average rate earned on assets is responsible for the increase in interest income, as average interest-earning assets decreased $7.2 million or 2.0% to $360.1 million for the recently-ended quarterly period. The increase in average rate earned on assets was primarily related to an increase in the rate earned on loans, which resulted from new loan production carrying higher interest rates and adjustable rate mortgages continuing to reprice upward.

Interest expense decreased for the comparable quarterly periods due to decreases in both the average balance of interest-bearing liabilities and decrease in the average rate paid on those funds. Average interest-bearing liabilities decreased $10.5 million or 3.3% to $306.1 million for the quarterly period just ended, while the average rate paid decreased 52 basis points to 2.91% for the period.

Non-interest income increased $48,000 or 43.2% and totaled $159,000 for the three months ended June 30, 2026, chiefly due to an increase in net gain on sale of loans, which increased $42,000 or 107.7% compared to the quarterly period ended June 30, 2025. Non-interest expense decreased $12,000 or 0.6% to $2.2 million for the three months ended June 30, 2026, primarily due to a decrease in FDIC insurance premiums, which decreased $34,000 or 59.6%. The Company benefited from lower FDIC insurance premiums that followed the previously announced termination by the Office of the Comptroller of the Currency of its formal written agreement with the Company’s indirect wholly owned subsidiary First Federal Savings Bank of Kentucky. Management anticipates current FDIC insurance rates to remain stable.

The increase in net earnings on a twelve-month basis was primarily attributable to increased net interest income and higher no...