Company Overview - Kentucky First Federal Bancorp operates as a holding company, engaging in public deposit activities through its subsidiaries, primarily serving Perry, Franklin, Boyle, and Garrard counties in Kentucky, USA [4] - The company provides first residential mortgage loans and other real estate-secured loans, including residential mortgages, multi-family loans, construction loans, and various deposit products [4] Financial Performance - The company generated $16.53 million in revenue but reported a net loss of $1.72 million, resulting in an earnings per share (EPS) of -$0.21 [2] - The price-to-earnings (P/E) ratio is currently at -13.33, indicating negative earnings [2] - There are no institutional ratings for buying, holding, or selling the stock at this time [2] Stock Performance - Kentucky First Federal Bancorp's stock surged by 5.11%, recently trading at $2.88 per share with a volume of 18,532 shares and a turnover rate of 0.23% [1] - The stock's fluctuation rate was noted at 3.56% [1] Industry Context - The banking industry experienced a minor overall increase of 0.02%, with related stocks showing significant movement [3] - Notable gains were observed in stocks such as FinVolution Group, Tompkins Financial, and CVB Financial, while FinVolution Group, UWM Holdings Corporation, and Eagle Bancorp Montana displayed high trading volumes with turnover rates of 4.29%, 1.54%, and 1.34% respectively [3] - Stocks with considerable volatility included Better Home & Finance Holding, FinVolution Group, and Patriot National Bancorp, with fluctuation rates of 41.41%, 37.50%, and 9.60% respectively [3]

Financial Performance - Kentucky First Federal Bancorp reported a net loss of $1.1 million or ($0.13) diluted earnings per share for the three months ended June 30, 2024, compared to net earnings of $42,000 or $0.00 diluted earnings per share for the same period in 2023[1]. - The company recorded a goodwill impairment charge of $947,000, representing 100.0% of the previously reported goodwill, leading to a net loss of $1.7 million or ($0.21) diluted earnings per share for the fiscal year ended June 30, 2024[2]. - The company reported a net loss of $1,721,000 for the twelve months ended June 30, 2024, compared to a net income of $933,000 for the same period in 2023[10]. - Basic and diluted earnings per share for the twelve months ended June 30, 2024, were $(0.21), down from $0.11 for the same period in 2023[10]. - Income (loss) before income taxes was $(1,960,000) for the twelve months ended June 30, 2024, compared to $1,227,000 for the same period in 2023[10]. Revenue and Income Analysis - Net interest income decreased by $1.9 million or 21.0% to $7.0 million for the year ended June 30, 2024, despite interest income increasing by $3.5 million or 27.6% to $16.3 million[2]. - Interest income increased to $16,277,000 for the twelve months ended June 30, 2024, compared to $12,758,000 for the same period in 2023, representing a growth of 27%[10]. - Interest expense rose to $9,283,000 for the twelve months ended June 30, 2024, compared to $3,902,000 for the same period in 2023, an increase of 138%[10]. - Non-interest income decreased to $251,000 for the twelve months ended June 30, 2024, from $302,000 for the same period in 2023, a decline of 17%[10]. Asset and Liability Management - Total assets increased by $25.9 million or 7.4% to $374.9 million at June 30, 2024, primarily due to a $19.2 million or 6.1% increase in net loans[5]. - Deposits increased by $29.8 million or 13.2% to $256.1 million at June 30, 2024, with brokered certificates of deposit totaling $52.0 million[5]. - The average rate earned on interest-earning assets increased by 223 basis points to 6.16%, while the average rate paid on interest-bearing liabilities increased by 272 basis points to 4.17%[4]. Equity and Valuation - Shareholders' equity decreased by $2.7 million or 5.4% to $48.0 million at June 30, 2024, primarily due to the goodwill impairment charge and net loss[6]. - The company’s book value per share decreased to $5.94 at June 30, 2024, down from $6.27 at June 30, 2023[9]. Expenses - Non-interest expense increased by $1.4 million for the year ended June 30, 2024, with the goodwill impairment charge accounting for 69.5% of this increase[2]. - Other non-interest expenses increased to $9,181,000 for the twelve months ended June 30, 2024, compared to $7,818,000 for the same period in 2023, an increase of 17%[10]. Credit Losses - The company adopted a new accounting standard for the calculation of its allowance for credit losses, resulting in a $497,000 increase in the allowance for loans[4]. - Provision for credit losses was $24,000 for the twelve months ended June 30, 2024, down from $113,000 for the same period in 2023[10]. Share Information - The weighted average outstanding shares for basic and diluted earnings were 8,098,715 for the twelve months ended June 30, 2024, compared to 8,133,927 for the same period in 2023[10].

Financial Performance - The company reported a net loss of $643,000 for the nine months ended March 31, 2024, compared to a net income of $891,000 for the same period in 2023[12]. - Earnings per share for the nine months ended March 31, 2024, was $(0.08), compared to $0.11 for the same period in 2023[12]. - Net income for the nine-month period ended March 31, 2024, was $(643,000), a decrease of $1.5 million or 172.2% from the same period in 2023[131]. - Non-interest income decreased by $37,000 or 15.7% to $199,000 for the nine months ended March 31, 2024, mainly due to a decrease in bank-related fees and services[139]. - The company's net interest margin for the nine months ended March 31, 2024, was 1.94%, down from 2.87% in the same period of 2023[115]. - Net interest income after provision for credit losses was $5,105,000 for the nine months ended March 31, 2024, down from $6,812,000 in the prior year, a decrease of 25.0%[12]. - Net interest income decreased by $1.8 million or 26.5% to $5.1 million, primarily due to interest expense increasing by $4.4 million or 193.0%[132]. - The net interest spread decreased from 2.66% for the prior year to 1.46% for the nine-month period ended March 31, 2024[136]. Assets and Liabilities - Total assets increased to $369,100,000 as of March 31, 2024, up from $349,022,000 on June 30, 2023, representing a growth of approximately 5.8%[9]. - Total liabilities increased to $320,086,000 as of March 31, 2024, from $298,311,000 as of June 30, 2023, marking a growth of approximately 7.3%[9]. - Cash and cash equivalents rose to $15,423,000 as of March 31, 2024, compared to $8,167,000 as of June 30, 2023, an increase of 89.5%[9]. - Deposits increased to $246,104,000 as of March 31, 2024, compared to $226,309,000 at June 30, 2023[108]. - The company's total assets increased by $20.1 million, or 5.8%, to $369.1 million compared to June 30, 2023[119]. - Total liabilities increased by $21.8 million, or 7.3%, to $320.1 million at March 31, 2024, driven by an increase in deposits of $19.8 million or 8.7%[126]. Equity and Dividends - As of March 31, 2024, the total equity of Kentucky First Federal Bancorp decreased to $49,014 thousand from $51,139 thousand as of March 31, 2023, reflecting a decline of approximately 4.2%[21]. - Shareholders' equity decreased by $1.7 million or 3.3% to $49.0 million at March 31, 2024, primarily due to the adoption of the CECL accounting standard and dividends paid[128]. - Dividends per share decreased to $0.20 for the nine months ended March 31, 2024, down from $0.30 in the same period of 2023[12]. - The company paid $671 thousand in dividends on common stock during the nine months ended March 31, 2024, down from $1,026 thousand in the same period of 2023[24]. Loan Portfolio - Net loans increased to $328,134,000 as of March 31, 2024, compared to $313,807,000 as of June 30, 2023, reflecting a rise of about 4.6%[9]. - The total loan portfolio amounted to $328,134,000, an increase from $313,807,000 as of June 30, 2023, representing a growth of approximately 4.2%[55]. - The residential real estate segment, particularly one- to four-family loans, saw an increase to $254,789,000 from $240,076,000, marking a growth of approximately 6.1%[55]. - Multi-family loans decreased to $15,755,000 from $19,067,000, reflecting a decline of about 17.9%[55]. - The construction loan segment increased to $14,239,000 from $12,294,000, showing a growth of approximately 15.8%[55]. - Home equity loans increased to $10,326,000 from $9,217,000, representing a growth of approximately 12.0%[55]. - The total amount of loans on deposits decreased to $795,000 from $855,000, a decline of about 7.0%[55]. Credit Quality and Allowance for Losses - The allowance for credit losses (ACL) increased to $2,106,000 from $1,634,000, indicating a rise of about 28.8%[55]. - The provision for credit losses for the nine months ended March 31, 2024, was a recovery of $13 thousand, compared to a recovery of $113 thousand in the same period of 2023[24]. - The company believes the ACL as of March 31, 2024, is adequate based on ongoing monitoring and evaluations[60]. - The total allowance for loan losses as of March 31, 2024, was $2,106,000, with a significant portion attributed to residential real estate loans[80]. - The recorded investment in nonaccrual loans was $4,819,000, with loans past due over 90 days still on accrual totaling $408,000[86]. - The total past due loans as of March 31, 2024, amounted to $7,176,000, with $323,064,000 in loans not past due, resulting in a total of $330,240,000[89]. - The aging of past due loans as of March 31, 2024, showed $5,948,000 in one- to four-family loans past due, with a total of $254,789,000 in loans outstanding[89]. Securities and Fair Value - As of March 31, 2024, the total amortized cost of available-for-sale securities was $10,752,000, with gross unrealized losses of $527,000, resulting in a fair value of $10,225,000[52]. - Fair value of available-for-sale securities decreased to $10,225,000 as of March 31, 2024, from $12,080,000 at June 30, 2023[105]. - The company's other comprehensive loss was $396,000 at the end of March 2024, reflecting unrealized losses on available-for-sale securities[109]. - Unrealized holding gains on available-for-sale securities for the nine months ended March 31, 2024, were $42,000, compared to a loss of $480,000 in the same period of 2023[109]. Risk Management and Internal Controls - The Company categorizes loans into risk categories based on borrowers' ability to service their debt, with classifications including Special Mention, Substandard, and Doubtful[91][92][93]. - The company continues to maintain a conservative approach to risk management, with minimal special mention and substandard loans across its loan portfolio[94][95]. - The Company's disclosure controls and procedures were evaluated as effective by the CEO and CFO, ensuring timely and accurate reporting as required by the SEC[155]. - There were no significant changes in the Company's internal control over financial reporting during the quarter ended March 31, 2024[156]. Other Information - The company has completed its stock repurchase program, having repurchased up to 150,000 shares initiated on February 3, 2021[161]. - There were no legal proceedings reported during the quarter[158]. - The Company has not disclosed any changes to risk factors that could materially affect its business since the last annual report[159].

Financial Performance - For the three months ended March 31, 2024, Kentucky First Federal Bancorp reported a net loss of $107,000, a decrease of 174.3% compared to net earnings of $144,000 for the same period in 2023[2]. - The Company recorded an income tax benefit of $200,000 for the nine months ended March 31, 2024, compared to an income tax expense of $283,000 for the same period in 2023[4]. Interest Income and Expense - Net interest income decreased by $280,000 or 13.7% to $1.8 million due to interest expense increasing by $1.2 million or 106.7% to $2.4 million, while interest income increased by $963,000 or 30.0% to $4.2 million[2][3]. - The average rate earned on interest-earning assets increased by 75 basis points to 4.67%, while the average rate paid on interest-bearing liabilities increased by 149 basis points to 3.19%[3]. - The Company expects the cost of wholesale funds to have peaked and may begin to decline over the next several months, while the yield on assets is expected to continue increasing unless there is a significant drop in interest rates[3]. Assets and Liabilities - Total assets increased by $20.1 million or 5.8% to $369.1 million as of March 31, 2024, primarily due to an increase in loans, net, of $14.3 million or 4.6%[5]. - Total liabilities increased by $21.8 million or 7.3% to $320.1 million, with deposits increasing by $19.8 million or 8.7% to $246.1 million[5]. Shareholders' Equity - Shareholders' equity decreased by $1.7 million or 3.3% to $49.0 million at March 31, 2024, primarily due to the net loss for the period and the adoption of the CECL accounting standard[6]. - The book value per share as of March 31, 2024, was $6.06, down from $6.27 at June 30, 2023[10]. Accounting Standards - The Company adopted a new accounting standard for the calculation of its allowance for credit losses, resulting in an increase of $497,000 in the allowance for loans since July 1, 2023[3].

HAZARD, Ky. and FRANKFORT, Ky. and DANVILLE, Ky. and LANCASTER, Ky., May 10, 2024 (GLOBE NEWSWIRE) -- 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 a net loss of $107,000 or ($0.01) diluted earnings per share for the three months ended March 31, 2024, compared to net earnings of $144,000 or $0.02 diluted earnings per share for the three month ...

PART I FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=ITEM%201%3A%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income, equity, and cash flows, highlighting the adoption of ASC 326 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased due to loan and cash growth, while liabilities rose from deposits and FHLB advances, and shareholders' equity decreased reflecting a net loss, dividend payments, and ASC 326 adoption Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2023 | June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $14,584 | $8,167 | +78.6% | | Loans, net | $325,648 | $313,807 | +3.8% | | **Total assets** | **$366,247** | **$349,022** | **+4.9%** | | **Liabilities & Equity** | | | | | Deposits | $244,629 | $226,309 | +8.1% | | Federal Home Loan Bank advances | $71,008 | $70,087 | +1.3% | | **Total liabilities** | **$317,064** | **$298,311** | **+6.3%** | | **Total shareholders' equity** | **$49,183** | **$50,711** | **-3.0%** | - Effective July 1, 2023, the company adopted the Current Expected Credit Loss (CECL) methodology for estimating the Allowance for Credit Losses (ACL), replacing the previous incurred loss methodology[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net loss for both the six-month and three-month periods, primarily driven by a sharp increase in interest expense outpacing interest income growth, leading to a significant decline in net interest income Key Operating Results (in thousands, except per share data) | Metric | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $3,328 | $4,880 | $1,657 | $2,448 | | Provision for loan losses | $15 | $113 | $9 | $0 | | **Net Income (Loss)** | **$(536)** | **$747** | **$(361)** | **$374** | | **EPS (Basic and diluted)** | **$(0.07)** | **$0.09** | **$(0.05)** | **$0.04** | | Dividends per share | $0.10 | $0.20 | $0.10 | $0.10 | [Condensed Consolidated Statements of Comprehensive Income](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) The company recorded a comprehensive loss for the six months ended December 31, 2023, contrasting with comprehensive income in the prior-year period, primarily due to a net loss partially offset by unrealized gains on available-for-sale securities Comprehensive Income (Loss) Summary (in thousands) | Component | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(536) | $747 | $(361) | $374 | | Other comprehensive gains (losses), net of tax | $93 | $(343) | $231 | $87 | | **Comprehensive income (loss)** | **$(443)** | **$404** | **$(130)** | **$461** | [Consolidated Statements of Changes in Shareholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity decreased primarily due to the cumulative impact of ASC 326 adoption, a net loss, and cash dividends, partially offset by other comprehensive income Changes in Shareholders' Equity (Six Months Ended Dec 31, 2023, in thousands) | Description | Amount | | :--- | :--- | | Balance at June 30, 2023 | $50,711 | | Cumulative impact of adoption of ASC 326 | $(414) | | Net loss | $(536) | | Other comprehensive income | $93 | | Cash dividends | $(671) | | **Balance at December 31, 2023** | **$49,183** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents increased, driven by net cash from financing activities, primarily deposits and FHLB advances, offsetting cash used in operating and investing activities Summary of Cash Flows (Six Months Ended Dec 31, in thousands) | Cash Flow Category | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,092) | $803 | | Net cash used in investing activities | $(10,601) | $(26,372) | | Net cash provided by financing activities | $18,111 | $7,400 | | **Net increase (decrease) in cash** | **$6,418** | **$(18,169)** | | Beginning cash and cash equivalents | $8,167 | $25,823 | | **Ending cash and cash equivalents** | **$14,584** | **$7,654** | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies and financial data, covering the basis of presentation, the impact of ASC 326, loan portfolio breakdowns, credit quality, and fair value disclosures - The company adopted ASC 326 (CECL) on July 1, 2023, resulting in a **$497,000** increase in the allowance for credit loss on loans and a **$414,000** decrease to retained earnings[43](index=43&type=chunk)[44](index=44&type=chunk) Loan Portfolio Composition (in thousands) | Loan Type | Dec 31, 2023 | June 30, 2023 | | :--- | :--- | :--- | | One- to four-family residential | $250,922 | $240,076 | | Multi-family | $18,727 | $19,067 | | Construction | $13,165 | $12,294 | | Nonresidential real estate | $30,493 | $30,217 | | Other | $14,072 | $12,333 | | **Total Loans** | **$327,780** | **$315,441** | - Non-performing loans (nonaccrual and past due 90+ days) totaled **$5.2 million** at December 31, 2023, compared to **$5.4 million** at June 30, 2023[88](index=88&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=ITEM%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, emphasizing the negative impact of rising interest rates on net interest income and profitability, covering balance sheet changes, asset quality, and operating results, noting the dividend suspension [Discussion of Financial Condition Changes](index=45&type=section&id=Discussion%20of%20Financial%20Condition%20Changes) Total assets grew, driven by loan portfolio increase, while liabilities rose from deposits, and shareholders' equity fell due to CECL adoption, net loss, and dividends, with non-performing loans slightly decreasing - Total assets increased by **$17.2 million** (**4.9%**) to **$366.2 million**, primarily due to growth in net loans[122](index=122&type=chunk) - Non-performing loans were approximately **$5.2 million**, or **1.6%** of total loans, at December 31, 2023, a slight improvement from **$5.4 million**, or **1.7%**, at June 30, 2023[125](index=125&type=chunk) - Due to a decline in earnings, the board suspended the payment of dividends indefinitely as of **January 16, 2024**, until earnings and liquidity improve[132](index=132&type=chunk) [Comparison of Operating Results for the Six-month Periods](index=47&type=section&id=Comparison%20of%20Operating%20Results%20for%20the%20Six-month%20Periods) The company reported a net loss for the six months ended December 31, 2023, primarily due to a significant drop in net interest income caused by rising interest expenses outpacing asset yields, alongside increased non-interest expenses - Net income decreased by **$1.3 million** (**171.8%**) to a loss of **$536,000** for the six months ended Dec 31, 2023, compared to income of **$747,000** in the prior year period[134](index=134&type=chunk) - Net interest income fell by **$1.6 million** (**31.8%**) as interest expense grew by **281.4%**, far outpacing the **27.3%** increase in interest income, due to funding sources repricing more quickly than assets[135](index=135&type=chunk) Net Interest Margin & Spread (Six Months Ended Dec 31) | Metric | 2023 | 2022 | Change (bps) | | :--- | :--- | :--- | :--- | | Net interest spread | 1.44% | 2.90% | -146 | | Net interest margin | 1.92% | 3.06% | -114 | [Comparison of Operating Results for the Three-month Periods](index=49&type=section&id=Comparison%20of%20Operating%20Results%20for%20the%20Three-month%20Periods) The company posted a net loss for the quarter ended December 31, 2023, primarily driven by a significant decrease in net interest income due to surging interest expenses outpacing interest income growth, leading to severe margin compression - Net loss for the quarter was **$361,000**, a decrease of **$735,000** from a net income of **$374,000** in the prior-year quarter[146](index=146&type=chunk) - Net interest income for the quarter decreased by **$791,000** (**32.3%**) as interest expense increased by **232.4%** while interest income only rose **25.4%**[147](index=147&type=chunk) Net Interest Margin & Spread (Three Months Ended Dec 31) | Metric | 2023 | 2022 | Change (bps) | | :--- | :--- | :--- | :--- | | Net interest spread | 1.39% | 2.86% | -147 | | Net interest margin | 1.89% | 3.03% | -114 | [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=ITEM%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the Company qualifies as a smaller reporting company - The company is a smaller reporting company, and therefore this item is not applicable[157](index=157&type=chunk) [Controls and Procedures](index=51&type=section&id=ITEM%204%3A%20Controls%20and%20Procedures) The Company's CEO and CFO concluded that disclosure controls and procedures were effective, with no significant changes to internal controls over financial reporting during the quarter - Management concluded that the Company's disclosure controls and procedures were effective as of December 31, 2023[158](index=158&type=chunk) - There were no significant changes in the Company's internal control over financial reporting during the quarter ended December 31, 2023[159](index=159&type=chunk) PART II OTHER INFORMATION [Risk Factors](index=52&type=section&id=ITEM%201A.%20Risk%20Factors) This section highlights the indefinite suspension of the quarterly cash dividend, which could adversely affect the company's common stock market price - On **January 16, 2024**, the company announced the suspension of its quarterly dividend indefinitely, which could have an adverse impact on the market price of its common stock[163](index=163&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase common stock during the quarter, with its most recent repurchase program substantially completed as of May 18, 2023 - No shares of the company's common stock were repurchased during the three months ended December 31, 2023[166](index=166&type=chunk) [Exhibits](index=54&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including charter, bylaws, CEO/CFO certifications, and XBRL financial data - Exhibits filed include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, and XBRL interactive data files[172](index=172&type=chunk)

Financial Performance - The company reported a net loss of $175 thousand for the three months ended September 30, 2023, compared to a net income of $373 thousand in the same period of 2022[11]. - Net interest income decreased to $1,670 thousand for the three months ended September 30, 2023, down from $2,432 thousand in the same period of 2022, a decline of about 31.3%[11]. - Non-interest income decreased to $74 thousand for the three months ended September 30, 2023, down from $98 thousand in the same period of 2022, a decrease of about 24.5%[11]. - The company's other comprehensive loss for the three months ended September 30, 2023, was $(565), compared to $(430) for the same period in 2022, indicating a deterioration in comprehensive income[105]. - The effective tax rates for the periods ended September 30, 2023, and 2022 were 28.3% and 23.7%, respectively[134]. Assets and Liabilities - Total assets increased to $356,784 thousand as of September 30, 2023, up from $349,022 thousand on June 30, 2023, representing a growth of approximately 2.5%[8]. - Total liabilities increased by $8.8 million, or 3.0%, to $307.1 million at September 30, 2023, driven by a $26.1 million increase in deposits, or 11.5%[120]. - Total cash and cash equivalents at the end of the period increased to $12,586,000 from $8,635,000 year-over-year[19]. - The carrying value of cash and cash equivalents increased to $12,586 as of September 30, 2023, compared to $8,167 as of June 30, 2023, reflecting a growth of approximately 54.5%[104]. Deposits and Equity - Total deposits increased to $252,359 thousand as of September 30, 2023, compared to $226,309 thousand on June 30, 2023, reflecting an increase of approximately 11.5%[8]. - Shareholders' equity decreased to $49,649 thousand as of September 30, 2023, down from $50,711 thousand on June 30, 2023, a decline of about 2.1%[8]. - The company expects future dividends to be limited to no more than $0.05 per share due to recent declines in earnings[123]. Credit Losses and Provisions - The provision for credit losses was $6 thousand for the three months ended September 30, 2023, significantly lower than $113 thousand in the same period of 2022[11]. - The allowance for credit losses increased to $2,126,000 as of September 30, 2023, compared to $1,634,000 as of June 30, 2023, reflecting management's assessment of credit risk[55]. - A provision for credit loss of $6,000 was deemed prudent in light of the increase in the loan portfolio during the recently-ended quarter[130]. Loans and Non-Performing Loans - The total loans receivable as of September 30, 2023, amounted to $318,187,000, an increase from $313,807,000 as of June 30, 2023, with residential real estate loans comprising $245,109,000[55]. - Non-performing loans rose to approximately $5.3 million, or 1.6% of total loans, compared to $4.7 million, or 1.5%, at June 30, 2023[116]. - The total past due loans amounted to $6,392,000 as of September 30, 2023, compared to $6,071,000 as of June 30, 2023, indicating an increase of 5.3%[87]. Expenses - Total non-interest expense increased to $1,982 thousand for the three months ended September 30, 2023, compared to $1,928 thousand in the same period of 2022, an increase of approximately 2.8%[11]. - Non-interest expense increased by $54,000 or 2.8% to $2.0 million for the same period, mainly driven by higher employee compensation and benefits, which rose by $48,000 or 4.0% to $1.2 million[132]. Securities and Fair Value - The fair value of available-for-sale securities decreased to $11,230, down from $12,080 as of June 30, 2023, representing a decline of approximately 7.0%[101]. - The amortized cost of available-for-sale securities was $11,972,000 with gross unrealized losses of $754,000 as of September 30, 2023[50]. - The unrealized holding losses on available-for-sale securities for the three months ended September 30, 2023, were $(753), compared to $(573) for the same period in 2022, indicating an increase in losses[105].

Financial Position - As of June 30, 2023, Kentucky First Federal Bancorp had total assets of $349.0 million, deposits of $226.3 million, and stockholders' equity of $50.7 million[17]. - First Federal of Hazard had total assets of $89.1 million, net loans of $81.0 million, and total capital of $18.0 million as of June 30, 2023[20]. - First Federal of Kentucky had total assets of $260.4 million, net loans of $232.7 million, and total capital of $30.5 million as of June 30, 2023[21]. - As of June 30, 2023, the company had $20.2 million in available liquidity, including $8.2 million in cash and cash equivalents, with uninsured deposits estimated at approximately $13.8 million or 6.10% of total deposits[130]. Loan Portfolio - The loan portfolio included $271.4 million in residential mortgage loans, representing 85.9% of the total loan portfolio[29]. - Adjustable-rate residential mortgage loans accounted for $237.4 million, or 87.5% of the residential mortgage loan portfolio[30]. - At June 30, 2023, construction loans totaled $12.3 million, or 3.9% of the total loan portfolio[34]. - Multi-family loans amounted to $19.1 million, or 6.0% of the total loan portfolio[37]. - Nonresidential real estate loans totaled $30.2 million, or 9.6% of the total loan portfolio[38]. - As of June 30, 2023, commercial non-mortgage loans totaled $1.2 million, representing 0.4% of the total loan portfolio[40]. - Consumer loans amounted to $10.8 million, or 3.5% of the total loan portfolio, with home equity loans making up $9.2 million[41]. - Home equity loans accounted for 2.9% of the company's total loan portfolio as of June 30, 2023[41]. - Loans secured by savings deposits represented 0.3% of the total loan portfolio at June 30, 2023[42]. - At June 30, 2023, the company serviced $21.7 million in loans for the Federal Home Loan Bank of Cincinnati[44]. - As of June 30, 2023, approximately 96.3% of the loan portfolio is collateralized by real estate, indicating a high exposure to real estate market disruptions[125]. - At June 30, 2023, $240.1 million, or 76.1%, of the loan portfolio is secured by one-to-four family real estate, all located in Kentucky, which increases lending risks due to regional economic conditions[126]. Competition and Market Share - The company faces significant competition for deposits and loan origination, with larger competitors having greater resources[65]. - First Federal of Hazard had a deposit market share of 6.9% in Perry County, while its largest competitors had market shares of 38.7%, 24.0%, and 27.6%[66]. - First Federal of Kentucky's deposit market shares in Franklin, Boyle, and Garrard counties were 8.2%, 7.0%, and 16.9%, respectively, with major competitors holding 24.5%, 17.3%, and 6.8%[67]. - The company faces intense competition in its market areas, which could reduce net interest income and profitability due to price competition for loans and deposits[134]. Financial Performance - Net income decreased by $657,000 or 41.3% compared to the fiscal year ended June 30, 2022, primarily due to decreased net interest income and increased provision for loan losses[120]. - Net interest income decreased by $304,000 or 3.3%, totaling $8.9 million, while interest income increased by $1.8 million or 16.9% to $12.8 million[120]. - Interest expense increased by $2.1 million or 122.5% to $3.9 million, attributed to higher average rates on deposits and FHLB advances[120]. - Non-interest income decreased by $213,000 or 41.4% during the fiscal year ended June 30, 2023, totaling $302,000, primarily due to decreased gains on loan sales[128]. Regulatory Environment - First Federal of Hazard and First Federal of Kentucky are subject to extensive regulation by the OCC and FDIC, ensuring compliance with safety and soundness standards[69]. - The Dodd-Frank Act significantly changed the financial regulatory regime, imposing enhanced regulations on U.S. banks and financial services firms[70]. - Federal regulations require a minimum Tier 1 leverage ratio of 4.0% and a common equity Tier 1 ratio of 4.5%[75]. - The minimum capital requirements include a new common equity Tier 1 capital ratio of 4.5%, a Tier 1 to risk-based assets capital ratio of 6%, and a total capital ratio of 8%[141]. - The capital levels of First Federal of Hazard and First Federal of Kentucky exceeded the minimum required capital amounts for capital adequacy as of June 30, 2023[77]. Economic Conditions - The unemployment rate in Perry County was 6.6% in July 2023, compared to 3.8% in Kentucky and the United States[24]. - The median household income in Perry County was $43,931, significantly lower than the state average of $52,326 and the national average of $74,580[24]. - Rising inflation and interest rates may adversely affect borrowers' ability to repay loans, increasing the potential for delinquencies and defaults[123]. - Future interest rate increases may lead to a decline in net interest income due to the faster repricing of liabilities compared to assets[120]. - The Federal Reserve Board increased the target federal funds rate to a range of 5.25% to 5.50% as of August 2023, impacting net interest income[119]. - Changes in U.S. tax laws may adversely affect the market for residential properties and the demand for mortgage loans, potentially impacting the company's loan portfolio[140]. Internal Controls and Governance - As of June 30, 2023, the company's internal control over financial reporting was assessed as effective[177]. - The company has established adequate internal control over financial reporting to safeguard assets from unauthorized use[176]. - The company has adopted a Code of Ethics and Business Conduct applicable to all directors, officers, and employees[188]. - The company is classified as a smaller reporting company, which affects certain regulatory requirements[169]. - The company has not reported any disagreements with accountants on accounting and financial disclosure[171]. Shareholder Actions - The company repurchased a total of 10,980 shares of its Common Stock at an average price of $6.05 per share during May 2023[166]. - The company has completed its program to repurchase up to 150,000 shares of its Common Stock, initiated on February 3, 2021[166]. - First Federal MHC has received Federal Reserve Board approval to waive quarterly dividends totaling $0.40 per share annually, expected to continue through the third quarter of 2024[157]. - The company expects to continue waiving future dividends, with quarterly dividends of $0.10 per common share approved through May 2024[108]. Risks and Uncertainties - The implementation of the new accounting standard CECL starting July 1, 2023, may require the company to increase its allowance for loan losses, potentially impacting financial condition and results of operations[132]. - Changes in management's estimates and assumptions may materially impact the consolidated financial statements and financial condition[144]. - Security breaches in internet banking activities could expose the company to legal liability and damage its reputation[148]. - The company is not a party to any pending legal proceedings that could have a material adverse effect on its financial condition[163]. Miscellaneous - The documents do not include any future outlook or performance guidance[201]. - There are no mentions of new products or technology developments in the provided content[201]. - No information regarding market expansion or acquisitions was found in the documents[201]. - The overall content is limited to formal filings and signatures without substantive financial information[201].

PART I [Financial Statements](index=4&type=section&id=ITEM%201%20FINANCIAL%20STATEMENTS) Unaudited financial statements for March 31, 2023, show assets grew to $342.9 million, but net income fell to $891,000 due to higher interest expense [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $342.9 million by March 31, 2023, driven by loan growth and FHLB advances, offsetting deposit decreases and a slight decline in equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | June 30, 2022 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | **$342,914** | **$328,080** | **$14,834** | **4.5%** | | Cash and cash equivalents | $8,085 | $25,823 | ($17,738) | -68.7% | | Loans, net | $306,960 | $274,583 | $32,377 | 11.8% | | **Total Liabilities** | **$291,775** | **$276,055** | **$15,720** | **5.7%** | | Deposits | $209,391 | $239,857 | ($30,466) | -12.7% | | Federal Home Loan Bank advances | $80,899 | $34,066 | $46,833 | 137.5% | | **Total Shareholders' Equity** | **$51,139** | **$52,025** | **($886)** | **-1.7%** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income for the nine months ended March 31, 2023, decreased to $891,000 from $1.38 million, primarily due to increased interest expense and a loan loss provision Statements of Operations Highlights (Nine Months Ended March 31, in thousands) | Metric | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | $6,925 | $6,976 | -0.7% | | Provision (credit) for loan losses | $113 | ($106) | N/A | | Non-interest Income | $236 | $422 | -44.1% | | Non-interest Expense | $5,874 | $5,746 | 2.2% | | **Net Income** | **$891** | **$1,384** | **-35.6%** | Statements of Operations Highlights (Three Months Ended March 31, in thousands) | Metric | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | $2,045 | $2,138 | -4.4% | | Provision (credit) for loan losses | $– | ($106) | N/A | | **Net Income** | **$144** | **$334** | **-56.9%** | Earnings Per Share (Basic and Diluted) | Period | 2023 | 2022 | | :--- | :--- | :--- | | Nine months ended March 31 | $0.11 | $0.17 | | Three months ended March 31 | $0.02 | $0.04 | [Condensed Consolidated Statements of Comprehensive Income](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for the nine months ended March 31, 2023, significantly decreased to $530,000, primarily due to unrealized holding losses on available-for-sale securities Comprehensive Income (in thousands) | Metric | Nine Months Ended March 31, 2023 | Nine Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net Income | $891 | $1,384 | | Other comprehensive loss, net of tax | ($361) | $– | | **Comprehensive Income** | **$530** | **$1,384** | [Consolidated Statements of Changes in Shareholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity decreased from $52.0 million to $51.1 million, primarily due to dividends, treasury share acquisitions, and other comprehensive loss, despite net income - Key activities impacting shareholders' equity for the nine months ended March 31, 2023 included net income of **$891,000**, cash dividends of **$1.026 million**, acquisition of **$394,000** in treasury shares, and an other comprehensive loss of **$361,000**[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash and cash equivalents decreased by $17.7 million for the nine months ended March 31, 2023, as cash used in investing activities for loans outpaced operating and financing inflows Cash Flow Summary (Nine Months Ended March 31, in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,002 | $1,144 | | Net cash (used in) provided by investing activities | ($33,424) | $28,976 | | Net cash provided by (used in) financing activities | $14,684 | ($5,707) | | **Net (decrease) increase in cash and cash equivalents** | **($17,738)** | **$24,413** | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, CECL model adoption, loan portfolio composition, allowance for loan losses, and fair value measurements, with non-performing loans at $5.9 million - The company will adopt the **Current Expected Credit Loss (CECL) model** effective July 1, 2023, which is expected to add complexity and costs to its credit loss evaluation process[35](index=35&type=chunk)[36](index=36&type=chunk) Loan Portfolio Composition (in thousands) | Loan Type | March 31, 2023 | June 30, 2022 | | :--- | :--- | :--- | | One- to four-family | $236,796 | $216,432 | | Multi-family | $19,859 | $14,252 | | Construction | $9,234 | $1,363 | | Nonresidential real estate | $30,014 | $31,441 | | Other | $10,440 | $10,286 | | **Total Loans** | **$308,593** | **$276,112** | - The allowance for loan losses increased to **$1.63 million** at March 31, 2023, from **$1.53 million** at June 30, 2022, with a provision of **$113,000** recorded for the nine-month period[64](index=64&type=chunk) - Nonaccrual loans totaled **$5.4 million** and loans past due over 90 days still accruing totaled **$0.5 million** as of March 31, 2023[72](index=72&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=ITEM%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and operations, noting asset growth driven by loans, but net income decreased to $891,000 due to rising interest expense and increased loan loss provision [Discussion of Financial Condition](index=38&type=section&id=Discussion%20of%20Financial%20Condition) Total assets increased to $342.9 million, driven by a $32.4 million growth in net loans, while cash decreased and non-performing loans remained stable at $5.9 million - Asset growth was primarily driven by a **$32.4 million** (**11.8%**) increase in net loans, reaching **$307.0 million** at March 31, 2023[107](index=107&type=chunk)[109](index=109&type=chunk) - Non-performing loans (90+ days past due or nonaccrual) were **$5.9 million**, or **1.9%** of total loans, at March 31, 2023, compared to **$5.8 million**, or **2.1%**, at June 30, 2022[110](index=110&type=chunk) - The allowance for loan losses was **$1.6 million**, representing **27.8%** of nonperforming loans and **0.5%** of total loans at March 31, 2023[110](index=110&type=chunk) [Comparison of Operating Results for the Nine-month Periods](index=39&type=section&id=Comparison%20of%20Operating%20Results%20for%20the%20Nine-month%20Periods) Net income for the nine months ended March 31, 2023, fell 35.6% to $891,000, driven by a surge in interest expense and a provision for loan losses, despite increased interest income - Net income decreased by **$493,000** (**35.6%**) to **$891,000** for the nine months ended March 31, 2023, compared to the prior year[113](index=113&type=chunk) - Interest expense increased by **$961,000** (**71.7%**) due to a **49 basis point** increase in the average rate paid on interest-bearing liabilities, driven by FOMC rate hikes[114](index=114&type=chunk)[115](index=115&type=chunk) - A provision for loan loss of **$113,000** was recorded, reflecting the **$32.4 million** (**11.8%**) increase in the net loan portfolio[118](index=118&type=chunk) - Non-interest income decreased by **$186,000** (**44.1%**), primarily due to a **$225,000** reduction in net gains on sales of loans as rising rates reduced demand for long-term fixed-rate loans[120](index=120&type=chunk) [Comparison of Operating Results for the Three-month Periods](index=42&type=section&id=Comparison%20of%20Operating%20Results%20for%20the%20Three-month%20Periods) Net income for the quarter ended March 31, 2023, decreased 56.9% to $144,000, driven by a significant surge in interest expense that compressed the net interest spread - Net income for the quarter decreased by **$190,000** (**56.9%**) to **$144,000** compared to the same period in 2022[126](index=126&type=chunk) - Quarterly interest expense surged by **$742,000** (**175.4%**), driven by higher rates on borrowings and a shift in funding from deposits to FHLB advances[127](index=127&type=chunk)[129](index=129&type=chunk) - The net interest spread for the quarter decreased to **2.22%** from **2.51%** in the prior year period[130](index=130&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=ITEM%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable as the company qualifies as a smaller reporting company - The company is a smaller reporting company and is not required to provide these disclosures[138](index=138&type=chunk) [Controls and Procedures](index=44&type=section&id=ITEM%204%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no significant changes to internal control over financial reporting - Management concluded that the Company's disclosure controls and procedures were effective as of the end of the reporting period[139](index=139&type=chunk) - There were no significant changes in the Company's internal control over financial reporting during the quarter ended March 31, 2023[140](index=140&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=45&type=section&id=ITEM%201.%20Legal%20Proceedings) The company reported no legal proceedings - There are no legal proceedings to report[142](index=142&type=chunk) [Risk Factors](index=45&type=section&id=ITEM%201A.%20Risk%20Factors) New risk factors include potential deposit outflows due to banking failures, with the company noting its uninsured deposits at 13.2% and $80.7 million in off-balance sheet liquidity - A new risk factor has been identified concerning financial challenges at other banks (e.g., Silicon Valley Bank, Signature Bank) potentially causing diminished depositor confidence and disruptive deposit outflows across the industry[144](index=144&type=chunk) - The company's uninsured deposits are estimated to be approximately **$27.8 million**, or **13.2%** of total deposits, as of March 31, 2023[144](index=144&type=chunk) - The company has off-balance sheet liquidity sources totaling **$80.7 million**, including **$59.7 million** in additional borrowing capacity at the FHLB of Cincinnati[144](index=144&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 42,000 shares of common stock during the quarter ended March 31, 2023, under its publicly announced repurchase plan Common Stock Repurchases (Quarter Ended March 31, 2023) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2023 | – | $– | | February 2023 | 10,000 | $7.07 | | March 2023 | 32,000 | $6.75 | [Exhibits](index=47&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, CEO/CFO certifications, and XBRL data files

Financial Performance - Net income for the six months ended December 31, 2022, was $747,000, a decrease of 29% compared to $1,050,000 for the same period in 2021[12]. - Comprehensive income for the six months ended December 31, 2022, was $404,000, compared to $1,050,000 in the prior year, indicating a significant decrease[15]. - Earnings per share for the six months ended December 31, 2022, was $0.09, down from $0.13 in the same period of 2021[12]. - Net income for the six months ended December 31, 2022, was $747,000, a decrease of 29% compared to $1,050,000 for the same period in 2021[23]. - The effective tax rate for the six-month period ended December 31, 2022, was 23.5%, compared to 18.7% for the same period in 2021[114]. Income and Expenses - Total interest income rose to $6,016,000 for the six months ended December 31, 2022, compared to $5,755,000 in the prior year, reflecting an increase of 4.5%[12]. - Net interest income after provision for loan losses was $4,767,000 for the six months ended December 31, 2022, slightly down from $4,838,000 in the same period of 2021[12]. - Total non-interest income decreased to $167,000 for the six months ended December 31, 2022, from $328,000 in the prior year, a decline of 49%[12]. - Non-interest expense increased by $83,000 or 2.1% to $4.0 million, mainly due to higher auditing and accounting costs[112]. - Non-interest income decreased by $161,000 or 49.1% to $167,000, primarily due to lower net gains on sales of loans[111]. Assets and Liabilities - Total assets increased to $335,377,000 as of December 31, 2022, up from $328,080,000 on June 30, 2022, representing a growth of 0.4%[9]. - Total liabilities increased to $283,736,000 as of December 31, 2022, compared to $276,055,000 on June 30, 2022, marking a rise of 2.4%[9]. - The company reported a net cash provided by operating activities of $803,000 for the six months ended December 31, 2022, compared to $1,425,000 for the same period in 2021[23]. - The ending cash and cash equivalents decreased to $7,654,000 at December 31, 2022, down from $45,292,000 at the end of the previous year[23]. - The company reported no other real estate owned (OREO) written down during the six- or three-month periods ended December 31, 2022[85]. Loans and Credit Quality - The total loans receivable as of December 31, 2022, amounted to $300.619 million, an increase from $276.112 million as of June 30, 2022, representing an increase of approximately 8.9%[43]. - The allowance for loan losses increased to $1.655 million as of December 31, 2022, compared to $1.529 million as of June 30, 2022, indicating a rise of approximately 8.25%[43]. - The provision for loan losses was $113,000 for the six months ended December 31, 2022, compared to no provision in the same period of 2021[23]. - Non-performing loans were approximately $6.1 million, or 2.0% of total loans, slightly down from $5.8 million or 2.1% at June 30, 2022[101]. - The recorded investment in loans collectively evaluated for impairment was $295,121,000, with an allowance of $1,655,000 attributed to these loans[61]. Deposits - Deposits decreased to $209,383,000 as of December 31, 2022, down from $239,857,000 on June 30, 2022, a decline of 12.7%[9]. - The company’s total deposits as of December 31, 2022, were $209,383,000, with a fair value of $209,521,000[89]. Investment and Securities - The amortized cost of available-for-sale agency mortgage-backed securities was $13.996 million as of December 31, 2022, with gross unrealized losses of $457, resulting in a fair value of $13.539 million[37]. - The fair value of available-for-sale securities as of December 31, 2022, was $13,539,000, compared to $10,477,000 as of June 30, 2022[89]. - The company has not recognized any impairment through earnings for agency mortgage-backed securities, indicating a stable assessment of these assets[38]. Risk Management - The company utilizes a risk rating system to categorize loans based on borrowers' ability to service their debt, with annual analysis performed[70]. - The company has engaged a third-party software provider to model data for the new credit loss evaluation process, anticipating increased complexity and costs[33]. - The company expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses when the new accounting standard ASU 2016-13 becomes effective, but the magnitude of this adjustment is currently undetermined[33].