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].

Financial Performance - Net income for the three months ended September 30, 2022, was $373 thousand, a decrease of 34.3% from $568 thousand in the same period of 2021[10]. - Basic and diluted earnings per share for the three months ended September 30, 2022, were $0.05, compared to $0.07 for the same period in 2021, reflecting a decline of 28.6%[31]. - Non-interest income dropped significantly to $98 thousand, down 57.1% from $228 thousand in the same quarter of 2021[10]. - Net interest income after provision for loan losses was $2,319 thousand, a decline of 7.4% compared to $2,505 thousand in the same quarter of 2021[10]. - Net interest income decreased by $73,000, or 2.9%, to $2.4 million for the quarter, primarily due to a $89,000 decrease in interest income[108]. - Non-interest expense decreased by $53,000, or 2.7%, totaling $1.9 million, mainly due to lower employee compensation and benefits[116]. - Income tax expense decreased by $68,000, or 37.0%, to $116,000, with effective tax rates of 23.7% for the current period[119]. Asset and Liability Management - Total assets increased to $330,917 thousand as of September 30, 2022, compared to $328,080 thousand on June 30, 2022, reflecting a growth of 0.56%[8]. - Total liabilities increased to $279,288 thousand as of September 30, 2022, compared to $276,055 thousand on June 30, 2022, marking a rise of 0.80%[8]. - Deposits decreased to $226,292 thousand as of September 30, 2022, down 5.5% from $239,857 thousand on June 30, 2022[8]. - Cash and cash equivalents decreased to $8,635 thousand as of September 30, 2022, down 66.6% from $25,823 thousand at the end of June 2022[18]. - The total carrying value of financial assets was $292,659,000 as of September 30, 2022, with a fair value of $287,011,000[79]. Loan Portfolio and Credit Quality - The total loans receivable as of September 30, 2022, amounted to $292.7 million, an increase from $276.1 million as of June 30, 2022, indicating a growth of approximately 6.0%[40]. - The allowance for loan losses increased to $1.642 million as of September 30, 2022, compared to $1.529 million as of June 30, 2022, representing an increase of 7.4%[40]. - The company reported a charge-off of $51,000 in nonresidential real estate loans during the quarter, leading to an ending balance of $410,000 in the allowance for this category[55]. - The company’s residential real estate loans increased to $225.3 million as of September 30, 2022, from $216.4 million as of June 30, 2022, marking an increase of approximately 4.0%[40]. - The company reported a total of $6.941 million in past due loans as of September 30, 2022, with $5.631 million past due between 30-89 days and $1.310 million greater than 90 days[65]. - The company's non-performing loans were approximately $5.3 million, or 1.8% of total loans, down from $5.8 million, or 2.1%, at June 30, 2022[98]. - The allowance for loan losses totaled $1.6 million at September 30, 2022, representing 31.1% of non-performing loans[98]. Regulatory Compliance and Reporting - Kentucky First Federal Bancorp's quarterly report for the period ended September 30, 2022, includes consolidated financial statements formatted in XBRL[101]. - The report contains the Consolidated Balance Sheets, Consolidated Statements of Operations, and Consolidated Statements of Cash Flows[101]. - CEO and CFO certifications were provided in accordance with the Sarbanes-Oxley Act of 2002[31.1][31.2]. - The report is filed under the Securities Exchange Act of 1934, ensuring compliance with regulatory requirements[140]. - The company has made multiple amendments to its Bylaws, with the latest being Amendment No. 3[3.5]. - The report is part of the ongoing regulatory filings, indicating the company's commitment to transparency[140]. Economic Outlook - The company anticipates potential impacts from general economic conditions and changes in the interest rate environment on its future performance[83]. - The company expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses when the new credit loss standard becomes effective in the fiscal year beginning July 1, 2023[28].

Financial Position - As of June 30, 2022, Kentucky First Federal Bancorp had total assets of $328.1 million, deposits of $239.9 million, and stockholders' equity of $52.0 million[15]. - First Federal of Hazard had total assets of $84.2 million, net loans of $72.2 million, and deposits of $48.2 million as of June 30, 2022[17]. - First Federal of Kentucky reported total assets of $243.8 million, net loans of $202.3 million, and deposits of $193.8 million as of June 30, 2022[18]. Loan Portfolio Composition - The loan portfolio primarily consists of residential mortgage loans, totaling $232.0 million, or 84.0% of the total loan portfolio as of June 30, 2022[26]. - Adjustable-rate residential mortgage loans accounted for $205.1 million, or 88.4% of the residential mortgage loan portfolio as of June 30, 2022[27]. - Multi-family loans totaled $14.3 million, or 5.2% of the total loan portfolio as of June 30, 2022[34]. - Nonresidential real estate loans amounted to $31.4 million, or 11.4% of the total loan portfolio as of June 30, 2022[35]. - Commercial non-mortgage loans totaled $1.0 million, representing 0.4% of the total loan portfolio[37]. - Consumer loans amounted to $9.2 million, or 3.3% of the total loan portfolio, with home equity loans making up $7.7 million[38]. - Loans secured by savings accounts totaled 0.3% of the total loan portfolio as of June 30, 2022[39]. - At June 30, 2022, $23.2 million in loans were being serviced for the Federal Home Loan Bank of Cincinnati[41]. - As of June 30, 2022, 88.4% of the residential real estate loan portfolio consists of adjustable-rate loans, which may be impacted by rising interest rates[118]. - As of June 30, 2022, $216.4 million, or 78.4%, of the loan portfolio is secured by one-to-four family real estate, all located in Kentucky[130]. - Approximately 96.3% of the loan portfolio as of June 30, 2022, is collateralized by real estate, making it vulnerable to market disruptions[129]. Market and Economic Conditions - The unemployment rate in Perry County was 5.4% in July 2022, higher than the state and national averages of 3.8% and 3.7%, respectively[21]. - The median household income in Perry County was $28,287, significantly lower than the state average of $48,182 and the national average of $67,862[21]. - The distressed economy in the market area of First Federal of Hazard continues to lag behind Kentucky and the U.S., limiting loan demand and growth potential[131]. - Inflationary pressures are expected to remain elevated throughout 2022, potentially increasing loan delinquencies and non-performing assets[125]. - The ongoing COVID-19 pandemic has led to significant economic disruptions, affecting business operations and financial markets[119]. - Approximately $4.7 trillion in fiscal stimulus has been appropriated by Congress in response to the COVID-19 pandemic, impacting the economic environment[121]. Regulatory Environment - The company is subject to extensive regulation and supervision by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation[66]. - The Dodd-Frank Act significantly changed the financial regulatory regime in the U.S., impacting First Federal of Kentucky's operations[67]. - Federal regulations require a 4.0% Tier 1 leverage ratio and a 4.5% common equity Tier 1 ratio for insured depository institutions[72]. - The Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 provides limited regulatory relief to financial institutions with less than $10 billion in assets, benefiting First Federal of Kentucky[69]. - Federal savings associations are subject to a capital directive or cease and desist order, with civil penalties potentially reaching $1 million per day for egregious violations[84]. - The current deposit insurance limit per account owner is $250,000, with assessment rates ranging from 1.5 to 30 basis points of total average assets[86]. - The FDIC may adjust insurance assessment rates, which could adversely affect the operating expenses of the banks[87]. - Savings and loan holding companies with less than $3.0 billion in assets are exempt from consolidated capital requirements unless directed otherwise by the Federal Reserve Board[101]. Competition and Market Share - The company faces significant competition for deposits and loan origination, with larger competitors holding greater resources[62]. - First Federal of Hazard had a deposit market share of 6.9% in Perry County as of June 30, 2022[63]. - First Federal of Kentucky had a deposit market share of 8.2%, 7.0%, and 16.9% in Franklin, Boyle, and Garrard counties respectively as of June 30, 2022[64]. - The largest competitors for deposits include Boyle Bancorp, Inc. at 24.5%, Wesbanco Bank, Inc. at 17.3%, and Community Trust Bancorp, Inc. at 6.8% market share[64]. - As of June 30, 2022, Wesbanco Bank, Inc. had assets of $16.8 billion, Boyle Bancorp, Inc. had $791.2 million, and Community Trust Bancorp, Inc. had $5.4 billion in assets[64]. Capital and Financial Management - The capital levels of First Federal of Hazard and First Federal of Kentucky exceed the minimum required capital amounts for capital adequacy as of June 30, 2022[74]. - The capital levels of First Federal of Hazard and First Federal of Kentucky exceed the required capital amounts as of June 30, 2022, according to Community Bank Leverage Ratio regulations[140]. - The company does not intend to pay dividends in the future that would result in a recapture of any portion of its bad debt reserves[111]. - First Federal MHC has successfully obtained Federal Reserve Board approval to waive dividends of $0.10 per common share through May 2023, with expectations to continue waiving future dividends as needed for operations[104]. - The company is subject to regulatory scrutiny regarding dividend waivers, which could impair its ability to pay dividends to stockholders[154]. Operational and Technological Risks - Effective liquidity management is essential, as a failure to maintain adequate liquidity could materially affect business operations[135]. - Security measures may not be sufficient to mitigate the risk of cyber attacks, potentially jeopardizing confidential information and operations[142]. - The company has established policies to prevent systems failures, but there is no assurance that these measures will be effective, which could adversely impact business operations[144]. - Any systems failures may require the company to find alternative service sources, potentially damaging its reputation and resulting in customer loss[145]. - The company must keep pace with technological changes to remain competitive, as failure to do so could materially impact its financial condition[146]. Employee and Management Information - First Federal of Kentucky had 62 full-time employees and two part-time employees as of June 30, 2022[65]. - The company's management has evaluated the effectiveness of its disclosure controls and procedures, concluding they are effective as of the end of the reporting period[169]. - The company's management assessed the effectiveness of internal control over financial reporting as of June 30, 2022, concluding it is effective[175]. - There were no changes in internal control over financial reporting during the quarter ended June 30, 2022, that materially affected its effectiveness[178]. - The company currently has no equity-based compensation plans in place[195]. Shareholder Actions - The company repurchased 63,520 shares at an average price of $7.55 during June 2022, with a total of 131,500 shares available for repurchase under announced programs[162]. - First Federal MHC has historically waived its right to dividends, significantly increasing the dividends paid to public stockholders[150]. Business Operations - The company operates in three distinct market areas, focusing on community-oriented banking services[20]. - The company conducts business through seven offices, with the main office in Hazard, Kentucky, opened in 2016[156]. - The company is not currently involved in any legal proceedings that could materially affect its financial condition[158].

Financial Performance - Net income for the nine months ended March 31, 2022, was $1,384 thousand, an increase of 22.6% compared to $1,128 thousand for the same period in 2021[11]. - Earnings per share for the nine months ended March 31, 2022, was $0.17, compared to $0.14 for the same period in 2021, indicating a growth of 21.4%[11]. - Net income for the three months ended March 31, 2022, was $334,000, a decrease of 29.4% from $473,000 for the same period in 2021[37]. - Net earnings for the nine months ended March 31, 2022, were $1.4 million or $0.17 diluted earnings per share, an increase of $256,000 or 22.7% from the prior year[110]. Assets and Liabilities - Total assets decreased to $333,898 thousand as of March 31, 2022, from $338,063 thousand on June 30, 2021, representing a decline of approximately 1.5%[9]. - Total liabilities decreased by $4.5 million or 1.6% to $281.3 million at March 31, 2022, primarily due to a decrease in borrowings[106]. - Total deposits increased to $238,642 thousand as of March 31, 2022, up from $226,843 thousand on June 30, 2021, reflecting a growth of approximately 5.9%[9]. - Total shareholders' equity increased to $52,646 thousand as of March 31, 2022, from $52,296 thousand on June 30, 2021, reflecting a growth of approximately 0.7%[9]. Income and Expenses - Net interest income after provision for loan losses was $7,082 thousand for the nine months ended March 31, 2022, compared to $7,119 thousand for the same period in 2021, showing a slight decrease of 0.5%[11]. - Total non-interest expense decreased to $5,746 thousand for the nine months ended March 31, 2022, down from $6,131 thousand in the same period of 2021, a reduction of approximately 6.3%[11]. - Non-interest income decreased by $11,000 or 2.5% to $422,000 for the nine months ended March 31, 2022, primarily due to a decrease in net gains on sales of loans[116]. - Non-interest expense decreased by $148,000 or 7.3% to $1.9 million for the three months ended March 31, 2022, primarily due to a decrease in employee compensation and benefits[130]. Loans and Credit Quality - Loans, net of allowance, decreased to $269,396 thousand as of March 31, 2022, from $297,902 thousand on June 30, 2021, a decline of approximately 9.6%[9]. - The allowance for loan losses decreased to $1.484 million as of March 31, 2022, down from $1.622 million as of June 30, 2021, reflecting a reduction of 8.5%[43]. - Non-performing loans totaled approximately $5.7 million or 2.1% of total loans at March 31, 2022, a decrease from $6.7 million or 2.2% at June 30, 2021[101]. - The total past due loans as of March 31, 2022, amounted to $3.817 million, with $2.765 million past due for 30-89 days and $1.052 million greater than 90 days[56]. Cash and Cash Equivalents - The ending cash and cash equivalents as of March 31, 2022, were $46,061,000, significantly higher than $14,767,000 as of March 31, 2021[23]. - Cash and cash equivalents increased by $24.4 million or 112.8% to $46.1 million at March 31, 2022, primarily due to increased deposits and loan repayments[99]. Economic Outlook and Strategy - The company anticipates potential impacts from general economic trends, inflation, and competitive conditions in the financial services industry, which may affect future performance[82]. - The company has not undertaken the responsibility to publicly release revisions to forward-looking statements, indicating a cautious approach to future projections[82]. - The company expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new credit loss standard is effective[33].

Financial Performance - Net income for the six months ended December 31, 2021, was $1,050 thousand, up 60.45% from $655 thousand for the same period in 2020[12]. - Basic and diluted earnings per share increased to $0.13 for the six months ended December 31, 2021, compared to $0.08 for the same period in 2020, representing a growth of 62.5%[12]. - Net income for the six months ended December 31, 2021, was $1,050,000, an increase of 60.2% compared to $655,000 for the same period in 2020[23]. - Net income allocated to common shareholders for the six months ended December 31, 2021, was $1,050,000, compared to $655,000 for the same period in 2020, representing a 60.3% increase[38]. - For the three months ended December 31, 2021, net income was $482,000, a 30.3% increase from $370,000 for the same period in 2020[125]. Income and Expenses - Total interest income decreased to $5,755 thousand for the six months ended December 31, 2021, down 4.57% from $6,031 thousand in the same period of 2020[12]. - Total non-interest income increased to $328 thousand for the six months ended December 31, 2021, compared to $251 thousand in the same period of 2020, marking a growth of 30.68%[12]. - Non-interest income increased by $77,000, or 30.7%, to $328,000 for the six months ended December 31, 2021, primarily due to an increase in net gains on sales of loans[120]. - Net interest income before provision for loan losses decreased by $25,000, or 0.5%, to $4.8 million for the six-month period ended December 31, 2021[113]. - Non-interest expense decreased to $3,875 thousand for the six months ended December 31, 2021, down 5.77% from $4,112 thousand in the same period of 2020[12]. - Non-interest expense decreased by $237,000, or 5.8%, totaling $3.9 million for the six months ended December 31, 2021, mainly due to lower employee compensation and benefits[121]. Assets and Liabilities - Total assets increased to $339,568 thousand as of December 31, 2021, compared to $338,063 thousand on June 30, 2021, reflecting a growth of 0.44%[9]. - Total liabilities increased to $286,909 thousand as of December 31, 2021, compared to $285,767 thousand on June 30, 2021, reflecting a growth of 0.4%[9]. - Shareholders' equity increased to $52,659 thousand as of December 31, 2021, from $52,296 thousand on June 30, 2021, an increase of 0.69%[9]. - The carrying value of cash and cash equivalents increased to $45,292,000 from $21,648,000 as of June 30, 2021, reflecting a significant growth[80]. - Total deposits increased to $236,838,000 with a fair value of $237,112,000 as of December 31, 2021, compared to $226,843,000 and $227,183,000 respectively as of June 30, 2021[80]. Loans and Credit Quality - Loans, net of allowance, decreased to $276,684 thousand as of December 31, 2021, from $297,902 thousand as of June 30, 2021, a decline of 7.1%[9]. - The total loans receivable as of December 31, 2021, amounted to $276,684,000, a decrease from $297,902,000 as of June 30, 2021, reflecting a decline of 7.1%[42]. - The allowance for loan losses as of December 31, 2021, was $1,603,000, down from $1,622,000 as of June 30, 2021, indicating a reduction of 1.2%[44]. - Nonaccrual loans as of December 31, 2021, totaled $6,000,000, while loans past due over 90 days still accruing were $442,000[52]. - The risk category of loans as of December 31, 2021, included $268.7 million classified as pass, $1.5 million as special mention, and $8.05 million as substandard[61]. Cash Flow and Dividends - Total cash provided by operating activities increased to $1,425,000 for the six months ended December 31, 2021, compared to $111,000 in the prior year[23]. - Cash dividends per common share remained stable at $0.20 for both the six months ended December 31, 2021, and 2020[12]. - Cash dividends paid on common stock were $696,000 for the six months ended December 31, 2021, slightly up from $691,000 in the previous year[23]. Regulatory and Compliance - The company is in the final stages of selecting a third-party vendor to assist with the implementation of new accounting standards related to credit losses, expected to begin in the coming months[34]. - The company maintained a well-capitalized status with capital ratios exceeding regulatory requirements as of December 31, 2021[95]. - The company reported no material changes in risk factors that could materially affect its business or financial condition[141]. Stock and Shareholder Actions - The company repurchased 8,500 shares at an average price of $7.13 during December 2021, with a total of 140,000 shares repurchased in the quarter[143]. - The company has initiated a new stock repurchase plan authorized for the purchase of up to 150,000 shares of its common stock[143].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ____________ to _______________ Commission File Number: 0-51176 KENTUCKY FIRST FEDERAL BANCORP (Exact name of registrant as specified in its charter) United States of America 61-1484858 ...