Kentucky First Federal Bancorp(KFFB) - 2026 Q1 - Quarterly Report

Financial Performance - Net income for the three months ended September 30, 2025, was $344 thousand, a significant improvement from a net loss of $15 thousand in the same period of 2024[11]. - Comprehensive income for the three months ended September 30, 2025, was $410 thousand, compared to $226 thousand in the same period of 2024, indicating an increase of approximately 81.5%[13]. - The company reported a basic and diluted earnings per share of $0.04 for the three months ended September 30, 2025, compared to a loss per share of $0.00 in the same period of 2024[11]. - Shareholders' equity increased by $410,000, or 0.8%, to $48.8 million at September 30, 2025, primarily due to net income of $344,000 for the quarter[131]. - Net interest income increased to $2,504 thousand for the three months ended September 30, 2025, compared to $1,870 thousand for the same period in 2024, reflecting a growth of approximately 33.8%[11]. - Non-interest income rose to $153 thousand for the three months ended September 30, 2025, compared to $137 thousand in the prior year, marking an increase of approximately 11.7%[11]. - Non-interest expense rose by $191,000, or 9.5%, totaling $2.2 million, mainly due to increased data processing charges and outside service fees[142]. - Income tax expense increased from a benefit of $6,000 in the prior year to an expense of $109,000, reflecting higher earnings[144]. Asset and Liability Management - Total assets decreased to $366,492 thousand as of September 30, 2025, from $371,211 thousand on June 30, 2025, representing a decline of approximately 1.9%[9]. - Total liabilities decreased to $317,713 thousand as of September 30, 2025, from $322,842 thousand on June 30, 2025, a reduction of about 1.6%[9]. - Cash and cash equivalents decreased to $14,625 thousand as of September 30, 2025, from $19,480 thousand on June 30, 2025, a decline of approximately 25.1%[9]. - The company experienced a net decrease in deposits of $6,148 thousand during the three months ended September 30, 2025[19]. - The total deposits amounted to $271,415,000 as of September 30, 2025, compared to $277,563,000 as of June 30, 2025, reflecting a decline of approximately 2.9%[98]. Loan Portfolio and Credit Quality - The loan portfolio totaled $328,616,000 as of September 30, 2025, with an allowance for credit losses of $2,166,000[49]. - One-to-four-family residential loans accounted for $249,018,000 of the loan portfolio as of September 30, 2025[49]. - The company reported a decrease in multi-family loans from $15,505,000 on June 30, 2025, to $14,569,000 on September 30, 2025[49]. - Non-performing loans decreased to approximately $3.2 million, or 1.0% of total loans, down from $3.9 million, or 1.2%, at June 30, 2025[126]. - The allowance for credit losses (ACL) was $2.2 million, representing 67.1% of non-performing loans at September 30, 2025, compared to 54.1% at June 30, 2025[126]. - The total ACL for all loan segments as of September 30, 2025, was $2,166,000, compared to $2,170,000 as of June 30, 2025, indicating a slight decrease[68]. - The company categorizes loans into risk categories based on borrowers' ability to service their debt, with special mention loans indicating potential weaknesses[77]. - The risk category for residential real estate loans shows $4,554,000 classified as substandard, indicating potential losses if deficiencies are not corrected[80]. Regulatory and Compliance - The company is committed to addressing deficiencies resulting from the formal written agreement with the OCC, which includes implementing a revised three-year strategic plan[102]. - The Individual Minimum Capital Requirements (IMCRs) imposed by the OCC require a common equity tier 1 capital ratio of at least 9.0%, a tier 1 capital ratio of at least 11.0%, and a total capital ratio of at least 12.0%[101]. - As of September 30, 2025, First Federal Savings Bank of Kentucky's common equity tier 1 capital ratio was 16.07%, significantly above the required minimum of 9.0%[121]. Securities and Investments - The amortized cost of available-for-sale securities as of September 30, 2025, was $11,832,000, with gross unrealized gains of $117,000 and gross unrealized losses of $0, resulting in an estimated fair value of $11,727,000[41]. - The fair value of available-for-sale securities increased to $11,727,000 from $9,757,000 as of June 30, 2025, representing a growth of approximately 20.1%[95]. - The total temporarily impaired available-for-sale (AFS) securities amounted to $8,427,000 with gross unrealized losses of $117,000 as of September 30, 2025[44]. - The amortized cost of agency mortgage-backed securities in the AFS category was $8,427,000, with a fair value of $8,310,000[44]. Management and Governance - The Company appointed R. Clay Hulette as CEO, pending regulatory approval, with Don D. Jennings continuing as President and Chairman[111]. - The company suspended quarterly dividends indefinitely, with future payments dependent on various regulatory and operational factors[132].