Kentucky First Federal Bancorp(KFFB) - 2026 Q2 - Quarterly Report

Financial Performance - Net income for the six months ended December 31, 2025, was $648 thousand, compared to a net loss of $2 thousand for the same period in 2024[10]. - Comprehensive income for the six months ended December 31, 2025, was $732 thousand, significantly higher than $58 thousand in the same period of 2024[14]. - Earnings per share for the six months ended December 31, 2025, was $0.08, compared to a loss per share of $0.00 for the same period in 2024[10]. - Net interest income for the six months ended December 31, 2025, was $5,160 thousand, a 32.1% increase from $3,907 thousand for the same period in 2024[10]. - Non-interest income increased to $331 thousand for the six months ended December 31, 2025, up from $308 thousand in the same period of 2024, marking a growth of 7.5%[10]. - The net interest margin improved to 2.85% for the six months ended December 31, 2025, compared to 2.15% for the same period in 2024[120]. - The net interest spread increased from 1.75% for the prior year quarterly period to 2.45% for the three-month period ended December 31, 2025[151]. Assets and Liabilities - Total assets increased to $375,278 thousand as of December 31, 2025, up from $371,211 thousand on June 30, 2025, representing a growth of 1.8%[9]. - Total liabilities rose to $326,177 thousand as of December 31, 2025, compared to $322,842 thousand on June 30, 2025, indicating a 1.0% increase[9]. - The total shareholders' equity increased to $49,101 thousand as of December 31, 2025, from $48,369 thousand on June 30, 2025, reflecting a growth of 1.5%[9]. - Cash and cash equivalents increased by $192,000, or 1.0%, to $19.7 million, with interest-bearing demand deposits rising by $5.5 million, or 64.5%[125]. - The total deposits amounted to $273,194,000 as of December 31, 2025, with a fair value of $273,234,000[102]. Credit Losses and Loan Performance - The provision for credit losses was $10 thousand for the six months ended December 31, 2025, down from $15 thousand in the same period of 2024[10]. - The allowance for credit losses (ACL) at December 31, 2025, is deemed adequate by management, with specific allocations made for loans based on risk characteristics and economic conditions[55]. - The total provision for credit losses for the six months ended December 31, 2025, was $2,170,000, with an ending balance of $2,176,000 in the ACL[69]. - The recorded investment in nonaccrual loans as of December 31, 2025, was $2,046,000, with an additional $328,000 in loans past due over 89 days still on accrual[77]. - Non-performing loans decreased to approximately $2.4 million, or 0.7% of total loans, down from $3.9 million, or 1.2%, at June 30, 2025[128]. Securities and Investments - The fair value of available-for-sale securities increased from $9,757,000 on June 30, 2025, to $11,185,000 on December 31, 2025[99]. - The company's investment securities included available-for-sale securities with an amortized cost of $11,266,000 and a fair value of $11,185,000 as of December 31, 2025[42]. - The securities portfolio, consisting of mortgage-backed securities, increased by $1.4 million, or 14.2%, totaling $11.3 million at December 31, 2025[126]. Regulatory Compliance and Governance - The company has entered into a formal written agreement with the OCC, which will remain effective until amended or terminated[114]. - The company is committed to adhering to the Sarbanes-Oxley Act of 2002, as evidenced by CEO and CFO certifications included in the report[31.1][31.2]. - A compliance committee has been created to monitor and oversee compliance with the provisions of the Agreement and submit quarterly evaluation reports[117]. - The company has appointed R. Clay Hulette as Chief Executive Officer, with regulatory approval received on December 10, 2025[113]. Strategic Objectives - The company is focused on increasing earnings, core deposits, and reducing reliance on higher-cost funding sources as part of its strategic objectives[108]. - The company anticipates a 4.1% increase in economic value of equity (EVE) under a sudden decrease in prevailing market interest rates of 100 basis points[118]. - The company has adopted a revised written liquidity risk management program emphasizing cash flow projections, diversified funding sources, and robust liquidity stress testing[117].