Kentucky First Federal Bancorp Reports Earnings (Form 8-K)

Kentucky First Federal Bancorp Reports Earnings

Kentucky First Federal Bancorp (Nasdaq: KFFB), the holding company (the "Company") for First Federal Savings and Loan Association of Hazard and First Federal Savings Bank of Kentucky, Frankfort, Kentucky, announced net income of $304,000 or $0.04 diluted earnings per share for the three months ended December 31, 2025, compared to net income of $13,000 or $0.00 diluted earnings per share for the three months ended December 31, 2024, an increase of $291,000. Net earnings were $648,000 or $0.08 diluted earnings per share for the six months ended December 31, 2025 compared to a net loss of $2,000 or $(0.00) diluted earnings per share for the six months ended December 31, 2024, an increase of $650,000.

The increase in net earnings for the quarter ended December 31, 2025 was primarily attributable to higher net interest income. Net interest income increased $618,000 or 30.3% to $2.7 million due to increased interest income and decreased interest expense from period to period. Interest income increased $392,000 or 8.2% to $5.2 million, while interest expense decreased $226,000 or 8.2% to $2.5 million for the recently-ended quarter.

Interest income increased for the comparable quarterly periods due to an increase in the average rate earned on interest-earning assets, which increased 48 basis points to 5.76%. Average interest-earning assets decreased $2.8 million or 0.8% to $359.5 million for the recently-ended quarterly period. The average rate earned on assets was due primarily to an increase in the rate earned on loans, which was the result of new loan production carrying higher interest rates and adjustable rate mortgages continuing to reprice upward. Interest expense decreased for the comparable quarterly periods due to a decrease in the average balance of interest-bearing liabilities as well as a decrease in the average rate paid on those funds. Average interest-bearing liabilities decreased $2.9 million or 0.9% to $308.2 million for the quarterly period just ended, while the average rate paid decreased 26 basis points to 3.27% for the period.

Non-interest income increased $7,000 or 4.1% and totaled $178,000 for the three months ended December 31, 2025.

Non-interest expense increased $220,000 or 10.0% to $2.4 million for the three months ended December 31, 2025 primarily due to data processing expense increasing $118,000 or 110.3%. Employee compensation and benefits also increased $100,000 or 8.3%. Outside service fees increased $79,000 or 51.0% for the three months ended December 31, 2025, compared to December 31, 2024. This was slightly offset by professional fees decreasing $57,000 or 31.5% in the same period.

The increase in net earnings on a six-month basis was primarily attributable to increased net interest income, higher non-interest income, and decreased provision for loan losses, and which was partially offset by increased provision for income tax and increased non-interest expense.

Net interest income increased $1.3 million or 32.1% to $5.2 million due to increased interest income and decreased interest expense from period to period. Interest income increased $825,000 or 8.8% to $10.2 million, while interest expense decreased $428,000 or 7.8% to $5.1 million for the recently-ended semi-annual period. Non-interest income increased $23,000 or 7.5% year over year primarily due to increased net gains on sales of loans, while provision for loan loss decreased $5,000 or 33.3% to $10,000 for the six months ended December 31, 2025. Non-interest expense increased $412,000 or 9.8% to $4.6 million for the six months ended December 31, 2025, due primarily to data processing expense increasing $180,000 or 66.4%. Employee compensation and benefits also increased $119,000 or 5.0%. Outside service fees increased $169,000 or 75.1% for the six months ended December 31, 2025 compared to December 31, 2024. This was slightly offset by professional fees decreasing $81,000 or 35.4% in the same period. Income tax expense increased $219,000 as a result of higher pre-tax earnings.

At December 31, 2025, assets totaled $375.3 million, an increase of $4.1 million or 1.1%, from $371.2 million at June 30, 2025, due primarily to an increase in loans, net, of $2.6 million or 0.8%, as well as an increase in investment securities of $1.4 million or 14.2%. Cash and cash equivalents totaled $19.7 million, an increase of $192,000 or 1.0% compared to June 30, 2025. Total liabilities increased $3.3 million or 1.0% to $326.2 million at December 31, 2025. FHLB advances increased $8.7 million or 20.3% to $51.4 million to fund the growth in assets. Deposits decreased $4.4 million or 1.6% to $273.2 million primarily related to a decrease in savings accounts associated with distributions of funds in administration of various estate accounts.

At December 31, 2025, the Company reported its book value per share as $6.07. Shareholders' equity increased $732,000 or 1.5% to $49.1 million at December 31, 2025 compared to June 30, 2025. The increase in shareholders' equity was primarily associated with net earnings during the period, as well as accumulated other comprehensive loss decreasing $84,000 at December 31, 2025 compared to June 30, 2025. Unrealized losses on our investment portfolio continued to decrease during the recently-ended period.