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 March 31, 2023

☐ 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
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

655 Main Street, Hazard, Kentucky 41702

(Address of principal executive offices)(Zip Code)

(502) 223-1638

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 par value per share		KFFB		The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days: Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-Accelerated filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: At May 12, 2023, the latest practicable date, the Corporation had 8,097,695 shares of $.01 par value common stock outstanding.

INDEX

	Page
PART I FINANCIAL INFORMATION	1

ITEM 1 FINANCIAL STATEMENTS	1

Condensed Consolidated Balance Sheets	1

Condensed Consolidated Statements of Operations	2

Condensed Consolidated Statements of Comprehensive Income	3

Consolidated Statements of Changes in Shareholders’ Equity	4

Condensed Consolidated Statements of Cash Flows	6

Notes to Condensed Consolidated Financial Statements	8

ITEM 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk	36

ITEM 4 Controls and Procedures	36

PART II OTHER INFORMATION	37

SIGNATURES	40

PART I-FINANCIAL INFORMATION

ITEM 1: Financial Statements

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share data)

	March 31,			June 30,
	2023			2022
ASSETS
Cash and due from financial institutions	$	2,242		$	2,002
Fed funds sold		656			14,824
Interest-bearing demand deposits		5,187			8,997
Cash and cash equivalents		8,085			25,823

Securities available-for-sale		12,863			10,477
Securities held-to-maturity, at amortized cost- approximate fair value of $273 and $323 at March 31, 2023 and June 30, 2022, respectively		289			339
Loans held for sale		–			152
Loans, net of allowance of $1,633 and $1,529 at March 31, 2023 and June 30, 2022, respectively		306,960			274,583
Real estate owned, net		70			10
Premises and equipment, net		4,490			4,563
Federal Home Loan Bank stock, at cost		4,688			6,498
Accrued interest receivable		887			649
Bank-owned life insurance		2,811			2,750
Goodwill		947			947
Prepaid income taxes		–			382
Deferred income taxes		49			–
Prepaid expenses and other assets		775			907

Total assets	$	342,914		$	328,080

LIABILITIES AND SHAREHOLDERS’ EQUITY

Deposits	$	209,391		$	239,857
Federal Home Loan Bank advances		80,899			34,066
Advances by borrowers for taxes and insurance		503			766
Accrued interest payable		48			12
Accrued income taxes		469			–
Deferred income taxes		–			889
Other liabilities		465			465
Total liabilities		291,775			276,055

Commitments and contingencies		–			–

Shareholders’ equity
Preferred stock, 500,000 shares authorized, $.01 par value; no shares issued and outstanding		–			–
Common stock, 20,000,000 shares authorized, $.01 par value; 8,596,064 shares issued		86			86
Additional paid-in capital		34,891			34,892
Retained earnings		20,425			20,560
Unearned employee stock ownership plan (ESOP)		–			(5	)
Treasury shares at cost, 498,369 and 441,369 common shares at March 31, 2023 and June 30, 2022, respectively		(3,902	)		(3,508	)
Accumulated other comprehensive income (loss)		(361	)		–
Total shareholders’ equity		51,139			52,025

Total liabilities and shareholders’ equity	$	342,914		$	328,080

See accompanying notes to condensed consolidated financial statements.

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except per share data)

	Nine months ended March 31,					Three months ended March 31,
	2023		2022			2023		2022
Interest income
Loans, including fees	$	8,522	$	8,190		$	2,983	$	2,513
Mortgage-backed securities		345		8			116		2
Interest-bearing deposits and other		359		118			111		46
Total interest income		9,226		8,316			3,210		2,561

Interest expense
Interest-bearing demand deposits		29		29			9		10
Savings		235		203			62		68
Certificates of Deposit		844		823			383		258
Deposits		1,108		1,055			454		336
Borrowings		1,193		285			711		87
Total interest expense		2,301		1,340			1,165		423
Net interest income		6,925		6,976			2,045		2,138
Provision (credit) for loan losses		113		(106	)		–		(106	)
Net interest income after provision for loan losses		6,812		7,082			2,045		2,244

Non-interest income
Earnings on bank-owned life insurance		60		59			20		19
Net gain on sales of loans		6		231			–		23
Net gain (loss) on sales of real estate owned		–		(8	)		–		–
Net gain on sale of property and equipment held for sale		10		–			–		–
Other		160		140			49		52
Total non-interest income		236		422			69		94

Non-interest expense
Employee compensation and benefits		3,697		3,675			1,243		1,237
Data processing		330		416			100		109
Occupancy and equipment		469		460			156		159
FDIC insurance premiums		63		49			22		23
Voice and data communications		93		93			32		31
Advertising		110		106			31		20
Outside service fees		181		133			77		31
Auditing and accounting		212		128			36		48
Regulatory assessments		67		77			17		25
Foreclosure and real estate owned expenses (net)		77		67			32		23
Franchise and other taxes		107		114			29		23
Other		468		428			141		142
Total non-interest expense		5,874		5,746			1,916		1,871

Income before income taxes		1,174		1,758			198		467

Income tax expense		283		374			54		133

NET INCOME	$	891	$	1,384		$	144	$	334

EARNINGS PER SHARE
Basic and diluted	$	0.11	$	0.17		$	0.02	$	0.04
DIVIDENDS PER SHARE	$	0.30	$	0.30		$	0.10	$	0.10

See accompanying notes to condensed consolidated financial statements.

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Nine months ended March 31,					Three months ended March 31,
	2023			2022		2023			2022
Net income	$	891		$	1,384	$	144		$	334

Other comprehensive gains (losses), net of tax:
Unrealized holding gains (losses) on securities designated as available-for-sale, net of taxes (benefit) of $(119), $0, $(6) and $0 during the respective periods		(361	)		–		(18	)		–
Comprehensive income	$	530		$	1,384	$	126		$	334

See accompanying notes to condensed consolidated financial statements.

Kentucky First Federal Bancorp

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the nine months ended

(Unaudited)

(Dollar amounts in thousands, except per share data)

March 31, 2023

	Common stock		Additional paid-in capital			Retained earnings			Unearned employee stock ownership plan (ESOP)			Treasury shares			Accumulated other comprehensive loss			Total
Balance at June 30, 2022	$	86	$	34,892		$	20,560		$	(5	)	$	(3,508	)	$	–		$	52,025

Net income		–		–			891			–			–			–			891
Allocation of ESOP shares		–		(1	)		–			5			–			–			4
Acquisition of shares for Treasury		–		–			–			–			(394	)		–			(394	)
Other comprehensive loss																(361	)		(361	)
Cash dividends of $0.30 per common share		–		–			(1,026	)		–			–			–			(1,026	)

Balance at March 31, 2023	$	86	$	34,891		$	20,425		$	-		$	(3,902	)	$	(361	)	$	51,139

March 31, 2022

	Common stock		Additional paid-in capital			Retained earnings			Unearned employee stock ownership plan (ESOP)			Treasury shares			Accumulated other comprehensive income		Total
Balance at June 30, 2021	$	86	$	34,916		$	20,364		$	(102	)	$	(2,968	)	$	–	$	52,296

Net income		–		–			1,384			–			–			–		1,384
Allocation of ESOP shares		–		(23	)		–			95			–			–		72
Acquisition of shares for Treasury		–		–			–			–			(61	)		–		(61	)
Cash dividends of $0.30 per common share		–		–			(1,045	)		–			–			–		(1,045	)

Balance at March 31, 2022	$	86	$	34,893		$	20,703		$	(7	)	$	(3,029	)	$	–	$	52,646

SEC Form 10-Q filed by Kentucky First Federal Bancorp