Kentucky First Federal Bancorp Releases Earnings

HAZARD, Ky. and FRANKFORT, Ky. and DANVILLE, Ky. and LANCASTER, Ky., Oct. 31, 2019 (GLOBE NEWSWIRE) -- 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 earnings of $234,000 or $0.03 diluted earnings per share for the three months ended September 30, 2019, compared to net earnings of $138,000 or $0.02 diluted earnings per share for the three months ended September 30, 2018, an increase of $96,000 or 69.6%.   

The increase in net earnings for the quarter ended September 30, 2019, was primarily attributable to lower non-interest expense and higher net interest income, which were partially offset by increases in provision for loan losses and provision for income tax.  Non-interest expense decreased $122,000 or 5.5% to $2.1 million for the recently ended quarter due to cost-saving measures implemented by management.  Net interest income increased $35,000 or 1.5% to $2.4 million for the quarter just ended as interest income increased $282,000 or 9.3% to $3.3 million and interest expense increased $247,000 or 35.3% to $947,000.  Interest income increased period-to-period due to increases in both the average volume of interest-earning assets and the average rate earned on those assets.  Average interest-earning assets increased $13.0 million or 4.5% to $304.8 million for the quarter ended September 30, 2019, compared to the prior-year period, while the average interest rate earned on the assets increased 19 basis points to 437 basis points.  Likewise, interest expense was higher for both deposits and borrowings for the recently ended quarterly period compared to the year-ago period, because of both rate and volume changes.  Interest expense on deposits increased primarily due to a change in the make-up of deposits.  In addition to attracting new time deposits, some of the banks’ deposit customers opted for the higher rate associated with the time deposits rather than remain in traditional savings accounts.  The average rate paid on deposits increased 30 basis points to 167 basis points for the quarter ended September 30, 2019.  Interest expense for borrowings increased period-to-period due primarily to a higher volume of borrowings.  Average borrowings increased $13.7 million or 28.0% to $62.8 million for the quarter ended September 30, 2019, while the average rate paid on borrowings for the recently ended quarterly period was 229 basis points or 18 basis points lower than the prior year.  Non-interest income increased $5,000 or 7.2% to $74,000 for the just-ended quarter.  Provision for loan losses totaled $59,000 for the quarter ended September 30, 2019, an increase of $48,000 compared to $11,000 for the prior year period.   The increase in the provision for loan losses was due to charge-offs taken on properties repossessed during the quarter based on updated appraisals at the time of repossession.  Income tax expense increased $18,000 or 42.9% and totaled $60,000 for the quarter just ended in response to the higher overall taxable income. 

At September 30, 2019, assets totaled $328.8 million, a decrease of $2.0 million or 0.6%, from $330.8 million at June 30, 2019.  This decrease was attributed primarily to a decrease in loans, net, which decreased $1.3 million or 0.5% to $279.6 million at September 30, 2019.  Total liabilities decreased $1.8 million or 0.7% to $262.7 million at September 30, 2019, primarily resulting from a decrease in advances, which decreased $2.3 million or 3.5% to $64.4 million at September 30, 2019.  Short-term advances were repaid with the proceeds of loan repayments, maturing time deposits in other financial institutions, and additional retail deposits, which increased $243,000 or 0.1% and totaled $196.1 million at quarter end. 

At September 30, 2019, the Company reported its book value per share as $7.95.  The change in shareholders’ equity was primarily associated with net profits for the period, less dividends paid on common stock. 

This press release may contain statements that are forward-looking, as that term is defined by the Private Securities Litigation Act of 1995 or the Securities and Exchange Commission in its rules, regulations and releases.  The Company intends that such forward-looking statements be subject to the safe harbors created thereby.  All forward-looking statements are based on current expectations regarding important risk factors including, but not limited to, real estate values, the impact of interest rates on financing, changes in general economic conditions, legislative and regulatory changes that adversely affect the business of the Company, changes in the securities markets and the Risk Factors described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended June 30, 2019.  Accordingly, actual results may differ from those expressed in the forward-looking statements, and the making of such statements should not be regarded as a representation by the Company or any other person that results expressed therein will be achieved.

Kentucky First Federal Bancorp is the parent company of First Federal Savings and Loan Association of Hazard, which operates one banking office in Hazard, Kentucky and First Federal Savings Bank of Kentucky, which operates three banking offices in Frankfort, Kentucky, two banking offices in Danville, Kentucky and one banking office in Lancaster, Kentucky.  Kentucky First Federal Bancorp shares are traded on the Nasdaq National Market under the symbol KFFB.  At September 30, 2019, the Company had approximately 8,266,577 shares outstanding of which approximately 56.9% was held by First Federal MHC.