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Kentucky First Federal Bancorp Releases Earnings

HAZARD, Ky., FRANKFORT, Ky., DANVILLE, Ky. and LANCASTER, Ky., Feb. 07, 2017 (GLOBE NEWSWIRE) -- Kentucky First Federal Bancorp (Nasdaq:KFFB), the holding company for First Federal Savings and Loan Association of Hazard and First Federal Savings Bank of Kentucky, announced net earnings of $254,000 or $0.03 diluted earnings per share for the three months ended December 31, 2016, compared to net earnings of $404,000 or $0.05 diluted earnings per share for the three months ended December 31, 2015, a decrease of $150,000 or 37.1%.  Net earnings were $551,000 or $0.07 diluted earnings per share for the six months ended December 31, 2016, compared to net earnings of $942,000 or $0.11 diluted earnings per share for the six months ended December 31, 2015, a decrease of $391,000 or 41.5%.

/EIN News/ -- The decrease in net earnings on a quarter-to-quarter basis was primarily attributable to lower interest income, higher provision for loan losses, lower non-interest income and somewhat offset by lower non-interest expense.

Interest income decreased $174,000 or 5.8% to $2.8 million for the quarter ended December 31, 2016 compared to the prior year quarter, primarily because of lower yields and lower balances in the Company’s loan portfolio.  Provision for loan losses totaled $52,000 for the just-ended quarter compared to no provision for the prior year period due chiefly to loan charge-offs.  Non-interest income decreased $50,000 or 39.7% to $76,000 for the quarter ended December 31, 2016, compared to the prior year quarter, primarily because of decreased gains on sales of REO and sales of loans.  The Company’s non-interest expense decreased $68,000 or 3.1% to $2.1 million for the recently-ended quarterly period due primarily to lower FDIC insurance premiums and lower employee compensation and benefits costs.

Chief Executive Officer Don D. Jennings commented that “after several years, we are finally beginning to see some vitality in our central Kentucky markets.  During the three- and six-month periods ended December 31, 2016, our loan portfolio repriced downward due to the historically low interest rate environment that has prevailed for so many years.  However, we are encouraged by the recent growth in our loan portfolio and the current direction of interest rates in general.  Our loan portfolio at December 31, 2016, increased by $8.8 million or 3.7% compared to June 30, 2016.  Increased loan demand and the prospect of decreased regulatory burden gives us reason to feel optimistic.” 

The decrease in net earnings on a six-month basis was primarily attributable to lower interest income, higher provision for loan losses, and higher non-interest expense.

Interest income decreased $369,000 or 6.2% to $5.6 million for the six month period ended December 31, 2016 compared to the prior year period, primarily because of lower yields on the Company’s loan portfolio.  Provision for loan losses totaled $56,000 for the six month period just-ended compared to $11,000 for the prior year period due chiefly to loan charge-offs.  Non-interest expense increased $35,000 or 0.8% to $4.3 million for the six-month period recently ended, due primarily to higher occupancy and equipment expense as well as other costs.

At December 31, 2016 assets increased $14.0 million or 4.8% to $305.8 million compared to $291.9 million at June 30, 2016.  This increase is attributable primarily to increases in loans and investment securities.  Total liabilities increased $14.0 million or 6.3% to $238.4 million at December 31, 2016, as FHLB advances increased $20.0 million or 59.9% to $53.1 million and deposits decreased $5.5 million or 2.9% to $183.1 million at December 31, 2016.  The Company utilized part of its short-term borrowing to fund the acquisition of a short-term $6.5 million U.S. Treasury note.  Subsequent to the quarter just ended the Company reduced advances by $6.5 million with the proceeds received from the maturity of the investment. 

At December 31, 2016, the Company reported its book value per share as $7.95.

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, 2016.  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, which operates one banking office in Hazard, Kentucky, and First Federal Savings Bank, which operates six banking offices in Kentucky, including three in Frankfort, two in Danville, and one in Lancaster.  Kentucky First Federal Bancorp shares are traded on the Nasdaq National Market under the symbol KFFB.  At December 31, 2016, the Company had approximately 8,483,501 shares outstanding of which approximately 55.7% was held by First Federal MHC.

             
  SUMMARY OF FINANCIAL HIGHLIGHTS          
  Condensed Consolidated Balance Sheets        
      December 31,   June 30,    
      2016   2016    
      (In thousands, except share data)    
       (Unaudited)
   
Assets            
  Cash and Cash Equivalents $ 12,520 $ 13,108    
  Time deposits in other financial institutions   4,699   3,711    
  Investment Securities   9,461   4,213    
  Loans Held for Sale   255   --    
  Loans, net   247,257   238,468    
  Other Assets   31,654   32,371    
    Total Assets $ 305,846 $ 291,871    
Liabilities            
  Deposits $ 183,097 $ 188,572    
  FHLB Advances   53,110   33,211    
  Deferred revenue   586   595    
  Other Liabilities   1,592   1,978    
    Total Liabilities   238,385   224,356    
Shareholders' Equity   67,461   67,515    
Total Liabilities and Equity $ 305,846 $ 291,871    
Book Value Per Share $ 7.95 $ 8.00    
                                     
                 
  Condensed Consolidated Statements of Income                
  (In thousands, except share data)                    
      Six months ended December 31,   Three months ended December 31,  
      2016   2015     2016   2015  
      (Unaudited)     (Unaudited)
 
  Interest Income $ 5,600  $ 5,969    $ 2,811  $ 2,985  
  Interest Expense   669   692     341   342  
  Net Interest Income   4,931   5,277     2,470   2,643  
  Provision for Losses on Loans   56   11     52   --  
  Non-interest Income   244   240     76   126  
  Non-interest Expense    4,269    4,234     2,101  
2,169   
  Income Before Income Taxes   850   1,272     393   600  
  Income Taxes   299   330     139   196  
  Net Income $ 551 $ 942   $ 254  $ 404  
  Earnings per share:                    
    Basic and diluted $ 0.07 $ 0.11   $ 0.03  $ 0.05  
  Weighted average outstanding shares:                    
    Basic and diluted   8,382,239   8,319,589     8,384,586   8,321,924  
                       
Contact:
                    Kentucky First Federal Bancorp
                    Don Jennings, President 
                    Clay Hulette, Vice President
                    (502) 223-1638

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