Kentucky First Federal Bancorp Releases Earnings
August 28 2017 - 5:36PM
Kentucky First Federal Bancorp (Nasdaq:KFFB), (the “Company”) the
holding company for First Federal Savings and Loan Association of
Hazard and First Federal Savings Bank of Kentucky, announced net
income of $935,000 or $0.11 diluted earnings per share for the year
ended June 30, 2017, which represents a $566,000 or 37.7% decrease
from the year ended June 30, 2016. The decrease in earnings
year over year was due primarily to a decrease in net interest
income and an increase in provision for loan loss. Net
interest income decreased $415,000 or 4.0% from $10.3 million for
the prior year end to $9.9 million for the recent year end due to a
decrease in interest income and increase in interest expense.
Interest income decreased $318,000 or 2.7% to $11.3 million for the
fiscal year just ended, while interest expense increased $97,000 or
7.1% to $1.5 million for the twelve months ended June 30,
2017. Interest income for the fiscal year decreased primarily
due to the Company’s assets earning a lower rate of interest for
the period. Interest expense increased primarily due to
overall higher dollar volume of Federal Home Loan Bank (“FHLB”)
advances and higher interest rates paid on those advances.
The Company has utilized FHLB advances to supplement the funding it
receives from deposits to originate loans which it holds in its
portfolio. Management expects the banks’ net interest margins
will continue to tighten for two primary reasons. Mortgage
loan competition has intensified in our central Kentucky market
area, which makes loan growth contingent upon accepting lower
interest rates in general. In addition, funding sources,
including local depositors, the FHLB and some other wholesale
sources, are seeking higher interest rates in light of the 75 basis
point rise in interest rates orchestrated by the Federal Open
Market Committee over the last seven months of the Company’s fiscal
year. As such, we expect our cost of funds to continue to
rise after several years of record low levels. Provision for
loan losses increased $227,000 to $242,000 for the year just ended
as the Company charged off loans. Non-interest income
decreased $25,000 or 6.5% to $362,000 for the year, while
non-interest expense decreased $18,000 or 0.2% to $8.5 million for
the twelve months ended June 30, 2017.
The Company reported net income of $216,000 or $0.02 diluted
earnings per share for the three months ended June 30, 2017, a
decrease of $165,000, or 43.3% compared to $381,000 or $0.05 per
share for the three months ended June 30, 2016. The decrease
in net profit was due to a decrease in non-interest income and net
interest income as well as increases in non-interest expense and
provision for loan losses. Non-interest income decreased
$138,000 or 83.1% to $28,000 for the three months ended June 30,
2017, due primarily to REO results. Downward valuation
adjustments for REO increased in the recently-ended quarter
compared to the prior year period, while net gain on sales of REO
decreased between the comparable periods. Net interest income
decreased $38,000 or 1.5% to $2.4 million for the quarter just
ended primarily due to an increase in interest expense.
Non-interest expense increased $38,000 or 1.8% for the three-month
period ended June 30, 2017 to $2.1 million, while provision for
losses on loans increased $16,000 to $20,000 for the quarter just
ended.
At June 30, 2017, total assets were $308.5 million, an
increase of $16.6 million, or 5.7%, from the $291.9 million
total at June 30, 2016. The increase in total assets was
related primarily to an increase in loans, net, which increased
$19.8 million or 8.3% to $258.2 million at June 30, 2017. At
June 30, 2017, total liabilities were $241.3 million, an
increase of $17.0 million, or 7.6%, from total liabilities at
June 30, 2016. The increase in total liabilities was
related primarily to an increase in FHLB advances.
At June 30, 2017, 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 June 30, 2017 the Company
had approximately 8,444,515 shares outstanding, of which
approximately 56.0% was held by First Federal MHC.
SUMMARY OF FINANCIAL
HIGHLIGHTSCondensed Consolidated Statements of
Financial Condition
|
|
|
June
30, |
|
|
June
30, |
|
|
|
|
2017 |
|
|
2016 |
|
|
|
(In
thousands, except per share data) |
|
|
|
(Unaudited) |
|
|
(Audited) |
|
Assets |
|
|
|
|
|
|
|
Cash and Cash
Equivalents |
$ |
12,804 |
|
$ |
13,108 |
|
|
Interest-bearing time
deposits in other financial institutions |
|
4,201 |
|
|
3,711 |
|
|
Investment
Securities |
|
1,558 |
|
|
4,213 |
|
|
Loans Receivable,
net |
|
258,244 |
|
|
238,468 |
|
|
Real estate acquired
through foreclosure |
|
358 |
|
|
527 |
|
|
Other Assets |
|
31,320 |
|
|
31,844 |
|
|
Total
Assets |
$ |
308,485 |
|
$ |
291,871 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Deposits |
$ |
182,845 |
|
$ |
188,572 |
|
|
FHLB Advances |
|
55,780 |
|
|
33,211 |
|
|
Deferred revenue |
|
578 |
|
|
595 |
|
|
Other Liabilities |
|
2,136 |
|
|
1,978 |
|
|
Total
Liabilities |
|
241,339 |
|
|
224,356 |
|
|
|
|
|
|
|
|
|
Shareholders' Equity |
|
67,146 |
|
|
67,515 |
|
|
|
|
|
|
|
|
|
Total
Liabilities and Equity |
$ |
308,485 |
|
$ |
291,871 |
|
|
|
|
|
|
|
|
|
Book Value
Per Share |
$ |
7.95 |
|
$ |
8.00 |
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of
Operations
|
(In thousands,
except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended June 30, |
|
|
Three months ended June 30, |
|
|
|
|
2017 |
|
|
|
|
2016 |
|
|
2017 |
|
2016 |
|
|
|
|
(Unaudited) |
|
|
|
|
(Audited) |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income |
$ |
11,316 |
|
$ |
11,634 |
|
$ |
2,853 |
$ |
2,807 |
|
|
Interest Expense |
|
1,457 |
|
|
1,360 |
|
|
411 |
|
327 |
|
|
Net Interest
Income |
|
9,859 |
|
|
10,274 |
|
|
2,442 |
|
2,480 |
|
|
Provision for Losses on
Loans |
|
242 |
|
|
15 |
|
|
20 |
|
4 |
|
|
Non-interest
Income |
|
362 |
|
|
387 |
|
|
28 |
|
166 |
|
|
Non-interest Expense |
8,531 |
|
|
8,549 |
|
|
2,114 |
|
2,076 |
|
|
|
Income Before Income
Taxes |
|
1,448 |
|
|
2,097 |
|
|
336 |
|
566 |
|
|
Income Taxes |
|
513 |
|
|
596 |
|
|
120 |
|
185 |
|
|
Net Income |
$ |
935 |
|
$ |
1,501 |
|
$ |
216 |
$ |
381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
$ |
0.11 |
|
$ |
0.18 |
|
$ |
0.02 |
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
outstanding shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
8,345,422 |
|
|
8,324,195 |
|
|
8,354,938 |
|
8,312,262 |
|
Contact:
Don Jennings, President, or Clay Hulette, Vice President
(502) 223-1638
216 West Main Street
P.O. Box 535
Frankfort, KY 40602
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