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
$869,000 or $0.11 diluted earnings per share for the three months
ended December 31, 2017, compared to net earnings of $254,000 or
$0.03 diluted earnings per share for the three months ended
December 31, 2016, an increase of $615,000 or 242.1%.
Net earnings were $1.1 million or $0.14 diluted
earnings per share for the six months ended December 31, 2017,
compared to net earnings of $551,000 or $0.07 diluted earnings per
share for the six months ended December 31, 2016, an increase of
$598,000 or 108.5%.
The increase in net earnings on a quarter-to-quarter basis was
primarily attributable to increased non-interest income and lower
income tax expense.
Non-interest income increased $360,000 to $436,000 for the three
months ended December 31, 2017, compared to the prior year quarter,
primarily because of an increase in earnings on bank-owned life
insurance (“BOLI”). During the quarter just ended the Bank
received BOLI insurance proceeds on policies maintained under its
long-standing overall employee benefits program pursuant to the
passing of a covered individual.
The Company recorded a net income tax benefit of $160,000 for
the three months ended December 31, 2017, compared to federal
income tax expense of $139,000 in the prior year quarter. The
decrease in income tax expense was primarily related to a change in
income tax law. Recently-enacted tax reform has reduced the
top income tax rate for corporations beginning January 1,
2018. Under U.S. Generally Accepted Accounting Principles the
effect of changes in tax laws or rates is recognized in income tax
expense in the period in which the legislation is enacted.
The Company recognized an income tax benefit of approximately
$268,000 related to lower tax rates expected to be applied to its
net deferred tax liabilities in the future.
Net interest income before provision for loan
losses increased $12,000 or 0.5% to $2.5 million for the
three-month period just ended. Interest income increased by
$173,000, or 6.2%, to $3.0 million, while interest expense
increased $161,000 or 47.2% to $502,000 for the three months ended
December 31, 2017. Costs associated with the Company’s
funding sources are increasing as short-term interest rates
continue to rise. The Company recorded a $3,000 provision for
losses on loans during the three months ended December 31, 2017,
compared to a provision of $52,000 for the three months ended
December 31, 2016. Non-interest expense increased $105,000 or
5.0% and totaled $2.2 million for the three months ended December
31, 2017.
The increase in net earnings on a six-month basis was also
primarily attributable to increased non-interest income and lower
income tax expense.
Non-interest income increased $332,000 to $576,000 for the six
months ended December 31, 2017, compared to the prior year quarter,
primarily because of an increase in BOLI earnings. Federal
income taxes decreased $324,000 or 108.4% as the Company’s income
tax benefit totaled $25,000 for the recently-ended six-month period
compared to income tax expense of $299,000 in the prior year
period, primarily because of the change in income tax law.
Net interest income before provision for loan
losses decreased $16,000 or 0.3% to $4.9 million for the six-month
period just ended. Interest income increased by $285,000, or 5.1%,
to $5.9 million, while interest expense increased $301,000 or 45.0%
to $970,000 for the six months ended December 31, 2017. The
Company recorded a $3,000 provision for losses on loans during the
six months ended December 31, 2017, compared to a provision of
$56,000 for the six months ended December 31, 2016.
Non-interest expense increased $95,000 or 2.2% and totaled
$4.4 million for the six months ended December 31, 2017.
At December 31, 2017 assets increased $955,000 or 0.3% to $309.4
million compared to $308.5 million at June 30, 2017. This
increase is attributable primarily to increases in loans and time
deposits, which were partially offset by a decrease in cash and
cash equivalents. Total liabilities increased $436,000 or
0.2% to $241.8 million at December 31, 2017, primarily as a result
of an increase in deposits, which increased $8.5 million or 4.6% to
$191.3 million at December 31, 2017. The Company has been
successful in competing for and attracting deposits in its local
markets as short-term interest rates have risen. FHLB
advances decreased $7.2 million or 12.8% and totaled $48.6 million
at quarter end.
At December 31, 2017, the Company reported its book value per
share as $8.01.
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, 2017. 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, 2017, the
Company had approximately 8,444,515 shares outstanding of which
approximately 56.0% was held by First Federal MHC.
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SUMMARY OF FINANCIAL HIGHLIGHTS |
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Condensed Consolidated Balance Sheets |
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December 31, |
|
June 30, |
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|
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2017 |
|
2017 |
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(In
thousands, except share data) |
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(Unaudited) |
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Assets |
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Cash and
Cash Equivalents |
$ |
9,360 |
$ |
12,804 |
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|
|
Time
deposits in other financial institutions |
|
6,681 |
|
4,201 |
|
|
|
Investment
Securities |
|
1,315 |
|
1,558 |
|
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Loans Held
for Sale |
|
240 |
|
-- |
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|
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Loans,
net |
|
260,806 |
|
258,244 |
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Real
estate acquired through foreclosure |
|
806 |
|
358 |
|
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Other
Assets |
|
30,232 |
|
31,320 |
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Total Assets |
$ |
309,440 |
$ |
308,485 |
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Liabilities |
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Deposits |
$ |
191,303 |
$ |
182,845 |
|
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FHLB
Advances |
|
48,627 |
|
55,780 |
|
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|
Deferred
revenue |
|
567 |
|
578 |
|
|
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Other
Liabilities |
|
1,278 |
|
2,136 |
|
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Total Liabilities |
|
241,775 |
|
241,339 |
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Shareholders' Equity |
|
67,665 |
|
67,146 |
|
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Total
Liabilities and Equity |
$ |
309,440 |
$ |
308,485 |
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Book Value
Per Share |
$ |
8.01 |
$ |
7.95 |
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Condensed Consolidated Statements of Income |
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(In thousands, except
share data) |
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Six months ended December 31, |
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Three months ended December 31, |
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2017 |
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2016 |
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2017 |
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2016 |
|
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(Unaudited) |
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|
(Unaudited) |
|
|
Interest Income |
$ |
5,885 |
|
$ |
5,600 |
|
$ |
2,984 |
|
$ |
2,811 |
|
|
Interest Expense |
|
970 |
|
|
669 |
|
|
502 |
|
|
341 |
|
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Net Interest
Income |
|
4,915 |
|
|
4,931 |
|
|
2,482 |
|
|
2,470 |
|
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Provision for Losses on
Loans |
|
3 |
|
|
56 |
|
|
3 |
|
|
52 |
|
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Non-interest
Income |
|
576 |
|
|
244 |
|
|
436 |
|
|
76 |
|
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Non-interest Expense |
4,364 |
|
|
4,269 |
|
|
2,206 |
|
|
2,101 |
|
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Income Before Income
Taxes |
|
1,124 |
|
|
850 |
|
|
709 |
|
|
393 |
|
|
Income Taxes |
|
(25 |
) |
|
299 |
|
|
(160 |
) |
|
139 |
|
|
Net Income |
$ |
1,149 |
|
$ |
551 |
|
$ |
869 |
|
$ |
254 |
|
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Earnings per
share: |
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|
|
|
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|
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Basic and
diluted |
$ |
0.14 |
|
$ |
0.07 |
|
$ |
0.11 |
|
$ |
0.03 |
|
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Weighted average
outstanding shares: |
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|
|
|
|
|
|
|
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Basic and
diluted |
|
8,361,941 |
|
|
8,382,239 |
|
|
8,364,276 |
|
|
8,384,586 |
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Contact:
Kentucky First Federal BancorpDon Jennings, PresidentClay Hulette,
Vice President(502) 223-1638
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