HAZARD, Ky. and FRANKFORT, Ky., Feb. 1, 2011 /PRNewswire/ -- Kentucky First Federal Bancorp (Nasdaq: KFFB), the holding company for First Federal Savings and Loan Association of Hazard and First Federal Savings Bank of Frankfort, Kentucky, announced net earnings of $298,000, or $0.04 per diluted share, for the three months ended December 31, 2010, compared to $215,000, or $0.03 per diluted share, for the three months ended December 31, 2009, an increase of $83,000 or 38.6% period to period.  The Company reported net earnings of $631,000 or $0.08 per diluted share for the six months ended December 31, 2010, compared to a net loss of $147,000 or $0.02 per diluted share for the six months ended December 31, 2009.

The increase in net income for the quarter ended December 31, 2010 was primarily attributable to a higher level of net interest income and was partially offset by higher non-interest expenses.  Net interest income increased $301,000 or 19.0% to $1.9 million for the recent quarter ended, while non-interest expense increased $214,000 or 17.0% to $1.5 million.  Lower levels of interest expense on liabilities were chiefly responsible for the improvement in net interest income.  Normal repricing of interest-bearing liabilities into the current low interest rate environment was primarily responsible for the positive change from period to period.  The increase in non-interest expense was the result of higher levels of employee compensation and benefits, which was attributed to higher costs associated with the Company's Employee Stock Ownership Plan.  

The increase in net income for the six months ended December 31, 2010 was primarily attributable to lower provision for loan losses.  The provision for loan losses decreased $960,000 or 93.4% from $1.0 million for the six month period ended a year ago compared to $68,000 for the period just ended.  Net interest income increased $536,000 or 17.2% to $3.6 million for the recent period ended, while non-interest expense increased $363,000 or 14.9% to $2.8 million.  

At December 31, 2010, assets had increased $4.5 million, or 1.9%, to $241.4 million compared to $236.9 million at June 30, 2010.  This increase was attributed primarily to an increase in investment securities of $9.4 million, or 96.3%, to $19.2 million at December 31, 2010.  Somewhat offsetting the increase in investment securities were decreases in cash and cash equivalents and loans, which decreased $2.5 million and $2.0 million, respectively, or 30.4% and 1.0%, respectively.  At December 31, 2010, liabilities had increased $4.1 million or 2.3%, primarily as a result of additional FHLB advances, which increased $6.2 million or 19.3% to $38.2 million.  Shortly after the quarter-ended December 31, 2010, the Company's $11.0 million short-term investment in a U.S. Treasury note matured and the short-term FHLB advance used to finance the investment was repaid.

At December 31, 2010, the Company's reported book value per share was $7.51.

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 and changes in the securities markets.  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 three banking offices in Frankfort, Kentucky.  Kentucky First Federal Bancorp shares are traded on the Nasdaq National Market under the symbol KFFB.  At December 31, 2010, the Company had approximately 7,745,703 shares outstanding of which approximately 61.0% was held by First Federal MHC.

SOURCE Kentucky First Federal Bancorp