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Kentucky First Federal Bancorp (Nasdaq: KFFB) reported net income of $581,000, or $0.07 diluted earnings per share, for the three months ended March 31, 2026, compared with net income of $7,000, or $0.00 diluted earnings per share, for the same period in 2025. For the nine months ended March 31, 2026, net earnings were $1.2 million, or $0.15 diluted earnings per share, compared with $5,000, or $0.00 diluted earnings per share, for the nine months ended March 31, 2025.
The increase in net earnings for the quarter ended March 31, 2026 was primarily driven by higher net interest income. Net interest income rose $736,000, or 34.5%, to $2.9 million. The improvement reflected higher interest income and lower interest expense.
Interest income increased due to a higher average rate earned on interest-earning assets, which rose 48 basis points to 5.76%. Average interest-earning assets decreased $2.2 million, or 0.6%, to $365.1 million.
The company attributed the higher asset yield primarily to increased rates earned on loans, supported by new loan production carrying higher interest rates and adjustable-rate mortgages continuing to reprice upward.
Interest expense declined as the average balance of interest-bearing liabilities fell and the average rate paid decreased. Average interest-bearing liabilities decreased $3.8 million, or 1.2%, to $312.9 million, while the average rate paid fell 37 basis points to 3.06%.
Non-interest income increased $58,000, or 71.6%, to $139,000 for the three months ended March 31, 2026.
Non-interest expense increased $34,000, or 1.6%, to $2.2 million, primarily due to higher employee compensation and benefits expense, which rose $79,000, or 6.5%, driven by annual performance-based adjustments and higher health insurance costs. Data processing expense also increased $64,000, or 35.6%. These increases were slightly offset by outside service fees decreasing $36,000, or 23.5%.
On a nine-month basis, the increase in net earnings was primarily attributable to higher net interest income and increased non-interest income, partially offset by higher non-interest expense and an increased provision for income tax.
Net interest income increased $2.0 million, or 33.0%, to $8.0 million. Interest income rose $1.2 million, or 8.7%, to $15.5 million, while interest expense decreased $754,000, or 9.2%, to $7.5 million.
Non-interest income increased $81,000, or 20.8%, year over year, primarily due to higher net gains on sales of loans. The provision for loan loss increased $15,000, or 41.7%, to $51,000 for the nine months ended March 31, 2026.
Non-interest expense increased $446,000, or 7.0%, to $6.8 million for the nine months ended March 31, 2026. The company cited data processing expense rising $244,000, or 54.1%, and employee compensation and benefits increasing $198,000, or 5.5%. Outside service fees increased $134,000, or 35.5%, while regulatory assessment expense decreased $18,000, or 25.4%. Income tax expense increased $386,000 due to higher pre-tax earnings.
At March 31, 2026, assets totaled $374.5 million, up $3.3 million, or 0.9%, from $371.2 million at June 30, 2025. The company said the increase was primarily due to higher cash and cash equivalents, which rose $1.8 million, or 9.3%, to $21.3 million. Loans, net, totaled $328.2 million, up $975,000, or 0.3%, and investment securities increased $480,000, or 4.8%, compared with June 30, 2025.
Total liabilities increased $2.0 million, or 0.6%, to $324.9 million at March 31, 2026. FHLB advances rose $6.2 million, or 14.4%, to $48.9 million to fund asset growth. Deposits decreased $3.9 million, or 1.4%, to $273.7 million, primarily due to lower savings accounts related to distributions of funds in administration of various estate accounts.
The company reported book value per share of $6.14 at March 31, 2026. Shareholders’ equity increased $1.3 million, or 2.7%, to $49.7 million at March 31, 2026 compared with June 30, 2025. The increase was attributed to net earnings during the period and a $60,000 decrease in accumulated other comprehensive loss. Unrealized losses on the investment portfolio continued to decrease during the period.
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 in Danville, Kentucky, and one in Lancaster, Kentucky. Kentucky First Federal Bancorp shares trade on the Nasdaq National Market under the symbol KFFB. At March 31, 2026, the company reported approximately 8,086,715 shares outstanding, with approximately 58.5% held by First Federal MHC.
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