Kentucky First Federal Bancorp (KFFB)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 returned to modest profitability: Net income was $0.013 million and diluted EPS was $0.00; net interest income rose 23.0% year over year to $2.038 million as asset repricing outpaced liability costs .
• Balance sheet mix improved: deposits increased $6.9 million (+2.7%) quarter over quarter while FHLB advances declined $7.2 million (-10.4%); book value per share was $5.94 at quarter-end .
• Non-interest income benefited from secondary market loan activity; net gains on sales of loans increased by $74,000 year over year, driving non-interest income to $171,000 for the quarter .
• No formal guidance or earnings call transcript was provided; forward-looking commentary emphasized deposit growth, reducing wholesale funding reliance, addressing OCC-related requirements, and uncertain dividend capacity subject to regulatory approvals .
• Potential near-term catalysts: continued deposit inflows and sustained net interest income growth as asset yields improve relative to funding costs .

What Went Well and What Went Wrong

What Went Well

• Net interest income expanded materially year over year (+$381,000, +23.0%) to $2.038 million, driven by a higher average rate earned on interest-earning assets (up to 5.28%) and interest income growth (+$857,000, +21.8%) .
• Funding progress: deposits rose $6.9 million (+2.7%) q/q; FHLB advances fell $7.2 million (-10.4%), consistent with management’s strategy to reduce reliance on higher-cost wholesale funding .
• Loan sale market tailwind: non-interest income increased to $171,000 (+$125,000, +271.7%) on stronger fixed-rate secondary market demand; management: “the repricing level of our assets has begun to outpace the increase in expenses paid on liabilities” .

What Went Wrong

• Expense pressure: non-interest expense increased $54,000 y/y, primarily from higher professional fees (+$123,000), partially offset by lower compensation (-$62,000) .
• Core loan balances and securities declined: loans, net decreased $2.8 million (-0.8%) and investment securities fell $1.0 million (-10.6%) in the quarter, reflecting repayments/prepayments .
• Dividends remain uncertain pending regulatory approvals and MHC waiver; forward-looking disclosures continue to reference OCC-related requirements and dividend constraints .

Financial Results

KPIs (Balance Sheet)

Estimates vs. Actuals (S&P Global consensus unavailable)

Note: S&P Global consensus estimates were not available for KFFB for Q2 2025 in our attempt to retrieve data.

Guidance Changes

No formal quantitative guidance was provided for revenue, margins, OpEx, OI&E, tax rate, or segments. Management reiterated strategic priorities (grow core deposits, reduce wholesale funding reliance) and noted dividend capacity depends on regulatory approvals and MHC waiver; thus no guidance change can be assessed .

Earnings Call Themes & Trends

No Q2 2025 earnings call transcript was available; themes are drawn from company press releases.

Management Commentary

• “While the rising interest rate environment has slowed and market rates have even decreased, the repricing level of our assets has begun to outpace the increase in expenses paid on liabilities.”
• “As consistent with our efforts to reduce our reliance on higher cost funding sources, FHLB advances decreased $7.2 million… Partially offsetting the decrease in FHLB advances was an increase in total deposits of $6.9 million.”
• President Jennings (prior quarter/fiscal context): “After a punishing year, our net interest income is beginning to improve as the increase in interest income has begun to outpace the increase in our cost of funds. We believe that continued improvement will help lead the Company back to profitability.”

Q&A Highlights

No Q2 2025 earnings call transcript was available; therefore no Q&A highlights or on-call guidance clarifications can be provided for the period [Search returned none].

Estimates Context

• Wall Street consensus (S&P Global) for EPS and revenue was unavailable for Q2 2025 in our retrieval attempt; KFFB’s disclosures do not include a “revenue” line item, and reported metrics focus on interest income, net interest income, and non-interest income .
• In absence of formal consensus, investors should compare actual NII and EPS with internal expectations; drivers to monitor include deposit growth, FHLB reduction, and asset yield progression versus funding costs .

Key Takeaways for Investors

• Earnings inflected to a modest profit in Q2 2025 (EPS $0.00), supported by stronger NII and gains on loan sales; watch for sustainability of asset yield advantage over funding costs .
• Positive funding mix shift—deposits up, FHLB down—should support NIM stabilization and lower funding cost sensitivity if maintained .
• Expense discipline remains a focal point; professional fees elevated amid regulatory and remediation work—monitor trajectory and potential normalization .
• Core loan balances contracted q/q while cash liquidity rose; track loan production and secondary market activity for growth versus liquidity positioning .
• Dividend policy remains constrained by regulatory approvals/MHC waiver; any progress on approvals could be a stock catalyst for income-focused holders .
• Near-term trading implications: headlines on deposit growth and further NII improvement likely to be viewed constructively; unexpected increases in wholesale funding or professional fees would be negative .
• Medium-term thesis: execution on deposit growth, reduction in wholesale funding, and regulatory remediation under OCC oversight can support gradual profitability recovery and book value stability .