Kentucky First Federal Bancorp (KFFB)·Q3 2025 Earnings Summary

Executive Summary

• Calendar Q3 2025 (fiscal Q1 2026) returned to meaningful profitability: net income $0.34M ($0.04 EPS) vs $(0.00) prior-year, driven by a 33.9% increase in net interest income and lower funding costs; noninterest income rose on stronger loan sale gains .
• Asset yields expanded and funding costs eased: average yield on interest-earning assets rose 53 bps to 5.59% and average rate paid on interest-bearing liabilities fell 22 bps to 3.33%, supporting margin expansion .
• Expense pressures persisted: noninterest expense rose $191k YoY on higher outside services (+$90k) and data processing (+$62k) costs; deposits fell $6.1M QoQ as the bank used liquidity to pay down funding sources .
• Leadership transition announced in October aims to accelerate profitability initiatives and execution under a seasoned team (subject to regulatory approval), a potential catalyst for narrative shift around operating improvement .
• No formal guidance or earnings call transcript was available; there were no visible Wall Street consensus estimates for EPS or revenue, limiting “beat/miss” framing (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

• Net interest income increased $634k (+33.9%) to $2.50M on both higher asset yields and lower funding costs; interest income +$432k (+9.4%) to $5.05M and interest expense −$202k (−7.3%) to $2.55M .
• Asset repricing traction: average rate earned on interest-earning assets rose 53 bps to 5.59% (loan yield +63 bps to 5.71%) while the average rate paid declined 22 bps to 3.33% .
• Credit costs benign: no provision for credit losses this quarter vs $15k in the prior-year quarter; loan portfolio down slightly QoQ (−$0.80M) to $326.5M .

What Went Wrong

• Operating expense pressure: noninterest expense +$191k YoY, led by outside services (+$90k to $160k) and data processing (+$62k to $226k) as third-party services and core provider costs increased .
• Deposit softness QoQ: total deposits fell $6.1M (−2.2%) to $271.4M, reflecting use of liquidity to reduce funding; FHLB advances were roughly stable QoQ .
• Execution complexity/costs around regulatory remediation continue to influence professional/third-party fees (a theme highlighted earlier in FY25) .

Financial Results

Note: Kentucky First’s reported line items reflect bank financials (net interest income and noninterest income). Revenue* below represents S&P Global’s aggregation (Net interest income + Noninterest income).

• Prior-year comparison (Sep 30): Net income improved from $(0.00) to $0.04 EPS and pre-tax income rose from $(0.02)M to $0.45M, aided by stronger NII, no provision expense, and modest noninterest income growth .
• Asset yields/funding costs in current quarter: Avg yield 5.59% (+53 bps YoY) and avg rate paid 3.33% (−22 bps YoY) .

KPIs

Estimates note: *Values retrieved from S&P Global.

Guidance Changes

• The Q3 2025 8-K and press release did not include quantitative guidance; no dividend update was provided in these documents .

Earnings Call Themes & Trends

No Q3 2025 earnings call transcript or investor call materials were found in the document set as of this report.

Management Commentary

• “The Company and First Federal Savings Bank are very pleased to welcome back Clay Hulette in a full-time capacity to serve as CEO… His appointments… will allow the Company and the Banks to leverage his business and financial acumen and community connections to further our financial initiatives.” — Walter G. Ecton, Jr., Chairman
• “I am honored at the trust that the Boards have bestowed upon me… to again be working with Don Jennings and the seasoned teams of both Banks.” — R. Clay Hulette
• “We welcome Clay’s return to the executive management team… I look forward to working with and supporting Clay in my new role…” — Don D. Jennings

Q&A Highlights

• No earnings call was identified for Q3 2025; therefore, no Q&A highlights or clarifications were available in transcripts.

Estimates Context

• Wall Street consensus: S&P Global showed no visible consensus for EPS or revenue for Q3 2025; we therefore do not present beat/miss analysis for EPS or revenue. Actual EPS was $0.04 and revenue* approximated $2.66M (NII + noninterest income) .
• Implications: In absence of published estimates, near-term models (if any) would need to reflect sustained asset yield expansion, easing funding costs, and noninterest income tailwind from loan sales, balanced against continued operating cost pressure (outside services and core processing) .
• Note: *Values retrieved from S&P Global.

Key Takeaways for Investors

• Earnings inflected on spread expansion: higher asset yields with easing funding costs produced a sharp NII increase, driving EPS to $0.04 despite expense pressure .
• Expense headwinds remain a drag: elevated outside services and data processing costs continue; watch for normalization as remediation and third-party projects progress .
• Mixed funding signals: recent QoQ deposit contraction offset prior progress reducing wholesale reliance; monitor deposit trends and pricing discipline into Q4 .
• Noninterest income improving: stronger mortgage secondary market activity supports fee line; sustainability depends on rate path and local demand .
• Leadership change is a potential execution catalyst: returning, seasoned leadership may accelerate profitability initiatives and regulatory execution (subject to approval) .
• Capital/Book value stable to improving: BVPS rose to $6.03 on earnings and modest AOCI improvement; provides some downside support for a thinly-covered microcap bank .
• No formal guidance or Street coverage: trading likely to react to reported trends (NII trajectory, deposit behavior, cost run-rate) and management updates rather than estimate revisions .

Estimates note: Items marked with * are values retrieved from S&P Global.