Kentucky First Federal Bancorp (Nasdaq: KFFB) announced unaudited financial results for the three months ended September 30, 2026. The company reported net income of $919,000, or $0.11 per diluted share, for the period. This represents a significant increase compared to the same quarter in the prior year, when net income was $344,000, or $0.04 per share.
The rise in profitability was driven primarily by higher net interest income, which increased by $639,000, or 25.5%, to $3.1 million. This growth was attributed to a 38 basis point increase in the average rate earned on interest-earning assets to 5.97% and a 50 basis point decrease in the average rate paid on interest-bearing liabilities to 2.82%. While the average balance of interest-earning assets decreased by $12.6 million, the increase in rates was sufficient to boost total interest income by $159,000 to $5.2 million. Conversely, interest expense decreased by $480,000 to $2.1 million.
Non-interest income also rose by 18.3% to $181,000, largely due to a $27,000 increase in net gains from the sale of loans. However, the company recorded a provision for credit losses of $40,000 for the quarter, compared to $0 in the prior year. Management cited the current economic environment and recent Federal Open Market Committee interest rate increases as factors justifying this provision. Additionally, non-interest expense decreased by 5.9% to $2.1 million, and income tax expense increased to $291,000.
At September 30, 2026, the company reported total assets of $356.3 million, a decrease of $6.1 million from the previous quarter. This decline was driven by a $4.1 million decrease in loans, net, and a $2.1 million decrease in investment securities. Total deposits decreased by $7.2 million to $253.6 million. Despite the asset contraction, shareholders' equity increased by 1.3% to $51.0 million, resulting in a book value per share of $6.30.
