Kentucky First Federal Bancorp reported higher earnings for the three months ended September 30, 2026, as stronger net interest income and lower expenses more than offset a larger credit-loss provision and higher taxes. Net income rose to $919,000, or 11 cents per diluted share, from $344,000, or 4 cents per share, a year earlier.
The results reflect improved interest margins: yields on earning assets increased while the average cost of interest-bearing funds declined. The company also reported lower average balances of both interest-earning assets and interest-bearing liabilities.
Key details
- Net interest income rose 25.5% to $3.1 million, an increase of $639,000 from the prior-year quarter.
- Interest income increased 3.1% to $5.2 million, while interest expense fell 18.8% to $2.1 million.
- The average yield on interest-earning assets increased 38 basis points to 5.97%. The company attributed the higher loan yield in part to new loans carrying higher rates and adjustable-rate mortgages repricing upward.
- The average rate paid on interest-bearing liabilities fell 50 basis points to 2.82%, the main reason interest expense declined.
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Average interest-earning assets decreased 3.5% to $349.1 million, while average interest-bearing liabilities fell 4.4% to $293.0 million.
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Non-interest expense declined 5.9%, or $130,000, from a year earlier. Lower outside service fees, FDIC insurance premiums, employee and compensation costs, and regulatory assessments contributed to the reduction.
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Non-interest income increased 18.3% to $181,000, mainly because net gains on loan sales rose by $27,000.
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The provision for credit losses was $40,000, compared with no provision in the year-earlier quarter. Management said it considered the current economic environment and recent and potential interest-rate increases, which it said could add pressure on borrowers and affect the loan portfolio.
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Income tax expense increased to $291,000 from $109,000, reflecting higher earnings. The release said pretax income was $757,000 higher than in the prior-year quarter.
What changes for investors: The quarter’s improvement came primarily from a wider contribution between interest earned on assets and interest paid on funding, alongside lower operating costs. At the same time, the company increased its credit-loss provision, citing borrower and economic risks.