HAZARD and FRANKFORT, Ken., Jan. 20 /PRNewswire-FirstCall/ -- Kentucky First Federal Bancorp (Nasdaq: KFFB), the holding company for First Federal Savings and Loan Association of Hazard and First Federal Savings Bank of Frankfort, Kentucky, announced net earnings of $323,000, or $0.04 per diluted share, for the three months ended December 31, 2008, compared to $211,000, or $0.03 per diluted share, for the three months ended December 31, 2007, an increase of $112,000 or 53.1% period to period. Net earnings for the six months ended December 31, 2008, were $635,000, or $0.08 per diluted share, compared to $363,000 or $0.05 per diluted share for the six months ended December 31, 2007.

The increase in net earnings for the quarter ended December 31, 2008 was primarily attributable to an increase in net interest income. The increase in net interest income was primarily attributed to lower interest expense period to period, despite a decline in interest income for the comparable periods. Interest expense decreased $550,000 or 26.9% from $2.0 million to $1.5 million for the quarterly periods ended December 31, 2007 and 2008, respectively, while interest income decreased $335,000 or 9.9% from $3.4 million to $3.1 million for the same time periods, respectively.

At December 31, 2008, assets had decreased $2.7 million, or 1.1%, to $245.0 million compared to $247.7 million at June 30, 2008. This decrease was attributed primarily to a decrease in cash and cash equivalents of $11.3 million, or 70.5%, to $4.7 million at December 31, 2008. Funds from the decrease in cash and cash equivalents were redeployed into loans. Loans receivable, net increased $9.0 million or 5.0% to $191.1 million at December 31, 2008.

At December 31, 2008, the Company reported its book value per share as $7.48.

This press release may contain statements that are forward-looking, as that term is defined by the Private Securities Litigation Act of 1995 or the Securities and Exchange Commission in its rules, regulations and releases. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. All forward-looking statements are based on current expectations regarding important risk factors including, but not limited to, real estate values, the impact of interest rates on financing, changes in general economic conditions, legislative and regulatory changes that adversely affect the business of the Company and changes in the securities markets. Accordingly, actual results may differ from those expressed in the forward-looking statements, and the making of such statements should not be regarded as a representation by the Company or any other person that results expressed therein will be achieved.

Kentucky First Federal Bancorp is the parent company of First Federal Savings and Loan Association, which operates one banking office in Hazard, Kentucky and First Federal Savings Bank, which operates three banking offices in Frankfort, Kentucky. Kentucky First Federal Bancorp shares are traded on the Nasdaq National Market under the symbol KFFB. At December 31, 2008, the Company had approximately 8,124,000 shares outstanding of which approximately 59.6% was held by First Federal MHC.





    SUMMARY OF FINANCIAL HIGHLIGHTS
    Condensed Consolidated Statements of Financial Condition

                                 December 31,           June 30,
                                    2008                  2008
                                (In thousands, except share data)
                                (Unaudited)             (Audited)
    Assets
     Cash and Cash Equivalents     $4,707                $15,966
     Investment Securities         21,637                 22,539
     Loans Available for Sale           0                     86
     Loans Receivable, net        191,097                182,051
     Other Assets                  27,512                 27,013
       Total Assets              $244,953               $247,655

    Liabilities
     Deposits                    $135,917               $137,634
     FHLB Advances                 47,255                 47,801
     Other Liabilities              2,494                  2,427
       Total Liabilities          185,666                187,862
    Shareholders' Equity           59,287                 59,793
    Total Liabilities
     and Equity                  $244,953               $247,655
    Book Value Per Share            $7.48                  $7.44



    Condensed Consolidated Statements of Earnings
    (In thousands, except share data)

                Six months ended December 31,  Three months ended December 31,
                       2008          2007           2008          2007
                          (Unaudited)                   (Unaudited)

    Interest Income   $6,189        $6,737         $3,058        $3,393
    Interest Expense   3,057         4,107          1,497         2,047
    Net Interest
     Income            3,132         2,630          1,561         1,346
    Provision for
     Losses on Loans      15             -              -             -
    Other Operating
     Income              114            88             59            43
    General,
     Administrative, and
     Other Expense     2,292         2,189          1,146         1,079
    Earnings Before
     Federal Income
     Taxes               939           529            474           310
    Federal Income
     Taxes               304           166            151            99
    Net Earnings        $635          $363           $323          $211
    Basic Earnings
     Per Share         $0.08         $0.05          $0.04         $0.03
    Diluted Earnings
     Per Share         $0.08         $0.05          $0.04         $0.03
    Dividends Per
     Share             $0.20         $0.20          $0.10         $0.10

    Weighted average
     outstanding
     shares:
       Basic       7,588,835     7,781,376      7,561,721     7,745,436
       Diluted     7,588,835     7,781,376      7,561,721     7,745,436

SOURCE Kentucky First Federal Bancorp