Kentucky First Federal Bancorp reported its financial results for the three-month period ending September 30, 2024, showing a slight increase in total assets to $375.7 million, up from $374.9 million as of June 30, 2024. Cash and cash equivalents decreased by 5.6% to $17.3 million, while loans held for sale surged to $1.5 million from $110,000 in the previous quarter. The company’s loan portfolio, net of allowance for credit losses, remained stable at $333.2 million, reflecting a modest increase of $1.5 million.

Interest income for the quarter rose to $4.6 million, a 23.7% increase from $3.7 million in the same period last year. This growth was driven by a higher average balance of loans and an increase in the average yield on interest-earning assets, which rose to 5.05%. Net interest income also improved, reaching $1.9 million, up 12% from $1.7 million a year earlier. However, total interest expense increased significantly by 33.2% to $2.8 million, leading to a net loss of $15,000 for the quarter, a notable improvement from the $175,000 loss reported in the same period of 2023.

Non-interest income saw a substantial increase of 85.1% to $137,000, primarily due to higher net gains on loan sales. Conversely, non-interest expenses rose slightly to $2.0 million, driven by increased data processing charges and higher FDIC insurance premiums. The effective tax rate remained relatively stable at 28.6%.

The company’s allowance for credit losses (ACL) was maintained at $2.1 million, representing 50.2% of non-performing loans, which increased to approximately $4.3 million, up from $3.9 million in the previous quarter. The total classified loans as a percentage of total loans stood at 2.0%, with assets classified as substandard totaling $6.6 million.

Strategically, Kentucky First Federal Bancorp is addressing regulatory requirements following a formal agreement with the Office of the Comptroller of the Currency (OCC) due to its designation as being in "troubled condition." The bank is required to maintain specific capital ratios and submit a revised strategic plan focusing on risk management and compliance.

Overall, while the bank experienced a net loss, improvements in interest income and non-interest income, alongside a stable loan portfolio, indicate a cautious recovery amidst ongoing regulatory challenges.