Kentucky First Federal Bancorp Releases Earnings

HAZARD, Ky. and FRANKFORT, Ky., Nov. 4 /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 a net loss of $362,000 or $(0.05) diluted
earnings per share for the three months ended September 30, 2009, compared to
net income of $312,000 or $0.04 diluted earnings per share for the three
months ended September 30, 2008, a decrease of $674,000.

The decrease in net earnings for the quarter ended September 30, 2009 was
primarily attributable to a provision for loan loss of $968,000 compared to a
provision of $15,000 in the prior year's quarter. The provision was chiefly
the result of the Company's establishing specific valuation reserves in
response to deterioration in the financial position of a single borrower.
Also contributing to the decrease in net earnings was a decrease in net
interest income. Interest income decreased $237,000 or 7.6% from $3.1 million
for the quarter ended September 30, 2008 to $2.9 million for the quarter just
ended. While interest expense decreased on a quarter-to-quarter basis, the
decrease of $194,000 or 12.4% was insufficient to offset the decrease in
interest income. Interest expense was $1.4 million for the quarter just
ended. FDIC premiums increased $36,000 or 600.0% to $42,000 for the quarter
ended September 30, 2009, compared to $6,000 for the quarter ended September
30, 2008.

At September 30, 2009 assets had decreased $5.1 million or 2.1% to $235.8
million compared to $240.9 million at June 30, 2009. This decrease was
attributed primarily to a decrease in cash and cash equivalents and investment
securities, which resulted from the Company's efforts to effectively utilize
liquidity by continuing its strategy of funding loans to the extent possible
and then paying down borrowings. Also contributing to the decrease in assets
was the increase in the allowance for loan and lease losses, which increased
$921,000 or 135.8% to $1.6 million at September 30, 2009. FHLB advances
decreased $6.2 million or 15.3% to $34.0 million at September 30, 2009.
Funding for the borrowing reduction came primarily from maturing investment
securities, which decreased $3.6 million or 17.4% to $17.0 million at
September 30, 2009. Additional funding also came from an increase of $1.6
million or 1.1% in deposits, which totaled $141.3 million at September 30,
2009.

At September 30, 2009, the Company reported its book value per share as $7.35.

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, changes in the securities
markets and the Risk Factors described in Item 1A of the Company's Annual
Report on Form 10-K for the year ended June 30, 2009. 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 September 30, 2009, the
Company had approximately 7,867,000 shares outstanding of which approximately
60.1% was held by First Federal MHC.

SUMMARY OF FINANCIAL HIGHLIGHTS

Condensed Consolidated Statements of Financial Condition

September 30, June 30,
2009 2009
---- ----
(In thousands, except share data)
(Unaudited) (Audited)
Assets
Cash and Cash Equivalents $3,236 $4,217
Investment Securities 16,980 20,550
Loans Available for Sale -- 230
Loans Receivable, net 188,378 188,931
Other Assets 27,253 26,973
------ ------
Total Assets $235,847 $240,901
======== ========
Liabilities
Deposits $141,311 $139,743
FHLB Advances 34,005 40,156
Other Liabilities 2,729 2,608
----- -----
Total Liabilities 178,045 182,507
Shareholders' Equity 57,802 58,394
------ ------
Total Liabilities and Equity $235,847 $240,901
======== ========
Book Value Per Share $7.35 $7.42
===== =====

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

Three months ended September 30,
2009 2008
---- ----
(Unaudited)

Interest Income $2,894 $3,131
Interest Expense 1,366 1,560
----- -----
Net Interest Income 1,528 1,571
Provision for Losses on Loans 968 15
Non-interest Income 67 55
Non-interest Expense 1,177 1,146
----- -----
Income (Loss) Before Income Taxes (550) 465
Income Taxes (Benefit) (188) 153
---- ---
Net Income (Loss) $(362) $312
===== ====
Earnings (loss) per share:
Basic $(0.05) 0.04
====== ====
Diluted $(0.05) 0.04
====== ====
Weighted average outstanding shares:
Basic 7,564,576 7,692,010
========= =========
Diluted 7,564,576 7,692,010
========= =========

SOURCE Kentucky First Federal Bancorp

Don Jennings, President, or Clay Hulette, Vice President, of Kentucky First
Federal Bancorp, +1-502-223-1638