What changed in this filing

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Item 1. Financial Statements

2020-11-16 compared with 2020-05-14 · 631 added, 1035 removed, 381 unchanged (81% of the section changed)

Financial Statements

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

First Federal Bancorp

CONSOLIDATED BALANCE SHEETS

thousands, except share data)

September 30,

Cash and due from financial institutions

3 unchanged sentences

Securities available-for-sale

Securities held-to-maturity, at amortized cost- approximate fair value of $641 and $775 at March 31, 2020 and June 30, 2019, respectively

Securities held-to-maturity, at amortized cost- approximate fair value of $582 and $611 at September 30, 2020 and June 30, 2020, respectively

Loans held for sale

Loans, net of allowance of $1,448 and $1,456 at March 31, 2020 and June 30, 2019, respectively

Loans, net of allowance of $1,536 and $1,488 at September 30, 2020 and June 30, 2020, respectively

Real estate owned, net

9 unchanged sentences

Accrued interest payable

Deferred federal income taxes

Accrued federal income taxes

Deferred income taxes

Other liabilities

8 unchanged sentences

Retained earnings

Unearned employee stock ownership plan (ESOP), 33,600 shares and 47,607 shares at March 31, 2020 and June 30, 2019, respectively

Treasury shares at cost, 333,849 and 266,549 common shares at March 31, 2020 and June 30, 2019, respectively

Unearned employee stock ownership plan (ESOP), 24,262 shares and 28,931 shares at September 30, 2020 and June 30, 2020, respectively

Treasury shares at cost, 351,849 and 342,849 common shares at September 30, 2020 and June 30, 2020, respectively

Accumulated other comprehensive income

1 unchanged sentence

Total liabilities and shareholders’

See accompanying notes to condensed consolidated financial statements.

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED STATEMENTS OF

(Dollars in thousands, except per share

Nine months ended

See accompanying

notes to condensed consolidated financial statements.

First Federal Bancorp

CONSOLIDATED STATEMENTS OF OPERATIONS

in thousands, except per share data)

Three months ended

September 30,

Interest income

14 unchanged sentences

Net gain on sales of loans

Net gain (loss) on sales of real

Valuation adjustment for real estate owned

Net gain on sales of real estate owned

Total non-interest income

2 unchanged sentences

Occupancy and equipment

FDIC insurance premiums

Voice and data communications

6 unchanged sentences

Income before income taxes

Federal income tax expense

Income tax expense

EARNINGS PER SHARE

1 unchanged sentence

DIVIDENDS PER SHARE

See accompanying notes to condensed consolidated financial statements.

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

(In thousands)

Nine months ended

See accompanying

notes to condensed consolidated financial statements.

First Federal Bancorp

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended

September 30,

Other comprehensive income, net of tax:

Unrealized holding gains on securities designated as available-for-sale,

net of taxes of $0, $1, $0 and $0 during the respective periods

Unrealized holding gains on securities designated as available-for-sale, net of taxes of $(1), and $0 during the respective periods

Comprehensive income

See accompanying notes to condensed consolidated financial statements.

Kentucky First Federal Bancorp

CONSOLIDATED STATEMENTS OF CHANGES IN

SHAREHOLDERS’

For the nine months ended

(Dollar amounts in thousands, except per

March 31, 2020

comprehensive

Balance at June 30, 2019

Allocation of ESOP shares

Acquisition of shares for Treasury

Cash dividends of $0.30 per common share

Balance at March 31, 2020

March 31, 2019

See accompanying

notes to condensed consolidated financial statements.

First Federal Bancorp

STATEMENTS OF CHANGES IN SHAREHOLDERS’

the three months ended

amounts in thousands, except per share data)

comprehensive

2 unchanged sentences

Acquisition of shares for Treasury

Change in accounting method

Other comprehensive income

Cash dividends of $0.10 per common share

Balance at March 31, 2019

See accompanying notes to condensed consolidated financial statements.

Kentucky First Federal Bancorp

CONSOLIDATED STATEMENTS OF CHANGES IN

SHAREHOLDERS’

For the three months ended

(Dollar amounts in thousands, except per

March 31, 2020

comprehensive

Balance at December 31, 2019

Allocation of ESOP shares

Acquisition of shares for Treasury

Other comprehensive income

Cash dividends of $0.10 per common share

Balance at March 31, 2020

March 31, 2019

Balance at September 30, 2020

comprehensive

Balance at December 31, 2018

Balance at June 30, 2019

Allocation of ESOP shares

2 unchanged sentences

Cash dividends of $0.10 per common share

Balance at March 31, 2019

See accompanying notes to condensed consolidated financial statements.

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED STATEMENTS OF

(In thousands)

Nine months ended

Balance at September 30, 2019

See accompanying

notes to condensed consolidated financial statements.

First Federal Bancorp

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

September 30,

Cash flows from operating activities:

6 unchanged sentences

Net gain on sale of real estate owned

Valuation adjustments of real estate owned

ESOP compensation expense

11 unchanged sentences

Cash flows from investing activities:

Purchase of available-for-sale securities

Purchase of time deposits in other financial institutions

Maturities of time deposits in other financial institutions

2 unchanged sentences

Available for sale

Purchase of FHLB stock

Loans originated for investment, net of principal collected

4 unchanged sentences

Cash flows from financing activities:

(decrease) in deposits

Net increase in deposits

Payments by borrowers for taxes and insurance, net

4 unchanged sentences

Net cash provided by (used in) financing activities

in cash and cash equivalents

Net increase in cash and cash equivalents

Beginning cash and cash equivalents

Ending cash and cash equivalents

See accompanying notes to condensed consolidated financial statements.

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED STATEMENTS OF

CASH FLOWS (CONTINUED)

(In thousands)

Nine months ended

See accompanying

notes to condensed consolidated financial statements.

First Federal Bancorp

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

Three months ended

September 30,

Supplemental disclosure of cash flow information:

4 unchanged sentences

Loans made on sale of real estate owned

See accompanying notes to condensed consolidated financial statements.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

March 31, 2020

The Kentucky First Federal Bancorp (“Kentucky

or the “Company”) was incorporated under federal law in March 2005, and is the mid-tier holding company

for First Federal Savings and Loan Association of Hazard, Hazard, Kentucky (“First Federal of Hazard”) and Frankfort

First Bancorp, Inc.

See accompanying

notes to condensed consolidated financial statements.

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Kentucky First Federal Bancorp (“Kentucky First”

or the “Company”) was incorporated under federal law

in March 2005, and is the mid-tier holding company for First Federal Savings and Loan Association of Hazard, Hazard, Kentucky

(“First Federal of Hazard”) and Frankfort First Bancorp, Inc.

(“Frankfort First”).

Frankfort First is the holding company for First Federal Savings Bank of Kentucky,

Frankfort, Kentucky (“First Federal of Kentucky”).

First Federal of Hazard and First Federal of Kentucky (hereinafter

collectively the “Banks”) are Kentucky First’s primary operations, which consist of operating the Banks as two

independent, community-oriented savings institutions.

In December 2012, the Company acquired CKF

Bancorp, Inc., a savings and loan holding company which operated three banking locations in Boyle and Garrard Counties in Kentucky.

In accounting for the transaction, the assets and liabilities of CKF Bancorp were recorded on the books of First Federal of Kentucky

in accordance with accounting standard ASC 805, Business Combinations.

Frankfort First is

the holding company for First Federal Savings Bank of Kentucky, Frankfort, Kentucky (“First Federal of Kentucky”).

First Federal of Hazard and First Federal of Kentucky (hereinafter collectively the “Banks”) are Kentucky First’s

primary operations, which consist of operating the Banks as two independent, community-oriented savings institutions.

December 2012, the Company acquired CKF Bancorp, Inc., a savings and loan holding company which operated three banking locations

in Boyle and Garrard Counties in Kentucky.

In accounting for the transaction, the assets and liabilities of CKF Bancorp were recorded

on the books of First Federal of Kentucky in accordance with accounting standard ASC 805, Business Combinations.

Basis of Presentation

The accompanying unaudited condensed consolidated

financial statements, which represent the condensed consolidated balance sheets and results of operations of the Company, were

prepared in accordance with the instructions for Form 10-Q and, therefore, do not include information or footnotes necessary for

a complete presentation of financial position, results of operations and cash flows in conformity with U.S.

generally accepted

accounting principles.

However, in the opinion of management, all adjustments (consisting of only normal recurring adjustments)

which are necessary for a fair presentation of the condensed consolidated financial statements have been included.

of operations for the nine-month period ended March 31, 2020, are not necessarily indicative of the results which may be expected

for an entire fiscal year.

The condensed consolidated balance sheet as of June 30, 2019 has been derived from the audited consolidated

balance sheet as of that date.

Certain information and note disclosures normally included in the Company’s annual financial

statements prepared in accordance with U.S.

generally accepted accounting principles have been condensed or omitted.

These condensed

consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included

in the Company’s Form 10-K annual report for 2019 filed with the Securities and Exchange Commission.

Principles of Consolidation

- The consolidated financial statements include the accounts of the Company, Frankfort First, and its wholly-owned banking subsidiaries,

First Federal of Hazard and First Federal of Kentucky (collectively hereinafter “the Banks”).

All intercompany transactions

and balances have been eliminated in consolidation.

Reclassifications - Certain

amounts presented in prior periods have been reclassified to conform to the current period presentation.

Such reclassifications

had no impact on prior years’

accompanying unaudited condensed consolidated financial statements, which represent the condensed consolidated balance sheets

and results of operations of the Company, were prepared in accordance with the instructions for Form 10-Q and, therefore, do not

include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows

in conformity with U.S.

generally accepted accounting principles.

However, in the opinion of management, all adjustments (consisting

of only normal recurring adjustments) which are necessary for a fair presentation of the condensed consolidated financial statements

have been included.

The results of operations for the three-month period ended September 30, 2020, are not necessarily indicative

of the results which may be expected for an entire fiscal year.

The condensed consolidated balance sheet as of June 30, 2020 has

been derived from the audited consolidated balance sheet as of that date.

Certain information and note disclosures normally included

in the Company’s annual financial statements prepared in accordance with U.S.

generally accepted accounting principles have

been condensed or omitted.

These condensed consolidated financial statements should be read in conjunction with the consolidated

financial statements and notes thereto included in the Company’s Form 10-K annual report for 2020 filed with the Securities

and Exchange Commission.

of Consolidation - The consolidated financial statements include the accounts of the Company, Frankfort First, and its

wholly-owned banking subsidiaries, First Federal of Hazard and First Federal of Kentucky (collectively hereinafter “the

Banks”).

All intercompany transactions and balances have been eliminated in consolidation.

Reclassifications -

Certain amounts presented in prior periods may have been reclassified to conform to the current period presentation.

reclassifications had no impact on prior years’

net income or shareholders’

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

Basis of Presentation (continued)

New Accounting Standards

FASB ASC 326 - In June 2016,

the FASB issued ASU No.

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

of Presentation (continued)

Accounting Standards

ASC 326 - In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments –

Credit Losses (Topic 326):

Measurement of Credit Losses on Financial

The final standard will change estimates for credit losses related to financial assets measured at amortized

cost such as loans, held-to-maturity debt securities, and certain other contracts.

For estimating credit losses, the FASB is replacing

the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model.

Company will now use forward-looking information to enhance its credit loss estimates.

The amendment requires enhanced disclosures

to aid investors and other users of financial statements to better understand significant estimates and judgments used in estimating

credit losses, as well as the credit quality and underwriting standards of our portfolio.

The largest impact to the Company will

be on its allowance for loan and lease losses, although the ASU also amends the accounting for credit losses on available-for-sale

debt securities and purchased financial assets with credit deterioration.

The standard is effective for public companies for annual

periods and interim periods within those annual periods beginning after December 15, 2019.

However, the FASB has delayed the implementation

of the ASU for smaller reporting companies until years beginning after December 15, 2022, or in the Company’s case the fiscal

year beginning July 1, 2023.

ASU 2016-13 will be applied through a cumulative effect adjustment to retained earnings (modified-retrospective

approach), except for debt securities for which an other-than-temporary impairment had been recognized before the effective date.

A prospective transition approach is required for these debt securities.

We have formed a functional committee that is assessing

our data and system needs and are evaluating the impact of adopting the new guidance.

We expect to recognize a one-time cumulative

effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard

is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance

on the consolidated financial statements.

However, the Company does expect ASU 2016-13 to add complexity and costs to its current

credit loss evaluation process.

FASB ASC 842 –

2017, the FASB issued ASU No.

2016-02, Leases (Topic 842).

This guidance changes lease accounting by introducing the core

principle that a lessee should recognize the assets and liabilities that arise from operating leases under the premise that all

leases create an asset and a liability for the lessee in accordance with FASB Concepts Statement No.

6, Elements of Financial

The Company adopted this ASU effective July 1, 2019, with no recordation of right-to-use lease assets or operating

lease liabilities, because the level of operating leases was determined to be immaterial.

FASB ASC 350 –

2017, the FASB issued ASU No.

2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment.

This guidance modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds

its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value.

business entities, the amendments in this update are effective for fiscal years, and the interim periods within those fiscal years,

beginning after December 15, 2019, or July 1, 2020, with respect to the Company.

FASB ASC 820 –

2018, the FASB issued ASU No.

2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements

for Fair Value Measurement.

This guidance reduces the level of detail surrounding the processes used by the Company in determining

the fair value of some of its assets.

For public business entities, the amendments in this update are effective for fiscal years,

and the interim periods within those fiscal years, beginning after December 15, 2019, or July 1, 2020, with respect to the Company.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

Basis of Presentation (continued)

New Accounting Standards (continued)

FASB ASC 740–

2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes.

The amendments

in this ASU removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating

income taxes during interim periods.

The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred

taxes for tax goodwill and allocating taxes to members of a consolidated group.

For public business entities, the amendments in

this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, or July

1, 2021, with respect to the Company.

of Credit Losses on Financial Instruments.

The final standard will change estimates for credit losses related to financial

assets measured at amortized cost such as loans, held-to-maturity debt securities, and certain other contracts.

For estimating

credit losses, the FASB is replacing the incurred loss model with an expected loss model, which is referred to as the current

expected credit loss (CECL) model.

The Company will now use forward-looking information to enhance its credit loss estimates.

The amendment requires enhanced disclosures to aid investors and other users of financial statements to better understand significant

estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of our portfolio.

The largest impact to the Company will be on its allowance for loan and lease losses, although the ASU also amends the accounting

for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.

is effective for public companies for annual periods and interim periods within those annual periods beginning after December

However, the FASB has delayed the implementation of the ASU for smaller reporting companies until years beginning after

December 15, 2022, or in the Company’s case the fiscal year beginning July 1, 2023.

ASU 2016-13 will be applied through

a cumulative effect adjustment to retained earnings (modified-retrospective approach), except for debt securities for which an

other-than-temporary impairment had been recognized before the effective date.

A prospective transition approach is required for

these debt securities.

We have formed a functional committee that is assessing our data and system needs and are evaluating the

impact of adopting the new guidance.

We expect to recognize a one-time cumulative effect adjustment to the allowance for loan

losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the

magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements.

However, the Company does expect ASU 2016-13 to add complexity and costs to its current credit loss evaluation process.

ASC 820 –

In August 2018, the FASB issued ASU No.

2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes

to the Disclosure Requirements for Fair Value Measurement.

This guidance reduces the level of detail surrounding the processes

used by the Company in determining the fair value of some of its assets.

The Company adopted this ASU effective July 1, 2020,

with no material impact to the financial statements.

ASC 740–

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting

for Income Taxes.

The amendments in this ASU removes certain exceptions for recognizing deferred taxes for investments, performing

intraperiod allocation and calculating income taxes during interim periods.

The ASU also adds guidance to reduce complexity in

certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group.

For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal

years, beginning after December 15, 2020, or July 1, 2021, with respect to the Company.

Early adoption is permitted.

We do not anticipate a significant impact to our consolidated

financial statements.

Other accounting standards that have been

issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s

financial position, results of operations or cash flows.

anticipate a significant impact to our consolidated financial statements.

accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have

a material impact on the Company’s financial position, results of operations or cash flows.

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Earnings Per Share

Diluted earnings per share is computed

taking into consideration common shares outstanding and dilutive potential common shares to be issued or released under the Company’s

share-based compensation plans.

The factors used in the basic and diluted earnings per share computations follow:

Nine months ended

earnings per share is computed taking into consideration common shares outstanding and dilutive potential common shares to be

issued or released under the Company’s share-based compensation plans.

The factors used in the basic and diluted earnings

per share computations follow:

Three months ended

(in thousands)

September 30,

Net income allocated to common shareholders, basic and diluted

Nine months ended

Three months ended

Earnings per share, basic and diluted

Weighted average common shares outstanding, basic and diluted

There were no stock option shares outstanding

for the nine- or three-month periods ended March 31, 2020 and 2019.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

were no stock option shares outstanding for the three-month periods ended September 30, 2020 and 2019.

Investment Securities

The following table summarizes the amortized

cost and fair value of securities available-for-sale and securities held-to-maturity at March 31, 2020 and June 30, 2019, the corresponding

amounts of gross unrealized gains recognized in accumulated other comprehensive income and gross unrecognized gains and losses:

March 31, 2020

following table summarizes the amortized cost and fair value of securities available-for-sale and securities held-to-maturity

at September 30, 2020 and June 30, 2020, the corresponding amounts of gross unrealized gains recognized in accumulated other comprehensive

income and gross unrecognized gains and losses:

September 30, 2020

(in thousands)

6 unchanged sentences

Available-for-sale Securities

Treasury securities

Agency mortgage-backed:

1 unchanged sentence

Agency mortgage-backed:

The amortized cost and fair market value

of securities as of March 31, 2020, by contractual maturity, are shown below.

Actual maturities may differ from contractual maturities,

because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Securities without

a single maturity, primarily mortgage-backed securities, are not shown.

(in thousands)

Available for sale:

Within one year

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Investment Securities (continued)

Our pledged securities (including overnight

and time deposits in other financial institutions) totaled $1.9 million and $2.0 million at March 31, 2020 and June 30, 2019, respectively.

We evaluated securities in unrealized loss

positions for evidence of other-than-temporary impairment, considering duration, severity, financial condition of the issuer, our

intention to sell or requirement to sell.

Those securities were agency mortgage backed securities, which carry a very limited amount

Also, we have no intention to sell nor feel that we will be compelled to sell such securities before maturity.

our evaluation, no impairment has been recognized through earnings.

pledged securities (including overnight and time deposits in other financial institutions) totaled $1.9 million and $1.9 million

at September 30, 2020 and June 30, 2020, respectively.

evaluated securities in unrealized loss positions for evidence of other-than-temporary impairment, considering duration, severity,

financial condition of the issuer, our intention to sell or requirement to sell.

Those securities were agency mortgage backed

securities, which carry a very limited amount of risk.

Also, we have no intention to sell nor feel that we will be compelled to

sell such securities before maturity.

Based on our evaluation, no impairment has been recognized through earnings.

Loans receivable

The composition of the loan portfolio was

composition of the loan portfolio was as follows:

September 30,

(in thousands)

6 unchanged sentences

Allowance for loan losses

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

Loans receivable (continued)

The following table presents the activity

in the allowance for loan losses by portfolio segment for the nine months ended March 31, 2020:

(in thousands)

Provision for

Residential real estate:

One- to four-family

Nonresidential real estate

Commercial nonmortgage

Consumer and other:

Loans on deposits

The following table presents the activity

in the allowance for loan losses by portfolio segment for the three months ended March 31, 2020:

(in thousands)

Provision for

Residential real estate:

One- to four-family

Nonresidential real estate

Commercial nonmortgage

Consumer and other:

Loans on deposits

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

The following table presents the activity

in the allowance for loan losses by portfolio segment for the nine months ended March 31, 2019:

following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September

(in thousands)

6 unchanged sentences

Loans on deposits

The following table presents the activity

in the allowance for loan losses by portfolio segment for the three months ended March 31, 2019:

following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September

(in thousands)

Provision for

Residential real estate:

4 unchanged sentences

Loans on deposits

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

The following table presents the balance

in the allowance for loan losses and the recorded investment in loans by portfolio class and based on impairment method as of March

The recorded investment in loans excludes accrued interest receivable due to immateriality.

March 31, 2020:

following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio class

and based on impairment method as of September 30, 2020.

The recorded investment in loans excludes accrued interest receivable

due to immateriality.

September 30, 2020:

(in thousands)

9 unchanged sentences

Loans on deposits

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

The following tables present the balance

in the allowance for loan losses and the recorded investment in loans by portfolio class and based on impairment method as of June

following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio class

and based on impairment method as of June 30, 2020.

June 30, 2020:

10 unchanged sentences

Loans on deposits

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

Loans receivable (continued)

The following table presents loans individually

evaluated for impairment by class of loans as of and for the nine months ended March 31:

(in thousands)

With no related allowance recorded:

Residential real estate:

One- to four-family

Nonresidential real estate

Purchased credit-impaired loans

With an allowance recorded:

One- to four-family

The following table presents interest income

on loans individually evaluated for impairment by class of loans for the three months ended March 31:

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

receivable (continued)

following table presents interest income on loans individually evaluated for impairment by class of loans for the three months

ended September 30:

(in thousands)

Average Recorded Investment

Income Recognized

Cash Basis Income Recognized

Average Recorded Investment

Cash Basis Income Recognized

With no related allowance recorded:

Residential real estate:

One- to four-family

3 unchanged sentences

One- to four-family

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

Loans receivable (continued)

The following table presents the recorded

investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of March 31, 2020 and June 30, 2019:

March 31, 2020

following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans

as of September 30, 2020 and June 30, 2020:

September 30, 2020

June 30, 2020

8 unchanged sentences

Commercial and industrial

One- to four-family loans in process of

foreclosure totaled $654,000 and $1.2 million at March 31, 2020 and June 30, 2019, respectively.

Troubled Debt Restructurings:

A Troubled Debt Restructuring (“TDR”)

is the situation where the Bank grants a concession to the borrower that the Banks would not otherwise have considered due to the

borrower’s financial difficulties.

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

receivable (continued)

to four-family loans in process of foreclosure totaled $563,000 and $694,000 at September 30, 2020 and June 30, 2020, respectively.

Debt Restructurings:

Troubled Debt Restructuring (“TDR”) is the situation where the Bank grants a concession to the borrower that the Banks

would not otherwise have considered due to the borrower’s financial difficulties.

All TDRs are considered “impaired.”

6 unchanged sentences

The Company elected to adopt these provisions of the CARES Act.

At March 31, 2020 and June

30, 2019, the Company had $1.8 million and $1.6 million of loans classified as TDRs, respectively.

Of the TDRs at March 31, 2020,

approximately 22.5% were related to the borrower’s completion of Chapter 7 bankruptcy proceedings with no reaffirmation of

the debt to the Banks.

During the nine months ended March 31,

2020, the Company had three loans restructured as TDRs.

One borrower refinanced a piece of one- to four-family, non-owner occupied,

residential property to bring to current amounts owed on other loans with the Bank.

Because the borrower’s financial condition

had deteriorated, it was unlikely that the borrower could have secured financing elsewhere.

The restructured loan is collateralized

and cross-collateralized by real estate.

Another single family residential borrower filed for Chapter 7 bankruptcy protection and

did not reaffirm the debt personally, although the Company’s collateral position remains intact.

Finally, a first and second

mortgage on an 8-plex were refinanced into a single loan with a slightly extended maturity term and a lower interest rate, which

was consistent with similarly-priced comparable loans at the time of refinance.

During the nine months ended March 31,

2019, the Company had two loans restructured as TDRs.

A second mortgage loan of $219,000 was renewed and an additional $30,000

was loaned to a borrower to finish construction of an 8-plex, because construction project had experienced cost overruns.

carries the first mortgage on this project and both the primary and secondary loans are secured by the 8-plex and additional real

estate collateral.

The Company also refinanced an existing single-family mortgage loan and provided additional funds to a borrower

attempting to consolidate his debt.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

Loans receivable (continued)

The following table summarizes TDR loan

modifications that occurred during the nine months ended March 31, 2020 and 2019, and their performance, by modification type:

As of September 30, 2020,

the Banks had granted deferrals to 96 loans totaling $18.1 million.

At September 30, 2020, 81 loans totaling $16.2 million had

completed their approved deferral periods and $16.0 million or 98.6% had returned to normal repayment status.

At September 30,

2020, 15 loans totaling $1.9 million remained on their original deferral periods.

September 30, 2020 and June 30, 2020, the Company had $1.8 million and $1.9 million of loans classified as TDRs, respectively.

Of the TDRs at September 30, 2020, approximately 23.7% were related to the borrower’s completion of Chapter 7 bankruptcy

proceedings with no reaffirmation of the debt to the Banks.

the three months ended September 30, 2020, the Company had no loans restructured as TDRs.

the three months ended September 30, 2019, the Company had one loan restructured as a TDR.

A borrower refinanced a piece of one-

to four-family, non-owner occupied, residential property to bring to current amounts owed on other loans with the Bank.

the borrower’s financial condition had deteriorated, it was unlikely that the borrower could have secured financing elsewhere.

The restructured loan is collateralized and cross-collateralized by real estate.

following table summarizes TDR loan modifications that occurred during the three months ended September 30, 2019, and their performance,

by modification type:

(in thousands)

7 unchanged sentences

Restructurings

Nine months ended March 31, 2020

Three months ended September 30, 2019

Residential real estate:

Terms extended

Terms extended and additional funds advanced

Chapter 7 bankruptcy

Nine months ended March 31, 2019

Residential real estate:

Terms extended

There were no TDR loan modifications during

the three months ended March 31, 2020 or 2019.

No TDRs defaulted during the nine-month periods ended March 31, 2020 or 2019.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

Loans receivable (continued)

The following table presents the aging

of the principal balance outstanding in past due loans as of March 31, 2020, by class of loans:

TDRs defaulted during the three-month periods ended September 30, 2020 or 2019.

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

receivable (continued)

following table presents the aging of the principal balance outstanding in past due loans as of September 30, 2020, by class of

(in thousands)

30-89 Days Past Due

Residential real estate:

4 unchanged sentences

Loans on deposits

The following tables present the aging

of the principal balance outstanding in past due loans as of June 30, 2019, by class of loans:

following tables present the aging of the principal balance outstanding in past due loans as of June 30, 2020, by class of loans:

(in thousands)

4 unchanged sentences

Loans on deposits

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

Credit Quality Indicators:

The Company categorizes loans into risk

categories based on relevant information about the ability of borrowers to service their debt such as:

current financial information,

historical payment experience, credit documentation, public information, and current economic trends, among other factors.

Company analyzes loans individually by classifying the loans as to credit risk.

This analysis is performed on an annual basis.

Quality Indicators:

Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt

current financial information, historical payment experience, credit documentation, public information, and current economic

trends, among other factors.

The Company analyzes loans individually by classifying the loans as to credit risk.

This analysis

is performed on an annual basis.

The Company uses the following definitions for risk ratings:

Special Mention.

classified as special mention have a potential weakness that deserves management’s close attention.

If left uncorrected,

these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit

position at some future date.

Loans classified

as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged,

Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.

They are characterized

by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Loans classified

as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses

make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and

Loans not meeting the criteria above that

are analyzed individually as part of the above-described process are considered to be pass rated loans.

Loans listed that are not

rated are included in groups of homogeneous loans and are evaluated for credit quality based on performing status.

See the aging

of past due loan table above.

As of March 31, 2020, and based on the most recent analysis performed, the risk category of loans

by class of loans is as follows:

Loans classified as special mention have a potential weakness that deserves management’s close attention.

left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s

credit position at some future date.

Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or

of the collateral pledged, if any.

Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation

They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies

are not corrected.

Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic

that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly

questionable and improbable.

not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass

Loans listed that are not rated are included in groups of homogeneous loans and are evaluated for credit quality

based on performing status.

See the aging of past due loan table above.

As of September 30, 2020, and based on the most recent

analysis performed, the risk category of loans by class of loans is as follows:

(in thousands)

4 unchanged sentences

Loans on deposits

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

At June 30, 2019, the risk category of

loans by class of loans was as follows:

June 30, 2020, the risk category of loans by class of loans was as follows:

(in thousands)

4 unchanged sentences

Loans on deposits

Purchased Credit Impaired Loans:

The Company purchased loans during fiscal

year 2013 for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable,

at acquisition, that all contractually required payments would not be collected.

The carrying amount of those loans, net of a purchase

credit discount of $351,000 and $351,000 at March 31, 2020 and June 30, 2019, respectively, is as follows:

Credit Impaired Loans:

Company purchased loans during fiscal year 2013 for which there was, at acquisition, evidence of deterioration of credit quality

since origination and it was probable, at acquisition, that all contractually required payments would not be collected.

amount of those loans, net of a purchase credit discount of $351,000 and $351,000 at September 30, 2020 and June 30, 2020, respectively,

is as follows:

(in thousands)

September 30,

One- to four-family residential real estate

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

Accretable yield, or income expected to be collected, is as follows:

yield, or income expected to be collected, is as follows:

(in thousands)

September 30,

Twelve months

3 unchanged sentences

Balance at end of period

For those purchased loans disclosed above,

the Company made no increase in allowance for loan losses for the year ended June 30, 2019, nor for the nine-month period ended

March 31, 2020.

those purchased loans disclosed above, the Company made no increase in allowance for loan losses for the year ended June 30, 2020,

nor for the three-month period ended September 30, 2020.

Neither were any allowance for loan losses reversed during those periods.

Disclosures About Fair Value of Assets

and Liabilities

ASC topic 820 defines fair value as the

price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants

(exit price) at the measurement date.

ASC topic 820 also establishes a fair value hierarchy which requires an entity to maximize

the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes six

levels of inputs that may be used to measure fair value:

Level 1 –

prices in active markets for identical assets or liabilities.

Level 2 –

inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;

quoted prices in active markets that

are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full

term of the assets or liabilities.

Level 3 –

inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Following is a description of the valuation

methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to

the valuation hierarchy.

Where quoted market prices are available

in an active market, securities are classified within Level 1 of the valuation hierarchy.

If quoted market prices are not available,

then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics.

Level 2 securities

include agency mortgage-backed securities and agency bonds.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

Disclosures About Fair Value of Assets

and Liabilities (continued)

Impaired Loans

At the time a loan is considered impaired,

it is evaluated for loss based on the fair value of collateral securing the loan if the loan is collateral dependent.

is identified, a specific allocation will be established as part of the allowance for loan losses such that the loan’s net

carrying value is at its estimated fair value.

Impaired loans carried at fair value generally receive specific allocations of the

allowance for loan losses.

For collateral-dependent loans, fair value is commonly based on recent real estate appraisals.

appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.

Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable

sales and income data available.

Such adjustments are usually significant and typically result in a Level 3 classification of the

inputs for determining fair value.

Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s

financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market

conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business,

resulting in a Level 3 fair value classification.

Impaired loans are evaluated on a quarterly basis for additional impairment and

adjusted accordingly.

Other Real Estate

Assets acquired through or instead of loan

foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.

are subsequently accounted for at lower of cost or fair value less estimated costs to sell.

Fair value is commonly based on recent

real estate appraisals.

These appraisals may utilize a single valuation approach or a combination of approaches including comparable

sales and the income approach.

Adjustments are routinely made in the appraisal process by the independent appraisers to adjust

for differences between the comparable sales and income data available.

Such adjustments are usually significant and typically

result in a Level 3 classification of the inputs for determining fair value.

Financial assets measured at fair value

on a recurring basis are summarized below:

Disclosures About Fair Value of Assets and Liabilities

topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants (exit price) at the measurement date.

ASC topic 820 also establishes a fair value hierarchy

which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair

The standard describes six levels of inputs that may be used to measure fair value:

Quoted prices in active markets for identical assets or liabilities.

Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;

quoted prices

in active markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for

substantially the full term of the assets or liabilities.

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value

of the assets or liabilities.

is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification

of such instruments pursuant to the valuation hierarchy.

quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy.

quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with

similar characteristics.

Level 2 securities include agency mortgage-backed securities and agency bonds.

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Disclosures About Fair Value of Assets and Liabilities (continued)

the time a loan is considered impaired, it is evaluated for loss based on the fair value of collateral securing the loan if the

loan is collateral dependent.

If a loss is identified, a specific allocation will be established as part of the allowance for

loan losses such that the loan’s net carrying value is at its estimated fair value.

Impaired loans carried at fair value

generally receive specific allocations of the allowance for loan losses.

For collateral-dependent loans, fair value is commonly

based on recent real estate appraisals.

These appraisals may utilize a single valuation approach or a combination of approaches

including comparable sales and the income approach.

Adjustments are routinely made in the appraisal process by the independent

appraisers to adjust for differences between the comparable sales and income data available.

Such adjustments are usually significant

and typically result in a Level 3 classification of the inputs for determining fair value.

Non-real estate collateral may be valued

using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based

on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s

expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification.

loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing

a new cost basis.

These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell.

value is commonly based on recent real estate appraisals.

These appraisals may utilize a single valuation approach or a combination

of approaches including comparable sales and the income approach.

Adjustments are routinely made in the appraisal process by the

independent appraisers to adjust for differences between the comparable sales and income data available.

Such adjustments are

usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

assets measured at fair value on a recurring basis are summarized below:

Fair Value Measurements Using

1 unchanged sentence

Quoted Prices

March 31, 2020

September 30, 2020

Agency mortgage-backed:

June 30, 2020

Treasury notes

Agency mortgage-backed:

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

Disclosures About Fair Value of Assets

and Liabilities (continued)

Assets measured at fair value on a non-recurring

basis are summarized below:

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Disclosures About Fair Value of Assets and Liabilities (continued)

measured at fair value on a non-recurring basis are summarized below:

Fair Value Measurements Using

1 unchanged sentence

Quoted Prices

March 31, 2020

Other real estate owned, net

One- to four-family

June 30, 2020

One- to four-family

Other real estate owned, net

One- to four-family

There were no impaired loans, which was

measured using the fair value of the collateral for collateral-dependent loans, at March 31, 2020, and seven impaired loans at

June 30, 2019.

Amounts charged off were $9,000 for the nine-month period ended March 31, 2020 and $23,000 off for the nine-month

period ended March 31, 2019.

Other real estate owned was written down

$36,000 and $12,000 during the nine- and three-months ended March 31, 2020.

Other real estate owned measured at fair value less

costs to sell, had a carrying amount of $577,000 and $117,000 at March 31, 2020 and June 30, 2019, respectively.

Other real estate

owned was written down $54,000 and $0 during the nine- and three-month periods ended March 31, 2019, respectively.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

Disclosures About Fair Value of Assets

and Liabilities (continued)

The following table presents quantitative

information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at

March 31, 2020 and June 30, 2019:

March 31, 2020

(in thousands)

Foreclosed and repossessed assets:

One- to four-family

Sales comparison approach

Adjustments for differences between comparable sales

-2.7% to 41.2%

There were no impaired loans, which were measured

using the fair value of the collateral for collateral-dependent loans, at September 30, 2020, or at June 30, 2020.

charge off of $8,000 for the three-month period ended September 30, 2019.

There was no other real estate owned written

down during the three-months ended September 30, 2020 or 2019.

Other real estate owned measured at fair value less costs to sell,

had a carrying amount of $577,000 at September 30, 2020.

following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at

fair value on a non-recurring basis at September 30, 2020 and June 30, 2020:

June 30, 2020

(in thousands)

One- to four-family

Sales comparison approach

Adjustment for differences between comparable sales

25.3% to -50.6%

Foreclosed and repossessed assets:

1 unchanged sentence

Sales comparison approach

Adjustments for differences between comparable sales

Adjustments for

differences between

comparable sales

-2.7% to 41.2%

The following is a disclosure of the fair

value of financial instruments, both assets and liabilities, whether or not recognized in the consolidated balance sheet, for which

it is practicable to estimate that value.

For financial instruments where quoted market prices are not available, fair values are

based on estimates using present value and other valuation methods.

The methods used are greatly affected by

the assumptions applied, including the discount rate and estimates of future cash flows.

Therefore, the fair values presented may

not represent amounts that could be realized in an exchange for certain financial instruments.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

Disclosures About Fair Value of Assets

and Liabilities (continued)

Based on the foregoing methods and assumptions,

the carrying value and fair value of the Company’s financial instruments at March 31, 2020 and June 30, 2019 are as follows:

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Disclosures About Fair Value of Assets and Liabilities (continued)

following is a disclosure of the fair value of financial instruments, both assets and liabilities, whether or not recognized in

the consolidated balance sheet, for which it is practicable to estimate that value.

For financial instruments where quoted market

prices are not available, fair values are based on estimates using present value and other valuation methods.

methods used are greatly affected by the assumptions applied, including the discount rate and estimates of future cash flows.

Therefore, the fair values presented may not represent amounts that could be realized in an exchange for certain financial instruments.

on the foregoing methods and assumptions, the carrying value and fair value of the Company’s financial instruments at September

30, 2020 and June 30, 2020 are as follows:

Fair Value Measurements at

March 31, 2020 Using

September 30, 2020 Using

(in thousands)

20 unchanged sentences

Held-to-maturity securities

Loans held for sale

Loans receivable –

5 unchanged sentences

Accrued interest payable

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (continued)

March 31, 2020

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Other Comprehensive Income (Loss)

The Company’s other comprehensive

income is comprised solely of unrealized gains and losses on available-for-sale securities.

The following is a summary of the accumulated

other comprehensive income balances, net of tax:

Company’s other comprehensive income is comprised solely of unrealized gains and losses on available-for-sale securities.

The following is a summary of the accumulated other comprehensive income balances, net of tax:

September 30,

Beginning balance

1 unchanged sentence

Ending balance

Other comprehensive income (loss) components

and related tax effects for the periods indicated were as follows:

Nine months ended

(in thousands)

Unrealized holding gains (losses) on available-for-sale securities

Net-of-tax amount

Three months ended

comprehensive income (loss) components and related tax effects for the periods indicated were as follows:

September 30,

(in thousands)

1 unchanged sentence

Net-of-tax amount

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Forward-Looking Statements

Certain statements contained in this report

that are not historical facts are forward-looking statements that are subject to certain risks and uncertainties.

When used herein,

the terms “anticipates,”

First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

RESULTS OF OPERATIONS

Forward-Looking

statements contained in this report that are not historical facts are forward-looking statements that are subject to certain risks

and uncertainties.

When used herein, the terms “anticipates,”

“plans,”

1 unchanged sentence

“believes,”

and similar expressions

as they relate to Kentucky First Federal Bancorp or its management are intended to identify such forward looking statements.

First Federal Bancorp’s actual results, performance or achievements may materially differ from those expressed or implied

in the forward-looking statements.

Risks and uncertainties that could cause or contribute to such material differences include,

but are not limited to, general economic conditions, prices for real estate in the Company’s market areas, interest rate

environment, competitive conditions in the financial services industry, changes in law, governmental policies and regulations,

rapidly changing technology affecting financial services, the potential effects of the COVID-19 pandemic on the local and national

economic environment, on our customers and on our operations (as well as any changes to federal, state and local government laws,

regulations and orders in connection with the pandemic), and the other matters mentioned in Item 1A of the Company’s Annual

Report on Form 10-K for the year ended June 30, 2019.

Except as required by applicable law or regulation, the Company does not

undertake the responsibility, and specifically disclaims any obligation, to release publicly the result of any revisions that may

be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the

occurrence of anticipated or unanticipated events.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Average Balance Sheets

The following table represents the average

balance sheets for the nine month periods ended March 31, 2020 and 2019, along with the related calculations of tax-equivalent

net interest income, net interest margin and net interest spread for the related periods.

Nine Months Ended March 31,

And Dividends

(Dollars in thousands)

Interest-earning assets:

Mortgage-backed securities

Other securities

Other interest-earning assets

Total interest-earning assets

Allowance for loan losses

Non-interest-earning assets

Interest-bearing liabilities:

Demand deposits

Certificates of deposit

Total deposits

Total interest-bearing liabilities

Noninterest-bearing demand deposits

Noninterest-bearing liabilities

Total liabilities

Shareholders’

Total liabilities and shareholders’

Net interest spread

Net interest margin

Average interest-earning assets to average interest-bearing liabilities

Includes loan fees, immaterial in amount, in both interest income and the calculation of yield on loans.

Also includes loans on nonaccrual status.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Average Balance Sheets (continued)

The following table represents the average

balance sheets for the three-month periods ended March 31, 2020 and 2019, along with the related calculations of tax-equivalent

net interest income, net interest margin and net interest spread for the related periods.

Three Months Ended December 31,

and similar expressions as they relate to Kentucky First Federal Bancorp or its management are intended to identify such forward

looking statements.

Kentucky First Federal Bancorp’s actual results, performance or achievements may materially differ from

those expressed or implied in the forward-looking statements.

Risks and uncertainties that could cause or contribute to such material

differences include, but are not limited to, general economic conditions, prices for real estate in the Company’s market

areas, interest rate environment, competitive conditions in the financial services industry, changes in law, governmental policies

and regulations, rapidly changing technology affecting financial services, the potential effects of the COVID-19 pandemic on the

local and national economic environment, on our customers and on our operations (as well as any changes to federal, state and

local government laws, regulations and orders in connection with the pandemic), and the other matters mentioned in Item 1A of

the Company’s Annual Report on Form 10-K for the year ended June 30, 2020.

Except as required by applicable law or regulation,

the Company does not undertake the responsibility, and specifically disclaims any obligation, to release publicly the result of

any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements

or to reflect the occurrence of anticipated or unanticipated events.

First Federal Bancorp

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

RESULTS OF OPERATIONS (continued)

Balance Sheets

following table represents the average balance sheets for the three-month periods ended September 30, 2020 and 2019, along with

the related calculations of tax-equivalent net interest income, net interest margin and net interest spread for the related periods.

Three Months Ended September 30,

And Dividends

20 unchanged sentences

Average interest-earning assets to average interest-bearing liabilities

Includes loan fees, immaterial in amount, in both interest income and the calculation of yield on loans.

Also includes loans on nonaccrual status.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Discussion of Financial Condition Changes

from June 30, 2019 to March 31, 2020

Risks and Uncertainties Related to COVID-19 -

In March 2020 the World Health Organization determined that the spread of a new coronavirus, COVID-19, had risen to such a level

as to constitute a worldwide pandemic.

The spread of this virus has created a global public health crisis.

Uncertainty related

to the effects of the virus have disrupted financial markets, activity in all aspects of life including governmental, business

and consumer routines and the markets in which the Company operates.

In response to the crisis governmental authorities have closed

non-essential businesses and required various responses from individuals including stay-at-home restrictions and social distancing.

These governmental restrictions, along with a fear of contracting the virus, have resulted in severe reduction of commercial and

consumer activity, which is resulting in loss of revenues by businesses, a dramatic spike in unemployment, material decreases in

oil and gas prices and in business valuations, disrupted global supply chains and market volatility.

The federal government has taken several actions

designed to mitigate the impact of the economic disruption.

Three pieces of legislation that were enacted in March 2020 included

emergency funding for federal agencies to respond to the coronavirus outbreak related to developing a vaccine, medical supplies,

grants for public health agencies, small business loans, guaranteeing free coronavirus testing, establishing paid leave for employees,

enhanced unemployment insurance, expanded food security initiatives and increased Medicaid funding.

The Coronavirus Aid, Relief

and Economic Security (“CARES”) Act, enacted on March 27, 2020, was a $2.0 trillion relief bill responsible for sending

$1,200 to Americans making $75,000 or less, adding $600 per week to unemployment benefits for four months, giving $100 billion

to hospitals and health providers, making $500 billion of loans or investments to businesses, states and municipalities and $32

billion in grants to the airline industries and more.

Management expects the general impact of COVID-19,

as well as certain provisions of the CARES Act and other recent legislative and regulatory relief efforts, to have a material impact

on the Company’s operations.

loan fees, immaterial in amount, in both interest income and the calculation of yield on loans.

Also includes loans on nonaccrual

First Federal Bancorp

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

RESULTS OF OPERATIONS (continued)

of Financial Condition Changes from June 30, 2020 to September 30, 2020

and Uncertainties Related to COVID-19 - In March 2020 the World Health Organization determined that the spread of a new

coronavirus, COVID-19, had risen to such a level as to constitute a worldwide pandemic.

The spread of this virus has created a

global public health crisis.

Uncertainty related to the effects of the virus have disrupted financial markets, activity in all

aspects of life including governmental, business and consumer routines and the markets in which the Company operates.

to the crisis governmental authorities have closed non-essential businesses and required various responses from individuals including

stay-at-home restrictions and social distancing.

These governmental restrictions, along with a fear of contracting the virus,

have resulted in severe reduction of commercial and consumer activity, which is resulting in loss of revenues by businesses, a

dramatic spike in unemployment, material decreases in oil and gas prices and in business valuations, disrupted global supply chains

and market volatility.

expects the general impact of COVID-19, as well as certain provisions of the Coronavirus Aid, Relief and Economic Security (“CARES”)

Act, enacted on March 27, 2020, and other more recent legislative and regulatory relief efforts, to have a material impact on

the Company’s operations.

Because the impact is contingent upon the duration and severity of the economic downturn, management

2 unchanged sentences

which we are currently aware.

Business Continuity, Processes and Controls

As a financial institution, the Banks are considered

essential businesses and have remained open for business.

We have implemented our pandemic preparedness plan and have maintained

regular business hours except for closing for business on Fridays at 4:30 p.m.

We continue to offer customer service through drive-thru

facilities, automated teller machines, remote deposit capture and online and mobile banking applications.

We are offering by-appointment

options for transactions requiring in-person contact while maintaining social distancing mandates and surface cleaning protocols.

Our staff is practicing recommended personal hygiene protocols and social distancing while working on premises.

A small number

of employeesare working remotely.

We do not face current material resource constraints through the implementation of our pandemic

preparedness plan and do not anticipate incurring any material cost related to its implementation.

We have not identified any material

operational or internal control challenges or risks, nor do we anticipate any significant challenges to our ability to maintain

our systems and controls, related to operational changes resulting from implementation of the pandemic preparedness plan.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Financial Position and Results of Operations

Bank regulators have issued guidance and are

encouraging banks to work with customers affected by COVID-19.

Accordingly, we have been actively working with borrowers affected

by COVID-19 by offering a payment deferral program providing for either a three-month interest-only period or a full payment deferral

for three months.

While interest and fees will continue to accrue to income, under normal GAAP accounting if eventual credit losses

on these deferred payments emerge, interest and/or fee income accrued may need to be reversed.

As a result, interest income in

future periods could be negatively impacted.

At this time management anticipates that the deferral program will have an immaterial

impact to the Company’s financial condition and results of operation, while recognizing that a sustained negative economic

impact from COVID-19 could change this assessment, as borrowers’

ability to repay is impacted in future periods.

At March 31, 2020 the Company and the Banks

were considered well-capitalized with capital ratios in excess of regulatory requirements.

However, an extended economic recession

resulting from the COVID-19 pandemic could adversely impact the Company’s and the Banks’

capital position and regulatory

capital ratios due to a potential increase in credit losses.

Lending Operations and Credit Risk

As noted herein the Company is working with

its borrowers who are negatively impacted by COVID-19 by offering a payment deferral program.

As of May 12, 2020, we had 66 customers

under our payment deferral program with a total principal balance of $12.9 million in loans modified.

Continuity, Processes and Controls

a financial institution, the Banks are considered essential businesses and have remained open for business.

We have implemented

our pandemic preparedness plan and have maintained regular business hours except for closing for business on Fridays at 4:30 p.m.

We continue to offer customer service through drive-thru facilities, automated teller machines, remote deposit capture and online

and mobile banking applications.

We are offering by-appointment options for transactions requiring in-person contact while maintaining

social distancing mandates and surface cleaning protocols.

Our staff is practicing recommended personal hygiene protocols and

social distancing while working on premises.

A small number of employees are working remotely.

We do not face current material

resource constraints through the implementation of our pandemic preparedness plan and do not anticipate incurring any material

cost related to its implementation.

We have not identified any material operational or internal control challenges or risks, nor

do we anticipate any significant challenges to our ability to maintain our systems and controls, related to operational changes

resulting from implementation of the pandemic preparedness plan.

First Federal Bancorp

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

RESULTS OF OPERATIONS (continued)

of Financial Condition Changes from June 30, 2020 to September 30, 2020 (continued)

Position and Results of Operations

regulators have issued guidance and are encouraging banks to work with customers affected by COVID-19.

Accordingly, we have been

actively working with borrowers affected by COVID-19 by offering a payment deferral program providing for either a three-month

interest-only period or a full payment deferral for three months.

While interest and fees will continue to accrue to income, under

normal GAAP accounting if eventual credit losses on these deferred payments emerge, interest and/or fee income accrued may need

to be reversed.

As a result, interest income in future periods could be negatively impacted.

At this time management anticipates

that the deferral program will have an immaterial impact to the Company’s financial condition and results of operation,

while recognizing that a sustained negative economic impact from COVID-19 could change this assessment, as borrowers’

to repay is impacted in future periods.

September 30, 2020 the Company and the Banks were considered well-capitalized with capital ratios in excess of regulatory requirements.

However, an extended economic recession resulting from the COVID-19 pandemic could adversely impact the Company’s and the

capital position and regulatory capital ratios due to a potential increase in credit losses.

Operations and Credit Risk

noted herein the Company is working with its borrowers who are negatively impacted by COVID-19 by offering a payment deferral

As of September 30, 2020, we had 96 customers to avail themselves of our payment deferral program with a total principal

balance of $18.1 million in loans modified.

Of those 81 customers with principal balances totaling $16.2 million had returned

to amortizing status, while 15 customers (with principal totaling $1.9 million) had not completed the allowed deferral period

and three customers (with principal totaling $226,000) had not returned to amortizing status.

The CARES Act includes a Paycheck Protection

6 unchanged sentences

securing this important funding.

As of May 12, 2020, First Federal of Kentucky has approved and/or closed with the SBA 30 PPP loans

representing $1.1 million in funding.

It is our understanding that loans funded through the PPP are fully guaranteed by the United

States government.

Should those circumstances change, the bank could be required to increase its allowance for loan and lease losses

related to these loans resulting in an increase in the provision for loan and lease losses.

The Banks are prepared to continue to offer

short-term assistance in accordance with regulatory guidelines.

Management continues to identify and monitor weaknesses in the

loan portfolio resulting from fallout from the pandemic.

On a portfolio level, management continues to monitor aggregate exposures

to highly sensitive segments such as residential rental properties for changes in asset quality and payment performance.

also monitors unfunded commitments such as lines of credit and overdraft protection to determine liquidity and funding issues that

may arise with our customers.

If economic conditions worsen, the Company could need to increase its required allowance for loan

losses through additional provisions for loan losses.

It is possible that the Company’s asset quality metrics could be materially

and adversely impacted in future periods, if the effects of COVID-19 are prolonged.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

At March 31, 2020,

the Company’s assets totaled $331.0 million, an increase of $209,000, or 0.1%, from total assets at June 30, 2019.

This increase

was attributed primarily to an increase in cash and cash equivalents and was somewhat offset by decreases in time deposits in other

financial institutions and loans, net.

Cash and cash equivalents:

Cash and cash equivalents increased $7.2 million or 72.6% to $17.0 million at March 31, 2020.

Most of the Company’s cash

and cash equivalents are held in interest-bearing demand deposits.

Time deposits in other financial

institutions:

Time deposits in other financial institutions decreased by $4.2 million or 60.9% to $2.7 million at March

As short-term time deposits matured the funds were used to repay FHLB advances, reinvested at the highest earning level

possible or simply carried as interest-bearing demand deposits.

As of September 30, 2020, First Federal of Kentucky had approved and closed with the SBA 44 PPP

loans representing $1.4 million in funding.

It is our understanding that loans funded through the PPP are fully guaranteed by the

United States government.

Should those circumstances change, the bank could be required to increase its allowance for loan and

lease losses related to these loans resulting in an increase in the provision for loan and lease losses.

Banks are prepared to continue to offer short-term assistance in accordance with regulatory guidelines.

Management continues to

identify and monitor weaknesses in the loan portfolio resulting from fallout from the pandemic.

On a portfolio level, management

continues to monitor aggregate exposures to highly sensitive segments such as residential rental properties for changes in asset

quality and payment performance.

Management also monitors unfunded commitments such as lines of credit and overdraft protection

to determine liquidity and funding issues that may arise with our customers.

If economic conditions worsen, the Company could

need to increase its required allowance for loan losses through additional provisions for loan losses.

It is possible that the

Company’s asset quality metrics could be materially and adversely impacted in future periods, if the effects of COVID-19

are prolonged.

First Federal Bancorp

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

RESULTS OF OPERATIONS (continued)

of Financial Condition Changes from June 30, 2020 to September 30, 2020 (continued)

At September 30, 2020, the Company’s assets totaled $327.7 million, an increase of $6.5 million, or 2.0%, from total

assets at June 30, 2020.

This increase was attributed primarily to an increase in loans, net, and an increase in cash and cash

and cash equivalents:

Cash and cash equivalents increased $3.4 million or 24.9% to $17.1 million at September 30, 2020.

Most of the Company’s cash and cash equivalents are held in interest-bearing demand deposits.

deposits in other financial institutions:

Time deposits in other financial institutions decreased by $988,000 or 44.3%

to $1.2 million at September 30, 2020.

As short-term time deposits matured the funds were used to repay FHLB advances, reinvested

at the highest earning level possible or simply carried as interest-bearing demand deposits.

At September 30, 2020, our securities portfolio consisted of mortgage-backed securities.

Investment securities

31, 2020, our securities portfolio consisted of an agency bond and mortgage-backed securities.

Investment securities decreased

$650,000 or 35.7% to $1.2 million at March 31, 2020.

Loans receivable,

net, decreased by $2.3 million or 0.8% to $278.6 million at March 31, 2020.

Management continues to look for high-quality loans

to add to its portfolio and will continue to emphasize loan originations to the extent that it is profitable, prudent and consistent

with our interest rate risk strategies.

Non-Performing and Classified Loans:

At March 31, 2020, the Company had non-performing loans (loans 90 or more days past due or on nonaccrual status) of approximately

$7.5 million, or 2.7% of total loans (including loans purchased in the acquisition), compared to $8.0 million or 2.8%, of total

loans at June 30, 2019.

The Company’s allowance for loan losses totaled $1.4 million and $1.5 million at March 31, 2020

and June 30, 2019, respectively.

The allowance for loan losses at March 31, 2020, represented 19.2% of nonperforming loans and

0.5% of total loans (including loans purchased in the acquisition), while at June 30, 2019, the allowance represented 18.1% of

nonperforming loans and 0.5% of total loans.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Discussion of Financial Condition Changes

from June 30, 2019 to March 31, 2020 (continued)

decreased $539,000 or 47.3% to $600,000 at September 30, 2020.

Loans receivable, net, increased by $4.6 million or 1.6% to $290.5 million at September 30, 2020.

Management continues to

look for high-quality loans to add to its portfolio and will continue to emphasize loan originations to the extent that it is

profitable, prudent and consistent with our interest rate risk strategies.

Non-Performing and Classified Loans:

(continued) The Company had $10.5 million in assets classified as substandard for regulatory purposes at March 31, 2020, including

loans ($9.8 million), including loans acquired in the CKF Bancorp transaction and real estate owned (“REO”) ($748,000.)

Classified loans as a percentage of total loans (including loans acquired) was 3.5% and 3.9% at March 31, 2020 and June 30, 2019,

respectively.

Of substandard loans, 98.5% were secured by real estate on which the Banks have priority lien position.

The table below shows the aggregate amounts

of our assets classified for regulatory purposes at the dates indicated:

At September 30, 2020, the Company had non-performing loans (loans 90 or more days past due or on nonaccrual status) of

approximately $6.9 million, or 2.4% of total loans (including acquired loans), compared to $7.4 million or 2.6%, of total loans

at June 30, 2020.

The Company’s allowance for loan losses totaled $1.5 million and $1.5 million at September 30, 2020 and

June 30, 2020, respectively.

The allowance for loan losses at September 30, 2020, represented 22.4% of nonperforming loans and

0.5% of total loans (including acquired loans), while at June 30, 2020, the allowance represented 20.1% of nonperforming loans

and 0.5% of total loans.

The Company had $9.2 million in assets classified

as substandard for regulatory purposes at September 30, 2020, including loans ($8.5 million), including loans acquired in the CKF

Bancorp transaction and also including real estate owned (“REO”) ($679,000.) Classified loans as a percentage of total

loans (including loans acquired) was 2.9% and 3.1% at September 30, 2020 and June 30, 2020, respectively.

Of substandard loans,

99.9% were secured by real estate on which the Banks have priority lien position.

table below shows the aggregate amounts of our assets classified for regulatory purposes at the dates indicated:

(dollars in thousands)

September 30,

Substandard assets

1 unchanged sentence

Total classified assets

At March 31, 2020, the Company’s

At September 30, 2020, the Company’s

real estate acquired through foreclosure represented 7.4% of substandard assets compared to 6.7% at June 30, 2020.

During the periods

presented the Company made loans to facilitate the purchase of its other real estate owned by qualified buyers.

During the nine

months ended March 31, 2020, the Company sold property with a carrying value of $225,000 for $232,000 gross proceeds before costs

to sell, while during the year ended June 30, 2019, property with a carrying value of $193,000 was sold for $206,000 gross proceeds

before costs to sell.

During the nine months ended March 31, 2020 the Company made three loans totaling $95,000 to facilitate the

purchase of its other real estate owned by qualified borrowers, while for the fiscal year ended June 30, 2019 five loans were made

totaling $214,000 to facilitate the purchases.

Loans to facilitate the sale of other real estate owned, which were included in

substandard loans, totaled $23,000 and $136,000 at March 31, 2020 and June 30, 2019, respectively.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Discussion of Financial Condition Changes

from June 30, 2019 to March 31, 2020 (continued)

The following table presents the aggregate

carrying value of REO at the dates indicated:

March 31, 2020

presented the Company made no loans to facilitate the purchase of its other real estate owned by qualified buyers.

Loans to facilitate

the sale of other real estate owned, which were included in substandard loans, totaled $46,000 and $23,000 at September 30, 2020

and June 30, 2020, respectively.

First Federal Bancorp

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

RESULTS OF OPERATIONS (continued)

of Financial Condition Changes from June 30, 2020 to September 30, 2020 (continued)

following table presents the aggregate carrying value of REO at the dates indicated:

September 30, 2020

June 30, 2020

One- to four-family

At March 31, 2020 and June 30, 2019, the Company

had $2.0 million and $1.8 million of loans classified as special mention, respectively (including loans acquired in the CKF Bancorp

transaction on December 31, 2012.) This category includes assets which do not currently expose us to a sufficient degree of risk

to warrant classification, but do possess credit deficiencies or potential weaknesses deserving our close attention.

September 30, 2020 and June 30, 2020, the Company had $1.7 million and $1.7 million of loans classified as special mention, respectively

(including loans acquired in the CKF Bancorp transaction on December 31, 2012.) This category includes assets which do not currently

expose us to a sufficient degree of risk to warrant classification, but do possess credit deficiencies or potential weaknesses

deserving our close attention.

Total liabilities

increased $918,000, or 0.3% to $265.4 million at March 31, 2020, primarily as a result of an increase in deposits, which was somewhat

offset by a decrease in advances.

Deposits increased $12.7 million or 6.5% to $208.6 million at March 31, 2020, while advances

decreased $11.7 million or 17.5% to $55.0 million at March 31, 2020.

increased $6.6 million, or 2.5% to $275.9 million at September 30, 2020, primarily as a result of increases in advances and deposits.

Advances increased $3.7 million or 6.7% to $58.4 million at September 30, 2020, while deposits increased $2.8 million or 1.3% to

$215.1 million at September 30, 2020.

Shareholders’

At March 31, 2020, the Company’s shareholders’

equity totaled $65.6 million, a decrease of $709,000 or 1.1% from the

June 30, 2019 total.

At September 30, 2020, the Company’s shareholders’

equity totaled $51.8 million, a decrease of $82,000

or 0.2% from the June 30, 2020 total.

The change in shareholders’

equity was primarily associated with common shares purchased by the Company

to hold as treasury shares, and net profits for the period less dividends paid on common stock.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Discussion of Financial Condition Changes

from June 30, 2019 to March 31, 2020 (continued)

The Company paid dividends of $1.0 million

or 143.8% of net income for the nine-month period just ended.

On July 2, 2019, the members of First Federal MHC for the seventh

time approved a dividend waiver on annual dividends of up to $0.40 per share of Kentucky First Federal Bancorp common stock.

Board of Directors of First Federal MHC applied for approval of another waiver.

The Federal Reserve Bank of Cleveland has notified

the Company that it did not object to the waiver of dividends paid by the Company to First Federal MHC, and, as a result, First

Federal MHC will be permitted to waive the receipt of dividends for quarterly dividends up to $0.10 per common share through the

third calendar quarter of 2020.

Management believes that the Company has sufficient capital to continue the current dividend policy

without affecting the well-capitalized status of either subsidiary bank.

Management cannot speculate on future dividend levels,

because various factors, including capital levels, income levels, liquidity levels, regulatory requirements and overall financial

condition of the Company are considered before dividends are declared.

However, management continues to believe that a strong dividend

is consistent with the Company’s long-term capital management strategy.

equity was primarily associated with common shares purchased

by the Company to hold as treasury shares, and net profits for the period less dividends paid on common stock.

The Company paid dividends of $344,000 or 120.7%

of net income for the three-month period just ended.

On July 7, 2020, the members of First Federal MHC again approved a dividend

waiver on annual dividends of up to $0.40 per share of Kentucky First Federal Bancorp common stock.

The Board of Directors of First

Federal MHC applied for approval of another waiver.

The Federal Reserve Bank of Cleveland has notified the Company that it did

not object to the waiver of dividends paid by the Company to First Federal MHC, and, as a result, First Federal MHC will be permitted

to waive the receipt of dividends for quarterly dividends up to $0.10 per common share through the third calendar quarter of 2021.

Management believes that the Company has sufficient capital to continue the current dividend policy without affecting the well-capitalized

status of either subsidiary bank.

Management cannot speculate on future dividend levels, because various factors, including capital

levels, income levels, liquidity levels, regulatory requirements and overall financial condition of the Company are considered

before dividends are declared.

However, management continues to believe that a strong dividend is consistent with the Company’s

long-term capital management strategy.

See “Risk Factors”

in Part II, Item 1A,

of the Company’s Annual Report on Form 10-K for the year ended June 30, 2019 for additional discussion regarding dividends.

Comparison of Operating Results for

the Nine-Month Periods Ended March 31, 2020 and 2019

Net income totaled $722,000 or $0.09 diluted

earnings per share for the nine months ended March 31, 2020, an increase of $210,000 or 41.0% from net income of $512,000 for the

same period in 2019.

Net Interest Income

Net interest income before provision for

loan losses decreased $29,000 or 0.4% to $7.0 million for the nine-month period just ended.

Interest income increased by $380,000,

or 4.0%, to $9.8 million, while interest expense increased $409,000 or 17.5% to $2.8 million for the nine months ended March 31,

Interest income on loans increased $494,000

or 5.5% to $9.4 million, due primarily to an increase in the average volume of the loan portfolio.

The average balance of the loan

portfolio increased $10.1 million or 3.7% to $282.1 million for the nine-month period ended March 31, 2020, while the rate earned

on the loan portfolio increased 8 basis points to 4.44%.

Interest income on mortgage-backed securities decreased $7,000 or 29.2%

to $17,000 for the nine-month period just ended due to lower asset levels and lower yields earned.

in Part II, Item 1A, of the Company’s Annual Report

on Form 10-K for the year ended June 30, 2020 for additional discussion regarding dividends.

First Federal Bancorp

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

RESULTS OF OPERATIONS (continued)

of Operating Results for the Three-month Periods Ended September 30, 2020 and 2019

income totaled $285,000 or $0.04 diluted earnings per share for the three months ended September 30, 2020, an increase of $51,000

or 21.8% from net income of $234,000 for the same period in 2019.

Interest Income

interest income before provision for loan losses increased $9,000 or 0.4% to $2.4 million for the three-month period just ended.

Interest income decreased by $299,000, or 9.0%, to $3.0 million, while interest expense decreased $308,000 or 32.5% to $639,000

for the three months ended September 30, 2020.

Interest income on loans decreased $196,000

or 6.2% to $3.0 million, due primarily to a decrease in the average rate earned on the loan portfolio.

The average rate earned

on the loan portfolio decreased 39 basis points to 4.12%, while the average balance increased $7.6 million or 2.7% to $289.3 million

for the three-month period ended September 30, 2020.

Interest income on mortgage-backed securities decreased $2,000 or 33.3% to

$4,000 for the three-month period just ended due to lower asset levels and lower yields earned.

Interest income from other securities

increased $7,000 to $14,000 for the recently-ended period due primarily to a higher average volume of other securities period to

Interest income from interest-bearing deposits and other decreased $114,000 or 23.8% to $364,000 for the nine months just

ended primarily due to a decrease in the average rate earned, which decreased 89 basis points to 2.21% for the recently-ended period

compared to the period a year ago.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Comparison of Operating Results for

the Nine-Month Periods Ended March 31, 2020 and 2019 (continued)

Interest expense on deposits increased

$388,000 or 27.0% to $1.8 million for the nine months ended March 31, 2020, while interest expense on borrowings increased $21,000

or 2.3% to $927,000 for the same period.

The increase in interest expense on deposits was attributed primarily to an increase in

the average rate paid on deposits, which increased 26 basis points to 1.25% for the recently ended period.

The average balance

of deposits increased $2.1 million or 1.1% to $194.7 million for the most recent period.

The increase in interest expense on borrowings

was attributed to higher average borrowings outstanding, as the average rate on those borrowings decreased period to period.

average balance of borrowings outstanding increased $9.3 million or 17.9% to $61.2 million for the recently ended nine-month period,

while the average rate paid on borrowings decreased 31 basis points to 2.02% for the most recent period.

Net interest spread decreased from 3.00%

for the prior year quarterly period to 2.84% for the nine-month period ended March 31, 2020.

Provision for Losses on Loans

The Company recorded an $64,000 provision

for losses on loans during the nine months ended March 31, 2020, compared to a provision of $11,000 for the nine months ended March

Non-interest Income

Non-interest income increased $40,000 or

20.7% to $233,000 for the nine months ended March 31, 2020, compared to the prior year period, primarily because of an increase

in net gains on sales of loans and a decrease in valuation adjustment for REO.

Net gain on sales of loans increased $46,000 or

158.6% to $75,000 for the recently-ended nine-month period over the prior year amount, while valuation adjustment for REO decreased

$18,000 or 33.3% to $36,000.

Somewhat offsetting these primary sources of increases in non-interest income was a decrease in other

non-interest income, which decreased $24,000 or 15.5% to $131,000 for the recently-ended period, which was primarily due to a $13,000

gain on sale of assets recognized in the year ago period and decreased servicing fees in the current period.

Decreased servicing

fees include loan servicing fees, service charges on demand deposits, ATM surcharge fees and miscellaneous operating income.

Non-interest Expense

Non-interest expense decreased $311,000

or 4.7% and totaled $6.3 million for the nine months ended March 31, 2020, primarily due to cost-saving measures implemented by

Employee compensation and benefits for

the nine months ended March 31, 2020 decreased $201,000 or 4.6% to $4.2 million primarily due to lower contributions to the Company’s

decreased $3,000 to $3,000 for the recently-ended period due primarily to a lower average volume of other securities period to

Interest income from interest-bearing deposits and other decreased $98,000 or 68.1% to $46,000 for the three months just

ended due to a decrease in the average rate earned, which decreased 186 basis points to 84 basis points for the recently-ended

period compared to the period a year ago.

Interest expense on deposits decreased $74,000

or 12.6% to $514,000 for the three months ended September 30, 2020, while interest expense on borrowings decreased $234,000 or

65.2% to $125,000 for the same period.

The decrease in interest expense on deposits was attributed primarily to a decrease in the

average rate paid on interest-bearing deposits, which decreased 23 basis points to 99 basis points for the recently ended period.

The average balance of interest-bearing deposits increased $15.9 million or 8.3% to $208.4 million for the most recent period.

The decrease in interest expense on borrowings was attributed to both to a lower average rate paid on the borrowings and a lower

average balance of borrowings decreased period to period.

The average balance of borrowings outstanding decreased $11.0 million

or 17.5% to $51.8 million for the recently ended three-month period, while the average rate paid on borrowings decreased 132 basis

points to 97 basis points for the most recent period.

Net interest spread increased from 2.89% for

the prior year quarterly period to 2.90% for the three-month period ended September 30, 2020.

for Losses on Loans

Company recorded an $84,000 provision for losses on loans during the three months ended September 30, 2020, compared to a provision

of $59,000 for the three months ended September 30, 2019.

First Federal Bancorp

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

RESULTS OF OPERATIONS (continued)

of Operating Results for the Three-month Periods Ended September 30, 2020 and 2019 (continued)

income increased $54,000 or 73.0% to $128,000 for the three months ended September 30, 2020, compared to the prior year period,

primarily because of an increase in net gains on sales of loans.

Net gain on sales of loans increased $52,000 to $58,000 for the

recently-ended three-month period over the prior year amount.

The Company has seen significant loan refinance activity since the

emergency interest rate cut implemented by the Federal Open Market Committee in March of this year.

The Company’s long-term,

fixed rate loans, which some borrowers are preferring at this time, are usually sold to the FHLB of Cincinnati after they are

originated, which produced the gains.

expense decreased $19,000 or 0.9% and totaled $2.1 million for the three months ended September 30, 2020, primarily due to cost-saving

measures implemented by management.

Voice and data communications expense decreased

$40,000 or 65.6% to $21,000 for the quarterly period just ended, as upgraded technology was implemented.

Other non-interest expense

decreased $19,000 or 10.9% to $155,000 for the three months ended September 30, 2020, primarily due to lower general loan expenses.

Employee compensation and benefits decreased $17,000 or 1.3% to $1.3 million primarily due to lower employee compensation.

Banks were operating with two fewer full-time equivalent employees in the recently-ended quarterly period compared to the prior

year quarter, which resulted in lower compensation cost, lower fringe benefit cost and lower payroll taxes period to period.

offsetting the decreases in other employee compensation and benefits expense was an increase in contributions to the Company’s

Defined Benefit (“DB”) pension plan.

DB pension contributions decreased $214,000 or 23.8% to $683,000 for the nine-month

DB pension contributions increased $73,000 or 41.2% to $252,000 for the three-month

period recently ended compared to the prior year period.

Lower DB pension contributions are a result of the freeze placed on the

plan effective April 1, 2019, which is currently estimated to lower DB costs by $279,000 for the fiscal year ending June 30, 2020

compared to the prior fiscal year.

Occupancy and equipment expenses decreased $86,000 or 17.0% to $420,000 for the recently ended

nine-month period, as reduced maintenance and repair costs were experienced for both buildings and equipment and depreciation expense

declined period to period.

Voice and data communications expense decreased $59,000 or 31.6% to $128,000 for the nine months ended

March 31, 2020, primarily due to upgraded data connections which provide better connectivity, faster data transfer speeds and a

lower overall cost.

Other non-interest expense decreased $64,000 or 10.5% to $540,000 primarily as a result of decreased FDIC insurance

FDIC insurance premiums decreased from $63,000 for the nine months ended March 31, 2019 to zero for the recently ended

period, because the banks were able to utilize their Small Bank Assessment Credits (“SBAC”) during the period.

the Banks did not pay surcharges at least once during the credit calculation period (third quarter 2016 through third quarter 2018),

the FDIC determined the Banks to be eligible for credits against their insurance premiums when the Deposit Insurance Fund (“DIF”)

reserve ratio equals or exceeds 1.38%.

The DIF reserve ratio as of June 30, 2019 was 1.40%.

The FDIC automatically applies SBACs

to offset regular deposit insurance assessments for assessment periods where the DIF reserve ratio is at or above 1.38%.

for the nine months ended March 31, 2020 totaled $63,000.

The Banks’

remaining credits as of March 31, 2020 totaled $9,000.

The determination on whether credits can be applied in any assessment period can only be made after the FDIC determines the reserve

This information becomes publicly available approximately one month before that quarter’s assessments are paid.

management expects to be able to utilize the remaining credits going forward, use of the credits is dependent on the DIF exceeding

the 1.38% level.

Higher DB pension contributions were a result of higher administrative

fees and Pension Benefit Guarantee Corporation premiums, as the Company’s DB plan was frozen effective April 1, 2019.

and OREO expenses, net decreased $17,000 or 50.0% to $17,000 for the quarter just ended, due to lower levels of such activity.

Advertising expenses decreased $11,000 or 22.9% to $37,000 for the recently ended three-month period.

Somewhat offsetting the decreases in various

non-interest expense items were increases in auditing and accounting, and data processing expenses.

Auditing and accounting expenses

increased $75,000 or 98.7% to $151,000 for the nine months ended March 31, 2020.

Data processing increased $58,000 or 17.6%

to $388,000 for the period just ended as the Company expanded its digital banking platform.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Comparison of Operating Results for

the Nine-Month Periods Ended March 31, 2020 and 2019 (continued)

non-interest expense items were increases in FDIC insurance premiums, data processing expenses, and outside service fees.

FDIC insurance premiums increased $43,000 to $57,000 for the three months ended September 30, 2020.

In the prior year quarterly

period the Banks were able to utilize their Small Bank Assessment Credits (“SBAC”).

The SBAC were depleted in the quarterly

period ended June 30, 2020.

Data processing increased $42,000 or 40.0% to $147,000 for the period just ended as core processing

costs increased and the Company expanded its technology infrastructure.

Outside service fees increased $12,000 or 23.5% to $63,000

for the quarter ended September 30, 2020, primarily due to professional services related to the Company’s goodwill impairment

valuation during the period.

Federal Income Tax Expense

Federal income tax expense increased $6,000

or 50.4% to $176,000 for the nine months ended March 31, 2020, compared to the prior year period.

The effective tax rates for the

nine-month periods ended March 31, 2020 and 2019, were 19.6% and 18.6%, respectively.

Comparison of Operating Results for

the Three-Month Periods Ended March 31, 2020 and 2019

Net income totaled $240,000 for the three

months ended March 31, 2020, an increase of $33,000 or 15.9% from net income of $207,000 for the same period in 2019.

Net Interest Income

Net interest income before provision for

loan losses decreased $24,000 or 1.0% to $2.3 million for the three-month period just ended.

Interest income increased by $13,000,

or 0.4%, to $3.2 million, while interest expense increased $37,000 or 4.4% to $882,000 for the three months ended March 31, 2020.

Interest income on loans increased $91,000

or 3.0% to $3.1 million, due primarily to an increase in the average volume of the loan portfolio.

The average balance of the loan

portfolio increased $8.8 million or 3.2% to $281.9 million for the three-month period ended March 31, 2020, while the rate earned

on the loan portfolio remained unchanged.

Interest income on mortgage-backed securities decreased $2,000 to $6,000 for the quarterly

period just ended due chiefly to a lower volume of the assets.

Interest income from interest-bearing deposits and other decreased

$76,000 or 45.2% to $92,000 for the quarter just ended primarily due to a decrease in the average rate earned on those assets,

which decreased 161 basis points to 1.6% for the recently-ended quarterly period.

Interest expense on deposits increased

$121,000 or 23.9% to $628,000 for the three months ended March 31, 2020, while interest expense on borrowings decreased $84,000

or 24.9% to $254,000 for the same period.

The increase in interest expense on deposits was attributed primarily to an increase

in the average rate paid on deposits, which increased 21 basis points to 1.27% for the recently ended quarter.

The Company’s

time deposits have increased overall, as new customers choose that particular deposit product and existing customers appear to

have moved somewhat from savings and demand deposit accounts to certificates of deposit.

The interest in time deposits began in

response to the rising interest rate environment, which began in late 2015, but it has continued since the Federal Open Market

Committee began reducing interest rates in mid-2019.

Certificates of deposit usually bear a higher interest rate than demand deposits.

During the three months ended March 31, 2020, average time deposits increased $10.9 million or 8.8% to $134.9 million, while the

average cost of time deposits increased 25 basis points to 1.70% for the recently-ended period.

The decrease in interest expense

on borrowings was attributed to lower average rates paid on those funds, which decreased 71 basis points to 1.77% for the recent

quarterly period, as the average outstanding balance increased $2.7 million or 4.9% to $57.3 million for the three months ended

March 31, 2020 compared to the prior year quarterly period.

Net interest spread decreased from 2.96% for the prior year quarterly

period to 2.82% for the quarter ended March 31, 2020.

Provision for Losses on Loans

The Company recorded no provision for losses

on loans during the three months ended March 31, 2020 and 2019.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Comparison of Operating Results for

the Three-Month Periods Ended March 31, 2020 and 2019 (continued)

Non-interest Income

Non-interest income remained constant at

$81,000 for the three months ended March 31, 2020 and 2019.

Net gain on sales of loans increased $26,000 to $35,000 for the recently-ended

quarterly period and was largely offset by valuation adjustment on REO and decreased other non-interest income for the current

The Company recorded a valuation adjustment for REO of $12,000 during the three months just ended compared to no adjustment

in the prior year period and a decrease of $18,000 or 31.0% in other non-interest income period to period was attributed to recognition

of a gain of $13,000 on sale of assets recorded in the prior year period which did not reoccur in the recently-ended period.

Non-interest Expense

Non-interest expense decreased $67,000

or 3.1% and totaled $2.1 million for the three months ended March 31, 2020, primarily due to decreases in employee compensation

and benefits, occupancy and equipment, voice and data communications and other non-interest expenses.

Employee compensation and benefits for

the three months ended March 31, 2020 decreased $52,000 or 3.6% to $1.4 million primarily due to lower contributions to the Company’s

Defined Benefit (“DB”) pension plan.

DB pension contributions decreased $66,000 or 20.7% to $252,000 for the three-month

period recently ended compared to the prior year period due to factors described above.

Occupancy and equipment expenses decreased

$30,000 or 17.6% to $141,000 for the recently ended three-month period, as reduced maintenance and repair costs were experienced

for both buildings and equipment and depreciation expense declined period to period.

Voice and data communications expenses decreased

$26,000 or 48.1% to $28,000 for the recently ended period primarily due to upgraded data connections which provide better connectivity,

faster data transfer speeds and a lower overall cost.

Other non-interest expense decreased $34,000 or 16.7% to $170,000 primarily

as a result of decreased FDIC insurance premiums.

FDIC insurance premiums decreased from $21,000 for the three months ended March

31, 2019, to zero for the recently ended period, because the banks were able to utilize their SBAC during the period.

Somewhat offsetting the decreases in various

non-interest expense items were increases in auditing and accounting and data processing expenses.

Auditing and accounting expenses

increased $42,000 to $52,000 for the quarter ended March 31, 2020, due to higher cost accruals during the period.

Data processing

increased $33,000 or 28.4% to $149,000 for the quarter just ended as the Company expanded its digital banking platform.

Federal Income Tax Expense

The Company recorded a federal income tax

expense of $58,000 and $48,000 for the three months ended March 31, 2020 and 2019, respectively.

The effective tax rates

for the quarterly periods ended March 31, 2020 and 2019, were 19.5% and 18.8%, respectively.

Kentucky First Federal Bancorp

Quantitative and Qualitative

Disclosures About Market Risk

This item is not applicable as the Company

is a smaller reporting company.

or 10.0% to $66,000 for the three months ended September 30, 2020, compared to the prior year period.

The effective tax rates for

the three-month periods ended September 30, 2020 and 2019, were 18.8% and 20.4%, respectively.

First Federal Bancorp

Quantitative and Qualitative Disclosures About Market Risk

item is not applicable as the Company is a smaller reporting company.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements