What changed in this filing

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Item 1. Financial Statements

2021-05-17 compared with 2021-02-16 · 863 added, 869 removed, 472 unchanged (79% of the section changed)

Financial Statements

First Federal Bancorp

CONSOLIDATED BALANCE SHEETS

thousands, except share data)

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

Cash and due from financial institutions

Fed funds sold

Interest-bearing demand deposits

2 unchanged sentences

Securities available-for-sale

Securities held-to-maturity, at amortized cost- approximate fair value of $550 and $611 at December 31, 2020 and June 30, 2020, respectively

Securities held-to-maturity, at amortized cost- approximate fair value of $508 and $611 at March 31, 2021 and June 30, 2020, respectively

Loans held for sale

Loans, net of allowance of $1,622 and $1,488 at December 31, 2020 and June 30, 2020, respectively

Loans, net of allowance of $1,622 and $1,488 at March 31, 2021 and June 30, 2020, respectively

Real estate owned, net

20 unchanged sentences

Retained earnings

Unearned employee stock ownership plan (ESOP), 19,593 shares and 28,931 shares at December 31, 2020 and June 30, 2020, respectively

Treasury shares at cost, 359,349 and 342,849 common shares at December 31, 2020 and June 30, 2020, respectively

Unearned employee stock ownership plan (ESOP), 14,924 shares and 28,931 shares at March 31, 2021 and June 30, 2020, respectively

Treasury shares at cost, 369,349 and 342,849 common shares at March 31, 2021 and June 30, 2020, respectively

Accumulated other comprehensive income

1 unchanged sentence

Total liabilities and shareholders’

accompanying notes to condensed consolidated financial statements.

First Federal Bancorp

CONSOLIDATED STATEMENTS OF OPERATIONS

in thousands, except per share data)

Six months ended December 31,

Three months ended December 31,

See accompanying notes to condensed consolidated

financial statements.

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)

Nine months ended

Three months ended

Interest income

33 unchanged sentences

DIVIDENDS PER SHARE

accompanying notes to condensed consolidated financial statements.

First Federal Bancorp

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Six months ended December 31,

Three months ended December 31,

See accompanying notes to condensed consolidated

financial statements.

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE

(In thousands)

Nine months ended

Three months ended

Other comprehensive gains (losses), net of tax:

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

Comprehensive income

accompanying notes to condensed consolidated financial statements.

First Federal Bancorp

STATEMENTS OF CHANGES IN SHAREHOLDERS’

the six months ended

amounts in thousands, except per share data)

Additional paid-in

Retained earnings

Unearned employee stock ownership plan

Treasury shares

Accumulated other

Unrealized holding Gains (losses) on securities designated as available-for-sale,

net of taxes of $(1), $0, $0 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 share

March 31, 2021

comprehensive

income (loss)

Balance at June 30, 2020

3 unchanged sentences

Cash dividends of $0.30 per common share

Balance at December 31, 2020

Additional paid-in

Retained earnings

Unearned employee stock ownership plan

Treasury shares

Accumulated other

comprehensive income

Balance at March 31, 2021

March 31, 2020

comprehensive

Balance at June 30, 2019

3 unchanged sentences

Cash dividends of $0.30 per common share

Balance at March 31, 2020

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 share

March 31, 2021

comprehensive

Balance at December 31, 2020

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)

Additional paid-in

Retained earnings

Unearned employee stock ownership plan

Treasury shares

Accumulated other

comprehensive income

Balance at September 30, 2020

Allocation of ESOP shares

Acquisition of shares for Treasury

Other comprehensive income

Cash dividends of $0.10 per common share

Balance at March 31, 2021

March 31, 2020

comprehensive

Balance at December 31, 2019

Additional paid-in

Retained earnings

Unearned employee stock ownership plan

Treasury shares

Accumulated other

comprehensive income

Balance at September 30, 2019

Allocation of ESOP shares

2 unchanged sentences

Cash dividends of $0.10 per common share

Balance at December 30, 2019

accompanying notes to condensed consolidated financial statements.

First Federal Bancorp

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended December 31,

Balance at March 31, 2020

See accompanying notes to condensed consolidated

financial statements.

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Nine months ended

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities

Accretion of purchased loan credit discount

Amortization of purchased loan premium

Amortization of deferred loan origination costs (fees)

Amortization of premiums on investment securities

Adjustments to reconcile net

income to net cash provided by operating activities

Accretion of purchased loan credit

Amortization of purchased loan

Amortization of deferred loan origination

Amortization of premiums on investment

Net gain on sale of loans

Net (gain) loss on sale of real estate owned

Valuation adjustments of real estate owned

Net (gain) loss on sale of real

Valuation adjustments of real estate

ESOP compensation expense

3 unchanged sentences

Proceeds from loans held for sale

Increase (decrease) in cash, due to changes in:

Increase (decrease) in cash, due

to changes in:

Accrued interest receivable

2 unchanged sentences

Other liabilities

Net cash provided by operating activities

Net cash provided by operating

Cash flows from investing activities:

Maturities of time deposits in other financial institutions

Securities maturities, prepayments and calls:

Purchase of time deposits in other

financial institutions

Maturities of time deposits in

other financial institutions

Securities maturities, prepayments

Held to maturity

Available for sale

Loans originated for investment, net of principal collected

Proceeds from sale of real estate owned

Purchase of FHLB stock

Loans originated for investment,

net of principal collected

Proceeds from sale of real estate

Additions to real estate owned

Additions to premises and equipment, net

Net cash provided by (used in) investing activities

to premises and equipment, net

Net cash provided by (used in)

investing activities

Cash flows from financing activities:

Net increase in deposits

Payments by borrowers for taxes and insurance, net

Proceeds from Federal Home Loan Bank advances

Repayments on Federal Home Loan Bank advances

Payments by borrowers for taxes

and insurance, net

Proceeds from Federal Home Loan

Bank advances

Repayments on Federal Home Loan

Bank advances

Treasury stock purchased

Dividends paid on common stock

Net cash provided by (used in) financing activities

paid on common stock

provided by (used in) financing activities

Net increase in cash and cash equivalents

Beginning cash and cash equivalents

Ending cash and cash equivalents

accompanying notes to condensed consolidated financial statements.

First Federal Bancorp

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

Six months ended December 31,

cash and cash equivalents

and cash equivalents

See accompanying notes to condensed consolidated

financial statements.

Kentucky First Federal Bancorp

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Nine months ended

Supplemental disclosure of cash flow information:

4 unchanged sentences

Loans made on sale of real estate owned

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.

See accompanying notes to condensed consolidated

financial statements.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

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,

(“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.

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.

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.

Basis of Presentation

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.

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.

The results of operations for the six-month period ended December 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, 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.

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 nine-month period ended March

31, 2021, 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.

Such reclassifications had no impact on prior years’

net income or shareholders’

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Basis of Presentation (continued)

Accounting Standards

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

New Accounting Standards

FASB ASC 326 - In June 2016, the

FASB issued ASU No.

2016-13, Financial Instruments –

Credit Losses (Topic 326):

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.

Measurement of Credit Losses on Financial Instruments.

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.

The standard 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.

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 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.

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

Early adoption is permitted.

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)

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.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Earnings Per Share

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:

Six months ended December 31,

Three months ended December 31,

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

Three months ended

(in thousands)

Net income allocated to common shareholders, basic and diluted

Six months ended December 31,

Three months ended December 31,

Nine months ended

Three months ended

Weighted average common shares outstanding, basic and diluted

were no stock option shares outstanding for the six- or three-month periods ended December 31, 2020 and 2019.

There were no stock option shares outstanding

for the nine- or three-month periods ended March 31, 2021 and 2020.

Investment Securities

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

at December 31, 2020 and June 30, 2020, the corresponding amounts of gross unrealized gains recognized in accumulated other comprehensive

income and gross unrecognized gains and losses:

December 31, 2020

The following table summarizes the amortized cost

and fair value of securities available-for-sale and securities held-to-maturity at March 31, 2021 and June 30, 2020, the corresponding

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

March 31, 2021

(in thousands)

Amortized cost

Gross unrealized/ unrecognized

Estimated fair

unrealized/ unrecognized

Available-for-sale Securities

4 unchanged sentences

(in thousands)

Amortized cost

Gross unrealized/ unrecognized

Estimated fair

unrealized/ unrecognized

Available-for-sale Securities

2 unchanged sentences

Agency mortgage-backed:

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Investment Securities (continued)

pledged securities (including overnight and time deposits in other financial institutions) totaled $1.8 million and $1.9 million

at December 31, 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.

Our pledged securities (including overnight and

time deposits in other financial institutions) totaled $1.8 million and $1.9 million at March 31, 2021 and June 30, 2020, 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 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

composition of the loan portfolio was as follows:

The composition of the loan portfolio was as follows:

(in thousands)

6 unchanged sentences

Allowance for loan losses

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Loans receivable (continued)

following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended December

The following table presents the activity in the

allowance for loan losses by portfolio segment for the nine months ended March 31, 2021:

(in thousands)

9 unchanged sentences

Loans on deposits

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

The following table presents the activity in the

allowance for loan losses by portfolio segment for the three months ended March 31, 2021:

(in thousands)

Beginning balance

Provision for loan losses

Loans charged off

Ending balance

for loan losses

Residential real estate:

4 unchanged sentences

Loans on deposits

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Loans receivable (continued)

following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended December

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)

Beginning balance

Provision for loan losses

Loans charged off

Ending balance

for loan losses

Residential real estate:

4 unchanged sentences

Loans on deposits

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

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)

Beginning balance

Provision for loan losses

Loans charged off

Ending balance

for loan losses

Residential real estate:

4 unchanged sentences

Loans on deposits

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Loans receivable (continued)

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 December 31, 2020.

The recorded investment in loans excludes accrued interest receivable

due to immateriality.

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 31, 2021.

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

March 31, 2021:

(in thousands)

Loans individually evaluated

Loans acquired with deteriorated credit quality

Unpaid principal balance

individually evaluated

acquired with deteriorated credit quality

principal balance

and recorded investment

Ending allowance attributed to loans

Unallocated allowance

Total allowance

allowance attributed to loans

Loans individually evaluated for impairment:

8 unchanged sentences

Loans on deposits

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Loans receivable (continued)

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.

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 30, 2020.

June 30, 2020:

(in thousands)

2 unchanged sentences

deteriorated credit quality

Unpaid principal balance

Unpaid principal

and recorded investment

Ending allowance attributed to loans

Ending allowance

attributed to loans

Unallocated allowance

10 unchanged sentences

Loans on deposits

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Loans receivable (continued)

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

The following table presents interest income

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

(in thousands)

2 unchanged sentences

Nonresidential real estate

Purchased credit-impaired loans

Consumer and other

Purchased credit-impaired

With an allowance recorded:

One- to four-family

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

ended December 31:

The following table presents interest income

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

(in thousands)

Average Recorded Investment

Income Recognized

Cash Basis Income Recognized

Average Recorded Investment

Cash Basis Income Recognized

Average Recorded

Cash Basis Income

Average Recorded

Cash Basis Income

With no related allowance recorded:

2 unchanged sentences

Nonresidential real estate

Purchased credit-impaired loans

Consumer and other

Purchased credit-impaired

With an allowance recorded:

One- to four-family

Kentucky First

Federal Bancorp

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2020

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

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 December 31, 2020 and June 30,

December 31, 2020

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, 2021 and June 30, 2020:

March 31, 2021

June 30, 2020

5 unchanged sentences

Residential real estate:

One- to four-family residential real estate

One- to four-family residential

Nonresidential real estate and land

Commercial and industrial

One- to four-family loans in process of

foreclosure totaled $790,000 and $694,000 at December 31, 2020 and June 30, 2020, respectively.

One- to four-family loans in process of foreclosure

totaled $649,000 and $694,000 at March 31, 2021 and June 30, 2020, 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.

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.”

The provisions of the CARES Act included

an election to not apply the guidance on accounting for troubled debt restructurings to loan modifications, such as extensions

or deferrals, related to COVID-19 made between March 1, 2020 and the earlier of (i) December 31, 2020 or (ii) 60 days after the

end of the COVID-19 national emergency.

The relief can only be applied to modifications for borrowers that were not more than 30

days past due as of December 31, 2019.

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

The provisions of the CARES Act included an

election to not apply the guidance on accounting for troubled debt restructurings to loan modifications, such as extensions or

deferrals, related to COVID-19 made between March 1, 2020 and the earlier of (i) March 31, 2021 or (ii) 60 days after the end of the

COVID-19 national emergency.

The relief can only be applied to modifications for borrowers that were not more than 30 days past due

as of December 31, 2019.

2020, the Banks had granted deferrals to 101 loans totaling $18.4 million.

Of those, five loans totaling $293,000 had not yet completed

the initial 3-month deferral period at December 31, 2020.

One borrower who owes $859,000 had been granted an additional extension.

All other borrowers granted a deferral, composed of 95 loans totaling $17.2 million in principal had resumed regular payments.

At December 31, 2020 and June 30, 2020,

the Company had $1.9 million and $1.9 million of loans classified as TDRs, respectively.

Of the TDRs at December 31, 2020, approximately

29.6% were related to the borrower’s completion of Chapter 7 bankruptcy proceedings with no reaffirmation of the debt to

During the six months ended December 31,

2020, the Company had two loans, which were associated with a single borrower and were both secured by a single-family residence,

restructured as TDRs.

The loans were classified as TDRs pursuant to court action under Chapter 7 bankruptcy proceedings without

the borrower reaffirming the debt personally, and totaled $144,000 at December 31, 2020, and were current on payments.

Kentucky First

Federal Bancorp

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2020

In December 2020, Congress amended the CARES Act through the Consolidated Appropriation Act of 2021, which

provided additional COVID-19 relief to American families and businesses, including extending TDR relief under the CARES Act until

the earlier of December 31, 2021 or 60 days following the termination of the national emergency.

The Company elected to adopt these

provisions of the CARES Act.

As of March 31, 2021, the Banks had granted deferrals to 101 loans totaling $18.4 million.

borrower who owed $859,000 at March 31, 2021, had been granted an additional extension and returned to normal payment status in

All other borrowers granted a deferral, composed of 100 loans totaling $17.5 million in principal had resumed regular

payments at March 31, 2021.

At March 31, 2021 and June 30, 2020, the Company

had $1.9 million and $1.9 million of loans classified as TDRs, respectively.

Of the TDRs at March 31, 2021, approximately 29.4% 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, 2021,

the Company had two loans, which were associated with a single borrower and were both secured by a single-family residence, restructured

The loans were classified as TDRs pursuant to court action under Chapter 7 bankruptcy proceedings without the borrower reaffirming

the debt personally, and totaled $143,000 at March 31, 2021, and were current on payments as of that date.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Loans receivable (continued)

During the six months ended December 31,

2019, the Company had two 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.

The following table summarizes TDR loan

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

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.

The following table summarizes TDR loan modifications

that occurred during the nine months ended March 31, 2021 and 2020, and their performance, by modification type:

(in thousands)

7 unchanged sentences

Restructurings

Six months ended December 31, 2020

Nine months ended March 31, 2021

Residential real estate:

Chapter 7 bankruptcy

Six months ended December 31, 2019

Nine months ended March 31, 2020

Residential real estate:

2 unchanged sentences

Chapter 7 bankruptcy

No TDRs defaulted during the six-month

periods ended December 31, 2020 or 2019.

The following table summarizes TDR loan

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

(in thousands)

Troubled Debt

Restructurings

Performing to

Troubled Debt

Restructurings

Performing to

Troubled Debt

Restructurings

Three months ended December 31, 2020

Residential real estate:

Chapter 7 bankruptcy

Three months ended December 31, 2019

Residential real estate:

Terms extended

Chapter 7 bankruptcy

Kentucky First

Federal Bancorp

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2020

No TDRs defaulted during the nine-month periods

ended March 31, 2021 or 2020.

There were no TDR loan modifications that occurred

during the three months ended March 31, 2021 and 2020.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Loans receivable (continued)

The following table presents the aging

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

The following table presents the aging of the

principal balance outstanding in past due loans as of March 31, 2021, by class of loans:

(in thousands)

5 unchanged sentences

Loans on deposits

The following tables present the aging

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

The 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)

December 31, 2020

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

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.

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.

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:

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,

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, if

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

1 unchanged sentence

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 December 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

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.

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

As of March 31, 2021, and based on the most recent analysis performed, the risk category of loans by class of loans is as

(in thousands)

4 unchanged sentences

Loans on deposits

Kentucky First

Federal Bancorp

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2020

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Loans receivable (continued)

At June 30, 2020, the risk category of

loans by class of loans was as follows:

At June 30, 2020, the risk category of loans

by class of loans was as follows:

(in thousands)

5 unchanged sentences

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 December 31, 2020 and June 30, 2020, respectively, is as follows:

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, 2021 and June 30, 2020, respectively, is as follows:

(in thousands)

One- to four-family residential real estate

Kentucky First

Federal Bancorp

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2020

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Loans receivable (continued)

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

Accretable yield, or income expected to be collected,

is as follows:

(in thousands)

4 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, 2020, nor for the six-month period ended

December 31, 2020.

For 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 nine-month period ended March 31,

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

1 unchanged sentence

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:

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.

Quoted 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.

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

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)

December 31, 2020

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

March 31, 2021

Disclosures About Fair Value of Assets

1 unchanged sentence

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.

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.

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.

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.

These assets 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.

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

1 unchanged sentence

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:

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:

Fair Value Measurements Using

1 unchanged sentence

Quoted Prices

December 31, 2020

March 31, 2021

Agency mortgage-backed:

June 30, 2020

Agency mortgage-backed:

Kentucky First

Federal Bancorp

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2020

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Disclosures About Fair Value of Assets

5 unchanged sentences

Quoted Prices

December 31, 2020

Other real estate owned, net

One- to four-family

June 30, 2020

1 unchanged sentence

One- to four-family

There were no impaired loans, which were

measured using the fair value of the collateral for collateral-dependent loans, at December 31, 2020, or at June 30, 2020.

was a charge off of $8,000 for the six-month period ended December 31, 2019.

There was one single-family residential

property held as other real estate owned (“OREO”) written down by $19,000 during the six- and three-months ended December

31, 2020, while OREO was written down $24,000 during the six- and three-months ended December 31, 2019.

Other real estate owned

measured at fair value less costs to sell, had a carrying amount of $74,000 at December 31, 2020.

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

December 31, 2020 and June 30, 2020:

There were no impaired loans, which were measured

using the fair value of the collateral for collateral-dependent loans, at March 31, 2021, or at June 30, 2020.

Amounts charged off related

to the resolution of impaired loans were $45,000 for the nine-month period ended March 31, 2021 and $9,000 off for the nine-month period

ended March 31, 2020.

Other real estate owned (“OREO”)

was written down $19,000 and $0 during the nine- and three-months ended March 31, 2020.

One single-family residential property, which

was held as OREO and was written down by $19,000 during the nine months ended March 31, 2021, was sold during the period.

OREO measured at fair value less costs to sell at March 31, 2021.

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 June 30, 2020:

(in thousands)

December 31, 2020

Foreclosed and repossessed assets:

1 unchanged sentence

Sales comparison approach

Adjustments for differences between comparable sales

to 10.7% (-4.1%)

June 30, 2020

Foreclosed and repossessed assets:

One- to four-family

Sales comparison approach

Adjustments for differences between

1 unchanged sentence

-2.7% to 41.2% (20.4%)

Kentucky First

Federal Bancorp

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2020

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Disclosures About Fair Value of Assets

and Liabilities (continued)

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.

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.

Based on the foregoing methods and assumptions,

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

the carrying value and fair value of the Company’s financial instruments at March 31, 2021 and June 30, 2020 are as follows:

Fair Value Measurements at

December 31, 2020 Using

March 31, 2021 Using

(in thousands)

28 unchanged sentences

Accrued interest payable

Kentucky First

Federal Bancorp

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2020

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

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:

Six months ended

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:

Nine months ended

Beginning balance

3 unchanged sentences

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

Six months ended

Nine months ended

(in thousands)

5 unchanged sentences

Net-of-tax amount

First Federal Bancorp

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND 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,”

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,”

“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

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

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

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.

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)

Balance Sheets

following table represents the average balance sheets for the six month periods ended December 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.

Six Months Ended December 31,

Average Balance Sheets

The following table represents the average balance

sheets for the nine month periods ended March 31, 2021 and 2020, 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,

(Dollars in thousands)

19 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.

Includes loan fees, immaterial

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

Also includes loans on nonaccrual status.

First Federal Bancorp

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Balance Sheets

following table represents the average balance sheets for the three-month periods ended December 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,

Average Balance Sheets

The following table represents the average balance

sheets for the three-month periods ended March 31, 2021 and 2020, 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 March 31,

(Dollars in thousands)

19 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.

Includes loan fees, immaterial

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

Also includes loans on nonaccrual status.

First Federal Bancorp

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

of Financial Condition Changes from June 30, 2020 to December 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.

Discussion of Financial Condition Changes

from June 30, 2020 to March 31, 2021

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.

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 closed

or limited the operations of many 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

Management continues to monitor 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.

Because the impact is contingent upon

the duration and severity of the economic downturn, management cannot determine or estimate the magnitude of the impact at this

While the pandemic has affected the physical operations of the Banks, the business has been mostly unchanged with consistent

levels of consumer transactions and loan originations.

The potential for a deterioration in asset quality remains, but actual asset

quality has improved.

Classified assets at March 31, 2020, totaled $10.5 million compared to $8.7 million at December 31, 2020.

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 closed or limited the operations of

many 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.

Management continues to monitor 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 including the Consolidated Appropriations Act, 2021.

the impact is contingent upon the duration and severity of the economic downturn, management cannot determine or estimate the magnitude

of the impact at this time.

While the pandemic has affected the physical operations of the Banks, the business has been mostly unchanged

with consistent levels of consumer transactions and loan originations.

The potential for a deterioration in asset quality remains, but

actual asset quality has improved.

Classified assets at March 31, 2021, totaled $8.5 million compared to $10.5 million at March 31, 2020.

Management attributes some of this improved performance to the overall strengthening in the residential real estate market.

1 unchanged sentence

95% of the Company’s loans are secured by residential real estate.

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

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.

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

A small number of employees are working

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)

of Financial Condition Changes from June 30, 2020 to December 31, 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.

December 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

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 December 31, 2020, we had borrowers with 101 loans avail themselves of our payment deferral program with a total

principal balance of $18.4 million in loans modified.

Of those modified loans five loans totaling $293,000 in principal had not

yet completed the initial three-month deferral period.

One borrower with outstanding principal of $859,000 had been granted an

additional extension.

All other borrowers granted a deferral, composed of 95 loans totaling $17.2 million in principal had resumed

regular payments.

The CARES Act includes a Paycheck Protection

Program (“PPP”), which is administered by the Small Business Administration (“SBA”) and is designed to

aid small- and medium-sized businesses through federally-guaranteed loans disbursed through banks.

These loans are intended to

provide eight weeks of payroll and other costs to assist those businesses to either remain open or to re-open quickly and allow

their workers to pay their bills.

Discussion of Financial Condition Changes

from June 30, 2020 to March 31, 2021 (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, 2021 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 March 31, 2021, we had borrowers with

101 loans avail themselves of our payment deferral program with a total principal balance of $18.4 million in loans modified.

with outstanding principal of $859,000 had been granted an additional extension and returned to regular paying status in April 2021.

All other borrowers granted a deferral, composed of 100 loans totaling $17.5 million in principal had resumed regular payments.

The CARES Act and subsequent Consolidated Appropriations

Act, 2021, includes a Paycheck Protection Program (“PPP”), which is administered by the Small Business Administration (“SBA”)

and is designed to aid small- and medium-sized businesses through federally-guaranteed loans disbursed through banks.

These loans are

intended to provide eight weeks of payroll and other costs to assist those businesses to either remain open or to re-open quickly and

allow their workers to pay their bills.

First Federal of Kentucky qualified as an SBA lender to assist the small business community in

securing this important funding.

As of December 31, 2020, First Federal of Kentucky had approved and closed with the SBA 45 PPP

loans representing $1.5 million in funding.

Of those loans a total of 13 loans aggregating $931,000 had been repaid at the end

of the period.

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.

On December 21, 2020, Congress passed a second Coronavirus

Relief Bill, which provides for a second round of PPP loans, in which the Company plans to participate.

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

As of March 31, 2021, First Federal of Kentucky had approved and closed with the SBA 73 PPP loans representing

$2.6 million in funding.

Of those loans a total of 28 loans aggregating $1.2 million had been repaid at the end of the period.

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.

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.

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)

of Financial Condition Changes from June 30, 2020 to December 31, 2020 (continued)

At December 31, 2020, the Company’s assets totaled $330.7 million, an increase of $9.5 million, or 3.0%, from total

assets at June 30, 2020.

This increase was attributed primarily to an increase in loans, net.

and cash equivalents:

Cash and cash equivalents increased $1.0 million or 7.5% to $14.7 million at December 31, 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 $1.5 million or 66.6%

to $745,000 at December 31, 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 December 31, 2020, our securities portfolio consisted of mortgage-backed securities.

Discussion of Financial Condition Changes

from June 30, 2020 to March 31, 2021 (continued)

At March 31, 2021, the

Company’s assets totaled $332.6 million, an increase of $11.5 million, or 3.6%, from total assets at June 30, 2020.

This increase

was attributed primarily to an increase in loans, net.

Cash and cash equivalents:

and cash equivalents increased $1.1 million or 7.8% to $14.8 million at March 31, 2021.

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 $2.0 million or 88.9% to $247,000 at March 31, 2021.

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.

Investment securities:

decreased $569,000 or 50.0% to $570,000 at December 31, 2020.

Loans receivable, net, increased by $10.4 million or 3.6% to $296.3 million at December 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 December 31, 2020, the Company had non-performing loans (loans 90 or more days past due or on

nonaccrual status) of approximately $6.5 million, or 2.2% 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 $1.6 million and $1.5 million

at December 31, 2020 and June 30, 2020, respectively.

The allowance for loan losses at December 31, 2020, represented 24.8% 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 $8.7 million in assets

classified as substandard for regulatory purposes at December 31, 2020, including loans ($8.5 million), loans acquired in the CKF

Bancorp transaction and real estate owned (“REO”) ($164,000.) Classified loans as a percentage of total loans (including

loans acquired) was 2.9% and 3.1% at December 31, 2020 and June 30, 2020, respectively.

Of substandard loans, 100.0% 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:

31, 2021, our securities portfolio consisted of mortgage-backed securities.

Investment securities decreased $615,000 or 54.0% to $524,000

at March 31, 2021.

Loans receivable,

net, increased by $13.3 million or 4.7% to $299.2 million at March 31, 2021.

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:

March 31, 2021, the Company had non-performing loans (loans 90 or more days past due or on nonaccrual status) of approximately $6.2 million,

or 2.1% 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 $1.6 million and $1.5 million at March 31, 2021 and June 30, 2020, respectively.

The allowance for

loan losses at March 31, 2021, represented 26.1% 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 $8.5 million in assets classified

as substandard for regulatory purposes at March 31, 2021, including loans ($8.4 million), loans acquired in the CKF Bancorp transaction

and real estate owned (“REO”) ($141,000.) Classified loans as a percentage of total loans (including loans acquired) was

2.8% and 3.1% at March 31, 2021 and June 30, 2020, respectively.

Of substandard loans, 100.0% 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:

(dollars in thousands)

2 unchanged sentences

Total classified assets

December 31, 2020, the Company’s real estate acquired through foreclosure represented 1.9% of substandard assets compared

to 6.7% at June 30, 2020.

During the periods presented the Company made one loan totaling $37,000 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 $45,000 and $23,000 at December 31, 2020 and June 30, 2020, respectively.

First Federal Bancorp

At March 31, 2021, the Company’s real estate

acquired through foreclosure represented 1.7% of substandard assets compared to 6.7% at June 30, 2020.

During the periods presented the

Company made one loan totaling $37,000 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 $44,000 and $23,000 at March 31, 2021 and June

30, 2020, respectively.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

of Financial Condition Changes from June 30, 2020 to December 31, 2020 (continued)

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

December 31, 2020

Discussion of Financial Condition Changes

from June 30, 2020 to March 31, 2021 (continued)

The following table presents the aggregate carrying

value of REO at the dates indicated:

March 31, 2021

June 30, 2020

One- to four-family

At December 31, 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 $9.6 million, or 3.6% to $278.8 million at December 31, 2020, primarily as a result of increases in advances and deposits.

Advances increased $6.3 million or 11.6% to $61.0 million at December 31, 2020, while deposits increased $4.0 million or 1.9% to

$216.3 million at December 31, 2020.

Advances were used to fund loan growth.

At March 31, 2021 and June 30, 2020, the Company

had $1.6 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

$11.5 million, or 4.3% to $280.7 million at March 31, 2021, primarily as a result of increases in deposits.

Deposits increased $13.3 million

or 6.3% to $225.5 million at March 31, 2021, while advances decreased $1.5 million or 2.8% to $53.2 million at March 31, 2021.

Shareholders’

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

equity totaled $51.8 million, a decrease of $79,000

or 0.2% from the June 30, 2020 total.

March 31, 2021, the Company’s shareholders’

equity totaled $51.9 million, a decrease of $21,000 or 0.0% from the June 30,

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.

Company paid dividends of $691,000 or 105.5% of net income for the six-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.

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 $1.0 million or

92.2% of net income for the nine-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, 2020 for additional discussion

regarding dividends.

First Federal Bancorp

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.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

of Operating Results for the Six-month Periods Ended December 31, 2020 and 2019

income totaled $655,000 or $0.08 diluted earnings per share for the six months ended December 31, 2020, an increase of $173,000

or 35.9% from net income of $482,000 or $0.06 diluted earnings per share for the same period in 2019.

The increase in net income

on a six-month basis was primarily attributable to higher net interest income, higher non-interest income and lower non-interest

expense, which were partially offset by increased provision for loan losses and increased provision for income tax.

Interest Income

interest income before provision for loan losses increased $141,000 or 3.0% to $4.9 million for the six-month period just ended.

Interest income decreased by $560,000, or 8.5%, to $6.0 million, while interest expense decreased $701,000 or 37.5% to $1.2 million

for the six months ended December 31, 2020.

decrease in interest income period-to-period was due primarily to a decrease in the average rate earned on interest-earning assets,

as the average volume of interest-earning assets increased period-to-period.

The average rate decreased 49 basis points to 3.83%

for the recently-ended six-month period compared to the prior year period, while the average balance of interest-earning assets

increased $9.4 million or 3.1% to $314.9 million for the six months ended December 31, 2020.

Interest income on loans decreased

$361,000 or 5.7% to $5.9 million, due primarily to a decrease in the average rate earned on the loan portfolio, which decreased

40 basis points to 4.06%, while the average balance increased $10.6 million or 3.7% to $292.8 million for the six-month period

ended December 31, 2020.

Interest income from interest-bearing deposits and other decreased $188,000 or 69.13% to $84,000 for

the six months just ended due to a decrease in the average rate earned, which decreased 172 basis points to 0.79% for the recently-ended

period compared to the period a year ago.

decrease in interest expense was due primarily to a decrease of 57 basis points on the average rate paid on funding sources, which

totaled 0.89% for the six months ended December 31, 2020.

The Company’s interest-bearing liabilities have repriced quickly

as we are able to take advantage of the low interest rate environment that currently exists.

Interest expense on deposits decreased

$256,000 or 21.4% to $940,000 for the six months ended December 31, 2020, while interest expense on borrowings decreased $445,000

or 66.1% to $228,000 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 34 basis points to 0.90% for the recently ended period,

while the average balance of interest-bearing deposits increased $15.5 million or 8.0% to $208.5 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 period to period.

The average balance of borrowings outstanding decreased $8.8 million or 14.0%

to $54.3 million for the recently ended six-month period, while the average rate paid on borrowings decreased 129 basis points

to 0.84% for the most recent period.

interest spread increased from 2.85% for the prior year semiannual period to 2.94% for the six-month period ended December 31,

for Losses on Loans

Comparison of Operating Results for the Nine-month

Periods Ended March 31, 2021 and 2020

Net income totaled $1.1 million or $0.14 diluted

earnings per share for the nine months ended March 31, 2021, an increase of $406,000 or 56.2% from net income of $722,000 or $0.09 diluted

earnings per share for the same period in 2020.

The increase in net income on a nine-month basis was primarily attributable to higher

net interest income, higher non-interest income and lower non-interest expense, which were partially offset by increased provision for

loan losses and increased provision for income tax.

Net Interest Income

Net interest income before provision for loan

losses increased $266,000 or 3.8% to $7.3 million for the nine-month period just ended.

Interest income decreased by $825,000, or 8.4%,

to $9.0 million, while interest expense decreased $1.1 million or 39.7% to $1.7 million for the nine months ended March 31, 2021.

The decrease in interest income period-to-period

was due primarily to a decrease in the average rate earned on interest-earning assets, as the average volume of interest-earning assets

increased period-to-period.

The average rate decreased 50 basis points to 3.77% for the recently-ended nine-month period compared to the

prior year period, while the average balance of interest-earning assets increased $11.6 million or 3.8% to $317.1 million for the nine

months ended March 31, 2021.

Interest income on loans decreased $566,000 or 6.0% to $8.8 million, due primarily to a decrease in the average

rate earned on the loan portfolio, which decreased 44 basis points to 4.00%, while the average balance increased $12.7 million or 4.5%

to $294.8 million for the nine-month period ended March 31, 2021.

Interest income from interest-bearing deposits and other decreased $242,000

or 66.5% to $122,000 for the nine months just ended due primarily to a decrease in the average rate earned, which decreased 146 basis

points to 0.75% for the recently-ended period compared to the period a year ago.

The decrease in interest expense was due primarily

to a decrease of 59 basis points on the average rate paid on funding sources, which totaled 0.84% for the nine months ended March 31,

The Company’s interest-bearing liabilities have repriced quickly as we are able to take advantage of the low interest rate

environment that currently exists.

Interest expense on deposits decreased $497,000 or 27.2% to $1.3 million for the nine months ended

March 31, 2021, while interest expense on borrowings decreased $594,000 or 64.1% to $333,000 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 40 basis

points to 0.85% for the recently ended period, while the average balance of interest-bearing deposits increased $14.2 million or 7.3%

to $208.9 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 period to period.

The average balance of borrowings outstanding

decreased $6.0 million or 9.8% to $55.2 million for the recently ended nine-month period, while the average rate paid on borrowings decreased

121 basis points to 0.81% for the most recent period.

Net interest spread increased from 2.84% for

the prior year semiannual period to 2.93% for the nine-month period ended March 31, 2021.

Provision for Losses on Loans

Provision for loan losses increased $128,000

for the six-month period ended December 31, 2020, and totaled $192,000 compared to $64,000 for the prior year semi-annual period.

The higher provision was primarily in response to the higher level of loans maintained in the portfolio as well as increased levels

of multi-family and commercial real estate loans, which carry somewhat more risk.

While management continues to consider the potential

impact of COVID-19 on asset quality, no adjustment to the allowance for loan losses has been made for that specific reason.

the onset of the pandemic, the Company granted deferrals to borrowers representing $18.1 million in loans, but the overwhelming

majority of those borrowers have resumed regular payments.

Further, 95% of the Company’s loan portfolio is secured by residential

real estate, which has performed well during the pandemic.

First Federal Bancorp

for the nine-month period ended March 31, 2021, and totaled $192,000 compared to $64,000 for the prior year semi-annual period.

provision was primarily in response to the higher level of loans maintained in the portfolio as well as increased levels of multi-family

and commercial real estate loans, which carry somewhat more risk.

While management continues to consider the potential impact of COVID-19

on asset quality, no adjustment to the allowance for loan losses has been made for that specific reason.

Near the onset of the pandemic,

the Company granted deferrals to borrowers representing $18.1 million in loans, but the overwhelming majority of those borrowers have

resumed regular payments.

Further, 95% of the Company’s loan portfolio is secured by residential real estate, which has performed

well during the pandemic.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

of Operating Results for the Six-month Periods Ended December 31, 2020 and 2019 (continued)

income increased $99,000 or 65.1% to $251,000 for the six months ended December 31, 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 $115,000 to $155,000 for the recently-ended

six-month period.

In the current interest rate environment, many borrowers are choosing long-term, fixed rate loans, which the

bank usually sells to the Federal Home Loan Bank of Cincinnati (“FHLB”).

An increase in volume of these loans sold

was responsible for the increase in gain on sale of loans.

expense decreased $98,000 or 2.3% and totaled $4.1 million for the six months ended December 31, 2020, primarily due to cost-saving

measures implemented by management.

compensation and benefits decreased $124,000 or 4.5% to $2.6 million primarily due to lower employee compensation.

The Banks were

operating with two fewer full-time equivalent employees in the recently-ended semi-annual period compared to the prior year period,

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

Also contributing

to lower compensation cost was an increase in the number of loans originated in the recently-ended period compared to the prior

The Banks are required to defer a portion of the costs associated with loan originations and those costs are primarily related

to personnel costs.

Somewhat 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 increased $56,000 or 12.9% to

$486,000 for the six-month period recently ended compared to the prior year period.

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.

Other non-interest expense decreased $47,000 or 12.7% to $323,000 for the six months ended December 31, 2020, primarily

due to lower general insurance expenses, discretionary employee and meeting expenses, regulatory assessments and general loan

Voice and data communications expense decreased $43,000 or 43.0% to $57,000 for the six-month period just ended as upgraded

technology savings were realized.

offsetting the decreases in various non-interest expense items were increases in FDIC insurance premiums and data processing

FDIC insurance premiums increased to $88,000 for the six months ended December 31, 2020.

In the prior year

semi-annual 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 $53,000 or 22.2% to $292,000 for the period

just ended as core processing costs increased and the Company expanded its technology infrastructure.

tax expense increased $37,000 or 31.4% to $155,000 for the six months ended December 31, 2020, compared to the prior year period.

The effective tax rates for the six-month periods ended December 31, 2020 and 2019, were 19.1% and 19.7%, respectively.

First Federal Bancorp

Comparison of Operating Results for the Nine-month

Periods Ended March 31, 2021 and 2020 (continued)

Non-interest Income

Non-interest income increased $200,000 or 85.8%

to $433,000 for the nine months ended March 31, 2021, 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 $205,000 to $280,000 for the recently-ended nine-month period.

In the current

interest rate environment, many borrowers are choosing long-term, fixed rate loans, which the bank usually sells to the Federal Home

Loan Bank of Cincinnati (“FHLB”).

An increase in volume of these loans sold was responsible for the increase in gain on sale

Non-interest Expense

Non-interest expense decreased $185,000 or 2.9%

and totaled $6.1 million for the nine months ended March 31, 2021, primarily due to cost-saving measures implemented by management.

Employee compensation and benefits decreased

$141,000 or 3.4% to $4.0 million primarily due to lower employee compensation.

The Banks were operating with fewer full-time equivalent

employees in the nine-month period just ended compared to the prior year period.

Also contributing to lower compensation cost was an

increase in the number of loans originated in the recently-ended period compared to the prior year period.

The Banks are required to

defer a portion of the costs associated with loan originations and those costs are primarily related to personnel costs.

Somewhat 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 increased $38,000 or 5.5% to $720,000 for the nine-month period recently ended

compared to the prior year period.

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.

Other non-interest expense decreased $68,000

or 12.6% to $472,000 for the nine months ended March 31, 2021, primarily due to lower general insurance expenses, discretionary employee

and meeting expenses, regulatory assessments and general loan expenses.

Franchise and other taxes decreased $64,000 or 33.0% and totaled

$130,000 for the nine months ended March 31, 2021, as the Banks became subject to Kentucky corporate income tax on its earnings rather

than being subject to the Kentucky Savings and Loan tax effective January 1, 2021.

Voice and data communications expense decreased $48,000

or 37.5% to $80,000 for the nine-month period just ended as upgraded technology savings were realized.

Somewhat offsetting the decreases in various

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

FDIC insurance premiums increased

to $129,000 for the nine months ended March 31, 2021.

In the prior year semi-annual 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 10.8% to $430,000 for the period just ended as core processing costs increased and the Company expanded its technology infrastructure.

Income Tax Expense

Income tax expense increased $117,000 or 66.5%

to $293,000 for the nine months ended March 31, 2021, compared to the prior year period.

The effective tax rates for the nine-month periods

ended March 31, 2021 and 2020, were 20.6% and 19.6%, respectively.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

of Operating Results for the Three-month Periods Ended December 31, 2020 and 2019

income totaled $370,000 or $0.04 diluted earnings per share for the three months ended December 31, 2020, an increase of $122,000

or 49.2% from net income of $248,000 or $0.03 diluted earnings per share for the same period in 2019.

Interest Income

interest income before provision for loan losses increased $132,000 or 5.6% to $2.5 million for the three-month period just ended,

as interest expense decreased at a faster pace than interest income decreased for the quarter just ended.

Interest income decreased

by $261,000, or 8.0%, to $3.0 million, while interest expense decreased $393,000 or 42.6% to $529,000 for the three months ended

December 31, 2020.

income on loans decreased $165,000 or 5.3% to $3.0 million, due primarily to a decrease in the average rate earned on the loan

The average rate earned on the loan portfolio decreased 42 basis points to 4.00%, while the average balance increased

$13.5 million or 4.8% to $296.3 million for the three-month period ended December 31, 2020.

Interest income from interest-bearing

deposits and other decreased $90,000 or 70.3% to $38,000 for the three months just ended due to a decrease in the average rate

earned, which decreased 159 basis points to 0.73% for the recently-ended period compared to the period a year ago.

expense on deposits decreased $182,000 or 29.9% to $426,000 for the three months ended December 31, 2020, while interest expense

on borrowings decreased $211,000 or 67.2% to $103,000 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 44 basis points to 0.82% for the

recently ended period, while the average balance of interest-bearing deposits increased $15.3 million or 7.9% to $208.7 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 period to period.

The average balance of borrowings outstanding decreased

$6.7 million or 10.5% to $56.7 million for the recently ended three-month period, while the average rate paid on borrowings decreased

125 basis points to 0.73% for the most recent period.

interest spread increased 15 basis points from 2.83% for the prior year quarterly period to 2.98% for the three-month period ended

December 31, 2020.

for Losses on Loans

for loan losses totaled $108,000 for the three-month period ended December 31, 2020, an increase of $103,000 over the $5,000 provision

recorded for the prior year quarter.

The higher provision was primarily in response to the higher level of loans maintained in

the portfolio as well as increased levels of multi-family and commercial real estate loans, which carry somewhat more risk.

First Federal Bancorp

Comparison of Operating Results for the Three-month

Periods Ended March 31, 2021 and 2020

Net income totaled $473,000 or $0.06 diluted

earnings per share for the three months ended March 31, 2021, an increase of $233,000 or 97.1% from net income of $240,000 or $0.03 diluted

earnings per share for the same period in 2020.

Net Interest Income

Net interest income before provision for loan

losses increased $125,000 or 5.4% to $2.4 million for the three-month period just ended, as interest expense decreased at a faster pace

than interest income decreased for the quarter just ended.

Interest income decreased by $265,000, or 8.3%, to $2.9 million, while interest

expense decreased $390,000 or 44.2% to $492,000 for the three months ended March 31, 2021.

Interest income on loans decreased $205,000 or

6.6% to $2.9 million, due primarily to a decrease in the average rate earned on the loan portfolio.

The average rate earned on the loan

portfolio decreased 53 basis points to 3.88%, while the average balance increased $16.9 million or 6.0% to $298.8 million for the three-month

period ended March 31, 2021.

Interest income from interest-bearing deposits and other decreased $54,000 or 58.7% to $38,000 for the three

months just ended due to a decrease in the average rate earned, which decreased 95 basis points to 0.68% for the recently-ended period

compared to the period a year ago.

Interest expense on deposits decreased $241,000

or 38.4% to $387,000 for the three months ended March 31, 2021, while interest expense on borrowings decreased $149,000 or 58.7% to $105,000

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 53 basis points to 0.74% for the recently ended period, while the average balance of interest-bearing deposits

increased $11.6 million or 5.9% to $210.1 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 period to period.

The average balance

of borrowings outstanding decreased $306,000 or 0.5% to $57.0 million for the recently ended three-month period, while the average rate

paid on borrowings decreased 103 basis points to 0.74% for the most recent period.

Net interest spread increased 10 basis points

from 2.82% for the prior year quarterly period to 2.92% for the three-month period ended March 31, 2021.

Provision for Losses on Loans

There was no provision for loan losses for the

three-month periods ended March 31, 2021 or 2020.

The Company had recorded higher provision earlier in the fiscal year in response to

the higher level of loans maintained in the portfolio as well as increased levels of multi-family and commercial real estate loans, which

carry somewhat more risk.

Kentucky First Federal Bancorp

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

of Operating Results for the Three-month Periods Ended December 31, 2020 and 2019 (continued)

Comparison of Operating Results for the Three-month

Periods Ended March 31, 2021 and 2020 (continued)

Non-interest Income

Non-interest income increased $101,000 or 124.7%

57.7% to $123,000 for the three months ended December 31, 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 $63,000 to $97,000 for the recently-ended three-month period

over the prior year amount.

In the current interest rate environment, many borrowers are choosing long-term, fixed rate loans,

which the Banks usually sell to the FHLB.

An increase in volume of these loans sold was responsible for the increase in gain on

sale of loans.

expense decreased $79,000 or 3.7% and totaled $2.0 million for the three months ended December 31, 2020, primarily due to cost-saving

measures implemented by management.

compensation and benefits decreased $107,000 or 7.6% to $1.3 million primarily due to lower employee and director compensation.

Also contributing to lower compensation cost was an increase in the number of loans originated during the period, which increases

the expense deferred for those loans.

The Company’s DB pension contributions decreased $18,000 or 7.1% to $234,000 for the

three-month period recently ended compared to the prior year period.

Lower DB pension contributions for the quarter were a result

of lower total costs than originally anticipated.

Other non-interest expense decreased $14,000 or 7.7% to $168,000 for the three

months ended December 31, 2020, primarily due to lower general insurance expenses, discretionary employee and meeting expenses,

and regulatory assessments.

Auditing and accounting expenses decreased $13,000 or 25.0% to $39,000 for the quarter just ended.

to $182,000 for the three months ended March 31, 2021, 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 $90,000 to $125,000 for the recently-ended three-month period over the prior

In the current interest rate environment, many borrowers are choosing long-term, fixed rate loans, which the Banks usually

sell to the FHLB.

An increase in volume of these loans sold was responsible for the increase in gain on sale of loans.

Non-interest Expense

Non-interest expense decreased $87,000 or 4.1%

and totaled $2.0 million for the three months ended March 31, 2021, primarily due to cost-saving measures implemented by management.

Franchise and other taxes decreased $65,000 or

100.0% for the three months ended March 31, 2021, as the Banks became subject to Kentucky corporate income tax on its earnings rather

than being subject to the Kentucky Savings and Loan tax effective January 1, 2021.

Other non-interest expense decreased $21,000 or 12.4%

to $149,000 for the three months ended March 31, 2021, primarily due to lower discretionary employee and meeting expenses, and expenses

associated with management of the loan portfolio.

Employee compensation and benefits decreased $17,000 or 1.2% to $1.4 million primarily

due to lower employee and director compensation as well as higher deferred compensation cost attributed to an increase in the number

of loans originated during the period.

The Company’s DB pension contributions decreased $18,000 or 7.1% to $234,000 for the three-month

period recently ended compared to the prior year period.

Lower DB pension contributions for the quarter were a result of lower total

costs than originally anticipated.

Somewhat offsetting the decreases in various

non-interest expense items were increases in FDIC insurance premiums, foreclosure and OREO expenses, and data processing expenses.

FDIC insurance premiums totaled $31,000 for the three months ended December 31, 2020, compared to zero for the prior year period

due to a lack of SBAC credits for the current year.

Foreclosure and OREO expenses, net, increased $24,000 to $30,000 for the period

just ended as the Company resolved various substandard loans and incurred losses on the existing OREO.

Data processing expenses

increased $11,000 or 8.2% to $145,000 for the quarter ended December 31, 2020, primarily due to higher costs associated with enhanced

voice and data capabilities.

tax expense increased $31,000 or 53.4% to $89,000 for the three months ended December 31, 2020, compared to the prior year period.

The effective tax rates for the three-month periods ended December 31, 2020 and 2019, were 19.4% and 19.0%, respectively.

First Federal Bancorp

Quantitative and Qualitative Disclosures About Market Risk

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

non-interest expense items was an increase in FDIC insurance premiums, which totaled $41,000 for the three months ended March 31, 2021,

compared to zero for the prior year period due to a lack of SBAC credits for the current period.

Income Tax Expense

Income tax expense increased $80,000 or 137.9%

to $138,000 for the three months ended March 31, 2021, compared to the prior year period.

As described herein, the Banks became subject

to Kentucky corporate income tax on its earnings rather than being subject to the Kentucky Savings and Loan tax effective January 1,

The effective tax rates for the three-month periods ended March 31, 2021 and 2020, were 22.6% and 19.5%, 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.

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