What changed in this filing

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Item 1. Financial Statements

2022-02-14 compared with 2021-11-15 · 321 added, 289 removed, 380 unchanged (62% of the section changed)

3 unchanged sentences

thousands, except share data)

September 30,

Cash and due from financial institutions

4 unchanged sentences

Securities available-for-sale

Securities held-to-maturity, at amortized cost- approximate fair value of $ 452 and $ 476 at September 30, 2021 and June 30, 2021, respectively

Securities held-to-maturity, at amortized cost- approximate fair value of $ 421 and $ 476 at December 31, 2021 and June 30, 2021, respectively

Loans held for sale

Loans, net of allowance of $ 1,610 and $ 1,622 at September 30, 2021 and June 30, 2021, respectively

Loans, net of allowance of $ 1,603 and $ 1,622 at December 31, 2021 and June 30, 2021, respectively

Real estate owned, net

9 unchanged sentences

Accrued interest payable

Accrued income taxes

Deferred income taxes

9 unchanged sentences

Retained earnings

Unearned employee stock ownership plan (ESOP), 5,586 shares and 10,255 shares at September 30, 2021 and June 30, 2021, respectively

Treasury shares at cost, 369,349 and 369,349 common shares at September 30, 2021 and June 30, 2021, respectively

Unearned employee stock ownership plan (ESOP), 917 shares and 10,255 shares at December 31, 2021 and June 30, 2021, respectively

Treasury shares at cost, 377,849 and 369,349 common shares at December 31, 2021 and June 30, 2021, respectively

Accumulated other comprehensive income

5 unchanged sentences

in thousands, except per share data)

Six months ended

Three months ended

September 30,

Interest income

15 unchanged sentences

Net gain (loss) on sales of real estate owned

Valuation adjustment for real estate owned

Total non-interest income

19 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Six months ended

Three months ended

September 30,

Other comprehensive gains (losses), net of tax:

4 unchanged sentences

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

the three months ended

the six months ended

amounts in thousands, except per share data)

comprehensive

income (loss)

Balance at June 30, 2021

Allocation of ESOP shares

Acquisition of shares for Treasury

Cash dividends of $ 0.20 per common share

Balance at September 30, 2021

Balance at December 31, 2021

stock ownership

comprehensive

4 unchanged sentences

Cash dividends of $ 0.20 per common share

Balance at December 31, 2020

accompanying notes to condensed consolidated financial statements.

First Federal Bancorp

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

the three months ended

amounts in thousands, except per share data)

comprehensive

Balance at September 30, 2021

Allocation of ESOP shares

Acquisition of shares for Treasury

Cash dividends of $ 0.10 per common share

Balance at December 31, 2021

comprehensive

Balance at September 30, 2020

Allocation of ESOP shares

Acquisition of shares for Treasury

Cash dividends of $ 0.10 per common share

Balance at December 31, 2020

accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

September 30,

Six months ended

Cash flows from operating activities:

6 unchanged sentences

Net (gain) loss on sale of real estate owned

Valuation adjustments of real estate owned

ESOP compensation expense

26 unchanged sentences

Dividends paid on common stock

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Net increase in cash and cash equivalents

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

Three months ended

September 30,

Six months ended

Supplemental disclosure of cash flow information:

21 unchanged sentences

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.

of operations for the three-month period ended September 30, 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, 2021, 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.

in the opinion of management, all adjustments (consisting of only normal recurring adjustments) which are necessary for a fair presentation

of the condensed consolidated financial statements have been included.

The results of operations for the three-month and six-month periods

ended December 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, 2021, has been derived from the audited consolidated balance sheet as of that date.

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 2021 filed with the Securities and Exchange Commission.

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

2021 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

2 unchanged sentences

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’ equity.

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Basis of Presentation (continued)

Accounting Standards

23 unchanged sentences

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.

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

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

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.

The Company adopted ASU 2019-12

effective July 1, 2021, with no material impact to our consolidated financial statements.

Management is in the final stages of selecting a third-party vendor

to partner with and expects to begin working with the successful vendor on data validation and implementation efforts over the next several

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 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.

Company adopted ASU 2019-12 effective July 1, 2021, with no material 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

6 unchanged sentences

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

Six months ended

Three months ended

September 30,

(in thousands)

Net income allocated to common shareholders, basic and diluted

Earnings per share, basic and diluted

Six months ended

Three months ended

Weighted average common shares outstanding, basic and diluted

were no stock option shares outstanding for the three-month periods ended September 30, 2021 and 2020.

were no stock option shares outstanding for the six- or three-month periods ended December 31, 2021 and 2020.

Investment Securities

The following table summarizes the amortized cost

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

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

September 30, 2021

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

31, 2021 and June 30, 2021, the corresponding amounts of gross unrealized gains recognized in accumulated other comprehensive income

and gross unrecognized gains and losses:

December 31, 2021

(in thousands)

Amortized cost

Gross unrealized/ unrecognized

Estimated fair value

Available-for-sale Securities

4 unchanged sentences

(in thousands)

Amortized cost

Gross unrealized/ unrecognized

Estimated fair value

Available-for-sale Securities

2 unchanged sentences

Agency mortgage-backed:

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

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Investment Securities (continued)

pledged securities (including overnight and time deposits in other financial institutions) totaled $ 1.7 million and $ 1.8 million at December

31, 2021 and June 30, 2021, respectively.

5 unchanged sentences

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

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

Loans receivable

The composition of the loan portfolio was as follows:

September 30,

composition of the loan portfolio was as follows:

(in thousands)

6 unchanged sentences

Allowance for loan losses

The amounts above include net deferred loan costs

of $ 262,000 and $ 167,000 as of September 30, 2021 and June 30, 2021, respectively.

The following table presents the activity in the

allowance for loan losses by portfolio segment for the three months ended September 30, 2021:

amounts above include net deferred loan costs of $ 270,000 and $ 167,000 as of December 31, 2021 and June 30, 2021, respectively.

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended December 31, 2021:

(in thousands)

Beginning balance

Provision for loan losses

Loans charged off

Ending balance

Residential real estate:

4 unchanged sentences

Loans on deposits

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended December 31, 2021:

(in thousands)

Residential real estate:

One- to four-family

Nonresidential real estate

Commercial nonmortgage

Consumer and other:

Loans on deposits

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

The following table presents the activity in the

allowance for loan losses by portfolio segment for the three months ended September 30, 2020:

following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended December 31, 2020:

(in thousands)

Beginning balance

Provision for loan losses

Ending balance

Residential real estate:

4 unchanged sentences

Loans on deposits

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 September 30, 2021.

following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended December 31, 2020:

(in thousands)

Residential real estate:

One- to four-family

Nonresidential real estate

Commercial nonmortgage

Consumer and other:

Loans on deposits

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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, 2021.

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

September 30, 2021:

(in thousands)

Loans individually evaluated

Loans acquired with deteriorated credit quality

Unpaid principal balance

and recorded investment

Ending allowance attributed to loans

Loans individually evaluated for impairment:

8 unchanged sentences

Loans on deposits

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

The following tables present the balance in the

allowance for loan losses and the recorded investment in loans by portfolio class and based on impairment method as of June 30, 2021.

June 30, 2021:

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, 2021.

(in thousands)

Loans individually evaluated

Loans acquired with deteriorated credit quality

Unpaid principal balance

and recorded investment

Ending allowance attributed to loans

acquired with

credit quality

attributed to

Loans individually evaluated for impairment:

9 unchanged sentences

Loans on deposits

The following table presents interest income on

loans individually evaluated for impairment by class of loans for the three months ended September 30:

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

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

(in thousands)

With no related allowance recorded:

One- to four-family

Nonresidential real estate

Purchased credit-impaired loans

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

(in thousands)

Average Recorded Investment

7 unchanged sentences

Nonresidential real estate

Consumer and other

Purchased credit-impaired loans

1 unchanged sentence

One- to four-family

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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 September 30, 2021, and June 30, 2021:

September 30, 2021

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, 2021 and June 30, 2021:

December 31, 2021

June 30, 2021

7 unchanged sentences

Nonresidential real estate and land

Commercial and industrial

One- to four-family loans in process of foreclosure

totaled $ 525,000 and $ 577,000 at September 30, 2021 and June 30, 2021, 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.

to four-family loans in process of foreclosure totaled $ 479,000 and $ 577,000 at December 31, 2021 and June 30, 2021, respectively.

Debt Restructurings:

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

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

All TDRs are considered “impaired.”

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 the TDR relief under the CARES Act until the earlier of December 31, 2021 or 60 days following the termination of the national

The relief can only be applied to modifications for borrowers that were not more than 30 days past due as of December 31, 2019.

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 the TDR relief under the CARES Act until the earlier of December 31,

2021 or 60 days following the termination of the 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.

In response to the COVID-19 pandemic and the widespread economic downturn

that immediately resulted, the Company adopted a loan forbearance plan in which then-current affected borrowers could request deferral

of their loan payments for a period of three months.

A total of $815,000 in loans were accepted into the plan for the twelve months ended

June 30, 2021.

At June 30, 2021 all of those loans had reached the end of their three-month deferral data period and returned to regular

payment status.

At September 30, 2021 and June 30, 2021, the Company

had $ 1.7 million of loans classified as TDRs.

Of the TDRs at September 30, 2021, approximately 27.2 % were related to the borrower’s

completion of Chapter 7 bankruptcy proceedings with no reaffirmation of the debt to the Banks.

During the three months ended September 30,

2021, and 2020 the Company added no loans restructured as TDRs.

No TDRs defaulted during the three-month periods ended September 30,

2021, or 2020.

The following table presents the aging of the

principal balance outstanding in past due loans as of September 30, 2021, by class of loans:

to the COVID-19 pandemic and the widespread economic downturn that immediately resulted, the Company adopted a loan forbearance plan

in which then-current affected borrowers could request deferral of their loan payments for a period of three months.

A total of $ 815,000

in loans were accepted into the plan for the twelve months ended June 30, 2021.

At June 30, 2021 all of those loans had reached the end

of their three-month deferral data period and returned to regular payment status.

December 31, 2021 and June 30, 2021, the Company had $ 1.6 million and $ 1.7 million of loans classified as TDRs, respectively.

TDRs at December 31, 2021, approximately 27.2 % were related to the borrower’s completion of Chapter 7 bankruptcy proceedings with

no reaffirmation of the debt to the Banks.

the six- and three-months ended December 31, 2021, the Company restructured no loans as TDRs.

No TDRs defaulted during the six-month

periods ended December 31, 2021 or 2020.

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

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.

following table summarizes TDR loan modifications that occurred during the six months ended December 31, 2020, and their performance,

by modification type:

(in thousands)

Troubled Debt

Restructurings

Performing to

Troubled Debt

Restructurings

Performing to

Troubled Debt

Restructurings

Six months ended December 31, 2020

Residential real estate:

Chapter 7 bankruptcy

following table summarizes TDR loan modifications that occurred during the three months ended December 31, 2020, 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

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

following table presents the aging of the principal balance outstanding in past due loans as of December 31, 2021, by class of loans:

(in thousands)

Residential real estate:

One-to four-family

Nonresidential real estate

Commercial and industrial

Commercial non-mortgage

Consumer and other:

Loans on deposits

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

Loans receivable (continued)

The following tables present the aging of the

principal balance outstanding in past due loans as of June 30, 2021, by class of loans:

following tables present the aging of the principal balance outstanding in past due loans as of June 30, 2021, by class of loans:

(in thousands)

4 unchanged sentences

Loans on deposits

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.

The Company analyzes loans

individually by classifying the loans as to credit risk.

This analysis is performed on an annual basis.

The Company uses the following

definitions for risk ratings:

Special Mention.

Loans 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, if

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2021

Loans receivable (continued)

Quality Indicators:

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

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:

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

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

credit position at some future date.

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

collateral pledged, if any.

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

They are characterized

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

Loans classified as

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

or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and 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 September 30, 2021, and based on the most recent analysis performed, the risk category of loans by class of loans is

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

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

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

and improbable.

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

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

See the aging of past due loan table above.

As of December 31, 2021, and based on the most recent analysis performed, the risk

category of loans by class of loans is as follows:

(in thousands)

4 unchanged sentences

Loans on deposits

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2021

Loans receivable (continued)

At June 30, 2021, the risk category of loans by

class of loans was as follows:

June 30, 2021, the risk category of loans by class of loans was as follows:

(in thousands)

4 unchanged sentences

Loans on deposits

Purchased Credit Impaired Loans:

The Company purchased loans during fiscal year

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

that all contractually required payments would not be collected.

The carrying amount of those loans, net of a purchase credit discount

of $ 88,000 and $ 88,000 at September 30, 2021 and June 30, 2021, respectively, is as follows:

Credit Impaired Loans:

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

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

The carrying amount

of those loans, net of a purchase credit discount of $ 88,000 and $ 88,000 at December 31, 2021 and June 30, 2021, respectively, is as

(in thousands)

September 30,

One- to four-family residential real estate

Accretable yield, or income expected to

be collected, is as follows:

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loans receivable (continued)

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

(in thousands)

September 30,

Twelve months

3 unchanged sentences

Balance at end of period

For those purchased loans disclosed above, the

Company made no increase in allowance for loan losses for the year ended June 30, 2021, nor for the three-month period ended September

those purchased loans disclosed above, the Company made no increase in allowance for loan losses for the year ended June 30, 2021, nor

for the six-month period ended December 31, 2021.

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

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

Disclosures About Fair Value of Assets and

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 – Quoted prices

in active markets for identical assets or liabilities.

Level 2 – 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 – Unobservable

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.

Financial assets measured at fair value on a recurring

basis are summarized below:

Disclosures About Fair Value of Assets and Liabilities

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

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

ASC topic 820 also establishes a fair value hierarchy which requires

an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

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

1 – Quoted prices in active markets for identical assets or liabilities.

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

quoted prices in

active markets that are not active;

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

the full term of the assets or liabilities.

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

assets or liabilities.

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

such instruments pursuant to the valuation hierarchy.

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

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

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

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Disclosures About Fair Value of Assets and Liabilities (continued)

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

Fair Value Measurements Using

1 unchanged sentence

Quoted Prices

September 30, 2021

December 31, 2021

Agency mortgage-backed:

1 unchanged sentence

Agency mortgage-backed:

Impaired Loans

Following is a description of the valuation methodologies

and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheet

as well as the general classification of such assets pursuant to the valuation hierarchy.

For assets classified within Level 3 of the

fair value hierarchy, the process used to develop the reported fair value is described below.

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.

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.

There were no impaired loans, which were measured

on a nonrecurring basis during the period using the fair value of the collateral for collateral-dependent loans, at September 30, 2021,

or at June 30, 2021.

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

Disclosures About Fair Value of Assets

and Liabilities (continued)

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.

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.

There was no other real estate owned (“OREO”)

written down during the three-months ended September 30, 2021 or 2020.

There was no OREO measured on a nonrecurring basis during the period

at fair value less costs to sell at September 30, 2021 or June 30, 2021.

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 September 30, 2021 and June 30, 2021 are as follows:

is a description of the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized

in the accompanying consolidated balance sheet as well as the general classification of such assets pursuant to the valuation hierarchy.

For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

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

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

income approach.

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

the comparable sales and income data available.

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

of the inputs for determining fair value.

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

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

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

a Level 3 fair value classification.

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

There were no loans measured on a nonrecurring

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

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Disclosures About Fair Value of Assets and Liabilities (continued)

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.

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.

was no other real estate owned (“OREO”) written down during the six- or three-month periods ended December 31, 2021 or 2020.

There was no OREO measured on a nonrecurring basis during the period at fair value less costs to sell at December 31, 2021 or June 30,

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

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

For financial instruments where quoted market prices are not available,

fair values are based on estimates using present value and other valuation methods.

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

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

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Disclosures About Fair Value of Assets and Liabilities (continued)

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

31, 2021 and June 30, 2021 are as follows:

Fair Value Measurements at

September 30, 2021 Using

December 31, 2021 Using

(in thousands)

27 unchanged sentences

Accrued interest payable

Kentucky First Federal Bancorp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

First Federal Bancorp

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Other Comprehensive Income (Loss)

The Company’s other comprehensive income

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

The following is a summary of the accumulated other

comprehensive income balances, net of tax:

Three months ended

September 30,

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

Beginning balance

1 unchanged sentence

Ending balance

Other comprehensive income (loss) components and

related tax effects for the periods indicated were as follows:

Three months ended

September 30,

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

Six months ended

(in thousands)

1 unchanged sentence

Net-of-tax amount

Kentucky First Federal Bancorp

Kentucky First Federal

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