What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-09-28 compared with 2022-09-28 · 260 added, 201 removed, 236 unchanged (66% of the section changed)

7 unchanged sentences

However, in light of elevated inflation and a strong labor market, the

FOMC commenced increasing the target range for the federal funds rate by implementing a 25 basis point increase to a range of 0.25% to

0.50% in March 2022, a 50 basis point increase to a range of 0.75% to 1.00% in May 2022, a 75 basis point increase to a range of 1.50%

to 1.75% in June 2022 and in July 2022, the FOMC implemented another 75 basis point increase to a range of 2.25% to 2.50%.

At its September

2022 meeting the FOMC raised the overnight rate 75 basis points totaling an increase of 3.0% since March 2022 and announced that it would

continue to battle inflation with additional increases in interest rates in 2022 and 2023.

If interest rates continue to rise, our net interest

income may decline in the short term since, due to the generally shorter terms of interest-bearing liabilities, interest expense paid

on interest-bearing liabilities, increases more quickly than interest income earned on interest-earning assets, such as loans and investments.

In addition, rising interest rates may hurt our income because of reduced demand for new loans and refinancing loans may in turn result

in reduced interest and fee income earned on new loans and loan refinancings.

While we believe that modest interest rate increases will

not significantly hurt our interest rate spread over the long term due to our high level of liquidity and the presence of a significant

amount of adjustable-rate mortgage loans in our loan portfolio, interest rate increases may initially reduce our interest rate spread

until such time as our loans and investments reprice to higher levels.

FOMC commenced increasing the target range for the federal funds rate.

Since maintaining a federal funds rate target in the range of 0%

to 0.25% from March 2020 through 2021, the Federal Reserve Board made multiple rate increases during 2022 and 2023 increasing the target

federal funds rate to a range of 5.00% to 5.25% as of June 2023, and subsequently to a range of 5.25% to 5.50% as of August 2023.

future direction and levels of interest rates remain uncertain.

The increase in interest rates has caused our

net interest income to decline.

Net income decreased $657,000 or 41.3% compared to the fiscal year ended June 30, 2022 primarily due to

decreased net interest income, decreased non-interest income, increased provision for loan losses, and increased non-interest expenses,

which were somewhat offset by decreased income taxes.

Net interest income decreased $304,000 or 3.3% and totaled $8.9 million for the

year just ended, as interest income increased $1.8 million or 16.9% to $12.8 million and interest expense increased $2.1 million or 122.5%

to $3.9 million.

Our funding sources repriced more quickly during the interest rate increases than our assets.

Consequently, the increase

in our interest expense was attributed primarily to higher average rates paid on both deposits and FHLB advances, while the increase in

our interest income was a combination of both higher average balances and higher rates earned on those assets.

If interest rates continue

to rise, our net interest income may decline in the short term since, due to the generally shorter terms of interest-bearing liabilities,

interest expense paid on interest-bearing liabilities, increases more quickly than interest income earned on interest-earning assets,

such as loans and investments.

In addition, rising interest rates may hurt our income because of reduced demand for new loans and refinancing

loans may in turn result in reduced interest and fee income earned on new loans and loan refinancings.

While we believe that modest interest

rate increases will not significantly hurt our interest rate spread over the long term due to our high level of liquidity and the presence

of a significant amount of adjustable-rate mortgage loans in our loan portfolio, interest rate increases may initially reduce our interest

rate spread until such time as our loans and investments reprice to higher levels.

Changes in interest rates also affect the value

5 unchanged sentences

effect on stockholders’ equity.

Rising interest rates may adversely affect

the ability of borrowers to repay loans.

We offer fixed-rate and adjustable-rate mortgage

3 unchanged sentences

At June 30, 2023, 87.5% of our residential real estate loan portfolio were adjustable-rate loans.

Changes in interest rates could have a negative impact on our results of operations by reducing the ability of borrowers to repay their

current loan obligations as interest rates rise, the borrower’s payments rise, increasing the potential for delinquencies and defaults.

Risks Related to the COVID-19 Pandemic and

Associated Economic Slowdown

The ongoing COVID-19 pandemic and measures

taken to limit its spread could adversely our business, financial condition, and results of operations.

The COVID-19 pandemic has negatively impacted

economic and commercial activity and financial markets, both globally and within the United States.

Measures to contain the virus, such

as stay-at-home orders, travel restrictions, closure of non-essential businesses, occupancy limitations and social distancing requirements,

resulted in significant business and operational disruptions, including business closures, and mass layoffs and furloughs.

restrictions have generally been lifted or eased and consumer and business spending and unemployment levels have improved significantly,

the economic recovery has been uneven, with industries such as travel, entertainment, hospitality and food service lagging, and, as of

June 30, 2022, many companies have not returned workers to their offices.

Supply chain disruptions precipitated by the abrupt economic

slowdown have contributed to increased costs, lost revenue, and inflationary pressures for many segments of the economy.

Further, a significant

number of workers left their jobs during the COVID-19 pandemic, leading to wage inflation in many industries as businesses attempt to

fill vacant positions.

The United States government has taken significant

steps to attempt to mitigate the economic effects of the pandemic.

Congress appropriated approximately $4.7 trillion of fiscal stimulus

in response to the COVID-19 pandemic pursuant to the Coronavirus Aid, Relief, and Economic Security Act, the American Rescue Plan Act

and other supplemental legislation.

In March 2020, the Federal Open Market Committee of the Federal Reserve reduced the target range for

the federal funds rate to between 0.0% and 0.25%, compared to the previous target of between 1.00% and 1.25%.

The Federal Reserve also

took several actions to support financial markets, enable banks to continue to lend through the pandemic, and support businesses of all

Whether the economic stimulus will have a lasting positive effect or whether it will contribute to higher inflation or other economic

ill effects is unknown.

Several vaccines for COVID-19 have been developed

and widely distributed in the United States.

However, it is unknown how effective they will be long-term or whether variants of the virus

will develop against which the vaccines are less effective.

The extent to which the COVID-19 pandemic will

ultimately affect our business is unknown and will depend, among other things, on the duration of the pandemic, the actions undertaken

by national, state and local governments and health officials to contain the virus or mitigate its effects, the safety and effectiveness

of the vaccines that have been developed and the extent to which they are accepted by the public, the development of effective therapies,

the permanence of operating conditions that developed during the pandemic, and how quickly and to what extent economic conditions improve

and normal business and operating conditions resume.

The longer the pandemic persists, the more pronounced the ultimate effects are likely

The continuation of the COVID-19 pandemic and

the efforts to contain the virus, including effects of economic stimulus, and the exhaustion or expiration of stimulus benefits, could:

● reduce the demand for loans and other financial services;

● result in increases in loan delinquencies, problem assets, and foreclosures;

● cause the value of collateral for loans, especially real estate, to decline in value;

● reduce the availability and productivity of our employees;

● cause our vendors and counterparties to be unable to meet existing obligations to us;

● negatively impact the business and operations of third-party service providers that perform critical services

for our business;

● cause the value of our securities portfolio to decline;

● cause the net worth and liquidity of loan guarantors to decline, impairing their ability to honor commitments

Any one or a combination of the above events could

have a material, adverse effect on our business, financial condition, and results of operations.

Rising interest rates could have a negative impact on our results of operations by reducing the ability of borrowers to repay their current

loan obligations as interest rates rise, the borrower’s payments rise, increasing the potential for delinquencies and defaults.

Risks Related to Our Lending Activities

1 unchanged sentence

may affect our results of operations and financial condition.

Inflation rose sharply at the end of 2021 and

has continued rising in 2022 at levels not seen for over 40 years.

Inflation has risen sharply since the end of 2021

to levels not seen for over 40 years.

Inflationary pressures are currently expected to remain elevated throughout 2023.

Inflation could lead to increased costs to our customers, making it more difficult for them to repay their loans or other obligations.

High interest rates may be needed to tame persistent inflationary price pressures, which could also push down asset prices and weaken

economic activity.

A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies

and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in

turn, would adversely affect our business, financial condition and results of operations.

Inflation could

lead to increased costs to our customers, making it more difficult for them to repay their loans or other obligations.

High interest rates

may be needed to tame persistent inflationary price pressures, which could also push down asset prices and weaken economic activity.

deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing

assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely

affect our business, financial condition and results of operations.

If our allowance for loan losses is not

51 unchanged sentences

our asset base in that market.

Strong competition within our market areas

could hurt our profits and slow growth.

Although we consider ourselves competitive in

our market areas, we face intense competition both in making loans and attracting deposits.

Price competition for loans and deposits might

result in our earning less on our loans and paying more on our deposits, which reduces net interest income.

Some of the institutions with

which we compete have substantially greater resources than we have and may offer services that we do not provide.

We expect competition

to increase in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in

the financial services industry.

Our profitability will depend upon our continued ability to compete successfully in our market areas.

Our mortgage banking revenue and the value

of our mortgage servicing rights can be volatile.

We plan to continue to sell our longer-term, conforming

and non-conforming fixed-rate loans that we originate to generate noninterest income.

We also earn revenue from fees we receive for servicing

mortgage loans.

Changes in interest rates may impact our mortgage banking revenues, which could negatively impact our noninterest income.

When rates rise, the demand for mortgage loans usually tends to fall, reducing loan origination volume and the related amount of gains

on the sales of loans.

Under the same conditions, net revenue from our mortgage servicing activities can increase due to slower prepayments,

which reduces our amortization expense for mortgage servicing rights.

When rates fall, mortgage originations usually tend to increase

and the value of our mortgage servicing rights usually tends to decline, also with some offsetting revenue effect.

During the fiscal year

ended June 30, 2023, non-interest income decreased $213,000 or 41.4% and totaled $302,000, primarily due to decreased gains on loan sales.

In addition, our results of operations are affected

by the amount of noninterest expenses associated with mortgage banking activities, such as salaries and employee benefits (including commissions),

occupancy, equipment and data processing expense, and other operating costs.

During periods of reduced loan demand, our results of operations

may be adversely affected to the extent that we are unable to reduce expenses commensurate with the decline in mortgage loan origination

Liquidity Risk

Financial challenges at other banking institutions could lead

to depositor concerns that spread within the banking industry causing disruptive and destabilizing deposit outflows.

In March 2023, Silicon Valley Bank and Signature Bank experienced large

deposit outflows coupled with insufficient liquidity to meet withdrawal demands, resulting in the institutions being placed into FDIC

receivership.

In May 2023, First Republic Bank was also placed into FDIC receivership.

In the aftermath of these events, there has been

substantial market disruption and concerns that diminished depositor confidence could spread across the banking industry, leading to deposit

outflows that could destabilize other institutions.

To strengthen public confidence in the banking system, the FDIC took action to protect

funds held in uninsured deposit accounts at Silicon Valley Bank, Signature Bank and First Republic Bank.

However, the FDIC has not committed

to protecting uninsured deposits in other institutions that experience outsized withdrawal demands.

To further bolster the banking system,

the Federal Reserve Board created a new Bank Term Funding Program to provide an additional source of liquidity.

At June 30, 2023, we had

$20.2 million in available liquidity, including $8.2 million in cash and cash equivalents.

Our uninsured deposits are estimated to be

approximately $13.8 million or 6.10% of total deposits.

At June 30, 2023, we had off-balance sheet liquidity sources totaling $89.3 million,

including $87.3 million in additional borrowing capacity at the Federal Home Loan Bank of Cincinnati.

Notwithstanding our significant

liquidity, large deposit outflows could adversely affect our financial condition and results of operations and could result in the closure

of the Banks.

Furthermore, the recent bank failures may result in strengthening of capital and liquidity rules which, if the revised rules

apply to us, could adversely affect our financial condition and results of operations.

Insufficient liquidity or liquidity related

concerns could impair our ability to fund operations, pay dividends on outstanding shares of stock, and jeopardize our financial condition,

growth and prospects.

We require sufficient liquidity to fund loan commitments,

satisfy depositor withdrawal requests, make payments on our debt obligations as they become due, and meet other cash commitments.

risk is the potential that we will be unable to meet our obligations as they become due because of an inability to liquidate assets or

obtain adequate funding at a reasonable cost, in a timely manner and without adverse conditions or consequences.

Our sources of liquidity

consist primarily of cash, assets readily convertible to cash (such as investment securities), increases in deposits, advances, as needed,

from the FHLB, borrowings, as needed, from the Federal Reserve Bank of Cleveland and other borrowings.

Our access to funding sources in

amounts adequate to finance our activities or on acceptable terms could be impaired by factors that affect our organization specifically

or the financial services industry or economy in general.

Any substantial, unexpected, and/or prolonged change in the level or cost of

liquidity, or any liquidity related requirements imposed by our regulators, could impair our ability to fund operations, pay dividends

on outstanding shares of stock, enact stock repurchases, and meet our obligations as they become due and could have a material adverse

effect on our business, financial condition and results of operations.

Risks Related to Our Business and Industry

14 unchanged sentences

results of operations.

Ineffective liquidity management could adversely

affect our financial results and condition.

Effective liquidity management is essential for

the operation of our business.

We require sufficient liquidity to meet customer loan requests, customer deposit maturities/withdrawals,

payments on our debt obligations as they come due and other cash commitments under both normal operating conditions and other unpredictable

circumstances causing industry or general financial market stress.

Our access to funding sources in amounts adequate to finance our activities

on terms that are acceptable to us could be impaired by factors that affect us specifically or the financial services industry or economy

Factors that could detrimentally impact our access to liquidity sources include a downturn in the geographic markets in which

our loans and operations are concentrated or difficult credit markets.

Our access to deposits may also be affected by the liquidity needs

of our depositors.

In particular, a majority of our liabilities are checking accounts and other liquid deposits, which are payable on

demand or upon several days’ notice, while by comparison, a substantial majority of our assets are loans, which cannot be called

or sold in the same time frame.

Although we have historically been able to replace maturing deposits and advances as necessary, we might

not be able to replace such funds in the future, especially if a large number of our depositors seek to withdraw their accounts, regardless

of the reason.

A failure to maintain adequate liquidity could materially and adversely affect our business, results of operations or financial

Our FDIC deposit insurance premiums and

assessments may increase, which would reduce our profitability.

On March 12, 2023, the Department of the Treasury,

the Federal Reserve and the FDIC issued a joint statement relating to the resolution of Silicon Valley Bank and Signature Bank that stated

that losses to support uninsured deposits of those banks would be recovered via a special assessment on banks.

On May 11, 2023 the FDIC

Board of Directors approved a notice of proposed rulemaking, which would implement a special assessment to recover the cost associated

with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.

In general, large banks with large

amounts of uninsured deposits benefitted most from the protection of uninsured depositors.

Banking organizations with total assets over

$50 billion would pay more than 95 percent of the special assessment and banking organizations with total assets under $5 billion would

not be subject to the special assessment.

Under the current provisions of this notice of proposed rulemaking, we believe that we would

not be impacted by the special assessment associated with the most recent banking organization closures.

Strong competition within our market areas

could hurt our profits and slow growth.

Although we consider ourselves competitive in

our market areas, we face intense competition both in making loans and attracting deposits.

Price competition for loans and deposits might

result in our earning less on our loans and paying more on our deposits, which reduces net interest income.

Some of the institutions with

which we compete have substantially greater resources than we have and may offer services that we do not provide.

We expect competition

to increase in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in

the financial services industry.

Our profitability will depend upon our continued ability to compete successfully in our market areas.

Risks Related to Laws and Regulations

Changes in laws and regulations and the

cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations.

The Banks are subject to extensive regulation,

supervision and examination by the OCC.

The Company is subject to extensive regulation, supervision and examination by the Federal Reserve

Such regulation and supervision govern the activities in which an institution and its holding company may engage and is intended

primarily for the protection of the federal deposit insurance fund and the depositors of the Banks rather than the protection of the Company’s

stockholders.

Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition

of restrictions on our operations, the classification of our assets and determination of the adequacy of the level of our allowance for

These regulations, along with existing tax, accounting, securities, insurance and monetary laws, rules, standards, policies,

and interpretations, control the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance,

and govern financial reporting and disclosures.

Any change in such regulation and oversight, whether in the form of regulatory policy,

regulations, legislation or supervisory action, may have a material impact on our operations.

Further, changes in accounting standards

can be both difficult to predict and involve judgment and discretion in their interpretation by us and our independent accounting firm.

These changes could materially impact, potentially even retroactively, how we report our financial condition and results of operations.

Non-compliance with the USA PATRIOT Act,

Bank Secrecy Act, or other laws and regulations could result in fines or sanctions.

The USA PATRIOT and Bank Secrecy Acts require

financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities.

If such activities are suspected, financial institutions are obligated to file suspicious activity reports with the U.S.

Office of Financial Crimes Enforcement Network.

These rules require financial institutions to establish procedures for identifying and

verifying the identity of customers seeking to open new financial accounts.

Failure to comply with these regulations could result in fines

or sanctions, including restrictions on pursuing any acquisitions or establishing or acquiring new branches.

The policies and procedures

we have adopted that are designed to assist in compliance with these laws and regulations may not be effective in preventing violations

of these laws and regulations.

Furthermore, these rules and regulations continue to evolve and expand.

We have not been subject to fines

or other penalties, or have suffered business or reputational harm, as a result of money laundering activities in the past.

Monetary policies and regulations of the

Federal Reserve Board could adversely affect our business, financial condition and results of operations.

In addition to being affected by general economic

conditions, our earnings and growth are affected by the policies of the Federal Reserve Board.

An important function of the Federal Reserve

Board is to regulate the money supply and credit conditions.

Among the instruments used by the Federal Reserve Board to implement these

objectives are open market purchases and sales of U.S.

government securities, adjustments to the discount rate and changes in banks’

reserve requirements against bank deposits.

These instruments are used in varying combinations to influence overall economic growth and

the distribution of credit, bank loans, investments and deposits.

Their use also affects interest rates charged on loans or paid on deposits.

The monetary policies and regulations of the Federal Reserve Board have had a significant effect on the operating results of financial

institutions in the past and are expected to continue to do so in the future.

The effects of such policies upon our business, financial

condition and results of operations cannot be predicted.

We may be adversely affected by recent changes

15 unchanged sentences

adversely affect our business, financial condition and results of operations.

Regulation of the financial services industry

is undergoing major changes, and we may be adversely affected by changes in laws and regulations.

We are subject to extensive government regulation,

supervision and examination.

Such regulation, supervision and examination governs the activities in which we may engage, and is intended

primarily for the protection of the deposit insurance fund and our depositors.

In 2010 and 2011, in response to the financial

crisis and recession that began in 2008, significant regulatory and legislative changes resulted in broad reform and increased regulation

affecting financial institutions.

The Dodd-Frank Act has created a significant shift in the way financial institutions operate and has

restructured the regulation of depository institutions by merging the Office of Thrift Supervision, which previously regulated the Banks,

into the OCC, and assigning the regulation of savings and loan holding companies, including the Company and the MHC, to the Federal Reserve

The Dodd-Frank Act also created the Consumer Financial Protection Bureau to administer consumer protection and fair lending laws,

a function that was formerly performed by the depository institution regulators.

As required by the Dodd-Frank Act, the federal banking

regulators have proposed new consolidated capital requirements that will limit our ability to borrow at the holding company level and

invest the proceeds from such borrowings as capital in the Banks that could be leveraged to support additional growth.

The Dodd-Frank

Act contains various other provisions designed to enhance the regulation of depository institutions and prevent the recurrence of a financial

crisis such as that which occurred in 2008 and 2009.

The full impact of the Dodd-Frank Act on our business and operations may not be known

for years until final regulations implementing the legislation are adopted.

The Dodd-Frank Act may have a material impact on our operations,

particularly through increased regulatory burden and compliance costs.

Any future legislative changes could have a material impact on

our profitability, the value of assets held for investment or the value of collateral for loans.

Future legislative changes could also

require changes to business practices and potentially expose us to additional costs, liabilities, enforcement action and reputational

In addition to the enactment of the Dodd-Frank Act, the federal regulatory agencies recently have begun to take stronger supervisory

actions against financial institutions that have experienced increased loan losses and other weaknesses as a result of the recent economic

These actions include the entering into of written agreements and cease and desist orders that place certain limitations on their

Federal banking regulators recently have also been using with more frequency their ability to impose individual minimal capital

requirements on banks, which requirements may be higher than those imposed under the Dodd-Frank Act or which would otherwise qualify the

bank as being “well capitalized” under the OCC’s prompt corrective action regulations.

If we were to become subject

to a supervisory agreement or higher individual capital requirements, such action may have a negative impact on our ability to execute

our business plans, as well as our ability to grow, pay dividends, repurchase stock or engage in mergers and acquisitions and may result

in restrictions in our operations.

See “Regulation and Supervision—Regulation of Federal Savings Associations—Capital

Requirements” for a discussion of regulatory capital requirements.

We may be subject to more stringent capital

requirements which could result in lower returns on equity, require the raising of additional capital, and limit our ability to pay dividends

or repurchase shares of our common stock.

In July 2013, the OCC and the Federal Reserve

Board approved a new rule that will substantially amend the regulatory risk-based capital rules applicable to First Federal of Hazard,

First Federal of Kentucky and Kentucky First.

The final rule implements the “Basel III” regulatory capital reforms and changes

required by the Dodd-Frank Act.

The final rule includes new minimum risk-based capital and leverage ratios, which became effective for

First Federal of Hazard, First Federal of Kentucky and Kentucky First on January 1, 2015, and refines the definition of what constitutes

“capital” for purposes of calculating these ratios.

The new minimum capital requirements are:

(i) a new common equity Tier

1 capital ratio of 4.5%;

(ii) a Tier 1 to risk-based assets capital ratio of 6% (increased from 4%);

(iii) a total capital ratio of 8%

(unchanged from current rules);

and (iv) a Tier 1 leverage ratio of 4%.

The final rule also establishes a “capital conservation”

buffer of 2.5%, and will result in the following minimum ratios:

We may be subject to more stringent

capital requirements which could result in lower returns on equity, require the raising of additional capital, and limit our ability to

pay dividends or repurchase shares of our common stock.

Federal regulations establish minimum capital

requirements for insured depository institutions, including minimum risk-based capital and leverage ratios, and define “capital”

for calculating these ratios.

The minimum capital requirements are:

(i) a new common equity Tier 1 capital ratio of 4.5%;

1 to risk-based assets capital ratio of 6% (increased from 4%);

(iii) a total capital ratio of 8% (unchanged from current rules);

(iv) a Tier 1 leverage ratio of 4%.

The regulations also establish a “capital conservation” buffer of 2.5%, and will result

in the following minimum ratios:

(i) a common equity Tier 1 capital ratio of 7%;

(ii) a Tier 1 to risk-based

assets capital ratio of 8.5%;

(ii) a Tier 1 to risk-based assets capital ratio of 8.5%;

and (iii) a total capital ratio of 10.5%.

The new capital conservation buffer requirement was phased in

beginning in January 2016 at 0.625% of risk-weighted assets and increased each year until fully implemented in January 2019.

An institution

will be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level

falls below the buffer amount.

These limitations will establish a maximum percentage of eligible retained income that can be utilized

for such actions.

As of June 30, 2022, the capital levels of First Federal of Hazard and First Federal of Kentucky exceed the required

capital amounts according to the Community Bank Leverage Ratio regulations and we believe they also meet the fully-phased in minimum capital

requirements.

See Note K-Stockholders’ Equity and Regulatory Capital of Notes to Consolidated Financial Statements.

The new capital conservation buffer requirement was phased in beginning in January 2016 at 0.625%

of risk-weighted assets and increased each year until fully implemented in January 2019.

An institution will be subject to limitations

on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount.

These limitations will establish a maximum percentage of eligible retained income that can be utilized for such actions.

As of June 30,

2023, the capital levels of First Federal of Hazard and First Federal of Kentucky exceed the required capital amounts according to the

Community Bank Leverage Ratio regulations and we believe they also meet the fully-phased in minimum capital requirements.

See Note K-Stockholders’

Equity and Regulatory Capital of Notes to Consolidated Financial Statements.

The application of more stringent capital requirements

3 unchanged sentences

and Supervision—Regulation of Federal Savings Associations—Capital Requirements.”

The Federal Reserve Board may require us to commit capital

resources to support the Banks.

Federal law requires that a holding company act as a source of financial

and managerial strength to its subsidiary banks and to commit resources to support such subsidiary banks.

Under the “source of strength”

doctrine, the Federal Reserve Board may require a holding company to make capital injections into a troubled subsidiary bank and may

charge the holding company with engaging in unsafe and unsound practices for failure to commit resources to a subsidiary bank.

injection may be required at times when the holding company may not have the resources to provide it and therefore may be required to

borrow the funds or raise capital.

Thus, any borrowing or funds needed to raise capital required to make a capital injection may be more

expensive or difficult to obtain and could have an adverse effect on our business, financial condition and results of operations.

Risks Related to Accounting Matters

Changes in management’s estimates and assumptions may have

a material impact on our consolidated financial statements and our financial condition or operating results.

In preparing the periodic reports and consolidated financial statements

we file under the Securities Exchange Act of 1934, as amended, our management is and will be required under applicable rules and regulations

to make estimates and assumptions as of a specified date.

These estimates and assumptions are based on management’s best estimates

and experience as of that date and are subject to substantial risk and uncertainty.

Materially different results may occur as circumstances

change and additional information becomes known.

Areas requiring significant estimates and assumptions by management include our evaluation

of the adequacy of our allowance for loan losses, the valuation of mortgage servicing rights, and the fair value of financial instruments.

Changes in accounting standards could affect reported earnings.

The bodies responsible for establishing accounting standards, including

the Financial Accounting Standards Board, the Securities and Exchange Commission and other regulatory bodies, periodically change the

financial accounting and reporting guidance that governs the preparation of our financial statements.

These changes can be hard to predict

and can materially impact how we record and report our consolidated financial condition and results of operations.

In some cases, we could

be required to apply new or revised guidance retroactively.

If we are required to impair our goodwill, intangibles, or other

long-lived assets, our financial condition and results of operations would be adversely affected.

Pursuant to Accounting Standards Codification (“ASC”) 350,

Intangibles - Goodwill and Other and ASC 360, Property, Plant and Equipment, we are required to perform an annual impairment review of

goodwill, intangibles and other long-lived assets which could result in an impairment charge if it is determined that the carrying value

of the assets are in excess of the fair value.

We perform the impairment test annually during our fourth fiscal quarter.

Goodwill, intangibles

and other long-lived assets are also tested more frequently if changes in circumstances or the occurrence of events indicates that a potential

impairment exists.

When changes in circumstances, such as changes in the variables associated with the judgments, assumptions and estimates

made in assessing the appropriate fair value indicate the carrying amount of certain assets may not be recoverable, the assets are evaluated

for impairment.

If actual operating results differ from these assumptions, it may result in an asset impairment.

As of June 30, 2020,

management early adopted ASU 2017-04, Intangibles-Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment, which

simplifies the required method for estimating the fair value of the Company.

Future write-downs of intangibles and other long-lived assets

could affect certain of the financial covenants under our debt agreements, could restrict our financial flexibility, and would impact

our results of operations.

Risks Related to Operational Matters

We are subject to certain risks in connection

53 unchanged sentences

impact on our business and therefore on our financial condition and results of operations.

If we are required to impair our goodwill,

intangibles, or other long-lived assets, our financial condition and results of operations would be adversely affected.

Pursuant to Accounting Standards Codification

(“ASC”) 350, Intangibles - Goodwill and Other and ASC 360, Property, Plant and Equipment, we are required to perform an annual

impairment review of goodwill, intangibles and other long lived assets which could result in an impairment charge if it is determined

that the carrying value of the assets are in excess of the fair value.

We perform the impairment test annually during our fourth fiscal

Goodwill, intangibles and other long lived assets are also tested more frequently if changes in circumstances or the occurrence

of events indicates that a potential impairment exists.

When changes in circumstances, such as changes in the variables associated with

the judgments, assumptions and estimates made in assessing the appropriate fair value indicate the carrying amount of certain assets may

not be recoverable, the assets are evaluated for impairment.

If actual operating results differ from these assumptions, it may result

in an asset impairment.

As of June 30, 2020, management early adopted ASU 2017-04, Intangibles-Goodwill and Other (Topic 350):

the Test for Goodwill Impairment, which simplifies the required method for estimating the fair value of the Company.

Future write-downs

of intangibles and other long lived assets could affect certain of the financial covenants under our debt agreements, could restrict our

financial flexibility, and would impact our results of operations.

Risks Related to Our Holding Company Structure

63 unchanged sentences

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-K

Item 1A. Risk Factors