Kentucky First Federal Bancorp Releases Earnings

    HAZARD, and FRANKFORT, Ky., Aug. 13 /EMWNews/ -- Kentucky

First Federal Bancorp (Nasdaq: KFFB), (the "Company") the holding company

for First Federal Savings and Loan Association of Hazard and First Federal

Savings Bank of Frankfort, Kentucky, announced net earnings of $932,000 for

the year ended June 30, 2008 or $0.12 diluted earnings per share. This

represents a $47,000 or 5.3% increase from the year ended June 30, 2007.

The increase in earnings was due primarily to a $43,000 or 1.0% decrease in

general, administrative and other expense, which declined to $4.3 million

for the recent year ended. Also contributing to the increase in net

earnings was an increase in net interest income, which increased $30,000 or

0.6% to $5.5 million for the year ended June 30, 2008.



    Net earnings for the three months ended June 30, 2008 were $308,000 or

$0.04 diluted earnings per share compared to $236,000 or $0.03 for the

three months ended June 30, 2007, an increase of $72,000 or 30.5%. Interest

expense decreased from $2.0 million in the three months ended June 30, 2007

to $1.6 million in the three months ended June 30, 2008, a decrease of

$346,000 or 17.5%, while interest income decreased by $190,000 or 5.8%. The

decrease in interest expense was primarily the result of decreases in

market interest rates and the corresponding decrease cost of short-term

deposits and borrowings.



    At June 30, 2008, the Company reported its book value per share as

$7.44.



    This press release may contain statements that are forward-looking, as

that term is defined by the Private Securities Litigation Act of 1995 or

the Securities and Exchange Commission in its rules, regulations and

releases. The Company intends that such forward-looking statements be

subject to the safe harbors created thereby. All forward-looking statements

are based on current expectations regarding important risk factors

including, but not limited to, real estate values, the impact of interest

rates on financing, the impact of competition, changes in general economic

conditions, legislative and regulatory changes that adversely affect the

business of the Company and changes in the securities markets. Accordingly,

actual results may differ from those expressed in the forward-looking

statements, and the making of such statements should not be regarded as a

representation by the Company or any other person that results expressed

therein will be achieved.



    Kentucky First Federal Bancorp is the parent company of First Federal

Savings and Loan Association, which operates one banking office in Hazard,

Kentucky and First Federal Savings Bank, which operates three banking

offices in Frankfort, Kentucky. Kentucky First Federal Bancorp shares are

traded on the Nasdaq National Market under the symbol KFFB. At June 30,

2008 the Company had approximately 8,003,000 shares outstanding, of which

approximately 59.1% was held by First Federal MHC.










    SUMMARY OF FINANCIAL HIGHLIGHTS



    Condensed Consolidated Statements of Financial Condition



                                              June 30,             June 30,

                                                2008                 2007

                                    (In thousands, except per share data)

                                            (Unaudited)            (Audited)

    Assets

      Cash and Cash Equivalents      $         15,966    $           2,720

      Investment Securities                    22,539               73,004

      Loans available for sale                     86                   --

      Loans Receivable, net                   182,051              166,156

      Other Assets                             27,013               27,036

           Total Assets              $        247,655    $         268,916



    Liabilities

      Deposits                       $        137,634    $         139,893

      FHLB Advances                            47,801               65,132

      Other Liabilities                         2,427                2,446

           Total Liabilities                  187,862              207,471



    Shareholders' Equity                       59,793               61,445



    Total Liabilities and Equity     $        247,655    $         268,916



    Book Value Per Share             $           7.44    $            7.41







    Condensed Consolidated Statements of Earnings



    (In thousands, except share and per share data)



                     Twelve months ended June 30,  Three months ended June 30,

                              2008        2007           2008          2007

                          (Unaudited)  (Audited)      (Unaudited)  (Unaudited)



     Interest Income   $    13,087 $    12,948   $      3,099  $       3,289

     Interest Expense        7,565       7,456          1,630          1,976

     Net Interest Income     5,522       5,492          1,469          1,313



     Provision for Losses

      on Loans                  12           0              0              0

     Other Operating Income    182         174             49             40

     General, Administrative,

      and Other Expense      4,321       4,364          1,061          1,004



     Earnings Before Federal

      Income Taxes           1,371       1,302            457            349

     Federal Income Taxes      439         417            149            113

     Net Earnings      $       932 $       885   $        308  $         236



     Earnings per share:

       Basic           $      0.12 $      0.11   $       0.04  $        0.03

       Diluted         $      0.12 $      0.11   $       0.04  $        0.03



     Weighted average

      outstanding

      shares:



       Basic             7,739,519   7,991,457      7,668,906      7,900,621



       Diluted           7,739,519   7,991,457      7,668,906      7,900,621