10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2015

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                to               

Commission file number 0-51176

KENTUCKY FIRST FEDERAL BANCORP

(Exact name of registrant as specified in its charter)

United States	61-1484858
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
479 Main Street, Hazard, Kentucky	41702
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:         (502) 223-1638       

Securities registered pursuant to Section 12(b) of the Act:

Common Stock (par value $0.01 per share)	The Nasdaq Stock Market, LLC
(Title of each class)	(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x
(Do not check if smaller reporting company)

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The aggregate market value of the common stock held by nonaffiliates was $27.9 million as of December 31, 2014.

Number of shares of common stock outstanding as of September 18, 2015: 8,439,515

DOCUMENTS INCORPORATED BY REFERENCE

The following lists the documents incorporated by reference and the Part of the Form 10-K into which the document is incorporated:

1. Portions of the Annual Report to Stockholders for the fiscal year ended June 30, 2015. (Part II)

2. Portions of Proxy Statement for the 2015 Annual Meeting of Stockholders. (Part III)

INDEX

		PAGE
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	17
Item 1B.	Unresolved Staff Comments	21
Item 2.	Properties	22
Item 3.	Legal Proceedings	22
Item 4.	Mine Safety Disclosures	22
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	23
Item 6.	Selected Financial Data	23
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	23
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 8.	Financial Statements and Supplementary Data	23
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	24
Item 9A.	Controls and Procedures	24
Item 9B.	Other Information	26
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	26
Item 11.	Executive Compensation	26
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	26
Item 13.	Certain Relationships and Related Transactions, and Director Independence	27
Item 14.	Principal Accounting Fees and Services	27
PART IV
Item 15.	Exhibits and Financial Statement Schedules	27
SIGNATURES		30

i

PART I

Item 1.  Business

Forward-Looking Statements

This report contains certain “forward-looking statements” within the meaning of the federal securities laws. These statements are not historical facts, rather statements based on Kentucky First Federal Bancorp’s current expectations regarding its business strategies, intended results and future performance. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions.

Management’s ability to predict results or the effect of future plans or strategies is inherently uncertain. Factors which could affect actual results include the following: interest rate trends; the general economic climate in the market areas in which Kentucky First Federal Bancorp operates, as well as nationwide; Kentucky First Federal Bancorp’s ability to control costs and expenses; competitive products and pricing; loan delinquency rates; and changes in federal and state legislation and regulation. These factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. Kentucky First Federal Bancorp assumes no obligation to update any forward-looking statements.

General

References in this Annual Report on Form 10-K to “we,” “us” and “our” refer to Kentucky First, and where appropriate, collectively to Kentucky First, First Federal of Hazard and First Federal of Frankfort.

Kentucky First Federal Bancorp. Kentucky First Federal Bancorp (“Kentucky First” or the “Company”) was incorporated as a mid-tier holding company under the laws of the United States on March 2, 2005 upon the completion of the reorganization of First Federal Savings and Loan Association of Hazard (“First Federal of Hazard”) into a federal mutual holding company form of organization (the “Reorganization”). On that date, Kentucky First completed its minority stock offering and issued a total of 8,596,064 shares of common stock, of which 4,727,938 shares, or 55%, were issued to First Federal MHC, a federally chartered mutual holding company formed in connection with the Reorganization, in exchange for the transfer of all of First Federal of Hazard’s capital stock, and 2,127,572 shares were sold at a cash price of $10.00 per share. Also on March 2, 2005, Kentucky First completed its acquisition of Frankfort First Bancorp, Inc. (“Frankfort First Bancorp”) and its wholly owned subsidiary First Federal Savings Bank of Frankfort, Frankfort, Kentucky (“First Federal of Frankfort”) (the “Merger”). Following the Reorganization and Merger, the Company retained Frankfort First Bancorp as a wholly owned subsidiary and holds all of the capital stock of First Federal of Hazard and First Federal of Frankfort. The Company is operating First Federal of Hazard and First Federal of Frankfort as two independent, community-oriented savings institutions.

On December 31, 2012, Kentucky First acquired CFK Bancorp, Inc., the savings and loan holding company for Central Kentucky Federal Savings Bank, a federally chartered savings bank located in Danville, Kentucky. Under the terms of the merger agreement, CKF Bancorp, Inc. shareholders received approximately 881,275 shares of Kentucky First common stock and an aggregate of $5.1 million in cash. Following the merger of CKF Bancorp, Inc. with and into Kentucky First, Central Kentucky Federal Savings Bank was merged into First Federal of Frankfort and now operates as a division of First Federal of Frankfort under the name “Central Kentucky Federal Savings Bank” through its two offices in Danville, Kentucky and its Lancaster, Kentucky branch. With the acquisition, the Company expanded its customer base in the central Kentucky area with an institution that shared its community banking orientation and thrift heritage and enjoyed a favorable reputation within the new Danville-Lancaster market area.

Kentucky First’s and First Federal of Hazard’s executive offices are located at 479 Main Street, Hazard, Kentucky, 41702 and the telephone number for investor relations is (888) 818-3372.

At June 30, 2015, Kentucky First had total assets of $296.3 million, deposits of $199.7 million and stockholders’ equity of $67.3 million. The discussion in this Annual Report on Form 10-K relates primarily to the businesses of First Federal of Hazard and First Federal of Frankfort (collectively, the “Banks”), as Kentucky First’s operations consist primarily of operating the Banks and investing funds retained in the Reorganization.

1

First Federal of Hazard and First Federal of Frankfort are subject to examination and comprehensive regulation by the Office of the Comptroller of the Currency and their savings deposits are insured up to applicable limits by the Deposit Insurance Fund, which is administered by the Federal Deposit Insurance Corporation. Both of the Banks are members of the Federal Home Loan Bank of Cincinnati, which is one of the 12 regional banks in the FHLB System. See “Regulation and Supervision.”

First Federal Savings and Loan Association of Hazard. First Federal of Hazard was formed as a federally chartered mutual savings and loan association in 1960. First Federal of Hazard operates from a single office in Hazard, Kentucky as a community-oriented savings and loan association offering traditional financial services to consumers in Perry and surrounding counties in eastern Kentucky. It engages primarily in the business of attracting deposits from the general public and using such funds to originate, when available, loans secured by first mortgages on owner-occupied, residential real estate and occasionally other loans secured by real estate. To the extent there is insufficient loan demand in its market area, and where appropriate under its investment policies, First Federal of Hazard has historically invested in mortgage-backed and investment securities, although since the reorganization, First Federal of Hazard has been purchasing whole loans and participations in loans originated at First Federal of Frankfort. At June 30, 2015, First Federal of Hazard had total assets of $77.2 million, net loans of $57.2 million, total mortgage-backed and other securities of $1.5 million, deposits of $56.6 million and total capital of $16.5 million.

First Federal Savings Bank of Frankfort. First Federal of Frankfort is a federally chartered savings bank, which is primarily engaged in the business of attracting deposits from the general public and originating primarily adjustable-rate loans secured by first mortgages on owner-occupied and nonowner-occupied one- to four-family residences in Franklin, Boyle, Garrard and other counties in Kentucky. First Federal of Frankfort also originates, to a lesser extent, home equity loans and loans secured by churches, multi-family properties, professional office buildings and other types of property. At June 30, 2015, First Federal of Frankfort had total assets of $229.2 million, net loans of $186.6 million, total mortgage-backed and other securities of $5.1 million, deposits of $156.6 million and total capital of $46.6 million.

First Federal of Frankfort’s main office is located at 216 W. Main Street, Frankfort, Kentucky 40602 and its main telephone number is (502) 223-1638.

Market Areas

First Federal of Hazard and First Federal of Frankfort operate in three distinct market areas.

First Federal of Hazard’s market area consists of Perry County, where the business office is located, as well as the surrounding counties of Letcher, Knott, Breathitt, Leslie and Clay Counties in eastern Kentucky. The economy in its market area has been distressed in recent years. The local economy depends on the coal industry and other industries, such as health care and manufacturing. Still, the economy in First Federal of Hazard’s market area continues to lag behind the economies of Kentucky and the United States. In the most recent available data, using information from the Commonwealth of Kentucky Economic Development and the United States Bureau of Labor Statistics, per capita personal income in Perry County averaged $31,766 in 2013, compared to personal income of $36,214 in Kentucky and $44,765 in the United States. Total population in Perry County has remained stable over the last five years at approximately 29,000. However, as a regional economic center, Hazard tends to draw consumers and workers who commute from surrounding counties. Employment in the market area, particularly in Perry County, consists primarily of the trade, transportation and utilities industry (18.2%), the mining industry (17.3%), and the services sector, including health care (15.4%). During the last five years, the unemployment rate has been higher than most regions, and in June 2015, was 8.4%, compared to 5.3% in Kentucky and 5.3% in the United States.

2

First Federal of Frankfort’s primary lending area includes the Kentucky counties of Franklin, Boyle, Garrard and surrounding counties, with the majority of lending originated on properties located in Franklin and Boyle Counties.

Franklin County has a population of approximately 49,000, of which approximately 27,000 live within the city of Frankfort, which serves as the capital of Kentucky. The primary employer in the area is government, which employs about 50.3% of the workforce followed by the services sector and construction, which employ about 13.2% and 10.2% of the workforce, respectively. Despite this large, relatively stable source of employment, the unemployment rate was 4.6% for June 2015 after having experienced an unemployment rate which had ranged from 4.5 to 9.0% in prior years. The per capita income in Franklin County for 2013 averaged $39,501.

Boyle County has a population of approximately 29,000. The service sector, which employs about 42.2% of the work force, is the largest employer, while the trade, transportation and utilities sector is the next largest employer with approximately 21.8% of the workforce. Centre College is one of the larger employers in the community. The unemployment rate was 5.7% in June 2015, while the per capita income in Boyle County for 2013 averaged $32,266.

Lending Activities

General. Our loan portfolio consists primarily of one- to four-family residential mortgage loans. As opportunities arise, we also offer loans secured by churches, commercial real estate, and multi-family real estate. We also offer loans secured by deposit accounts and, through First Federal of Frankfort, home equity loans. Substantially all of our loans are made within the Banks’ respective market areas.

Residential Mortgage Loans. Our primary lending activity is the origination of mortgage loans to enable borrowers to purchase or refinance existing homes in the Banks’ respective market areas. At June 30, 2015, residential mortgage loans totaled $212.1 million, or 85.5%, of our total loan portfolio. We offer a mix of adjustable-rate and fixed-rate mortgage loans with terms up to 30 years. Adjustable-rate loans have an initial fixed term of one, three, five or seven years. After the initial term, the rate adjustments on most of First Federal of Frankfort’s adjustable-rate loans are indexed to the National Average Contract Interest Rate for Major Lenders on the Purchase of Previously Occupied Homes. The interest rates on these mortgages are adjusted once a year, with limitations on adjustments generally of one percentage point per adjustment period, and a lifetime cap of five percentage points. We determine loan fees charged, interest rates and other provisions of mortgage loans on the basis of our own pricing criteria and competitive market conditions. Some loans originated by the Banks have an additional advance clause which allows the borrower to obtain additional funds at prevailing interest rates, subject to managements’ approval.

At June 30, 2015, the Company’s loan portfolio included $149.6 million in adjustable-rate residential mortgage loans, or 70.5%, of the Company’s residential mortgage loan portfolio.

The retention of adjustable-rate loans in the portfolio helps reduce our exposure to increases in prevailing market interest rates. However, there are unquantifiable credit risks resulting from potential increases in costs to borrowers in the event of upward repricing of adjustable-rate loans. It is possible that during periods of rising interest rates, the risk of default on adjustable-rate loans may increase due to increases in interest costs to borrowers. However, despite their popularity in some parts of the country, neither bank has offered adjustable-rate loans that contractually allow for negative amortization. Such loans, under some circumstances, can cause the balance of a closed-end loan to exceed the original balance and perhaps surpass the value of the collateral. Further, although adjustable-rate loans allow us to increase the sensitivity of our interest-earning assets to changes in interest rates, the extent of this interest sensitivity is limited by the initial fixed-rate period before the first adjustment and the periodic and lifetime interest rate adjustment limitations. Accordingly, there can be no assurance that yields on our adjustable-rate loans will fully adjust to compensate for increases in our cost of funds. Finally, adjustable-rate loans may decrease at a pace faster than decreases in our cost of funds, resulting in reduced net income.

3

While one- to four-family residential real estate loans are normally originated with up to 30-year terms, such loans typically remain outstanding for substantially shorter periods because borrowers often prepay their loans in full upon sale of the mortgaged property or upon refinancing the original loan. Therefore, average loan maturity is a function of, among other factors, the level of purchase and sale activity in the real estate market, prevailing interest rates and the interest rates payable on outstanding loans. As interest rates declined and remained low over the past few years, we have experienced high levels of loan repayments and refinancings.

The Banks offer various programs for the purchase and refinance of one- to four-family loans. Most of these loans have loan-to-value ratios of 80% or less, based on an appraisal provided by a state licensed or certified appraiser. For owner-occupied properties, the borrower may be able to borrow up to 95% of the value if they secure and pay for private mortgage insurance or they may be able to obtain a second mortgage (at a higher interest rate) in which they borrow up to 90% of the value. On a rare case-by-case basis, the Boards of Directors of the Banks may approve a loan above the 80% loan-to-value ratio without such enhancements.

Construction Loans. We originate loans to individuals to finance the construction of residential dwellings for personal use or for use as rental property. On a case-by-case basis we consider construction loans on other than owner-occupied, residential property. At June 30, 2015, construction loans totaled $3.8 million, or 1.5%, of our total loan portfolio. Our construction loans generally provide for the payment of interest only during the construction phase, which is usually less than one year. Loans generally can be made with a maximum loan to value ratio of 80% of the appraised value. Funds are disbursed as progress is made toward completion of the construction based on site inspections by qualified bank staff.

Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction or development and the estimated cost (including interest) of construction. During the construction phase, a number of factors could result in delays and cost overruns. If the estimate of construction costs proves to be inaccurate, we may be required to advance funds beyond the amount originally committed to permit completion of the development. If the estimate of value proves to be inaccurate, we may be confronted, at or before the maturity of the loan, with a project having a value which is insufficient to assure full repayment. As a result of the foregoing, construction lending often involves the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project rather than the ability of the borrower or guarantor to repay principal and interest. If we are forced to foreclose on a project before or at completion due to a default, there can be no assurance that we will be able to recover the unpaid balance and accrued interest on the loan, as well as related foreclosure and holding costs.

Multi-Family Loans. We offer mortgage loans secured by multi-family property (residential real estate comprised of five or more units.) At June 30, 2015, multi-family loans totaled $16.6 million, or 6.7%, of our total loan portfolio. We originate multi-family real estate loans for terms of generally 25 years or less. Loan amounts generally do not exceed 80% of the appraised value and tend to range much lower.

Nonresidential Loans. As opportunities arise, we offer mortgage loans secured by nonresidential real estate, which is generally secured by commercial office buildings, churches, condominiums and properties used for other purposes. At June 30, 2015, nonresidential totaled $25.7 million, or 10.3% of our total loan portfolio. We originate nonresidential real estate loans for terms of generally 25 years or less and loan amounts generally do not exceed 80% of the appraised value and tend to range much lower.

Loans secured by multi-family and nonresidential real estate generally have larger balances and involve a greater degree of risk than one- to four-family residential mortgage loans. Of primary concern in multi-family and nonresidential real estate lending is the borrower’s creditworthiness and the feasibility and cash flow potential of the project. Payments on loans secured by income properties often depend on successful operation and management of the properties. As a result, repayment of such loans may be subject to a greater extent than residential real estate loans to adverse conditions in the real estate market or the economy. To monitor cash flows on income properties, we require borrowers and/or loan guarantors to provide annual financial statements on larger multi-family and commercial real estate loans. In reaching a decision on whether to make a multi-family or nonresidential real estate loan, we consider the net cash flow of the project, the borrower’s expertise, credit history and the value of the underlying property.

4

Commercial Non-mortgage Loans. At June 30, 2015, commercial non-mortgage loans totaled $1.8 million, or 0.7%, of our total loan portfolio. We do not emphasize commercial non-mortgage loans, which may be secured by vehicles used in business or by inventory and equipment of the business or may be unsecured, although we do originate such loans on a limited basis and generally require a pre-existing relationship with the Bank. These loans are made only to businesses in our local market and we generally require personal guarantees of well-established individuals for these loans. Commercial loans involve an even greater degree of risk than real estate loans.

Consumer Lending. Our consumer loans include home equity lines of credit, loans secured by savings deposits, automobile loans and unsecured or personal loans. At June 30, 2015, our consumer loan balance totaled $8.4 million, or 3.5%, of our total loan portfolio. Of the consumer loan balance at June 30, 2015, $5.5 million were home equity loans, $2.3 million were loans secured by savings deposits and $678,000 were automobile or unsecured loans.

Our home equity loans are made at First Federal of Frankfort and are made on the security of residential real estate and have terms of up to 15 years. Most of First Federal of Frankfort’s home equity loans are second mortgages subordinate only to first mortgages also held by the bank and do not exceed 80% of the estimated value of the property, less the outstanding principal of the first mortgage. First Federal of Frankfort does offer home equity loans up to 90% of the value less the balance of the first mortgage at a premium rate to qualified borrowers. These loans are not secured by private mortgage insurance. First Federal of Frankfort’s home equity loans require the monthly payment of 1.0% to 2% of the unpaid principal until maturity, when the remaining unpaid principal, if any, is due. First Federal of Frankfort’s home equity loans bear variable rates of interest indexed to the prime rate for loans with 80% or less loan-to-value ratio, and 2% above the prime rate for loans with a loan-to-value ratio in excess of 80%. Interest rates on these loans can be adjusted monthly. At June 30, 2015, the total outstanding home equity loans amounted to 2.2% of the Company’s total loan portfolio.

Loans secured by savings are originated for up to 90% of the depositor’s savings account balance. The interest rate is varying percentage points above the rate paid on the savings account, and the account must be pledged as collateral to secure the loan. At June 30, 2015, loans on savings accounts totaled 0.9% of the Company’s total loan portfolio.

Consumer loans generally entail greater risk than do residential mortgage loans, particularly in the case of consumer loans which are unsecured or secured by rapidly depreciable assets. Automobile and unsecured loans at June 30, 2015, totaled 0.3% of the Company’s total loan portfolio.

Loan Originations, Purchases and Sales. Loan originations come from a number of sources. The primary source of loan originations are our in-house loan originators, and to a lesser extent, advertising and referrals from customers and real estate agents. First Federal of Frankfort sells fixed-rate loans with longer maturities to the Federal Home Loan Bank of Cincinnati (“FHLB-Cincinnati”). We earn income on the loans sold through fees we charge on the origination, interest spread premiums earned when we sell the loans, and loan servicing fees on an on-going basis, because servicing rights are retained on such loans. At June 30, 2015, $11.9 million in loans were being serviced by First Federal of Frankfort for the FHLB-Cincinnati.

Loan Approval Procedures and Authority. Our lending activities follow written, nondiscriminatory, underwriting standards and loan origination procedures established by each Bank’s Board of Directors and management. First Federal of Hazard’s loan committee, consisting of its two senior officers, has authority to approve loans of up to $275,000. Loans above this amount and loans with non-standard terms such as longer repayment terms or high loan-to-value ratios, must be approved by our Board of Directors. First Federal of Frankfort’s loan approval process allows for various combinations of experienced bank officers to approve or deny loans which are one- to four-family properties totaling $350,000 or less, church loans of under $150,000, home equity lines of credit of $100,000 or less and loans to individuals whose aggregate borrowings with the Bank is less than $500,000. Loans that do not conform to these criteria must be submitted to the Board of Directors or Executive Committee composed of at least three directors, for approval.

5

It is the Company’s practice to record a lien on the real estate securing a loan. The Banks generally do not require title insurance, although it may be required for loans made in certain programs. The Banks do require fire and casualty insurance on all security properties and flood insurance when the collateral property is located in a designated flood hazard area.

Loans to One Borrower. The maximum amount either Bank may lend to one borrower and the borrower’s related entities is limited, by regulation, to generally 15% of that Bank’s stated capital and the allowance for loan losses. At June 30, 2015, the regulatory limit on loans to one borrower was $2.6 million for First Federal of Hazard and $5.0 million for First Federal of Frankfort. Neither of the banks had lending relationships in excess of their respective lending limits. However, loans or participations in loans may be sold among the Banks, which may allow a borrower’s total loans with the Company to exceed the limit of either individual bank.

Loan Commitments. The Banks issue commitments for the funding of mortgage loans. Generally, these commitments exist from the time the underwriting of the loan is completed and the closing of the loan. Generally, these commitments are for a maximum of 30 or 60 days but management routinely extends the commitment if circumstances delay the closing. Management reserves the right to verify or re-evaluate the borrower’s qualifications and to change the rates and terms of the loan at that time.

If conditions exist whereby either Bank experiences a significant increase in loans outstanding or commits to originate loans that are riskier than a typical one- to four-family mortgage, management and the boards will consider reflecting the anticipated loss exposure in a separate liability. As residential loans are approved in the normal course of business, and those loans are underwritten to the standards of the Banks, management does not believe alteration of the allowance for loan losses is warranted. At June 30, 2015, no commitment losses were reflected in a separate liability.

First Federal of Frankfort offers construction loans in which the borrower obtains the loan for a short term, less than one year, and simultaneously extends a commitment for permanent financing. First Federal of Hazard offers a construction loan that is convertible to permanent financing, thus no additional commitment is made.

Interest Rates and Loan Fees. Interest rates charged on mortgage loans are primarily determined by competitive loan rates offered in our market areas and our yield objectives. Mortgage loan rates reflect factors such as prevailing market interest rate levels, the supply of money available to the savings industry and the demand for such loans. These factors are in turn affected by general economic conditions, the monetary policies of the federal government, including the Board of Governors of the Federal Reserve System, the general supply of money in the economy, tax policies and governmental budget matters.

We receive fees in connection with late payments on our loans. Depending on the type of loan and the competitive environment for mortgage loans, we may charge an origination fee on all or some of the loans we originate. We may also offer a menu of loans whereby the borrower may pay a higher fee to receive a lower rate or to pay a smaller or no fee for a higher rate.

Delinquencies. When a borrower fails to make a required loan payment, we take a number of steps to have the borrower cure the delinquency and restore the loan to current status. We make initial contact with the borrower when the loan becomes 15 days past due. Subsequently, bank staff under the direct supervision of senior management and with consultation by the Banks’ attorneys, attempt to contact the borrower and determine their status and plans for resolving the delinquency. However, once a delinquency reaches 90 days, management considers foreclosure and, if the borrower has not provided a reasonable plan (such as selling the collateral, securing a commitment from another lender to refinance the loan or submitting a plan to repay the delinquent principal, interest, escrow, and late charges) the foreclosure suit may be initiated. In some cases, management may delay initiating the foreclosure suit if, in management’s opinion, the Banks’ chance of loss is minimal (such as with loans where the estimated value of the property greatly exceeds the amount of the loan) or if the original borrower is deceased or incapacitated. If a foreclosure action is initiated and the loan is not brought current, paid in full, or refinanced with another lender before the foreclosure sale, the real property securing the loan is sold at foreclosure. The Banks are represented at the foreclosure sale and in most cases will bid an amount equal to the Banks’ investment (including interest, advances for taxes and insurance, foreclosure costs, and attorney’s fees). If another bidder outbids the Bank, the Bank’s investment is received in full. If another bidder does not outbid the Banks, the Banks acquire the property and attempt to sell it to recover their investment.

6

A borrower’s filing for bankruptcy can alter the methods available to the Banks to seek collection. In such cases, the Banks work closely with legal counsel to resolve the delinquency as quickly as possible.

We may consider loan workout arrangements with certain borrowers under certain conditions. Management of each bank provides a report to its board of directors on a monthly basis of all loans more than 60 days delinquent, including loans in foreclosure, and all property acquired through foreclosure.

Investment Activities

We have legal authority to invest in various types of liquid assets, including U.S. Treasury obligations, securities of various federal agencies and state and municipal governments, mortgage-backed securities and certificates of deposit of federally insured institutions. We also are required to maintain an investment in FHLB-Cincinnati stock, the level of which is largely dependent on our level of borrowings from the FHLB.

At June 30, 2015, our investment portfolio consisted of mortgage-backed securities issued and guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae with stated final maturities of 30 years or less. The Company held no equity position with Fannie Mae, but acquired an equity position in Freddie Mac along with the acquisition of CKF Bancorp. At June 30, 2015, the carrying amount of our Freddie Mac stock was $63,000, which was also its estimated fair market value, while its cost basis was $8,000.

Our investment objectives are to provide an alternate source of low-risk investments when loan demand is insufficient, to provide and maintain liquidity, to maintain a balance of high quality, diversified investments to minimize risk, to provide collateral for pledging requirements, to establish an acceptable level of interest rate risk, and to generate a favorable return. The Banks’ Board of Directors has the overall responsibility for each institution’s investment portfolio, including approval of investment policies. The management of each Bank may authorize investments as prescribed in each of the Bank’s investment policies.

Bank Owned Life Insurance

First Federal of Frankfort owns several Bank Owned Life Insurance policies totaling $3.0 million at June 30, 2015. The purpose of these policies is to offset future escalation of the costs of non-salary employee benefit plans such as First Federal of Frankfort’s defined benefit retirement plan and First Federal of Frankfort’s health insurance plan. The lives of certain key Bank employees are insured, and First Federal of Frankfort is the sole beneficiary and will receive any benefits upon the employee’s death. The policies were purchased from four highly-rated life insurance companies. The design of the plan allows for the cash value of the policy to be designated as an asset of First Federal of Frankfort. The asset’s value will increase by the crediting rate, which is a rate set by each insurance company and is subject to change on an annual basis. The growth of the value of the asset will be recorded as other operating income. Management does not foresee any expense associated with the plan. Because this is a life insurance product, current federal tax laws exempt the income from federal income taxes.

Bank owned life insurance is not secured by any government agency nor are the policies’ asset values or death benefits secured specifically by tangible property. Great care was taken in selecting the insurance companies, and the bond ratings and financial condition of these companies are monitored on a quarterly basis. The failure of one of these companies could result in a significant loss to First Federal of Frankfort. Other risks include the possibility that the favorable tax treatment of the income could change, that the crediting rate will not be increased in a manner comparable to market interest rates, or that this type of plan will no longer be permitted by First Federal of Frankfort’s regulators. This asset is considered illiquid because, although First Federal of Frankfort may terminate the policies and receive the original premium plus all earnings, such an action would require the payment of federal income taxes on all earnings since the policies’ inception.

7

Deposit Activities and Other Sources of Funds

General. Deposits, loan repayments and maturities, redemptions, sales and repayments of investment and mortgage-backed securities are the major sources of our funds for lending and other investment purposes. Loan repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are significantly influenced by general interest rates and money market conditions.

Deposit Accounts. The vast majority of our depositors are residents of the Banks’ respective market areas. Deposits are attracted from within our market areas through the offering of passbook savings and certificate accounts, and, at First Federal of Frankfort, checking accounts and individual retirement accounts (“IRAs”). We do not utilize brokered funds. Deposit account terms vary according to the minimum balance required, the time periods the funds must remain on deposit and the interest rate, among other factors. In determining the terms of our deposit accounts, we consider the rates offered by our competition, profitability to us, asset liability management and customer preferences and concerns. We review our deposit mix and pricing on an ongoing basis as needed.

Borrowings. First Federal of Hazard and First Federal of Frankfort borrow from the FHLB-Cincinnati to supplement their supplies of investable funds and to meet deposit withdrawal requirements. The Federal Home Loan Bank functions as a central reserve bank providing credit for member financial institutions. As members, each Bank is required to own capital stock in the FHLB-Cincinnati and is authorized to apply for advances on the security of such stock and certain of our mortgage loans and other assets (principally securities which are obligations of, or guaranteed by, the United States), provided certain standards related to creditworthiness have been met. Advances are made under several different programs, each having its own interest rate and range of maturities. Depending on the program, limitations on the amount of advances are based either on a fixed percentage of an institution’s net worth or on the Federal Home Loan Bank’s assessment of the institution’s creditworthiness.

Subsidiary Activities

The Company has no other wholly owned subsidiaries other than First Federal of Hazard and Frankfort First Bancorp. Frankfort First Bancorp has one subsidiary, First Federal of Frankfort.

As federally chartered savings institutions, the Banks are permitted to invest an amount equal to 2% of assets in subsidiaries, with an additional investment of 1% of assets where such investment serves primarily community, inner-city and community-development purposes. Under such limitations, as of June 30, 2015, First Federal of Hazard and First Federal of Frankfort were authorized to invest up to $2.3 million and $6.9 million, respectively, in the stock of or loans to subsidiaries, including the additional 1% investment for community, inner-city and community development purposes.

Competition

We face significant competition for the attraction of deposits and origination of loans. Our most direct competition for deposits has historically come from the banks and credit unions operating in our market areas and, to a lesser extent, from other financial services companies, such as investment brokerage firms. We also face competition for depositors’ funds from money market funds and other corporate and government securities. Several of our competitors are significantly larger than us and, therefore, have significantly greater resources. 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. Technological advances, for example, have lowered the barriers to enter new market areas, allowed banks to expand their geographic reach by providing services over the Internet and made it possible for non-depository institutions to offer products and services that traditionally have been provided by banks. Changes in federal law permit affiliation among banks, securities firms and insurance companies, which promotes a competitive environment in the financial services industry. Competition for deposits and the origination of loans could limit our growth in the future.

8

According to the Federal Deposit Insurance Corporation (“FDIC”), at June 30, 2014 (the most recent period for which information is available,) First Federal of Hazard had a deposit market share of 10.2% in Perry County. Its largest competitors, Hazard Bancorp (Peoples Bank & Trust Company of Hazard,) Community Trust Bancorp, Inc. (Community Trust Bank, Inc.) and 1^st Trust Bank, Inc. had Perry County deposit market shares of 42.3%, 16.9% and 23.4%, respectively. First Federal of Hazard’s competition for loans comes primarily from financial institutions in its market area and, to a lesser extent, from other financial services providers, such as mortgage companies and mortgage brokers. Competition for loans also comes from the increasing number of non-depository financial services companies entering the mortgage market, such as insurance companies, securities companies and specialty finance companies.

First Federal of Frankfort’s principal competitors for deposits in its market area are other banking institutions, such as commercial banks and credit unions, as well as mutual funds and other investments. First Federal of Frankfort principally competes for deposits by offering a variety of deposit accounts, convenient business hours and branch locations, customer service and a well-trained staff. According to the FDIC, at June 30, 2014, (the most recent period for which information is available,) First Federal of Frankfort had deposit market share of 8.9%, 38.4% and 18.7% for the Kentucky counties of Franklin, Boyle and Garrard. Its largest competitors for depositors are the Farmers Capital Bank Corporation (Farmers Bank and Capital Trust Company) at a 26.7% market share in the three-county area, Boyle Bancorp, Inc. (The Farmers National Bank of Danville) at 16.7% and Whitaker Bank Corporation of Kentucky at 12.3%. Farmers Capital Bank Corporation, Boyle Bancorp, Inc., and Whitaker Bank Corporation had assets at June 30, 2015, of $1.8 billion, $448.2 million and $1.4 billion, respectively. The Bank also faces considerable competition from credit unions including the Commonwealth Credit Union ($979.2 million in assets) and the Kentucky Employees Credit Union ($70.4 million in assets). First Federal of Frankfort competes for loans with other depository institutions, as well as specialty mortgage lenders and brokers and consumer finance companies. First Federal of Frankfort principally competes for loans on the basis of interest rates and the loan fees it charges, the types of loans it originates and the convenience and service it provides to borrowers. In addition, First Federal of Frankfort believes it has developed strong relationships with the businesses, real estate agents, builders and general public in its market area.

Personnel

At June 30, 2015, we had 69 full-time employees and two part-time employees, none of whom was represented by a collective bargaining unit. We believe our relationship with our employees is good.

Regulation and Supervision

General. First Federal of Hazard and First Federal of Frankfort are subject to extensive regulation, examination and supervision by the Office of the Comptroller of the Currency, as their primary federal regulator, and the Federal Deposit Insurance Corporation, as insurer of deposits. First Federal of Hazard and First Federal of Frankfort are each members of the Federal Home Loan Bank System and their deposit accounts are insured up to applicable limits by the Deposit Insurance Fund managed by the Federal Deposit Insurance Corporation. First Federal of Hazard and First Federal of Frankfort must each file reports with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation concerning their activities and financial condition in addition to obtaining regulatory approvals before entering into certain transactions such as mergers with, or acquisitions of, other financial institutions. There are periodic examinations by the Office of the Comptroller of the Currency and, under certain circumstances, the Federal Deposit Insurance Corporation to evaluate First Federal of Hazard’s and First Federal of Frankfort’s safety and soundness and compliance with various regulatory requirements. This regulatory structure is intended primarily for the protection of the insurance fund and depositors. The Federal Reserve Board, the agency that regulates and supervises bank holding companies, now supervises and regulates Kentucky First Federal MHC. Kentucky First and First Federal MHC, as savings and loan holding companies, are required to file certain reports with, and are subject to examination by, and otherwise are required to comply with the rules and regulations of the Federal Reserve Board.

9

The Dodd-Frank Act made extensive changes in the regulation of federal savings banks such as First Federal of Hazard and First Federal of Frankfort. Under the Dodd-Frank Act, the Office of Thrift Supervision was eliminated and responsibility for the supervision and regulation of federal savings banks was transferred to the Office of the Comptroller of the Currency, the agency that is primarily responsible for the regulation and supervision of national banks, on July 21, 2011. The Office of the Comptroller of the Currency assumed responsibility for implementing and enforcing many of the laws and regulations applicable to federal savings banks. Additionally, the Dodd-Frank Act created a new Consumer Financial Protection Bureau as an independent bureau of the Federal Reserve Board. The Consumer Financial Protection Bureau assumed responsibility for the implementation of the federal financial consumer protection and fair lending laws and regulations and has authority to impose new requirements. However, institutions of less than $10 billion in assets, such as First Federal of Hazard and First Federal of Frankfort, will continue to be examined for compliance with consumer protection and fair lending laws and regulations by, and be subject to the enforcement authority of, their prudential regulator. Many of the provisions of the Dodd-Frank Act require the issuance of regulations before their impact on operations can be fully assessed by management. However, there is a significant possibility that the Dodd-Frank Act will, at a minimum, result in increased regulatory burden and compliance for First Federal MHC, Kentucky First and each of the Banks.

Certain of the regulatory requirements that are applicable to First Federal of Hazard, First Federal of Frankfort, Kentucky First and First Federal MHC are described below. This discussion does not purport to be a complete description of the laws and regulations involved, and is qualified in its entirety by the actual laws and regulations. Moreover, laws and regulations are subject to changes by the U.S. Congress or the regulatory agencies as applicable.

Regulation of Federal Savings Institutions

Business Activities. Federal law and regulations, primarily the Home Owners’ Loan Act and the regulations of the Office of the Comptroller of the Currency, govern the activities of federal savings institutions, such as First Federal of Hazard and First Federal of Frankfort. These laws and regulations delineate the nature and extent of the activities in which federal savings banks may engage. In particular, certain lending authority for federal savings institutions, e.g., commercial, nonresidential real property loans and consumer loans, is limited to a specified percentage of the institution’s capital or assets.

Branching. Federal savings institutions are authorized to establish branch offices in any state or states of the United States and its territories, subject to the approval of the Office of the Comptroller of the Currency.

Capital Requirements. In early July 2013, the Federal Reserve Board and the OCC approved revisions to their capital adequacy guidelines and prompt corrective action rules that implement the revised standards of the Basel Committee on Banking Supervision, commonly called “Basel III,” and address relevant provisions of the Dodd-Frank Act. “Basel III” refers to two consultative documents released by the Basel Committee on Banking Supervision in December 2009, the rules text released in December 2010, and loss absorbency rules issued in January 2011, which include significant changes to bank capital, leverage and liquidity requirements.

The rules include new risk-based capital and leverage ratios, which became effective January 1, 2015, and revise the definition of what constitutes “capital” for purposes of calculating those ratios. The new minimum capital level requirements applicable to the Company and the Banks are: (1) a new common equity Tier 1 capital ratio of 4.5%; (2) a Tier 1 capital ratio of 6% (increased from 4%); (3) a total capital ratio of 8% (unchanged from current rules); and (4) a Tier 1 leverage ratio of 4% for all institutions. In addition, the rules assign a higher risk weight (150%) to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property. The rules also eliminate the inclusion of certain instruments, such as trust preferred securities, from Tier 1 capital. However, instruments issued prior to May 19, 2010 will be grandfathered for companies with consolidated assets of $15 billion or less. In addition, Tier 2 capital is no longer limited to the amount of Tier 1 capital included in total capital. Mortgage servicing rights, certain deferred tax assets and investments in unconsolidated subsidiaries over designated percentages of common stock will be required to be deducted from capital, subject to a two-year transition period. Finally Tier 1 capital will include accumulated other comprehensive income (which includes all unrealized gains and losses on available for sale debt and equity securities), subject to a two-year transition period.

The rules also establish a “capital conservation buffer” of 2.5% above the new regulatory minimum capital requirements, which must consist entirely of common equity Tier 1 capital and would result in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%; (ii) Tier 1 capital ratio of 8.5%; and (iii) a total capital ratio of 10.5%. The new capital conservation buffer requirement will be phased in beginning in January 2016 at 0.625% of risk-weighted assets and will increase by that amount each year until fully implemented in January 2019. An institution would 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 establish a maximum percentage of eligible retained income that could be utilized for such actions.

10

The OCC also has authority to establish individual minimum capital requirements in appropriate cases upon a determination that an institution’s capital level is or may become inadequate in light of the particular circumstances. At June 30, 2015, the Banks met each of their capital requirements.

Prompt Corrective Regulatory Action. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept broker deposits. The OCC is required to take certain supervisory actions against undercapitalized institutions, the severity of which depends upon the institution’s degree of undercapitalization. In addition, numerous mandatory supervisory actions become immediately applicable to an undercapitalized institution, including, but not limited to, increased monitoring by regulators and restrictions on growth, capital distributions and expansion. The OCC could also take any one of a number of discretionary supervisory actions, including the issuance of a capital directive and the replacement of senior executive officers and directors. Significantly and undercapitalized institutions are subject to additional mandatory and discretionary measures.

Loans to One Borrower. Federal law provides that savings institutions are generally subject to the limits on loans to one borrower applicable to national banks. Generally, subject to certain exceptions, a savings institution may not make a loan or extend credit to a single or related group of borrowers in excess of 15% of its unimpaired capital and surplus. An additional amount may be lent, equal to 10% of unimpaired capital and surplus, if secured by specified readily-marketable collateral.

Standards for Safety and Soundness. As required by statute, the federal banking agencies have adopted Interagency Guidelines prescribing Standards for Safety and Soundness. The guidelines set forth the safety and soundness standards that the federal banking agencies use to identify and address problems at insured depository institutions before capital becomes impaired. If the Office of the Comptroller of the Currency determines that a savings institution fails to meet any standard prescribed by the guidelines, the Office of the Comptroller of the Currency may require the institution to submit an acceptable plan to achieve compliance with the standard.

Limitation on Capital Distributions. Office of the Comptroller of the Currency regulations impose limitations upon all capital distributions by a savings institution, including cash dividends, payments to repurchase its shares and payments to shareholders of another institution in a cash-out merger. Under the regulations, an application to and the prior approval of the Office of the Comptroller of the Currency is required before any capital distribution if the institution does not meet the criteria for “expedited treatment” of applications under Office of the Comptroller of the Currency regulations (i.e., generally, examination and Community Reinvestment Act ratings in the two top categories), the total capital distributions for the calendar year exceed net income for that year plus the amount of retained net income for the preceding two years, the institution would be undercapitalized following the distribution or the distribution would otherwise be contrary to a statute, regulation or agreement with the Office of the Comptroller of the Currency. If an application is not required, the institution must still provide prior notice to the Federal Reserve Board of the capital distribution if, like First Federal of Hazard and First Federal of Frankfort, it is a subsidiary of a holding company as well as an informational notice to the Office of the Comptroller of the Currency. If First Federal of Hazard’s or First Federal of Frankfort’s capital were ever to fall below its regulatory requirements or the Office of the Comptroller of the Currency notified it that it was in need of increased supervision, its ability to make capital distributions could be restricted. In addition, the Office of the Comptroller of the Currency could prohibit a proposed capital distribution that would otherwise be permitted by the regulation, if the agency determines that such distribution would constitute an unsafe or unsound practice.

Qualified Thrift Lender Test. Federal law requires savings institutions to meet a qualified thrift lender test. Under the test, a savings institution is required to either qualify as a “domestic building and loan association” under the Internal Revenue Code or maintain at least 65% of its “portfolio assets” (total assets less: (i) specified liquid assets up to 20% of total assets; (ii) intangibles, including goodwill; and (iii) the value of property used to conduct business) in certain “qualified thrift investments” (primarily residential mortgages and related investments, including certain mortgage-backed securities, education loans, credit card loans and small business loans) in at least 9 months out of each 12-month period.

11

A savings institution that fails the qualified thrift lender test is subject to certain operating restrictions. The Dodd-Frank Act also specifies that failing the qualified thrift lender test is a violation of law that could result in an enforcement action and dividend limitations. At June 30, 2015, First Federal of Hazard and First Federal of Frankfort each met the qualified thrift lender test.

Transactions with Related Parties. Federal law limits the authority of First Federal of Hazard and First Federal of Frankfort to lend to, and engage in certain other transactions with (collectively, “covered transactions”), “affiliates” (e.g., any company that controls or is under common control with an institution, including Kentucky First, First Federal MHC and their non-savings institution subsidiaries). The aggregate amount of covered transactions with any individual affiliate is limited to 10% of the capital and surplus of the savings institution. The aggregate amount of covered transactions with all affiliates is limited to 20% of the savings institution’s capital and surplus. Loans and other specified transactions with affiliates are required to be secured by collateral in an amount and of a type described in federal law. The purchase of low quality assets from affiliates is generally prohibited. Transactions with affiliates must be on terms and under circumstances that are at least as favorable to the institution as those prevailing at the time for comparable transactions with non-affiliated companies. In addition, savings institutions are prohibited from lending to any affiliate that is engaged in activities that are not permissible for bank holding companies and no savings institution may purchase the securities of any affiliate other than a subsidiary. Transactions between sister depository institutions that are 80% or more owned by the same holding company are exempt from the quantitative limits and collateral requirements.

The Sarbanes-Oxley Act of 2002 generally prohibits a company from making loans to its executive officers and directors. However, that law contains a specific exception for loans by a depository institution to its executive officers and directors in compliance with federal banking laws. Under such laws, First Federal of Hazard’s and First Federal of Frankfort’s authority to extend credit to executive officers, directors and 10% shareholders (“insiders”), as well as entities such persons control, is limited. The law restricts both the individual and aggregate amount of loans First Federal of Hazard and First Federal of Frankfort may make to insiders based, in part, on First Federal of Hazard’s and First Federal of Frankfort’s respective capital positions and requires certain board approval procedures to be followed. Such loans must be made on terms, including rates and collateral, substantially the same as those offered to unaffiliated individuals prevailing at the time for comparable loans with persons not related to the lender and not involve more than the normal risk of repayment. There are additional restrictions applicable to loans to executive officers.

Enforcement. The Office of The Comptroller of the Currency has primary enforcement responsibility over federal savings institutions and has the authority to bring actions against the institution and all institution-affiliated parties, including stockholders, and any attorneys, appraisers and accountants who knowingly or recklessly participate in wrongful action likely to have an adverse effect on an insured institution. Formal enforcement action may range from the issuance of a capital directive or cease and desist order to removal of officers and/or directors to appointment of a receiver or conservator or termination of deposit insurance. Civil penalties cover a wide range of violations and can amount to $25,000 per day, or even $1 million per day in especially egregious cases. The Federal Deposit Insurance Corporation has authority to recommend to the Director of the Office of the Comptroller of the Currency that enforcement action to be taken with respect to a particular savings institution. If action is not taken by the Director, the Federal Deposit Insurance Corporation has authority to take such action under certain circumstances. Federal law also establishes criminal penalties for certain violations.

Assessments. Federal savings banks pay assessments to the Office of the Comptroller of the Currency to fund its operations. The general assessments, paid on a semi-annual basis, are based upon the savings institution’s total assets, including consolidated subsidiaries, its financial condition and the complexity of its portfolio.

12

Insurance of Deposit Accounts. The deposits of both First Federal of Hazard and First Federal of Frankfort are insured up to applicable limits by the Deposit Insurance Fund administered by the Federal Deposit Insurance Corporation. Deposit insurance per account owner is currently $250,000. Under the Federal Deposit Insurance Corporation’s risk-based assessment system, insured institutions are assigned a risk category based on supervisory evaluations, regulatory capital levels and certain other factors. An institution’s assessment rate depends upon the category to which it is assigned, and certain adjustments specified by Federal Deposit Insurance Corporation regulations. Institutions deemed less risky pay lower assessments. The Federal Deposit Insurance Corporation may adjust the scale uniformly, except that no adjustment can deviate more than two basis points from the base scale without notice and comment. No institution may pay a dividend if in default of the federal deposit insurance assessment.

The Dodd-Frank Act required the Federal Deposit Insurance Corporation to revise its procedures to base its assessments upon each insured institution’s total assets less tangible equity instead of deposits. The Federal Deposit Insurance Corporation finalized a rule, effective April 1, 2011, that set the assessment range at 2.5 to 45 basis points of total assets less tangible equity.

The Federal Deposit Insurance Corporation has authority to increase insurance assessments. A significant increase in insurance premiums would likely have an adverse effect on the operating expenses and results of operations of the Banks. Management cannot predict what insurance assessment rates will be in the future.

Federal Home Loan Bank System. First Federal of Hazard and First Federal of Frankfort are members of the Federal Home Loan Bank System, which consists of 12 regional Federal Home Loan Banks. The Federal Home Loan Bank provides a central credit facility primarily for member institutions. As members of the Federal Home Loan Bank of Cincinnati, First Federal of Hazard and First Federal of Frankfort are each required to acquire and hold shares of capital stock in that Federal Home Loan Bank. First Federal of Hazard and First Federal of Frankfort were in compliance with this requirement with investments in Federal Home Loan Bank of Cincinnati stock at June 30, 2015, of $2.0 million and $4.5 million, respectively.

Federal Reserve System. Pursuant to regulations of the Federal Reserve Board, a financial institution must maintain average daily reserves equal to 3% on transaction accounts of between $14.5 million and $103.6 million, plus 10% on the remainder. The first $14.5 million of transaction accounts are exempt. These percentages are subject to adjustment by the Federal Reserve Board. Because required reserves must be maintained in the form of vault cash or in a noninterest-bearing account at the Federal Reserve Bank, the effect of the reserve requirement is to reduce the amount of the institution’s interest-earning assets. As of June 30, 2015, the Banks met their reserve requirements.

Community Reinvestment Act. All federal savings institutions have a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods. The Community Reinvestment Act does not establish specific lending requirements or programs for financial institutions nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the Community Reinvestment Act. The Community Reinvestment Act requires the Office of the Comptroller of the Currency, in connection with its examination of a savings institution, to assess the institution’s record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by such institution.

The Community Reinvestment Act requires public disclosure of an institution’s rating and requires the Office of the Comptroller of the Currency to provide a written evaluation of an institution’s Community Reinvestment Act performance utilizing a four-tiered descriptive rating system. First Federal of Hazard and First Federal of Frankfort each received a “Satisfactory” rating as a result of their most recent Community Reinvestment Act assessments.

Holding Company Regulation

General. Kentucky First and First Federal MHC are savings and loan holding companies within the meaning of federal law. As such, they are registered with the Federal Reserve Board and are subject to Federal Reserve Board regulations, examinations, supervision, reporting requirements and regulations concerning corporate governance and activities. In addition, the Federal Reserve Board has enforcement authority over Kentucky First and First Federal MHC and their non-savings institution subsidiaries. Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a serious risk to First Federal of Hazard and/or First Federal of Frankfort.

13

Restrictions Applicable to Mutual Holding Companies. According to federal law and Federal Reserve Board regulations, a mutual holding company, such as First Federal MHC, may generally engage in the following activities: (1) investing in the stock of insured depository institutions and acquiring them by means of a merger or acquisition; (2) investing in a corporation the capital stock of which may be lawfully purchased by a savings association under federal law; (3) furnishing or performing management services for a savings association subsidiary of a savings and loan holding company; (4) conducting an insurance agency or escrow business; (5) holding, managing or liquidating assets owned or acquired from a savings association subsidiary of the savings and loan holding company; (6) holding or managing properties used or occupied by a savings association subsidiary of the savings and loan holding company; (7) acting as trustee under deed of trust; (8) any activity permitted for multiple savings and loan holding companies by Federal Reserve Board regulations; (9) any activity permitted by the Board of Governors of the Federal Reserve System for bank holding companies and financial holding companies; and (10) any activity permissible for service corporations. Legislation, which authorized mutual holding companies to engage in activities permitted for financial holding companies, expanded the authorized activities. Financial holding companies may engage in a broad array of financial services activities, including insurance and securities.

Federal law prohibits a savings and loan holding company, including a federal mutual holding company, from directly or indirectly, or through one or more subsidiaries, acquiring more than 5% of the voting stock of another savings institution, or its holding company, without prior written approval of the Federal Reserve Board. Federal law also prohibits a savings and loan holding company from acquiring or retaining control of a depository institution that is not insured by the Federal Deposit Insurance Corporation. In evaluating applications by holding companies to acquire savings institutions, the Federal Reserve Board must consider the financial and managerial resources and future prospects of the company and institution involved, the effect of the acquisition on the risk to the insurance funds, the convenience and needs of the community and competitive factors.

The Federal Reserve Board is prohibited from approving any acquisition that would result in a multiple savings and loan holding company controlling savings institutions in more than one state, except: (1) the approval of interstate supervisory acquisitions by savings and loan holding companies, and (2) the acquisition of a savings institution in another state if the laws of the state of the target savings institution specifically permit such acquisitions. The states vary in the extent to which they permit interstate savings and loan holding company acquisitions.

Capital Requirements. Savings and loan holding companies historically have not been subject to specific regulatory capital requirements. However, in July 2013, the Federal Reserve Board approved a new rule that implements the “Basel III” regulatory capital reforms and changes required by the Dodd-Frank Act. The final rule established consolidated capital requirements for many savings and loan holding companies, including the Company. See “Regulation and Supervision—Regulation of Federal Savings Institutions -Capital Requirements” above.

Source of Strength. The Dodd-Frank Act also extends the “source of strength” doctrine to savings and loan holding companies. The regulatory agencies must promulgate regulations implementing the “source of strength” policy that holding companies act as a source of strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial stress.

Dividends. The Federal Reserve Board has issued a policy statement on the payment of cash dividends by bank holding companies, which expressed the Federal Reserve Board’s view that a bank holding company should pay cash dividends only to the extent that the company’s net income for the past year is sufficient to cover both the cash dividends and a rate of earning retention that is consistent with the company’s capital needs, asset quality and overall financial condition. The Federal Reserve Board also indicated that it would be inappropriate for a company experiencing serious financial problems to borrow funds to pay dividends. Furthermore, under the prompt correction action regulations, the Federal Reserve Board may prohibit a bank holding company from paying any dividends if the holding company’s bank subsidiary is classified as “undercapitalized.” See “Depository Institution Regulation – Prompt Corrective Regulatory Action.”

14

Stock Holding Company Subsidiary Regulation. Federal Reserve Board regulations govern the two-tier mutual holding company form of organization and subsidiary stock holding companies that are controlled by mutual holding companies. Kentucky First is the stock holding company subsidiary of First Federal MHC. Kentucky First is only permitted to engage in activities that are permitted for First Federal MHC subject to the same restrictions and conditions.

Waivers of Dividends by First Federal MHC. Federal Reserve Board regulations require First Federal MHC to notify the Federal Reserve Board if it proposes to waive receipt of our dividends from Kentucky First. The Dodd-Frank Act addresses the issue of dividend waivers in the context of the transfer of the supervision of savings and loan holding companies to the Federal Reserve Board. The Dodd-Frank Act specified that dividends may be waived if certain conditions are met, including that the Federal Reserve Board does not object after being given written notice of the dividend and proposed waiver. The Dodd-Frank Act indicates that the Federal Reserve Board may not object to such a waiver (i) if the mutual holding company involved has, prior to December 1, 2009, reorganized into a mutual holding company structure, engaged in a minority stock offering and waived dividends; (ii) the board of directors of the mutual holding company expressly determines that a waiver of the dividend is consistent with its fiduciary duties to members and (iii) the waiver would not be detrimental to the safe and sound operation of the savings association subsidiaries of the holding company. The Federal Reserve Board will not consider the amount of dividends waived by the mutual holding company in determining an appropriate exchange ratio in the event of a full conversion to stock form. Kentucky First was granted such a waiver and dividends were paid to the Company’s shareholders on August 16 and November 22, 2011, as well as February 21, 2012. First Federal MHC was not allowed to waive its dividend with respect to the dividend paid on May 21, 2012. First Federal MHC subsequently received Federal Reserve Board approval to waive quarterly dividends totaling $0.40 per share annually beginning with the dividend paid on September 28, 2012 and continuing through the dividend payable in the 3rd quarter of 2014. In an effort to comply with Regulation MM and to be able to continue to waive the dividend, First Federal MHC put the issue to a vote of the members on August 23, 2012, again on July 9, 2013, again on July 8, 2014 and again on July 7, 2015. Members of First Federal MHC voted in favor of the dividend waiver on all four occasions. 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 quarter of 2016. It is expected that First Federal MHC will continue to waive future dividends, except to the extent dividends are needed to fund First Federal MHC’s continuing operations, subject to the ability of First Federal MHC to obtain regulatory approval of its requests to waive dividends and to its ability to obtain member approval of dividend waivers. For more information, see Item 1A, “Risk Factors – Our ability to pay dividends is subject to the ability of First Federal of Hazard and First Federal of Frankfort to make capital distributions to Kentucky First and the waiver of dividends by First Federal MHC.”

Conversion of First Federal MHC to Stock Form. Federal Reserve Board regulations permit First Federal MHC to convert from the mutual form of organization to the capital stock form of organization. In a conversion transaction, a new holding company would be formed as successor to First Federal MHC, its corporate existence would end, and certain depositors would receive the right to subscribe for additional shares of the new holding company. In a conversion transaction, each share of common stock held by stockholders other than First Federal MHC would be automatically converted into a number of shares of common stock of the new holding company based on an exchange ratio determined at the time of conversion that ensures that stockholders other than First Federal MHC own the same percentage of common stock in the new holding company as they owned in us immediately before conversion. Under Federal Reserve Board regulations, stockholders other than First Federal MHC would not be diluted because of any dividends waived by First Federal MHC (and waived dividends would not be considered in determining an appropriate exchange ratio, provided that the mutual holding company involved was formed, engaged in a minority offering and waived dividends prior to December 1, 2009), in the event First Federal MHC converts to stock form. First Federal MHC was formed, engaged in a minority stock offering and waived dividends prior to December 1, 2009. The total number of shares held by stockholders other than First Federal MHC after a conversion transaction also would be increased by any purchases by stockholders other than First Federal MHC in the stock offering conducted as part of the conversion transaction.

15

Acquisition of Control. Under the federal Change in Bank Control Act, a notice must be submitted to the Federal Reserve Board if any person (including a company), or group acting in concert, seeks to acquire “control” of a savings and loan holding company or savings association. An acquisition of “control” can occur upon the acquisition of 10% or more of the voting stock of a savings and loan holding company or savings institution or as otherwise defined by the Federal rd. Under the Change in Bank Control Act, the Federal Reserve Board has 60 days from the filing of a complete notice to act, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the anti-trust effects of the acquisition. Any company that so acquires control would then be subject to regulation as a savings and loan holding company.

Federal and State Taxation

General. We report our income on a fiscal year basis using the accrual method of accounting.

Federal Taxation. The federal income tax laws apply to us in the same manner as to other corporations with some exceptions, including particularly the reserve for bad debts discussed below. The following discussion of tax matters is intended only as a summary and does not purport to be a comprehensive description of the tax rules applicable to us. Our federal income tax returns are subject to examination for years 2011 and later. For the 2015 fiscal year, First Federal of Hazard’s and Frankfort First’s maximum federal income tax rate was 34.0%.

For fiscal years beginning before June 30, 1996, thrift institutions that qualified under certain definitional tests and other conditions of the Internal Revenue Code were permitted to use certain favorable provisions to calculate their deductions from taxable income for annual additions to their bad debt reserve. A reserve could be established for bad debts on qualifying real property loans, generally secured by interests in real property improved or to be improved, under the percentage of taxable income method or the experience method. The reserve for nonqualifying loans was computed using the experience method. Federal legislation enacted in 1996 repealed the reserve method of accounting for bad debts and the percentage of taxable income method for tax years beginning after 1995 and require savings institutions to recapture or take into income certain portions of their accumulated bad debt reserves. First Federal of Hazard did not qualify for such favorable tax treatment for any years through 1996. Approximately $5.2 million of First Federal of Frankfort First’s accumulated bad debt reserves would not be recaptured into taxable income unless Frankfort First makes a “non-dividend distribution” to Kentucky First as described below.

If First Federal of Hazard or First Federal of Frankfort makes “non-dividend distributions” to us, the distributions will be considered to have been made from First Federal of Hazard’s and First Federal of Frankfort’s unrecaptured tax bad debt reserves, including the balance of their reserves as of December 31, 1987, to the extent of the “non-dividend distributions,” and then from First Federal of Frankfort’s supplemental reserve for losses on loans, to the extent of those reserves, and an amount based on the amount distributed, but not more than the amount of those reserves, will be included in First Federal of Frankfort’s taxable income. Non-dividend distributions include distributions in excess of First Federal of Frankfort’s current and accumulated earnings and profits, as calculated for federal income tax purposes, distributions in redemption of stock, and distributions in partial or complete liquidation. Dividends paid out of First Federal of Frankfort’s current or accumulated earnings and profits will not be so included in First Federal of Frankfort’s taxable income.

The amount of additional taxable income triggered by a non-dividend distribution is an amount that, when reduced by the tax attributable to the income, is equal to the amount of the distribution. Therefore, if First Federal of Frankfort makes a non-dividend distribution to us, approximately one and one-half times the amount of the distribution not in excess of the amount of the reserves would be includable in income for federal income tax purposes, assuming a 34% federal corporate income tax rate. First Federal of Frankfort does not intend to pay dividends in the future that would result in a recapture of any portion of its bad debt reserves.

16

State Taxation. Although First Federal MHC and Kentucky First are subject to the Kentucky corporation income tax and state corporation license tax (franchise tax), the corporation license tax is repealed effective for tax periods ending on or after December 31, 2005. Gross income of corporations subject to Kentucky income tax is similar to income reported for federal income tax purposes except that dividend income, among other income items, is exempt from taxation. For First Federal MHC and Kentucky First tax years beginning July 1, 2005, the corporations are subject to an alternative minimum income tax. Corporations must pay the greater of the income tax, the alternative tax or $175. The corporations can choose between two methods to calculate the alternative minimum; 9.5 cents per $100 of the corporation’s gross receipts, or 75 cents per $100 of the corporation’s Kentucky gross profits. Kentucky gross profits means Kentucky gross receipts reduced by returns and allowances attributable to Kentucky gross receipts, less Kentucky cost of goods sold. The corporations, in their capacity as holding companies for financial institutions, do not have a material amount of cost of goods sold. Although the corporate license tax rate is 0.21% of total capital employed in Kentucky, a bank holding company, as defined in Kentucky Revised Statutes 287.900, is allowed to deduct from its taxable capital, the book value of its investment in the stock or securities of subsidiaries that are subject to the bank franchise tax.

First Federal of Hazard and First Federal of Frankfort are exempt from both the Kentucky corporation income tax and corporation license tax. However, both institutions are instead subject to the bank franchise tax, an annual tax imposed on federally or state chartered savings and loan associations, savings banks and other similar institutions operating in Kentucky. The tax is 0.1% of taxable capital stock held as of January 1 each year. Taxable capital stock includes an institution’s undivided profits, surplus and general reserves plus savings accounts and paid-up stock less deductible items. Deductible items include certain exempt federal obligations and Kentucky municipal bonds. Financial institutions which are subject to tax both within and without Kentucky must apportion their net capital.

Item 1A. Risk Factors

Rising interest rates may hurt our profits and asset values.

If interest rates rise, our net interest income would likely 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, a continuation of rising interest rates may hurt our income because of reduced demand for new loans, the demand for refinancing loans and the interest and fee income earned on new loans and 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 of our interest-earning assets, and in particular our securities portfolio. Generally, the value of fixed-rate securities fluctuates inversely with changes in interest rates. Unrealized gains and losses on securities available for sale are reported as separate components of equity. Decreases in the fair value of securities available for sale resulting from increases in interest rates therefore could have an adverse effect on stockholders’ equity.

A larger percentage of our loans are collateralized by real estate and further disruptions in the real estate market may result in losses and hurt our earnings.

Approximately 95.9% of our loan portfolio at June 30, 2015 was comprised of loans collateralized by real estate. The declining economic conditions have caused a decrease in demand for real estate, which has resulted in an erosion of some real estate values in our markets. Further disruptions in the real estate market could significantly impair the value of our collateral and our ability to sell the collateral upon foreclosure. The real estate collateral in each case provides an alternate source of repayment in the event of default by the borrower and may deteriorate in value during the time the credit is extended. If real estate values decline further, it will become more likely that we would be required to increase our allowance for loan losses. If during a period of reduced real estate values, we are required to liquidate the collateral securing a loan to satisfy the debt or to increase our allowance for loan losses, it could materially reduce our profitability and adversely affect our financial condition.

17

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.

The distressed economy in First Federal of Hazard’s market area could hurt our profits and slow our growth.

First Federal of Hazard’s market area consists of Perry and surrounding counties in eastern Kentucky. The economy in this market area has been distressed in recent years due to the decline in the coal industry on which the economy has been dependent. While the region has seen improvement in the economy from the influx of other industries, such as health care and manufacturing, and the competition provided by new methods of extracting natural gas has recently hurt the coal industry. As a consequence, the economy in First Federal of Hazard’s market area continues to lag behind the economies of Kentucky and the United States and First Federal of Hazard has experienced insufficient loan demand in its market area. While First Federal of Hazard will seek to use excess funds to purchase loans from First Federal of Frankfort, we expect the redeployment of funds from securities into loans to take several years. Moreover, the slow economy in First Federal of Hazard’s market area will limit our ability to grow our asset base in that market.

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 Office of the Comptroller of the Currency, and assigning the regulation of savings and loan holding companies, including the Company and the MHC, to the Federal Reserve Board. 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 risk.

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 crisis. These actions include the entering into of written agreements and cease and desist orders that place certain limitations on their operations. 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 Office of the Comptroller of the Currency’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 Institutions—Capital Requirements” for a discussion of regulatory capital requirements.

18

We expect that our return on equity will be low compared to other companies as a result of our high level of capital.

Return on average equity, which equals net income divided by average equity, is a ratio used by many investors to compare the performance of a particular company with other companies. For the year ended June 30, 2015, our return on average equity was 3.1%. We also intend to continue managing excess capital through our stock repurchase program, which has been successful, given relatively low market prices of the Company’s common stock. However, this program could be curtailed or rendered less effective if the market price of our stock increases, or if the Company’s liquid funds are deployed elsewhere. Our goal of generating a return on average equity that is competitive with other publicly-held subsidiaries of mutual holding companies, by increasing earnings per share and book value per share, without assuming undue risk, could take a number of years to achieve, and we cannot assure that our goal will be attained. Consequently, you should not expect a competitive return on average equity in the near future. Failure to achieve a competitive return on average equity might make an investment in our common stock unattractive to some investors and might cause our common stock to trade at lower prices than comparable companies with higher returns on average equity.

Additional annual employee compensation and benefit expenses may reduce our profitability and stockholders’ equity.

We will continue to recognize employee compensation and benefit expenses for employees and executives under our benefit plans. With regard to the employee stock ownership plan, applicable accounting practices require that the expense be based on the fair market value of the shares of common stock at specific points in the future, therefore we will recognize expenses for our employee stock ownership plan when shares are committed to be released to participants’ accounts. We will also recognize expenses for restricted stock awards and options over the vesting periods of those awards. In addition, employees of both subsidiary Banks participate in a defined-benefit plan through Pentegra. Costs associated with the defined-benefit plans could increase or legislation could be enacted that would increase the Banks’ obligations under the plan or change the methods the Banks use in accounting for the plans. Those changes could adversely affect personnel expense and the Company’s balance sheet.

First Federal MHC owns a majority of our common stock and is able to exercise voting control over most matters put to a vote of stockholders, including preventing sale or merger transactions you may like or a second-step conversion by First Federal MHC.

First Federal MHC owns a majority of our common stock and, through its Board of Directors, is able to exercise voting control over most matters put to a vote of stockholders. As a federally chartered mutual holding company, the board of directors of First Federal MHC must ensure that the interests of depositors of First Federal of Hazard are represented and considered in matters put to a vote of stockholders of Kentucky First. Therefore, the votes cast by First Federal MHC may not be in your personal best interests as a stockholder. For example, First Federal MHC may exercise its voting control to prevent a sale or merger transaction in which stockholders could receive a premium for their shares, prevent a second-step conversion transaction by First Federal MHC or defeat a stockholder nominee for election to the Board of Directors of Kentucky First. However, implementation of a stock-based incentive plan will require approval of Kentucky First’s stockholders other than First Federal MHC. Federal Reserve Board regulations would likely prevent an acquisition of Kentucky First other than by another mutual holding company or a mutual institution.

19

There may be a limited market for our common stock which may lower our stock price.

Although our shares of common stock are listed on the Nasdaq Global Market, there is no guarantee that the shares will be regularly traded. If an active trading market for our common stock does not develop, you may not be able to sell all of your shares of common stock on short notice and the sale of a large number of shares at one time could temporarily depress the market price.

Our ability to pay dividends is subject to the ability of First Federal of Hazard and First Federal of Frankfort to make capital distributions to Kentucky First and the waiver of dividends by First Federal MHC.

Our long-term ability to pay dividends to our stockholders is based primarily upon the ability of the Banks to make capital distributions to Kentucky First, and also on the availability of cash at the holding company level in the event earnings are not sufficient to pay dividends according to the cash dividend payout policy. Under Office of the Comptroller of the Currency safe harbor regulations, the Banks may each distribute to Kentucky First capital not exceeding net retained income for the current calendar year and the prior two calendar years. First Federal MHC owns a majority of Kentucky First’s outstanding stock. First Federal MHC has historically waived its right to dividends on the Kentucky First common shares it owns, in which case the amount of dividends paid to public stockholders is significantly higher than it would be if First Federal MHC accepted dividends. First Federal MHC is not required to waive dividends, but Kentucky First expects this practice to continue, subject to member and regulatory approval annually. First Federal MHC is required to obtain a waiver from the Federal Reserve Board allowing it to waive its right to dividends.

The Federal Reserve Board in 2011 issued regulations that govern the activities of Kentucky First and First Federal MHC and the regulations were implemented in the fourth quarter of 2011. Under Section 239.8(d) of the Federal Reserve Board’s Regulation MM governing dividend waivers, a mutual holding company may waive its right to dividends on shares of its subsidiary if the mutual holding company gives written notice of the waiver to the Federal Reserve Board and the Federal Reserve Board does not object. For a company such as First Federal MHC that waived dividends prior to December 1, 2009, the Federal Reserve Board may not object to a dividend waiver if such waiver would not be detrimental to the safety and soundness of the savings association subsidiary and the board of directors of the mutual holding company expressly determines that such dividend waiver is consistent with the board’s fiduciary duties to the members of the mutual holding company.

To address concerns with respect to the conflict of interest created by dividend waivers, Regulation MM requires the board of directors of the mutual holding company to adopt a resolution that describes the conflict of interest that exists because of a director’s ownership of stock in the subsidiary declaring the dividends and any actions the mutual holding company board have taken to eliminate the conflict of interest, such as the directors’ waiving their right to receive dividends. Also, the resolution must contain an affirmation that a majority of the mutual members eligible to vote have, within the 12 months prior to the declaration date of the dividend, voted to approve the waiver of dividends.

Federal MHC has received Federal Reserve Board approval to waive quarterly dividends totaling $0.40 per share annually beginning with the dividend paid on September 28, 2012 and continuing through the dividend payable in the 3rd quarter of 2016. It is expected that First Federal MHC will continue to waive future dividends, except to the extent dividends are needed to fund First Federal MHC’s continuing operations, subject to the ability of First Federal MHC to obtain regulatory approval of its requests to waive dividends and to its ability to obtain member approval of dividend waivers.

We cannot predict whether members will continue to approve annual dividend waiver requests or whether the Federal Reserve Board will grant future dividend waiver requests and, if granted, there can be no assurance as to the conditions, if any, the Federal Reserve Board will place on future dividend waiver requests by grandfathered mutual holding companies such as First Federal MHC. If First Federal MHC is unable to waive the receipt of dividends, our ability to pay dividends to our stockholders may be substantially impaired and the amounts of any such dividends may be significantly reduced.

20

We are subject to certain risks in connection with our use of technology.

Our security measures may not be sufficient to mitigate the risk of a cyber attack. Communications and information systems are essential to the conduct of our business, as we use such systems to manage our customer relationships, our general ledger and virtually all other aspects of our business. Our operations rely on the secure processing, storage, and transmission of confidential and other information in our computer systems and networks. Although we take protective measures and endeavor to modify them as circumstances warrant, the security of our computer systems, software, and networks may be vulnerable to breaches, unauthorized access, misuse, computer viruses, or other malicious code and cyber attacks that could have a security impact. If one or more of these events occur, this could jeopardize our or our customers’ confidential and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our operations or the operations of our customers or counterparties. We may be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are either not insured against or not fully covered through any insurance maintained by us. We could also suffer significant reputational damage.

Security breaches in our Internet banking activities could further expose us to possible liability and damage our reputation. Any compromise of our security also could deter customers from using our Internet banking services that involve the transmission of confidential information. We rely on standard Internet security systems to provide the security and authentication necessary to effect secure transmission of data. These precautions may not protect our systems from compromises or breaches of our security measures, which could result in significant legal liability and significant damage to our reputation and our business.

Our security measures may not protect us from systems failures or interruptions. While we have established policies and procedures to prevent or limit the impact of systems failures and interruptions, there can be no assurance that such events will not occur or that they will be adequately addressed if they do. In addition, we outsource certain aspects of our data processing and other operational functions to certain third-party providers. If our third-party providers encounter difficulties, or if we have difficulty in communicating with them, our ability to adequately process and account for transactions could be affected, and our business operations could be adversely impacted. Threats to information security also exist in the processing of customer information through various other vendors and their personnel.

The occurrence of any failures or interruptions may require us to identify alternative sources of such services, and we cannot assure you that we could negotiate terms that are as favorable to us, or could obtain services with similar functionality as found in our existing systems without the need to expend substantial resources, if at all. Further, the occurrence of any systems failure or interruption could damage our reputation and result in a loss of customers and business, could subject us to additional regulatory scrutiny, or could expose us to legal liability. Any of these occurrences could have a material adverse effect on our financial condition and results of operations.

Item 1B. Unresolved Staff Comments

None.

21

Item 2.  Properties

We conduct our business through seven offices. The following table sets forth certain information relating to our offices at June 30, 2015.

	Year Opened/Acquired		Owned or Leased	Net Book Value at June 30, 2015		Approximate Square Footage
	(Dollars in thousands)
First Federal of Hazard Main Office:
479 Main Street Hazard, Kentucky 41701		1960	Owned	$	255		15,000
First Federal of Frankfort Main Office: 216 West Main Street Frankfort, Kentucky 40601		2005	Owned		1,105		14,000
1980 Versailles Road Frankfort, Kentucky 40601		2005	Owned		509		1,800
1220 US 127 South Frankfort, Kentucky 40601		2005	Owned		477		2,480
340 West Main Street Danville, Kentucky 40422		2012	Owned		517		8,700
120 Skywatch Drive
Danville, Kentucky 40422		2012	Owned		774		2,300
208 Lexington Street
Lancaster, Kentucky 40444		2012	Owned		526		4,300

The net book value of our investment in premises and equipment was $5.2 million at June 30, 2015. See Note E of Notes to Consolidated Financial Statements.

Item 3. Legal Proceedings

From time to time, we may be defendants in claims and lawsuits against us, such as claims to enforce liens, condemnation proceedings on properties in which we hold security interests, claims involving the making and servicing of real property loans and other issues incident to our business. We are not a party to any pending legal proceedings that we believe could have a material adverse effect on our financial condition, results of operations or cash flows.

Item 4.  Mine Safety Disclosures

Not applicable.

22

PART II

Item 5.  Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

(a)   The information contained under the sections captioned “Market Information” in the Company’s Annual Report to Stockholders for the Fiscal Year Ended June 30, 2015 (the “Annual Report”) filed as Exhibit 13 hereto is incorporated herein by reference.

(b)   Not applicable.

(c)   The Company repurchased the following equity securities registered under the Securities Exchange Act of 1934, as amended, during the fourth quarter of the fiscal year ended June 30, 2015.

Period	(a)  Total Number of Shares Purchased		(b) Average Price Paid per Share		(c)  Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d)  Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs (1)
April 2015
Beginning date: April 1
Ending date: April 30		—		—		—		60,323
May 2015
Beginning date: May 1
Ending date: May 31		—		—		—		60,323
June 2015
Beginning date: June 1
Ending date: June 30		—		—		—		60,323
Total		—		—		—

(1) On January 16, 2014, the Company announced a program (its seventh) to repurchase up to 150,000 shares of its Common Stock.

Item 6.  Selected Financial Data

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

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report, is incorporated herein by reference.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

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

Item 8.  Financial Statements and Supplementary Data

The Consolidated Financial Statements, Notes to Consolidated Financial Statements, Report of Independent Registered Public Accounting Firm and Selected Financial Data, which are listed under Item 15 herein, are included in the Annual Report and are incorporated herein by reference.

23

Item 9.  Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

(a) Disclosure Controls and Procedures

The Company’s management, including the Company’s principal executive officer and principal financial officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b) Internal Control Over Financial Reporting

24

 

Parent Company of First Federal Savings and Loan of Hazard and First Federal Savings Bank of Frankfort

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING

Management of Kentucky First Federal Bancorp (the “Company”) is responsible for the preparation, integrity, and fair presentation of the consolidated financial statements included in this annual report. The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and, as such, include some amounts that are based on the best estimates and judgments of management.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The internal control system is designed to provide reasonable assurance to management and the Board of Directors regarding the reliability of the company’s financial reporting and the preparation and presentation of financial statements for external reporting purposes in conformity with accounting principles generally accepted in the United States of America, as well as to safeguard assets from unauthorized use or disposition. The system of internal control over financial reporting is evaluated for effectiveness by management and tested for reliability through a program of internal audit with actions taken to correct potential deficiencies as they are identified. Because of inherent limitations in any internal control system, no matter how well designed, misstatements due to error or fraud may occur and not be detected, including the possibility of the circumvention or overriding controls. Accordingly, even an effective internal control system can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, internal control effectiveness may vary over time.

Management assessed the effectiveness of the company’s internal control over financial reporting as of June 30, 2015, based upon criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission – 1992 (“COSO”).

Based on this assessment and on the forgoing criteria, management has concluded that, as of June 30, 2015, the Company’s internal control over financial reporting is effective.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuers that are not “large accelerated filers” or “accelerated filers” under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

/s/ Don D. Jennings	/s/ R. Clay Hulette
Don D. Jennings	R. Clay Hulette
Chief Executive Officer	Vice President and Chief Financial Officer

25

(c) Changes to Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

Not applicable.

PART III

Item 10.  Directors, Executive Officers, and Corporate Governance

Directors

The information contained under the section captioned “Proposal I ─ Election of Directors” in the Company’s definitive proxy statement for the Company’s 2015 Annual Meeting of Stockholders (the “Proxy Statement”) is incorporated herein by reference.

Executive Officers

The information regarding the Company’s executive officers is incorporated herein by reference to “Proposal I – Election of Directors” in the Proxy Statement.

Corporate Governance

Information regarding the Company’s Audit Committee and Audit Committee financial expert is incorporated herein by reference to the section captioned “Proposal I ─ Election of Directors ─ Committees of the Board of Directors” in the Proxy Statement.

Compliance with Section 16(a) of the Exchange Act

Information regarding compliance with Section 16(a) of the Exchange Act is incorporated by reference to section captioned “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement.

Disclosure of Code of Ethics

Kentucky First has adopted a Code of Ethics and Business Conduct that applies to all of its directors, officers and employees. To obtain a copy of this document at no charge, please write to Kentucky First Federal Bancorp, P.O. Box 535, Frankfort, Kentucky 40602-0535, or call toll-free (888) 818-3372 and ask for Investor Relations.

Item 11.  Executive Compensation

The information contained under the section captioned “Executive Compensation” in the Proxy Statement is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

(a) Security Ownership of Certain Beneficial Owners. Information required by this item is incorporated herein by reference to the section captioned “Voting Securities and Security Ownership” in the Proxy Statement.

26

(b) Security Ownership of Management. Information required by this item is incorporated herein by reference to the sections captioned “Voting Securities and Security Ownership” in the Proxy Statement.

(c) Changes in Control. Management of the Company knows of no arrangements, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.

(d) Equity Compensation Plans. The following table sets forth certain information with respect to the Company’s equity compensation plans as of June 30, 2015.

	(a)		(b)		(c)
	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders		325,800	$	10.10		95,416
Equity compensation plans not approved by security holders		—		—		—
Total		325,800	$	10.10		95,416

Item 13.  Certain Relationships and Related Transactions, and Director Independence

Certain Relationships and Related Transactions

The information required by this item is incorporated herein by reference to the section captioned “Transactions with Related Persons” in the Proxy Statement.

Corporate Governance

For information regarding director independence, the section captioned “Proposal I – Election of Directors” is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information required by this item is incorporated herein by reference to the section captioned “Audit and Other Fees Paid to Independent Accountant” in the Proxy Statement.

PART IV

Item 15.  Exhibits and Financial Statement Schedules

(a) List of Documents Filed as Part of This Report

(1) Financial Statements. The following consolidated financial statements are incorporated by reference from Item 8 hereof (see Exhibit 13):

Report of Independent Registered Public Accounting Firm

27

Consolidated Balance Sheets as of June 30, 2015 and 2014

Consolidated Statements of Income for the Years Ended June 30, 2015 and 2014

Consolidated Statements of Comprehensive Income for the Years Ended June 30, 2015 and 2014

Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended June 30, 2015 and 2014

Consolidated Statements of Cash Flows for the Years Ended June 30, 2015 and 2014

Notes to Consolidated Financial Statements

(2) Financial Statement Schedules. All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are omitted because of the absence of conditions under which they are required or because the required information is included in the consolidated financial statements and related notes thereto.

(3) Exhibits. The following is a list of exhibits filed as part of this Annual Report on Form 10-K and is also the Exhibit Index.

No.	Description
3.11	Charter of Kentucky First Federal Bancorp
3.26	Amended and Restated Bylaws of Kentucky First Federal Bancorp
4.11	Specimen Stock Certificate of Kentucky First Federal Bancorp
10.12	Employment Agreement between Kentucky First Federal Bancorp and Don D. Jennings, as amended†
10.22	Employment Agreement between First Federal Savings Bank of Frankfort and Don D. Jennings, as amended†
10.32	Employment Agreement between Kentucky First Federal Bancorp and R. Clay Hulette, as amended†
10.42	Employment Agreement between First Federal Savings Bank of Frankfort and R. Clay Hulette, as amended†
10.52	Employment Agreement between First Federal Savings Bank of Frankfort and Teresa Kuhl, as amended†
10.62	Amended and Restated First Federal Savings and Loan Association of Hazard Change in Control Severance Compensation Plan†
10.72	Amended and Restated First Federal Savings Bank of Frankfort Change in Control Severance Compensation Plan†
10.82	Amended and Restated First Federal Savings and Loan Association Supplemental Executive Retirement Plan†
10.93	Kentucky First Federal Bancorp 2005 Equity Incentive Plan†
10.104	Form of Restricted Stock Award Agreement†
10.114	Form of Incentive Stock Option Award Agreement†
10.124	Form of Non-Statutory Option Award Agreement†
10.135	Employment Agreement by and between Kentucky First Federal Bancorp and William H. Johnson†
10.145	Employment Agreement by and between First Federal Savings Bank of Frankfort and William H. Johnson†
13	Annual Report to Stockholders for the year ended June 30, 2015
21	Subsidiaries
23.1	Consent of Crowe Horwath LLP
31.1	Rule 13a-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a) Certification of Chief Financial Officer
32	Section 1350 Certifications
101*	The following materials from the Company’s Annual Report on Form 10-K for the year ended June 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows and the (vi) Notes to Consolidated Financial Statements.

28

† Management contract or compensation plan or arrangement.

* Furnished, not filed.

⁽¹⁾ Incorporated herein by reference to the Company’s Registration Statement on Form S-1 (File No. 333-119041).

⁽²⁾ Incorporated herein by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2008 (File No. 0-51176).

⁽³⁾ Incorporated herein by reference to the Company’s definitive additional proxy solicitation materials filed with the Securities and Exchange Commission on October 24, 2005.

⁽⁴⁾ Incorporated herein by reference to the Company’s Registration Statement on Form S-8 (File No. 333-130243).

⁽⁵⁾ Incorporated herein by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2012 (File No. 0-51176).

⁽⁶⁾ Incorporated herein by reference to the Company’s Annual Report on Form 10-K for the year ended June 30, 2012 (File No. 0-51176).

(b) Exhibits. The exhibits required by Item 601 of Regulation S-K are either filed as part of this Annual Report on Form 10-K or incorporated by reference herein.

(c) Financial Statements and Schedules Excluded from Annual Report. There are no other financial statements and financial statement schedules which were excluded from the Annual Report to Stockholders pursuant to Rule 14a-3(b) which are required to be included herein.

29

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	KENTUCKY FIRST FEDERAL BANCORP
September 28, 2015	By:	/s/ Don D. Jennings
		Don D. Jennings
		Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Don D. Jennings	September 28, 2015
Don D. Jennings
Chief Executive Officer and Director
(Principal Executive Officer)
/s/ R. Clay Hulette	September 28, 2015
R. Clay Hulette
Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
/s/ Tony D. Whitaker	September 28, 2015
Tony D. Whitaker
Chairman of the Board
/s/ Stephen G. Barker	September 28, 2015
Stephen G. Barker
Director
/s/ C. Michael Davenport.	September 28, 2015
C. Michael Davenport
Director
/s/ Walter G. Ecton, Jr.	September 28, 2015
Walter G. Ecton, Jr.
Director
/s/ William D. Gorman, Jr.	September 28, 2015
William D. Gorman, Jr.
Director

30

/s/ David R. Harrod	September 28, 2015
David R. Harrod
Director
/s/ William H. Johnson	September 28, 2015
William H. Johnson
Director
/s/ W. Banks Hudson	September 28, 2015
W. Banks Hudson
Director

31

EX-13

Exhibit 13

Parent company of

First Federal Savings and Loan Association of Hazard

and

First Federal Savings Bank of Frankfort

2015

Annual Report

KENTUCKY FIRST FEDERAL BANCORP

Kentucky First Federal Bancorp (“Kentucky First” or the “Company”) was formed under federal law in March 2005 and is the holding company for First Federal Savings and Loan Association of Hazard, Hazard, Kentucky (“First Federal of Hazard”) and First Federal Savings Bank of Frankfort, Frankfort, Kentucky (“First Federal of Frankfort”) (collectively, the “Banks”). Kentucky First’s operations consist primarily of operating the Banks as two independent, community-oriented savings institutions.

First Federal of Hazard is a federally chartered savings and loan association offering traditional financial services to consumers in Perry and surrounding counties in eastern Kentucky. First Federal of Hazard engages primarily in the business of attracting deposits from the general public and using such funds to originate, when available, loans secured by first mortgages on owner-occupied, residential real estate and, occasionally, other loans secured by real estate. To the extent there is insufficient loan demand in its market area, and where appropriate under its investment policies, First Federal of Hazard has historically invested in mortgage-backed and other securities, although since formation of the Company in 2005, First Federal of Hazard has been purchasing whole loans and participations in loans originated at First Federal of Frankfort.

First Federal of Frankfort is a federally chartered savings bank which is primarily engaged in the business of attracting deposits from the general public and the origination primarily of adjustable-rate loans secured by first mortgages on owner-occupied and non-owner-occupied one-to four-family residences in Franklin, Boyle, Garrard and surrounding counties in Kentucky. First Federal of Frankfort also originates, to a lesser extent, home equity loans, loans secured by churches, multi-family properties, professional office buildings and other types of property, as well as consumer loans and commercial and industrial loans.

MARKET INFORMATION

The Company’s common stock began trading under the symbol “KFFB” on the Nasdaq National Market on March 3, 2005. There are currently 8,439,515 shares of common stock outstanding and approximately 686 holders of record of the common stock. Following are the high and low closing prices, by fiscal quarter, as reported on the Nasdaq National Market during the periods indicated, as well as dividends declared on the common stock during each quarter.

	High		Low		Dividends Per Share
Fiscal 2015
First quarter	$	8.89	$	8.00	$	0.10
Second quarter		8.50		7.47		0.10
Third quarter		8.45		7.94		0.10
Fourth quarter		8.79		8.00		0.10

	High		Low		Dividends Per Share
Fiscal 2014
First quarter	$	8.97	$	7.55	$	0.10
Second quarter		8.45		7.87		0.10
Third quarter		8.97		8.03		0.10
Fourth quarter		8.88		8.00		0.10

2

TABLE OF CONTENTS

Kentucky First Federal Bancorp	(ii)
Market Information	(ii)
Letter to Shareholders	1
Selected Consolidated Financial and Other Data	2
Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Consolidated Financial Statements	27

3

Dear Shareholder:

We are pleased to present the 2015 Annual Report for Kentucky First Federal Bancorp.  We encourage you to read both the Annual Report and Proxy Statement.  We encourage you to vote and, if possible, to attend our annual meeting on November 12, 2015. Please note that, as always, our meeting will be held on the campus of the Hazard Community and Technical College, but this year we will be in the Challenger Learning Center, just across the parking lot.

The enclosed report shows a pretty good year.  We continue to have trouble with loan growth in the communities we serve, but despite a decrease in loan balances, net income improved compared to the previous year.  Our stock price remains pretty flat, but we remain proud to offer an attractive dividend yield.  We certainly appreciate the help from our staff and our depositors at First Federal of Hazard for approving  the First Federal MHC dividend waiver for the fourth year in a row. 

We have a number of exciting things happening at our banks.  First Federal of Hazard has purchased a new building just up the street from their current Main Street location.  The new building affords lots of parking and a drive-through window.  In Frankfort, a new building has been purchased to house our Versailles Road branch.  This will allow expanded drive-through capability and more office space.  Both will allow us to continue to improve customer service.

We have debuted new logos for both banks, and First Federal of Frankfort will soon have a new name:  First Federal  Savings Bank of Kentucky, to reflect our expanded footprint.

We wish the best to Deloris Justice, who retired this year from First Federal of Hazard after 43 years. 

We also had a retirement on our Board.  Herman Regan has served on the Frankfort bank board since 1988 and on the KFFB board since we formed the company in 2005.  C. Michael Davenport, who has served on the Frankfort bank board since 1996, has been appointed to serve in his place and will stand for election at the upcoming annual meeting.

We appreciate your continued support and confidence. Please call us with any questions or concerns and please think of us for your banking needs.

Sincerely,

Don Jennings

4

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

Selected Financial Condition Data

	At June 30,
	2015		2014		2013		2012		2011
	(Dollars in thousands)
Total assets	$	296,298	$	299,655	$	324,062	$	222,949	$	226,135
Cash and cash equivalents		13,635		11,511		16,540		5,735		5,049
Interest-bearing deposits		—		—		—		100		100
Securities held to maturity		6,423		9,018		12,232		4,756		6,810
Securities available for sale		159		247		205		189		203
Loans, net		243,815		246,788		262,491		182,473		182,796
Deposits		199,701		213,142		230,981		134,552		139,940
Federal Home Loan Bank advances		26,635		17,200		24,310		27,065		25,261
Shareholders’ equity		67,313		67,205		66,622		58,853		58,697
Allowance for loan losses		1,568		1,473		1,310		875		764
Nonperforming loans (90 days delinquent and nonaccrual)		6,512		9,740		7,987		1,794		876

Selected Operating Data

	Year Ended June 30,
	2015		2014		2013		2012		2011
	(Dollars in thousands, except per share data)
Total interest income	$	12,389	$	13,150	$	11,958	$	10,156	$	10,749
Total interest expense		1,428		1,618		1,686		2,179		3,181
Net interest income		10,961		11,532		10,272		7,977		7,568
Provision for losses on loans		343		580		662		139		668
Net interest income after provision for losses on loans		10,618		10,952		9,610		7,838		6,900
Total non-interest income		514		344		1,525		140		242
Total non-interest expenses		8,042		8,410		6,911		5,423		5,282
Income before federal income taxes		3,090		2,886		4,224		2,555		1,860
Federal income taxes		1,021		952		1,308		840		104
Net income	$	2,069	$	1,934	$	2,916	$	1,715	$	1,756
Net earnings per share – basic	$	0.25	$	0.23	$	0.37	$	0.23	$	0.23
Net earnings per share – diluted	$	0.25	$	0.23	$	0.37	$	0.23	$	0.23
Cash dividends declared per common share	$	0.40	$	0.40	$	0.40	$	0.40	$	0.40

5

Selected Financial Ratios and Other Data (1)

	Year Ended June 30,
	2015			2014			2013			2012			2011
Performance Ratios:
Return  on average assets (net income divided by average total assets)		0.70	%		0.63	%		1.05	%		0.75	%		0.75	%
Return  on average equity (net income divided by average equity)		3.07			2.90			4.70			2.91			3.04
Interest rate spread (combined weighted average interest rate earned less combined weighted average interest rate cost)		3.96			3.99			3.97			3.68			3.29
Net interest margin (net interest income divided by  average interest-earning assets)		4.07			4.10			4.09			3.93			3.61
Ratio of average interest-earning assets to average interest-bearing liabilities		120.33			119.14			118.57			123.34			121.00
Ratio of total general administrative and other expenses to average total assets		2.71			2.74			2.49			2.39			2.26
Efficiency ratio (1)		70.08			70.82			58.58			66.81			67.63
Dividend payout ratio (2)		66.94			78.13			44.00			93.53			63.58
Asset Quality Ratios:
Nonperforming loans as a percent of total loans at end of period (3)		2.67			3.95			3.04			0.98			0.48
Nonperforming assets as a percent of total assets at end of period (3)		2.74			3.87			2.82			1.90			2.29
Allowance for loan losses as a percent of total loans at end of period		0.64			0.60			0.50			0.48			0.42
Allowance for loan losses as a percent of nonperforming loans at end of period		24.08			18.44			16.40			48.77			87.21
Provision for loan losses to total loans		0.14			0.24			0.25			0.08			0.36
Net charge-offs to average loans outstanding		0.10			0.17			0.10			0.02			0.76
Capital Ratios:
Average equity to average assets		22.64			21.76			22.31			25.91			24.76
Shareholders’ equity or capital to total assets at end of period		22.72			22.43			20.56			26.40			25.96
Regulatory Capital Ratios:
Common equity Tier 1		31.91			N/A			N/A			N/A			N/A
Total capital to risk-weighted assets		32.88			33.37			28.12			38.57			39.01
Tier 1 (core) capital to risk-weighted assets		31.91			32.77			31.17			37.82			38.34
Tier 1 leverage capital to average assets		18.66			17.99			19.77			20.83			20.14
Number of banking offices		7			7			7			4			4

(1) Efficiency ratio represents the ratio of non-interest expenses divided by the sum of net interest income and total non-interest income.

(2) Represents dividends paid as a percent of net earnings. Dividends paid does not include dividends waived by First Federal MHC. In May 2012 dividends of $473,000 were paid to First Federal MHC.

(3) Nonperforming loans consist of nonaccrual loans, accruing loans greater than 90 days delinquent, and restructured loans not performing according to their revised terms, while nonperforming assets consist of nonperforming loans and real estate acquired through foreclosure.

6

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

References in this Annual Report to “we,” “us,” and “our” refer to Kentucky First Federal Bancorp and where appropriate, collectively to Kentucky First Federal Bancorp, First Federal of Hazard and First Federal of Frankfort.

Forward-Looking Statements

Certain statements contained in this Annual 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,” “expects,” “believes,” and similar expressions as they relate to the Company or its management are intended to identify such forward-looking statements.  The Company’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 and the risk factors described in Item 1A of our Annual Report on Form 10-K for the year ended June 30, 2015. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We wish to advise readers that the factors listed above could affect our financial performance and could cause our actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

We do not undertake, and specifically disclaim any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

General

The Company was incorporated as a mid-tier holding company under the laws of the United States on March 2, 2005 upon the completion of the reorganization of First Federal of Hazard into a federal mutual holding company form of organization (the “Reorganization”). On that date, Kentucky First completed its minority stock offering and issued a total of 8,596,064 shares of common stock, of which 4,727,938 shares, or 55%, were issued to First Federal MHC, a federally chartered mutual holding company formed in connection with the Reorganization, in exchange for the transfer of all of First Federal of Hazard’s capital stock, and 2,127,572 shares were sold at a cash price of $10.00 per share. On such date, Kentucky First completed its acquisition of Frankfort First and its wholly owned subsidiary, First Federal of Frankfort (the “Merger”). First Federal of Hazard and First Federal of Frankfort are operated as two independent savings institutions with separate charters. Each bank retains its own management and boards of directors. The members of management of Kentucky First also serve in a management capacity at one of the two subsidiary Banks, and the directors of Kentucky First also serve on the board of one of the two subsidiary Banks.

On December 31, 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 Frankfort in accordance with accounting standard ASC 805, Business Combinations.

Our results of operations are dependent primarily on net interest income, which is the difference between the income earned on our loans and securities and our cost of funds, consisting of the interest paid on deposits and borrowings. Results of operations are also affected by the provision for losses on loans and service charges and fees collected on our deposit accounts. Our general, administrative and other expense primarily consists of employee compensation and benefits expense, occupancy and equipment expense, data processing expense, other operating expenses and state franchise and federal income taxes. Results of operations are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, government policies and actions of regulatory authorities.

7

Income. We have two primary sources of pre-tax income. The first is net interest income, which is the difference between interest income, the income that we earn on our loans and investments, and interest expense, the interest that we pay on our deposits and borrowings.

To a much lesser extent, we also recognize pre-tax income from fee and service charges, which is the compensation we receive from providing financial products and services.

Expenses.The expenses we incur in operating our business consist of compensation, taxes and benefits, office occupancy, data processing fees, taxes and other expenses.

Compensation, taxes and benefits consist primarily of the salaries and wages paid to our employees and directors, payroll taxes and expenses for retirement and other employee benefits.

Office occupancy expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of taxes, depreciation charges, maintenance and costs of utilities.

Data processing fees primarily include fees paid to our third-party data processing providers.

Taxes consist of the current and deferred portion of federal income taxes as well as franchise taxes paid to the Commonwealth of Kentucky by the subsidiary Banks.

Other expenses include expenses for attorneys, accountants and consultants, advertising, telephone, employee training and education, charitable contributions, insurance, office supplies, postage and other miscellaneous operating activities.

Critical Accounting Policies

Our accounting and reporting policies comply with U.S. GAAP and conform to general practices within the banking industry. We believe that of our significant accounting policies, the following may involve a higher degree of management assumptions and judgments that could result in materially different amounts to be reported if conditions or underlying circumstances were to change.

Allowance for Loan Losses

The allowance for loan losses is the estimated amount considered necessary to cover probable incurred losses in the loan portfolio at the balance sheet date. The allowance is established through the provision for losses on loans, which is charged against income.

The management and the Boards of the Company and of First Federal of Hazard and First Federal of Frankfort review the allowance for loan losses on a quarterly basis. Consideration is given to a variety of factors in establishing this estimate including, but not limited to, current economic conditions, delinquency statistics, geographic and industry concentrations, the adequacy of the underlying collateral, the financial strength of the borrower, results of internal loan reviews, volume and mix of the loan portfolio and other relevant factors. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to change. Management considers the economic climate in the Banks’ respective lending areas to be among the factors most likely to have an impact on the level of the required allowance for loan losses.

8

Management continues to monitor and evaluate factors which could have an impact on the required level of the allowance. Management watches for national issues that may negatively affect a significant percentage of homeowners in the Banks’ lending areas. These may include significant increases in unemployment or significant depreciation in home prices. Management reviews employment statistics periodically when determining the allowance for loan losses and generally finds the unemployment rates in both lending areas to be high in relation to historical trends. Management has no current plans to alter the type of lending or collateral currently offered, but if such plans change or market conditions result in large concentrations of certain types of loans, such as commercial real estate or high loan-to-value ratio residential loans, management would respond with an increase in the overall allowance for loan losses.

The analysis has two components, specific and general allocations. Loans are classified as either homogenous or other. Homogenous loans are analyzed in the aggregate according to various criteria. Non-homogenous loans receive additional scrutiny and are classified as impaired or unimpaired. Specific allocations are made for loans that are determined to be impaired. Impairment is measured by determining the present value of expected future cash flows or, for collateral-dependent loans, the fair value of the collateral adjusted for market conditions and selling expenses. A loan is considered to be collateral-dependent when the circumstances of the borrower indicate that we can no longer rely upon the overall financial strength of that borrower to comply with the terms of the loan and that the loan will likely be repaid in whole or in part by proceeds from the sale of the collateral. Updated independent appraisals are ordered in most situations where management has determined to evaluate a loan for impairment. The general allocation is determined by segregating the remaining loans by type of loan, risk weighting (if applicable) and payment history. We also analyze historical loss experience, delinquency trends, general economic conditions and geographic and industry concentrations. This analysis establishes factors that are applied to the loan groups to determine the amount of the general reserve. Actual loan losses may be significantly more than the allowances we have established and, if so, this could have a material negative effect on our financial results.

Goodwill

We test goodwill for impairment at least annually and more frequently, if circumstances indicate its value may not be recoverable. We test goodwill for impairment by comparing the fair value of the reporting unit to the book value of the reporting unit. If the fair value exceeds book value, then goodwill is not considered to be impaired. Based on the annual goodwill impairment test as of March 31, 2015, and consideration of potential triggering events through year end, management does not believe any of the goodwill is impaired. Different conditions or assumptions, or changes in cash flows or profitability, if significantly negative or unfavorable, could have a material adverse effect on the outcome of the impairment evaluation and financial condition or future results of operations.

Deferred Taxes

We evaluate deferred tax assets and liabilities quarterly. We will realize these assets and liabilities to the extent profitable or carry back tax losses to periods in which we paid income taxes. Our determination of the realization of the deferred tax asset will be based upon management’s judgment of various future events and uncertainties, including the timing and amount of future income we will earn and the implementation of various tax plans to maximize realization of the deferred tax assets. Management believes the Company will generate sufficient operating earnings to realize the deferred tax benefits. Examinations of our income tax returns or changes in tax law may impact the tax liabilities and resulting provisions for income taxes.

9

Our Operating Strategy

Our mission is to operate and grow profitable, community-oriented financial institutions serving primarily retail customers in our market areas. We plan to pursue a strategy of:

• operating two community-oriented savings institutions, First Federal of Hazard, which serves customers in Perry and surrounding counties in eastern Kentucky, and First Federal of Frankfort, which serves customers primarily in the central Kentucky counties of Franklin, Boyle and Garrard, as well as their surrounding counties. Each Bank emphasizes traditional thrift activities of accepting deposits and originating primarily residential mortgage loans for portfolio;

• continuing our historic heavy reliance on our deposit base to fund our lending and investment activities and to supplement deposits with Federal Home Loan Bank of Cincinnati (“FHLB”) advances when advantageous or necessary. We expect our projected deposit mix to generally retain its existing composition of passbook, transaction and certificate of deposit accounts;

• gradually pursuing opportunities to increase and diversify lending in our market areas;

• applying conservative underwriting practices to maintain the high quality of our loan portfolios;

• managing our net interest margin and interest rate risk; and

• entertaining possibilities of expansion into other markets through branching or acquisition, if such possibilities are beneficial to the Company’s shareholders, provide a good fit within the Company’s mutual holding company framework and can be accomplished without undue encumbrance of the Company’s other operational areas.

Market Risk Analysis

Qualitative Aspects of Market Risk. Our most significant form of market risk is interest rate risk. We manage the interest rate sensitivity of our interest-bearing liabilities and interest-earning assets in an effort to minimize the adverse effects of changes in the interest rate environment. Deposit accounts typically react more quickly to changes in market interest rates than mortgage loans because of the shorter maturities of deposits. As a result, sharp increases in interest rates may adversely affect our earnings while decreases in interest rates may beneficially affect our earnings. To reduce the potential volatility of our earnings, we have sought to improve the match between asset and liability maturities (or rate adjustment periods), while maintaining an acceptable interest rate spread. Still, when market rates increase rapidly, increases in the cost of deposits and borrowings outpace the increases in the return on assets. The Company’s assets are primarily comprised of adjustable rate mortgages (all of which have some contractual limits in their ability to react to market changes) and short-term securities. Those assets will, over time, re-price to counteract the increased costs of deposits and borrowings.

Asset/Liability Management. Management and the boards of the subsidiary Banks are responsible for the asset/liability management issues that affect the individual Banks. Either Bank may work with its sister Bank to mitigate potential asset/liability risks to the Banks and to the Company as a whole. Management utilizes a third-party to perform interest rate risk calculations for each of the Banks. Management monitors and considers methods of managing the rate sensitivity and repricing characteristics of each of the Bank’s balance sheet components in an effort to maintain acceptable levels of change in the economic value of equity (“EVE”) as well as evaluating the impact on earnings in the event of changes in prevailing market interest rates. Interest rate sensitivity analysis is used to measure our interest rate risk by computing estimated changes in EVE that are a result of changes in the net present value of its cash flows from assets, liabilities, and off-balance sheet items. These changes in cash flow are estimated based on hypothetical instantaneous and permanent increases and decreases in market interest rates.

10

Because the interest rates at June 30, 2015, were practically zero, we believe our risk associated with falling interest rates was minimal. The model indicated that at June 30, 2015, in the event of a sudden and sustained increase in prevailing market interest rates of 300 basis points, our EVE would be expected to decrease $10.0 million or 15.0% to $57.6 million, at which level our fair value of tangible equity to fair value of tangible assets would be expected to be 15.8% and our fair value of equity to fair value of risk-weighted assets would be expected to be 37.8%. The projected decrease in EVE in the event of a sudden and sustained 300 basis point increase in prevailing interest rates is within the parameters established by each subsidiary Bank’s Board of Directors. Computations or prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments, and deposit run-offs. These computations should not be relied upon as indicative of actual results. Further, the computations do not contemplate any actions the Banks may undertake in response to changes in interest rates. Certain shortcomings are inherent in this method of computing EVE. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in differing degrees to changes in market interest rates. The interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates.

Statement of Financial Condition

General. At June 30, 2015, total assets were $296.3 million, a decrease of $3.4 million, or 1.1%, from the $299.7 million total at June 30, 2014. The decrease in total assets was related primarily to decreases in loans, net. At June 30, 2015, total liabilities were $229.0 million, a decrease of $3.5 million, or 1.5%, from total liabilities at June 30, 2014. The decrease in total liabilities was related primarily to decreases in deposits.

Loans. Our primary lending activity is the origination of loans for the purchase, refinance or construction of one- to four-family residential real estate located in our market areas. As opportunities arise, we also originate church loans, commercial real estate loans, and multi-family and nonresidential real estate loans. At June 30, 2015, one- to four- family residential real estate loans totaled $191.7 million, or 77.3% of total loans, compared to $196.4 million, or 78.8% of total loans, at June 30, 2014, caused primarily by lower demand for home financing in the Banks’ markets. Construction real estate loans totaled $3.8 million, or 1.5% of total loans, at June 30, 2015, compared to $2.1 million, or 0.9% of total loans at June 30, 2014. At June 30, 2015, multi-family real estate loans totaled $16.6 million, or 6.7% of total loans, compared to $14.0 million or 5.6% of total loans at June 30, 2014. Nonresidential real estate loans totaled $22.1 million, or 8.9% of total loans at June 30, 2015, compared to $21.9 million, or 8.8% of total loans, at June 30, 2014. Commercial and industrial loans totaled $1.8 million or 0.7% of total loans at June 30, 2015, compared to $2.1 million or 0.8% of total loans at June 30, 2014. Farm loans totaled $1.6 million at both June 30, 2015 and 2014, respectively, while consumer loans including automobile and unsecured loans totaled $8.4 million and $8.6 million at June 30, 2015 and 2014, respectively. At June 30, 2015, consumer loans were comprised of loans secured by deposits of $2.3 million or 0.9% of total loans and other consumer loans of $6.2 million or 2.5% of total loans. Please refer to Note C-Loans of the Notes to Consolidated Financial Statements for a further breakdown of Consumer and other loans.

11

The following table sets forth the composition of our loan portfolio at the dates indicated.

	At June 30,
	2015						2014						2013						2012						2011
	Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent
	(Dollars in thousands)
Real estate loans:
One- to four-family	$	191,721			77.3	%	$	196,381			78.8	%	$	209,092			79.0	%	$	149,086			81.1	%	$	158,821			86.4	%
Construction		3,780			1.5	%		2,122			0.9	%		1,753			0.7	%		964			0.5	%		1,062			0.3	%
Multi-family		16,621			6.7	%		14,002			5.6	%		14,506			5.5	%		15,495			8.4	%		4,504			2.5	%
Nonresidential and other																										12,211			6.6	%
Land		2,021			0.8	%		2,362			1.0	%		2,821			1.1	%		1,259			0.7	%		—			—
Farm		1,567			0.7	%		1,644			0.7	%		1,843			0.7	%		—			—			—			—
Nonresidential real estate		22,118			8.9	%		21,945			8.8	%		22,092			8.3	%		9,839			5.3	%		—			—
Commercial and industrial		1,782			0.7	%		2,080			0.8	%		3,189			1.2	%		—			—			—			—
Consumer:
Consumer and other		6,155			2.5	%		6,061			2.4	%		6,537			2.5	%		4,865			2.7	%		4,824			2.6	%
Loans on deposits		2,262			0.9	%		2,564			1.0	%		2,710			1.0	%		2,281			1.3	%		2,405			1.3	%
Total loans		248,027			100	%		249,161			100	%		264,543			100	%		183,789			100	%		183,827			100	%
Allowance for loan losses		(1,568	)					(1,473	)					(1,310	)					(875	)					(764	)
Undisbursed portion of loans in process		(2,753	)					(952	)					(833	)					(544	)					(353	)
Deferred loan origination costs		109						52						91						8103						86
Loans receivable, net	$	243,815					$	246,788					$	262,491					$	182,473					$	182,796

The following table sets forth certain information at June 30, 2015 regarding the dollar amount of loans repricing or maturing during the periods indicated. The table does not include any estimate of prepayments which significantly shorten the average life of all loans and may cause our actual repayment experience to differ from that shown below. Demand loans having no stated maturity are reported as due in one year or less.

(In thousands)	Real Estate Loans		Commercial Loans		Consumer Loans		Total Loans
One year or less	$	77,680	$	1,142	$	8,074	$	86,896
More than one year to five years		91,692		640		343		92,675
More than five years		68,456		—		—		68,456
Total	$	237,828	$	1,782	$	8,417	$	248,027

As of June 30, 2015, there were $66.7 million fixed-rate and $172.0 million adjustable-rate real estate loans maturing in more than a year, while there were $37,000 fixed-rate and $603,000 adjustable-rate commercial loans maturing in more than a year.

12

The following table shows loan origination activity during the periods indicated.

	Year Ended June 30,
(In thousands)	2015			2014			2013
Net loans at beginning of year	$	246,788		$	262,491		$	182,473
Loans acquired in CKF Bancorp transaction		—			—			94,086
Loans originated:
Real estate loans:
Residential one- to four-family		23,827			23,782			18,089
Construction		4,082			2,366			1,702
Multi-family		4,550			1,838			747
Land		132			104			118
Farm		—			21			13
Nonresidential real estate		1,542			1,432			3,316
Commercial and industrial		220			80			1,060
Consumer loans		2,668			1,670			3,914
Total loans originated		37,021			31,293			28,959
Deduct:
Real estate loan principal repayments and other		(37,891	)		(45,725	)		(42,215	)
Decrease (increase) in allowance		(95	)		(163	)		(435	)
Transfer to real estate acquired through foreclosure		(2,122	)		(1,069	)		(367	)
Other		114			(39	)		(10	)
Net loan activity		(2,973	)		(15,703	)		80,018
Net loans at end of period	$	243,815		$	246,788		$	262,491

Allowance for Loan Losses and Asset Quality. The allowance for loan losses is a valuation allowance for the probable incurred losses in the loan portfolio. We evaluate the allowance for loan losses no less than quarterly. When additional allowances are needed a provision for losses on loans is charged against earnings. The recommendations for increases or decreases to the allowance are presented by management to the Banks’ boards of directors. The Company’s board of directors oversees the overall allowance level for the Company and may propose increases or decreases for allowance levels at the banks.

The allowance for loan losses is established to recognize the probable incurred losses associated with lending activities. Loss and risk factors are based on our historical loss experience and industry averages and are adjusted for significant factors that in management’s judgment affect the collectibility of the portfolio as of the evaluation date. These significant factors may include changes in lending policies and procedures, changes in existing general economic and business conditions affecting our primary lending area, credit quality trends, collateral value, loan volumes and concentrations, seasoning of the loan portfolio, recent loss experience, duration of the current business cycle and bank regulatory examination results.

At June 30, 2015, the allowance for loan losses was $1.6 million, or 0.64% of total loans, compared to $1.5 million, or 0.60% of total loans at June 30, 2014. The allowance included $14,000 designated as specific reserves at June 30, 2014 and no specific reserves at June 30, 2015. Such reserves are calculated when a non-homogenous loan is considered impaired. An impaired loan is one in which it is likely that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Most of the Company’s loans are collateral-based and, in case of impairment, the loans are carried at the lower of cost or fair value less disposal costs.

13

Nonperforming loans, which consist of all loans 90 days or more past due and nonaccrual loans, totaled $6.5 million at June 30, 2015 and $9.7 million at June 30, 2014, a decrease of $3.2 million. The allowance for loan losses totaled 24.1% and 18.4% of nonperforming loans at June 30, 2015 and 2014, respectively. In determining the allowance for loan losses at any point in time, management and the boards of directors of the subsidiary Banks apply a systematic process focusing on the risk of loss in the portfolio. First, the loan portfolio is segregated by loan types to be evaluated collectively and loan types to be evaluated individually. Delinquent multi-family and nonresidential loans are evaluated individually for potential impairment. Second, the allowance for loan losses is evaluated using historic loss experience adjusted for significant factors by applying these loss percentages to the loan types to be evaluated collectively in the portfolio. To the best of management’s knowledge, all known and probable incurred losses that can be reasonably estimated have been recorded at June 30, 2015. Although management believes that its allowance for loan losses conforms with generally accepted accounting principles based upon the available facts and circumstances, there can be no assurance that additions to the allowance will not be necessary in future periods, which would adversely affect our results of operations.

Our banking regulators, as an integral part of their examination process, periodically review our allowance for loan losses. The examinations may require us to make additional provisions for loan losses based on judgments different from ours. In addition, because further events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that increases will not be necessary should the quality of any loans deteriorate as a result of the factors discussed above. Any material increase in the allowance for loan losses may adversely affect our financial condition and results of operations.

Summary of Loan Loss Experience. The following table sets forth an analysis of the allowance for loan losses for the periods indicated. Where specific loan loss allowances have been established, any difference between the loss allowance and the amount of loss realized has been charged or credited to the allowance.

	Year Ended June 30,
	2015			2014			2013			2012			2011
	(Dollars in thousands)
Allowance at beginning of period	$	1,473		$	1,310		$	875		$	764		$	1,535
Provision for loan losses		343			580			662			139			668
Charge-offs:
Real estate loans		(274	)		(467	)		(229	)		(28	)		(1,439	)
Consumer loans		—			—			—			—			—
Total charge-offs		(274	)		(467	)		(229	)		(28	)		(1,439	)
Recoveries:
Real estate loans		26			49			—			—			—
Consumer and other loans		—			1			2			—			—
Total recoveries		26			50			2			—			—
Net charge-offs	$	(248	)	$	(417	)	$	(227	)	$	(28	)	$	(1,439	)
Allowance at end of period	$	1,568		$	1,473		$	1,310		$	875		$	764
Allowance to nonperforming loans		24.1	%		18.4	%		16.4	%		48.8	%		87.21	%
Allowance to total loans outstanding at end of period		0.64	%		0.60	%		0.50	%		0.48	%		0.42	%
Net charge-offs to average loans outstanding during the period		0.10	%		0.17	%		0.10	%		0.02	%		0.76	%

14

The following table sets forth the breakdown of the allowance for loan losses by loan category, which management believes can be allocated on an approximate basis, at the dates indicated.

	At June 30,
	2015								2014								2013								2012								2011
	Amount		% of Allowance to Total Allowance			% of Loans in Category To Total Loans			Amount		% of Allowance to Total Allowance			% of Loans in Category To Total Loans			Amount		% of Allowance to Total Allowance			% of Loans in Category To Total Loans			Amount		% of Allowance to Total Allowance			% of Loans in Category To Total Loans			Amount		% of Allowance to Total Allowance			% of Loans in Category To Total Loans
	(Dollars in thousands)
Loans category:
Residential one- to four-family	$	1,059		67.5	%		77.4	%	$	1,003		68.1	%		78.8	%	$	874		66.7	%		79.0	%	$	565		64.6	%		81.1	%	$	494		64.7	%		86.4	%
Construction		21		1.3			1.5			11		0.7			0.9			8		0.6			0.7			3		0.3			0.5			3		0.4			0.6
Multi-family		94		6.0			6.7			73		5.0			5.6			63		4.8			5.5			49		5.6			8.4			13		1.7			2.5
Land		7		0.4			0.8			10		0.7			1.0			12		0.9			1.1			—		—			—			—		—			—
Farm		9		0.6			0.6			9		0.6			0.7			6		0.5			0.7			—		—			—			—		—			—
Nonresidential real estate		121		7.8			8.9			112		7.6			8.8			94		7.2			8.3			35		4.0			6.0			34		4.4			6.6
Commercial and industrial		10		0.6			0.7			11		0.7			0.8			13		1.0			1.2			—		—			—			—		—			—
Consumer and other		34		2.2			2.5			31		2.1			2.4			28		2.1			2.5			16		1.8			2.7			13		1.7			2.6
Loans on deposits		13		0.8			0.9			13		0.9			1.0			12		0.9			1.0			7		0.8			1.3			7		0.9			1.3
Unallocated		200		12.8			—			200		13.6			—			200		15.3			—			200		22.9			—			200		26.2			—
Total allowance for loan losses	$	1,568		100	%		100	%	$	1,473		100	%		100	%	$	1,310		100	%		100	%	$	875		100.0	%		100.0	%	$	764		100.0	%		100.0	%

15

Nonperforming and Classified Assets. When a loan becomes 90 days delinquent, the loan may be placed on nonaccrual status at which time the accrual of interest ceases, the interest previously accrued to income is reversed and interest income is thereafter recognized on a cash basis. Payments on a nonaccrual loan are applied to the outstanding principal and interest as determined at the time of collection of the loan or applied entirely to principal, depending on management’s assessment of ultimate collectibility. In situations where management believes collection of interest due is likely even if the loan is more than 90 days delinquent, then management may decide not to place the loan on non-accrual status.

We consider repossessed assets and loans that are 90 days or more past due to be nonperforming assets. Real estate that we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is classified as real estate owned until it is sold. When property is acquired it is recorded at the lower of carrying value of the investment or fair value less estimated selling costs at the date of foreclosure. Holding costs and declines in fair value after acquisition of the property are charged against income.

Under current accounting guidelines, a loan is defined as impaired when, based on current information and events, it is probable that the creditor will be unable to collect all amounts due under the contractual terms of the loan agreement. We consider one- to four-family mortgage loans and deposit loans to be homogeneous and collectively evaluate them for impairment. Other loans are evaluated for impairment on an individual basis. At June 30, 2015, 16 loans were individually considered impaired with valuations.

The following table provides information with respect to our nonperforming assets at the dates indicated.

	Year Ended June 30,
	2015			2014			2013			2012			2011
	(Dollars in thousands)
Nonaccrual loans:
Real estate loans	$	2,856		$	4,361		$	3,720		$	1,593		$	876
Commercial loans		388			47			40			—			—
Consumer loans		18			29			18			—			—
Total		3,262			4,437			3,778			1,593			876
Accruing loans past due 90 days or more:
Real estate loans		1,745			3,513			1,945			201			—
Commercial loans		—			—			—			—			—
Consumer loans		—			—			27			—			—
Total of accruing loans past due 90days or more		1,745			3,513			1,972			201			—
Restructured loans not performing as agreed		1,505			1,790			2,211			—			—
Total nonperforming loans		6,512			9,740			7,961			1,794			876
Restructured loans performing as agreed		346			207			659			187			—
Real estate acquired through foreclosure		1,593			1,846			1,163			2,445			4,304
Total nonperforming assets and performing restructured loans	$	8,451		$	11,793		$	9,783		$	4,426		$	5,180
Total nonperforming loans to total loans		2.67	%		3.95	%		3.04	%		0.98	%		0.48	%
Total nonperforming loans to total assets		2.20	%		3.25	%		2.47	%		1.10	%		0.39	%
Total nonperforming assets to total assets		2.74	%		3.87	%		2.82	%		1.90	%		2.29	%

Interest income that would have been recorded for the years ended June 30, 2015 and 2014, had nonaccrual loans been current according to their original terms amounted to $155,000, and $371,000, respectively. Income related to nonaccrual loans included in interest income for the years ended June 30, 2015 and 2014 amounted to $147,000, and $7,000, respectively.

16

Federal regulations require us to regularly review and classify our assets. In addition, our regulators have the authority to identify problem assets and, if appropriate, require them to be classified. There are three classifications for problem assets: substandard, doubtful and loss. “Substandard assets” must have one or more defined weaknesses and are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. “Doubtful assets” have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss. An asset classified “loss” is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. The regulations also provide for a “special mention” category, described as 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. Special mention assets totaled $8.1 million and $3.9 million at June 30, 2015 and 2014, respectively.

The following table shows the aggregate amounts of our assets classified for regulatory purposes at the dates indicated.

	At June 30,
	2015		2014		2013
	(In thousands)
Substandard assets	$	12,639	$	16,284	$	16,315
Doubtful assets		—		—		—
Loss assets		—		—		—
Total classified assets	$	12,639	$	16,284	$	16,315

Substandard assets at June 30, 2015, consisted of 159 loans totaling $11.0 million and 20 parcels of real estate owned with an aggregate carrying value of $1.6 million. At June 30, 2015, 12.6% of the Company’s substandard assets were represented by real estate acquired through foreclosure compared to 11.3% at June 30, 2014. During the fiscal years ended June 30, 2015 and 2014, the Company made loans to facilitate the purchase of its other real estate owned by qualified borrowers. The Company sold property with carrying values of $590,000 and $189,000 for $702,000 and $204,000 during the fiscal years ended June 30, 2015 and 2014, respectively. Such loans are considered loans to facilitate an exchange and, as such, the Company defers recognition of the gain until the proper time in the future. Loans to facilitate the sale of other real estate owned which were included in substandard loans and totaled $292,000 and $309,000 at June 30, 2015, and 2014, respectively.

The table below summarizes other real estate owned at June 30, 2015:

(Dollars in thousands)	Number of  properties		Net  carrying  value
Single family		15	$	1,440
Building lots		5		153
Total		20	$	1,593

17

The table below summarizes substandard loans at June 30, 2015:

(Dollars in thousands)	Number  of  properties		Net carrying  value
Single family, owner occupied		106	$	5,895
Single family, non-owner occupied		32		2,207
Two- to four-family, non-owner occupied		6		1,269
Nonresidential real estate		7		789
Commercial and industrial		1		—
Land		4		857
Consumer		3		29
Total		159	$	11,046

Other than disclosed above, there are no other loans at June 30, 2015 that we have serious doubts about the ability of the borrowers to comply with the present loan repayment terms.

Delinquencies. The following table provides information about delinquencies in our loan portfolios at the dates indicated.

	At June 30,
	2015				2014
	30-59 Days Past Due		60-89 Days Past Due		30-59 Days Past Due		60-89 Days Past Due
	(In thousands)
Real estate loans	$	3,140	$	2,474	$	1,987	$	3,212
Consumer loans		31		3		68		—
Total	$	3,171	$	2,477	$	2,055	$	3,212

Securities. Our securities portfolio consists of agency bonds and mortgage-backed securities with maturities of 30 years or less. Investment and mortgage-backed securities totaled $6.6 million at June 30, 2015, a decrease of $2.7 million, or 29.0%, compared to the $9.3 million total at June 30, 2014. The decrease in these securities resulted from scheduled maturities and normal repayment/prepayment from the mortgage-backed securities. All of our mortgage-backed securities were issued by Ginnie Mae, Fannie Mae or Freddie Mac.

18

The following table sets forth the carrying values and fair values of our securities portfolio at the dates indicated.

	At June 30,
	2015				2014				2013
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Available-for-sale securities:
Agency mortgage-backed: residential	$	94	$	96	$	134	$	136	$	162	$	166
FHLMC stock		8		63		8		111		8		39
	$	102	$	159	$	142	$	247	$	170	$	205
Held-to-maturity securities
Agency mortgage-backed: residential	$	2,821	$	2,931	$	3,792	$	3,971	$	5,341	$	5,502
Agency bonds		3,602		3,603		5,226		5,224		6,891		6,852
	$	6,423	$	6,534	$	9,018	$	9,195	$	12,232	$	12,354

At June 30, 2015 and 2014, we did not own any securities that had an aggregate book value in excess of 10% of our equity at that date.

19

The following table sets forth the maturities and weighted average yields of debt securities at June 30, 2015. At June 30, 2015, we had no U.S. Government agency securities with adjustable rates.

	One Year or Less					More Than One Year to  Five Years					More Than Five Years to  Ten Years					More Than Ten Years					Total Investment Portfolio
	Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Fair Value		Weighted Average Yield
	(Dollars in thousands)
Available for sale securities:
Mortgage-backed securities	$	4		1.92	%	$	19		1.92	%	$	26		1.92	%	$	45		1.92	%	$	94	$	96		1.92	%
Held to maturity securities:
Mortgage-backed securities	$	345		1.41	%	$	1,535		1.41	%	$	731		1.41	%	$	210		1.41	%	$	2,821	$	2,931		1.41	%
Agency bonds		1,512		0.48			2,090		0.71			—					—					3 602		3,603		0.61	%
		1,857					3,625					731					210					6,423		6,534
	$	1,861				$	3,644				$	757				$	255				$	6,517	$	6,630

20

Other Assets. Other assets at June 30, 2015, include goodwill of $14.5 million, which was a result of the Company’s acquisition of Frankfort First, and bank owned life insurance policies with a carrying value of $3.0 million and $2.9 million at June 30, 2015 and 2014, respectively, of which First Federal of Frankfort is the owner and beneficiary. Both subsidiary Banks are members and stockholders of the Federal Home Loan Bank of Cincinnati (“FHLB”). FHLB stock, at cost, totaled $6.5 million and $6.5 million at June 30, 2015 and 2014, respectively. During the fiscal year ended June 30, 2014, the FHLB redeemed $1.2 million of its stock owned by the Company pursuant to the FHLB’s capital program.

Deposits. Our primary source of funds is retail deposit accounts held primarily by individuals within our market areas. Deposits totaled $199.7 million at June 30, 2015, a decrease of $13.4 million or 6.3%, compared to the $213.1 million total at June 30, 2014. The decrease in deposits was a result of deposit customers’ shift to more liquidity in their deposit balances and redeploying some cash reserves.

The following table sets forth the balances of our deposit products at the dates indicated.

	At June 30,
	2015		2014		2013
	(In thousands)
Certificate of deposit accounts	$	116,098	$	136,705	$	154,934
Demand, transaction and savings accounts		83,603		76,427		76,047
Total	$	199,701	$	213,142	$	230,981

The following table indicates the amount of certificate of deposit accounts with balances equal to or greater than $100,000, by time remaining until maturity at June 30, 2015. The Federal Deposit Insurance Corporation (“FDIC”) currently insures deposits up to $250,000 in most cases, making certificate of deposit accounts with balances equal to or greater than $100,000 less volatile as before the limit was raised.

Maturity Period	Certificates  of Deposit
	(In thousands)
Three months or less	$	7,032
Over three months through six months		10,330
Over six months through twelve months		15,358
Over twelve months		13,489
Total	$	46,209

The following table sets forth our certificate of deposit accounts classified by rates at the dates indicated.

	At June 30,
	2015		2014		2013
	(In thousands)
Rate
0.01 -  0.99%	$	87,765	$	91,979	$	87,108
1.00 -  1.99		18,522		27,104		43,399
2.00 -  2.99		8,868		11,478		14,407
3.00 -  3.99		934		6,128		8,148
4.00 -  4.99		9		16		1,811
5.00 -  5.99		—		—		61
Total	$	116,098	$	136,705	$	154,934

21

The following table sets forth the amount and maturities of certificate accounts at June 30, 2015.

	Amount Due
	Less Than One Year		More Than One Year to Two Years		More Than Two Years to Three Years		More Than Three Years		Total		Percentage of Total Certificate Accounts
	(Dollars in thousands)
0.01 –0.99%	$	67,618	$	12,330	$	4,143	$	3,674	$	87,765		75.6	%
1.00 – 1.99		6,579		7,196		3,595		1,152		18,522		16.0
2.00 – 2.99		5,947		2,921		—		—		8,868		7.6
3.00 – 3.99		934		—		—		—		934		1.8
4.00 – 4.99		9		—		—		—		9		—
Total	$	81,087	$	22,447	$	7,738	$	4,826	$	116,098		100.0	%

The following table sets forth the average balances and rates paid on deposits.

	Year Ended June 30,
	2015					2014					2013
	Average		Average			Average		Average			Average		Average
	Balance		Rate			Balance		Rate			Balance		Rate
	(Dollars in thousands)
Noninterest-bearing demand	$	4,138		0.00	%	$	3,721		0.00	%	$	2,579		0.00	%
Interest-bearing demand		16,648		0.18	%		14,969		0.19	%		24,402		0.20	%
Savings accounts		59,276		0.40	%		58,436		0.42	%		37,579		0.57	%
Certificates of deposit		127,361		0.73	%		141,296		0.76	%		119,595		0.83	%

The following table sets forth the deposit activities for the periods indicated.

	Year Ended June 30,
	2015			2014			2013
	(In thousands)
Beginning balance	$	213,142		$	230,981		$	134,552
Deposits acquired from CKF Bancorp		—			—			101,477
Increase (decrease) before interest credited		(14,631	)		(19,180	)		(6,303	)
Interest credited		1,190			1,341			1,255
Net increase (decrease) in deposits		(13,441	)		(17,839	)		96,429
Ending balance	$	199,701		$	213,142		$	230,981

Borrowings. Advances from the Federal Home Loan Bank of Cincinnati amounted to $26.6 million and $17.2 million at June 30, 2015 and 2014, respectively.

22

The following table presents certain information regarding our Federal Home Loan Bank of Cincinnati advances during the periods and at the dates indicated.

	Year Ended June 30,
	2015			2014			2013
	(Dollars in thousands)
Balance outstanding at end of period	$	26,635		$	17,200		$	24,310
Maximum amount of advances outstanding at any month end during the period	$	29,047		$	27,016		$	43,808
Average advances outstanding during the period	$	20,375		$	19,413		$	30,050
Weighted average interest rate during the period		1.17	%		1.43	%		1.43	%
Weighted average interest rate at end of period		1.04	%		1.39	%		2.17	%

Shareholders’ Equity. Shareholders’ equity totaled $67.3 million at June 30, 2015, a $108,000 or 0.2%, increase compared to June 30, 2014. The increase resulted primarily from earnings exceeding dividends paid in the year.

The Banks are required to maintain minimum regulatory capital pursuant to federal regulations. At June 30, 2015, both First Federal of Hazard’s and First Federal of Frankfort’s regulatory capital substantially exceeded all minimum regulatory capital requirements. Management is not aware of any recent event that would cause this classification to change.

Results of Operations for the Years Ended June 30, 2015 and 2014

General. Net earnings totaled $2.1 million for the fiscal year ended June 30, 2015, an increase of $135,000, or 7.0%, from the net earnings recorded for the fiscal year ended June 30, 2014. The increase in earnings year over year was due primarily to decreases in non-interest expense and provision for losses on loans, as well as an increase in non-interest income. Non-interest expense decreased $368,000 or 4.4% from $8.4 million for the prior year end to $8.0 million for the recent year end primarily due to lower costs associated with the Company’s employee compensation and benefits. Provision for losses on loans decreased $237,000 or 40.9% to $343,000 for the year just ended due primarily to improving quality in the loan portfolio, while non-interest income increased $170,000 or 49.4% to $514,000. The increase non-interest income was due primarily to gains recognized on sales of real estate owned by the Company. Net interest income decreased $571,000 or 5.0% to $11.0 million for the recently ended fiscal year as interest income decreased more than interest expense decreased. Interest income decreased $761,000 or 5.8% due chiefly to lower yield earned on the Company’s loan portfolio. Interest expense decreased $190,000 or 11.7% to $1.4 million.

Interest Income. Total interest income for the fiscal year ended June 30, 2015 was $12.4 million, a decrease of $761,000, or 5.8%, compared to the fiscal year ended June 30, 2014. The decrease in interest income was due primarily to a decrease in interest income on loans, which decreased by $685,000, or 5.4% to $12.0 million for the fiscal year ended June 30, 2015, compared to fiscal 2014.

Interest income from loans decreased due to a decrease in the average rate earned on the portfolio as well as a decrease in the average balance outstanding. The average rate earned on the portfolio decreased 18 basis points from 5.05% for fiscal year 2014 to 4.87% for fiscal 2015, while the average balance of loans outstanding decreased $4.9 million or 2.0% from $251.2 million for the 2014 fiscal year to $246.3 million for the 2015 fiscal year. The decrease in the average rate earned on loans for fiscal 2015 occurred primarily as a result of borrowers refinancing to lower rates and to a lesser degree by loans repricing as scheduled, as many adjustable-rate loans are at their rate floors, because of the extended period of historically low interest rate environment. Income from other interest-earning assets also decreased year over year. Income on interest-bearing deposits and other decreased $50,000 or 16.2% to $258,000 for the fiscal year ended June 30, 2015, while income on the Company’s investment portfolio decreased $26,000 or 16.1% to $135,000 for the year just ended.

23

Interest Expense. Interest expense totaled $1.4 million for the fiscal year ended June 30, 2015, a decrease of $190,000, or 11.7%, from fiscal 2014. The decrease in interest expense resulted primarily from lower costs of deposits and borrowings. Interest expense on deposits decreased $151,000 or 11.3% to $1.2 million for the 2015 fiscal year, while the cost of borrowings decreased $39,000 or 14.1% to $238,000 for the 2015 fiscal year. Decreased costs on deposits were attributable primarily to a decrease in the average balance of those deposits, while a decrease in the interest rates paid on deposits also contributed to the overall decrease in cost. The average balance of deposits decreased $11.4 million or 5.3% to $203.3 million for the year just ended, while the rate paid on deposits decreased 4 basis points to 0.59% for the 2015 year. The average balance of certificates of deposit was $127.4 million for the recently-ended year. This category registered the largest decrease in volume by decreasing $13.9 million or 9.9% from fiscal 2014 to fiscal 2015, as depositors sought higher returns on their funds. The Company utilized FHLB advances to fund the decrease in deposits. Average borrowings increased by $962,000 or 5.0% to $20.4 million for the year ended June 30, 2015, while the average rate paid on borrowings decreased 26 basis points to 1.17% for fiscal 2015.

Net Interest Income. As a result of the aforementioned changes in interest income and interest expense, net interest income before provision for loan losses decreased $571,000 or 5.0% to $11.0 million for the 2015 year. As indicated on the following table, our net interest margin decreased from 4.13% for the 2014 fiscal year to 4.07% for the year just ended, primarily as a result of interest-bearing assets repricing to lower interest rates at a faster pace than our interest-earning liabilities repriced to lower interest rates. The pace at which the rates for interest-bearing liabilities has continued to decline as the low interest rate environment persists. As those liabilities reprice ever closer to nil, they will likely level off at the lowest levels. Also in the current historically-low interest rate environment, we might be forced to meet competing lenders’ low rates in order to retain our loan portfolio.

24

Average Balances and Yields. The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends, the total dollar amount of interest expense and the resulting average yields and costs. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented. For purposes of this table, average balances have been calculated using the average of daily balances and nonaccrual loans are included in average balances only. We did not hold any non-taxable securities during any of the periods presented in the table.

	2015								2014								2013
				Interest								Interest							Interest
	Average			And		Yield/			Average			And		Yield/			Average		And		Yield/
(Dollars in thousands)	Balance			Dividends		Cost			Balance			Dividends		Cost			Balance		Dividends		Cost
Interest-earning assets:
Loans	$	246,252		$	11,996		4.87	%	$	251,181		$	12,681		5.05	%	$	225,153	$	11,466		5.09	%
Mortgage-backed securities		3,412			110		3.22			4,515			132		2.92			6,510		185		2.84
Other securities		5,409			25		0.46			6,749			29		0.43			3,795		17		0.45
Other interest-earning assets		14,063			258		1.84			16,483			308		1.87			15,458		290		1.88
Total interest-earning assets		269,136			12,389		4.60			278,928			13,150		4.71			250,916		11,958		4.77
Less: ALLL		(1,533	)							(1,391	)
Noninterest-earning assets		29,693								29,445								27,007
Total assets	$	297,296							$	306,982							$	277,923
Interest-bearing liabilities:
Demand deposits	$	16,648		$	30		0.18	%	$	14,969		$	29		0.19	%	$	24,402	$	49		0.20	%
Savings		59,276			237		0.40			58,436			243		0.42			37,579		213		0.57
Certificates of deposit		127,361			923		0.73			141,296			1,069		0.76			119,595		993		0.83
Total deposits		203,285			1,190		0.59			214,701			1,341		0.63			181,576		1,255		0.69
Borrowings		20,375			238		1.17			19,413			277		1.43			30,050		431		1.43
Total interest-bearing liabilities		223,660			1,428		0.64			234,114			1,618		0.69			211,626		1,686		0.80
Noninterest-bearing demand deposits		4,138								3,721								2,579
Noninterest-bearing liabilities		2,190								2,344								1,708
Total liabilities		229,988								240,179								215,913
Shareholders’ equity		67,308								66,803								62,010
Total liabilities and shareholders’
Equity	$	297,296							$	306,982							$	277,923
Net interest income/average yield				$	10,961		3.96	%				$	11,532		4.02	%			$	10,272		3.97	%
Net interest margin							4.07	%							4.13	%						4.09	%
Average interest-earning assets to Average interest-bearing liabilities							120.33	%							119.14	%						118.57	%

25

Rate/Volume Analysis.The following table sets forth the effects of changing rates and volumes on our net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior year volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior year rate). For purposes of this table, changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionately based on the changes due to rate and the changes due to volume. The total column represents the sum of the prior columns.

	Twelve months ended June 30, 2015 to June 30, 2014 Increase (Decrease) Due to Changes In									Twelve months ended June 30, 2014 to June 30, 2013 Increase (Decrease) Due to Changes In
(in thousands)	Volume			Rate			Total			Volume			Rate			Total
Interest-earning assets:
Loans receivable	$	(244	)	$	(441	)	$	(685	)	$	1,311		$	(96	)	$	1,215
Mortgage-backed securities		(38	)		16			(22	)		(59	)		6			(53	)
Investment securities		(6	)		2			(4	)		13			(1	)		12
Other interest-earning assets		(44	)		(6	)		(50	)		19			(1	)		18
Total interest-earning assets		(332	)		(429	)		(761	)		1,284			(92	)		1,192
Interest-bearing liabilities:
Demand deposits		2			(1	)		1			(18	)		(2	)		(20	)
Savings		3			(9	)		(6	)		56			(26	)		30
Certificates of deposit		(100	)		(46	)		(146	)		147			(71	)		76
Borrowings		14			(53	)		(39	)		(152	)		(2	)		(154	)
Total interest-bearing liabilities		(81	)		(109	)		(190	)		33			(101	)		(68	)
Increase (decrease) in net interest income	$	(251	)	$	(320	)	$	(571	)	$	1,251		$	9		$	1,260

Provision for Losses on Loans. A provision for losses on loans is charged to earnings to maintain the total allowance for loan losses at a level calculated by management based on historical experience, the volume and type of lending conducted by the Banks, the status of past due principal and interest payments and other factors related to the collectability of the loan portfolio. Based upon an analysis of these factors, management recorded a provision of $343,000 for losses on loans for the fiscal year ended June 30, 2015, a decrease of $237,000 compared to a provision of $580,000 for fiscal 2014. Management believes all nonperforming loans are adequately collateralized or have been written down to their realizable value; however, there can be no assurance that the loan loss allowance will be adequate to absorb losses on known nonperforming assets or that the allowance will be adequate to cover losses on nonperforming assets in the future. See discussion about Allowance Loan Losses and Asset Quality.

26

Non-interest Income. Other non-interest income increased $170,000 or 49.4% to $514,000 for the fiscal year ended June 30, 2015, due primarily to gains recognized on sales of real estate owned by the Company. During fiscal 2015 we recognized gain of $207,000 in gains on sales of real estate owned compared to a loss of $14,000 for fiscal 2014. We experienced a decline of $27,000 or 49.1% on gain on sale of loans as fewer loan customers chose our 30-year fixed rate mortgages, which we sell to the FHLB. During fiscal 2015 we were able to sell fewer long-term, fixed rate loans into the secondary market than during the previous year because of waning market demand. The number of loans sold as well as their aggregate value declined year over year. The number of loans sold decreased by 8 or 66.7% from 12 for the year ended June 30, 2014 to just four for the year ended June 30, 2015, while the principal amount of loans sold decreased $1.1 million or 64.2% from $1.7 million for the 2014 fiscal year to $599,000 for the recently ended fiscal year. Contributing to the increase in non-interest income was a decrease in the valuation adjustment for real estate owned. Impairment charges on other real estate decreased from $101,000 for the 2014 fiscal year to $87,000 for the year just ended.

Non-interest Expense. Non-interest expense decreased $368,000 or 4.4% to $8.0 million for the fiscal year ended June 30, 2015 compared to fiscal 2014 primarily due to lower costs associated with the Company’s employee compensation and benefits, which decreased $ 494,000 or 9.2% from the 2014 fiscal year and totaled $4.9 million for the year just ended. Favorable funding levels for the Company’s defined benefit pension plan allowed us to recognize expense of $227,000 for the fiscal year ended June 30, 2015, compared to $876,000 for the immediately preceding year. See NOTEA-Summary of Significant Accounting Policies, Item 11. Retirement and Employee Benefit Plans.) Somewhat offsetting the decrease in employee compensation and benefits were increases in legal fees, outside service fees and occupancy and equipment. Legal fees increased $59,000 or 168.6% to $94,000 for the year ended June 30, 2015, while outside service fees increased $58,000 or 41.4%, to $198,000 for the year ended June 30, 2015, compared to fiscal 2014. The increase in outside service fees was attributable both to technology and communications capability as well as efforts to strengthen the Company’s internal audit processes.

Federal Income Taxes. The provision for federal income tax increased $69,000 or 7.2% from $952,000 for the fiscal year ended June 30, 2014 to $1.0 million for the fiscal year ended June 30, 2015. The effective income tax rate for each of the years ended June 30, 2015 and 2014, was 33.0%.

Liquidity and Capital Resources

Liquidity is the ability to meet current and future short-term financial obligations. Our primary sources of funds consist of cash and deposits at other banks, deposit inflows, loan repayments and maturities, calls and sales of investment and mortgage-backed securities and advances from the FHLB. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.

We periodically assess our available liquidity and projected upcoming liquidity demands. We regularly adjust our investments in liquid assets based upon our assessment of (1) expected loan demand, (2) expected deposit flows, (3) yields available on interest-earning deposits and securities, and (4) the objectives of our asset/liability management program. Excess liquid assets are invested generally in interest-earning deposits, federal funds and short- and intermediate-term U.S. Government agency obligations.

Our most liquid assets are cash, federal funds sold and interest-bearing deposits. The levels of these assets depend on our operating, financing, lending and investing activities during any given period. At June 30, 2015 and June 30, 2014, cash and cash equivalents totaled $13.6 million and $11.5 million, respectively. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $159,000 and $247,000 at June 30, 2015 and 2014, respectively.

We are not aware of any trends and/or demands, commitments, events or uncertainties that could result in a material protracted decrease in liquidity. We expect that all of our liquidity needs, including the contractual commitments set forth in the table below can be met by our currently available liquid assets and cash flows. In the event any unforeseen demand or commitments were to occur, we would access our borrowing capacity with the FHLB. We expect that our currently available liquid assets and our ability to borrow from the FHLB would be sufficient to satisfy our liquidity needs without any material adverse effect on our liquidity.

27

Our primary investing activities are the origination of loans and the purchase of investment securities. In fiscal 2015 and 2014, we originated $37.0 million and $31.3 million of loans, respectively. During fiscal 2015, these activities were funded primarily by proceeds from principal repayments on loans of $37.9 million. During fiscal 2014, these activities were funded primarily by proceeds from the principal repayments on loans of $45.7 million.

Financing activities consist primarily of activity in deposit accounts and in FHLB advances. Total deposits decreased $13.4 million (net of amortization of purchased premium) for the year ended June 30, 2015, compared to a net decrease of $17.4 million for the year ended June 30, 2014. FHLB advances increased $9.4 million from June 30, 2014 to June 30, 2015. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors and other factors. We generally manage the pricing of our deposits to be competitive and to increase core deposit relationships.

Commitments and Contractual Obligations

At June 30, 2015, we had $3.8 million in mortgage commitments. Certificates of deposit due within one year of June 30, 2015 totaled $75.9 million, or 38.0% of total deposits. If these deposits do not remain with us, we might be required to seek other sources of funds, including FHLB advances or other certificates of deposit. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before June 30, 2016. We believe, however, based on past experience, that a significant portion of our certificates of deposit will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.

For the year ended June 30, 2015, other than loan commitments, we engaged in no off-balance-sheet transactions reasonably likely to have a material effect on our financial condition, results of operations or cash flows.

28

Dividend Policy

In fiscal 2015, the Company’s net income exceeded its aggregate dividend of $1.4 million by $684,000. In fiscal 2014, the Company’s net income exceeded its aggregate dividend of $1.5 million by $423,000. Approximately 56.0% of the shares of Kentucky First Federal are held by First Federal MHC, a mutual holding company created in 2005. Under regulations of the board of governors of the federal reserve system mutual holding companies, who have waived their dividends prior to December 1, 2009, may continue to waive these dividends provided there is no objection by the Federal Reserve. This waiver action is conditioned on providing appropriate notice and absent the Federal Reserve’s determination that the waiver would be detrimental to the safe and sound operations of the banks. An interim final rule issued by the Federal Reserve raises some question whether we will continue to be allowed to waive these dividends without detriment to the Company as a whole. The Federal Reserve did not object to dividend waivers in August 2011, November 2011 or February 2012. However, they refused to allow the waiver for the May 2012 dividend. As a result, the dividend was paid to the MHC as well as to public shareholders. In an effort to comply with Regulation MM and to be able to continue to waive the dividend, First Federal MHC put the issue to a vote of the members and on August 23, 2012, again on July 9, 2013, again on July 8, 2014, and again on July 7, 2015. Members of First Federal MHC voted in favor of the dividend waiver on all four occasions and the Federal Reserve Bank of Cleveland subsequently approved the waiver of dividends. 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 quarter of 2016. Management believes that the Company has sufficient capital to continue the current dividend policy without affecting the well-capitalized status of either subsidiary bank. Indeed, the Banks still far exceed all regulatory required capital levels. Therefore, we expect to continue to seek approval from the Federal Reserve to allow First Federal MHC to waive its right to dividends. If management should anticipate a long-term trend in which dividends consistently exceed net income (either due to regulatory mandate or a drop in income levels), the dividend policy would be reconsidered. Management cautions that comparison between the Company’s published earnings per share and the Company’s published dividends per share does not lead to an accurate portrayal of the relationship between net income and dividends paid.

Impact of Inflation and Changing Prices

Our consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time due to inflation. The primary impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all of our assets and liabilities are monetary in nature. As a result, interest rates generally have a more significant impact on our performance than do general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

29

Report of Independent Registered Public Accounting Firm

Kentucky First Federal Bancorp

Frankfort, Kentucky

We have audited the accompanying consolidated balance sheets of Kentucky First Federal Bancorp as of June 30, 2015 and 2014, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2015 and 2014, and the results of its operations and its cash flows for the two years then ended, in conformity with U.S. generally accepted accounting principles.

Crowe Horwath LLP

Louisville, Kentucky

September 28, 2015

30

KENTUCKY FIRST FEDERAL BANCORP

CONSOLIDATED BALANCE SHEETS

June 30, 2015 and 2014

(Dollar amounts in thousands, except per share data)

	2015			2014
ASSETS
Cash and due from financial institutions	$	3,864		$	4,191
Interest-bearing demand deposits		9,771			7,320
Cash and cash equivalents		13,635			11,511
Securities available for sale		159			247
Securities held-to-maturity, at amortized cost- approximate fair value of $6,534 and $9,195 at June 30, 2015 and 2014, respectively		6,423			9,018
Loans held for sale		100			—
Loans, net of allowance of $1,568 and $1,473 at June 30, 2015 and 2014, respectively		243,815			246,788
Real estate owned, net		1,593			1,846
Premises and equipment, net		5,235			4,629
Federal Home Loan Bank stock, at cost		6,482			6,482
Accrued interest receivable		725			891
Bank-owned life insurance		2,971			2,878
Goodwill		14,507			14,507
Prepaid federal income taxes		—			227
Prepaid expenses and other assets		653			631
Total assets	$	296,298		$	299,655
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits	$	199,701		$	213,142
Federal Home Loan Bank advances		26,635			17,200
Advances by borrowers for taxes and insurance		699			616
Accrued interest payable		32			32
Accrued federal income taxes		78			—
Deferred federal income taxes		569			210
Deferred revenue		610			631
Other liabilities		661			619
Total liabilities		228,985			232,450
Commitments and contingencies		-			-
Shareholders’ equity
Preferred stock, 500,000 shares authorized, $.01 par value; no shares issued and outstanding		-			-
Common stock, 20,000,000 shares authorized, $.01 par value; 8,596,064 shares issued		86			86
Additional paid-in capital		34,638			34,671
Retained earnings		34,711			34,027
Unearned employee stock ownership plan (ESOP)		(1,223	)		(1,410	)
Treasury shares at cost, 112,563 and 27,886 common shares at June 30, 2015 and 2014, respectively		(937	)		(239	)
Accumulated other comprehensive income		38			70
Total shareholders’ equity		67,313			67,205
Total liabilities and shareholders’ equity	$	296,298		$	299,655

31

KENTUCKY FIRST FEDERAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME

For the years ended June 30, 2015 and 2014

(Dollar amounts in thousands, except per share data)

	2015			2014
Interest income
Loans, including fees	$	11,996		$	12,681
Mortgage-backed securities		110			132
Other securities		25			29
Interest-bearing deposits and other		258			308
Total interest income		12,389			13,150
Interest expense
Deposits		1,190			1,341
Borrowings		238			277
Total interest expense		1,428			1,618
Net interest income		10,961			11,532
Provision for loan losses		343			580
Net interest income after provision for loan losses		10,618			10,952
Non-interest income
Net gains on sales of loans		28			55
Earnings on bank-owned life insurance		93			91
Net gain (loss) on sales of REO		207			(14	)
Valuation adjustment for REO		(87	)		(101	)
Other		273			313
Total non-interest income		514			344
Non-interest expense
Employee compensation and benefits		4,859			5,353
Occupancy and equipment		610			552
Legal fees		94			35
Outside service fees		198			140
Data processing		429			457
Audit and accounting		252			263
FDIC insurance premiums		230			230
Franchise and other taxes		261			269
Foreclosure and REO expense, net		180			160
Other		929			951
Total non-interest expense		8,042			8,410
Income before income taxes		3,090			2,886
Federal income tax expense (benefit)
Current		646			1,056
Deferred		375			(104	)
Total federal income taxes		1,021			952
NET INCOME	$	2,069		$	1,934
EARNINGS PER SHARE
Basic and diluted	$	0.25		$	0.23

32

KENTUCKY FIRST FEDERAL BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended June 30, 2015 and 2014

(Dollar amounts in thousands)

	2015			2014
Net income	$	2,069		$	1,934
Other comprehensive income (loss), net of tax-related effects:
Unrealized holding gains (losses) on securities available for sale  during the year, net of tax expense (benefit) of $(16) and $24 in 2015 and 2014, respectively		(32	)		47
Comprehensive income	$	2,037		$	1,981

33

KENTUCKY FIRST FEDERAL BANCORP

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the years ended June 30, 2015 and 2014

(Dollar amounts in thousands, except per share data)

									Unearned
									employee
									stock						Accumulated
			Additional						ownership						other
	Common		paid-in			Retained			plan			Treasury			comprehensive
	stock		capital			earnings			(ESOP)			shares			income			Total
Balance at July 1, 2013	$	86	$	34,732		$	33,604		$	(1,626	)	$	(197	)	$	23		$	66,622
Net income		-		-			1,934			-			-			-			1,934
Allocation of ESOP shares		-		(61	)		-			216			-			-			155
Acquisition of 5,000 shares for Treasury		-		-			-			-			(42	)		-			(42	)
Unrealized gains on securities designated as available for sale, net of related tax effects		-		-			-			-			-			47			47
Cash dividends of $0.40 per common share		-		-			(1,511	)		-			-			-			(1,511	)
Balance at June 30, 2014		86		34,671			34,027			(1,410	)		(239	)		70			67,205
Net income		-		-			2,069			-			-			-			2,069
Allocation of ESOP shares		-		(33	)		-			187			-			-			154
Acquisition of 84,677 shares for Treasury		-		-			-			-			(698	)		-			(698	)
Unrealized gains on securities designated as available for sale, net of related tax effects		-		-			-			-			-			(32	)		(32	)
Cash dividends of $0.40 per common share		-		-			(1,385	)		-			-			-			(1,385	)
Balance at June 30, 2015	$	86	$	34,638		$	34,711		$	(1,223	)	$	(937	)	$	38		$	67,313

34

KENTUCKY FIRST FEDERAL BANCORP

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended June 30, 2015 and 2014

(Dollar amounts in thousands)

	2015			2014
Cash flows from operating activities:
Net income	$	2,069		$	1,934
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		278			288
Accretion of purchased loan discount		(310	)		(155	)
Amortization of purchased loan premium		18			11
Amortization of discounts and premiums on investment securities, net		148			216
Amortization (accretion) of deferred loan origination costs (fees)		55			(18	)
Accretion of premiums on Federal Home Loan Bank advances		—			(56	)
Accretion of premiums on deposits		(212	)		(414	)
Net gain on sale of loans		(28	)		(55	)
Valuation adjustment of REO		87			101
Net loss (gain) on real estate owned		(186	)		7
Deferred gain on sale of real estate owned		(21	)		(10	)
ESOP compensation expense		154			155
Earnings on bank-owned life insurance		(93	)		(91	)
Provision for loan losses		343			580
Origination of loans held for sale		(699	)		(1,420	)
Proceeds from loans held for sale		627			1,671
Increase (decrease) in cash, due to changes in:
Accrued interest receivable		166			28
Prepaid expenses and other assets		(22	)		51
Accrued interest payable		—			(4	)
Accounts payable and other liabilities		42			(5	)
Federal income tax (benefit)
Current		305			(223	)
Deferred		375			(104	)
Net cash provided by operating activities		3,096			2,487
Cash flows from investing activities:
Purchase of investment securities held to maturity		(8,500	)		(10,000	)
Investment securities maturities, prepayments and calls:
Held to maturity		10,947			13,000
Available for sale		40			27
Loans originated for investment, net of principal collected		1,388			13,794
Proceeds from Federal Home Loan Bank stock repurchase		—			1,250
Proceeds from sale of real estate owned		1,831			700
Additions to premises and equipment, net		(884	)		(309	)
Net cash provided by investing activities		4,822			18,462
Cash flows from financing activities:
Net change in deposits		(13,229	)		(17,425	)
Payments by borrowers for taxes and insurance, net		83			54
Proceeds from Federal Home Loan Bank advances		23,800			10,000
Repayments on Federal Home Loan Bank advances		(14,365	)		(17,054	)
Treasury stock repurchases		(698	)		(42	)
Dividends paid on common stock		(1,385	)		(1,511	)
Net cash used in financing activities		(5,794	)		(25,978	)
Net increase (decrease) in cash and cash equivalents		2,124			(5,029	)
Beginning cash and cash equivalents		11,511			16,540
Ending cash and cash equivalents	$	13,635		$	11,511

The accompanying notes are an integral part of these statements.

35

KENTUCKY FIRST FEDERAL BANCORP

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

For the years ended June 30, 2015 and 2014

(Dollar amounts in thousands)

	2015		2014
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Federal income taxes	$	330	$	1,275
Interest on deposits and borrowings	$	1,640	$	2,092
Supplemental disclosure of noncash investing activities:
Transfers from loans to real estate acquired through foreclosure	$	2,123	$	1,684
Loans disbursed upon sales of real estate acquired through foreclosure	$	643	$	198

The accompanying notes are an integral part of these statements.

36

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Kentucky First Federal Bancorp (the “Company”) is a savings and loan holding company whose activities are primarily limited to holding the stock and managing the operations of First Federal Savings and Loan Association of Hazard, Kentucky (“First Federal of Hazard”) and Frankfort First Bancorp, Inc., (“Frankfort First”) the holding company for First Federal Savings Bank of Frankfort (“First Federal of Frankfort”). First Federal of Hazard and First Federal of Frankfort are collectively referred to herein as “the Banks.” First Federal of Hazard is a community-oriented savings and loan association dedicated to serving consumers in Perry and surrounding counties in eastern Kentucky, while First Federal of Frankfort operates through six banking offices located in Frankfort, Danville and Lancaster, Kentucky. Both institutions engage primarily in the business of attracting deposits from the general public and applying those funds to the origination of loans for residential and consumer purposes. First Federal of Frankfort also originates, to a lesser extent, church loans, home equity and other loans. Other than a predominance of one- to four-family residential property, which is common in most thrifts, there are no significant concentrations of loans to any one industry or customer. However, the customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the Banks’ specific operating areas. The Banks’ profitability is significantly dependent on net interest income, which is the difference between interest income generated from interest-earning assets (i.e. loans and investments) and the interest expense paid on interest-bearing liabilities (i.e. customer deposits and borrowed funds). Net interest income is affected by the relative amount of interest-earning assets and interest-bearing liabilities and the interest received or paid on these balances. The level of interest rates paid or received by the Banks can be significantly influenced by a number of environmental factors, such as governmental monetary policy, that are outside of management’s control.

The following is a summary of the Company’s significant accounting policies which have been consistently applied in the preparation of the accompanying consolidated financial statements.

1.    Principles of Consolidation: The consolidated financial statements include the accounts of the Company, First Federal of Hazard, Frankfort First and First Federal of Frankfort. All significant intercompany accounts and transactions have been eliminated in consolidation.

2.    Use of Estimates: The consolidated financial information presented herein has been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP.”) To prepare financial statements in conformity with U.S. GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

3.    Securities: Debt securities are classified as held to maturity or available for sale. Securities classified as held to maturity are to be carried at cost only if the Company has the positive intent and ability to hold these securities to maturity. Securities designated as available for sale are carried at fair value with resulting unrealized gains or losses recorded to shareholders’ equity, net of tax.

37

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

3. Securities: (continued)

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

4.    Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal amount outstanding, adjusted for deferred loan origination fees, discounts on purchased loans, and the allowance for loan losses. Interest income is accrued on the unpaid principal balance unless the collectability of the loan is in doubt. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. Interest income on one- to four-family residential loans is generally discontinued at the time a loan is 180 days delinquent and on other loans at the time a loan is 90 days delinquent. All other loans are moved to non-accrual status in accordance with the Company’s policy, typically 90 days after the loan becomes delinquent. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

5.    Loans held for sale and Mortgage Servicing Rights: Loans held for sale are carried at the lower of cost (less principal payments received) or fair value, calculated on an aggregate basis. At June 30, 2015 the Company had $100,000 in loans held for sale, while at June 30, 2014 the Company had no loans held for sale.

38

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

5.    Loans held for sale and Mortgage Servicing Rights: (continued)

In selling loans, the Company utilizes a program with the Federal Home Loan Bank, retaining servicing on loans sold. Mortgage servicing rights on originated loans that have been sold are initially recorded at fair value. Capitalized servicing rights are amortized in proportion to and over the period of estimated servicing revenues. The Company recorded amortization related to mortgage servicing rights totaling $14,000 during each of the years ended June 30, 2015 and 2014. The carrying value of the Company’s mortgage servicing rights, which approximated fair value, totaled approximately $96,000 and $104,000 at June 30, 2015 and 2014, respectively.

The Company was servicing mortgage loans of approximately $11.9 million and $13.0 million that had been sold to the Federal Home Loan Bank at June 30, 2015 and 2014, respectively. During the fiscal year ended June 30, 2015, we sold $599,000 in loans under the FHLB program and the average balance of loans serviced was $12.3 million.

Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income. Changes in valuation allowances are reported with other non-interest income on the income statement. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses.

Servicing fee income which is reported on the income statement as other non-interest income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing fee income. Servicing fees totaled $20,000 and $35,000 for the fiscal years ended June 30, 2015 and 2014, respectively. Late fees and ancillary fees related to loan servicing are not material.

6.    Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loss experience, the nature and volume of the portfolio, trends in the level of delinquent and problem loans, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and current and anticipated economic conditions in the primary lending area. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired or loans otherwise classified as substandard or doubtful. The general component covers all loans and is based on historical loss experience adjusted for current factors. In consultation with regulators, the Company considers a time frame of two years when estimating the appropriate level of allowance for loan losses. This period may be shortened or extended based on anticipated trends in the banks or in the banks’ markets.

39

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

6. Allowance for loan losses: (continued)

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent eight quarters. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.

These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; economic trends and conditions; industry conditions; and effects of changes in credit concentrations. Our portfolio segments include residential real estate, nonresidential real estate and land, loans on deposits and consumer and other loans. Risk factors associated with our portfolio segments are as follows:

Residential Real Estate

Our primary lending activity is the origination of mortgage loans, which enable a borrower to purchase or refinance existing homes in the Banks’ respective market areas. We further classify our residential real estate loans as one- to four-family (owner-occupied vs nonowner-occupied), multi-family or construction. We believe that our first mortgage position on loans secured by residential real estate presents lower risk than our other loans, with the exception of loans on deposits.

We offer a mix of adjustable-rate and fixed-rate mortgage loans with terms up to 30 years for owner-occupied properties. For these properties a borrower may be able to borrow up to 95% of the value with private mortgage insurance. Alternatively, the borrower may be able to borrow up to 90% of the value with a traditional first mortgage and a second mortgage (bearing a higher rate of interest) on the additional 10% of the value.

We offer loans on one- to four-family rental properties at a maximum of 80% loan-to-value (“LTV”) ratio and we generally charge a slightly higher interest rate on such loans.

We also originate loans to individuals to finance the construction of residential dwellings for personal use or for use as rental property. We occasionally lend to builders for construction of speculative or custom residential properties for resale, but on a limited basis. Construction loans are generally less than one year in length, do not exceed 80% of the appraised value, and provide for the payment of interest only during the construction phase. Funds are disbursed as progress is made toward completion of the construction.

Multi-family and Nonresidential Loans

We offer mortgage loans secured by residential multi-family (five or more units), and nonresidential real estate. Nonresidential real estate loans are comprised generally of commercial office buildings, churches and properties used for other purposes. Generally, these loans are originated for 25 years or less and do not exceed 80% of the appraised value. Loans secured by multi-family and commercial real estate generally have larger balances and involve a greater degree of risk than one- to four-family residential mortgage loans. These loans depend on the borrower’s creditworthiness and the feasibility and cash flow potential of the project. Payments on loans secured by income properties often depend on successful operation and management of the properties. As a result, repayment on such loans may be subject to a greater extent to adverse conditions in the real estate market or economy than owner-occupied residential loans.

40

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

6. Allowance for loan losses: (continued)

Consumer lending

Our consumer loans include home equity lines of credit, loans secured by savings deposits, automobile loans, and unsecured loans. Home equity loans are generally second mortgage loans subordinate only to first mortgages also held by the bank and do not exceed 80% of the estimated value of the property. We do offer home equity loans up to 90% of the estimated value to qualified borrowers and these loans carry a premium rate. Loans secured by savings are originated up to 90% of the depositor’s savings account balance and bear interest at a rate higher than the rate paid on the deposit account. Because the deposit account must be pledged as collateral to secure the loan, the inherent risk of this type of loan is minimal. Loans secured by automobiles are made directly to consumers (there are no relationships with dealers) and are based on the value of the vehicle and the borrower’s creditworthiness. Vehicle loans present a higher level of risk because of the natural decline in the value of the property as well as its mobility. Unsecured loans are based entirely on the borrower’s creditworthiness and present the highest level of risk to the bank.

The Banks account for impaired loans by determining the present value of expected future cash flows discounted at the loan’s effective interest rate or, as an alternative, at the loan’s observable market price or fair value of the collateral, reduced by estimated selling costs.

A loan is considered impaired when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. Although most of our loans are secured by collateral, we rely heavily on the capacity of our borrowers to generate sufficient cash flow to service their debt. As a result, our loans do not become collateral-dependent until there is deterioration in the borrower’s cash flow and financial condition, which makes it necessary for us to look to the collateral for our sole source of repayment. Collateral-dependent loans which are more than ninety days delinquent are considered to constitute more than a minimum delay in repayment and are evaluated for impairment under the policy at that time.

We utilize updated independent appraisals to determine fair value for collateral-dependent loans, adjusted for estimated selling costs, in determining our specific reserve. In some situations management does not secure an updated independent appraisal. These situations may involve small loan amounts or loans that, in management’s opinion, have an abnormally low loan-to-value ratio.

With respect to the Banks’ investment in troubled debt restructurings, multi-family and nonresidential loans, and the evaluation of impairment thereof, such loans are nonhomogenous and, as such, may be deemed to be collateral-dependent when they become more than ninety days delinquent. We obtain updated independent appraisals in these situations or when we suspect that the previous appraisal may no longer be reflective of the property’s current fair value. This process varies from loan to loan, borrower to borrower, and also varies based on the nature of the collateral.

41

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

7. Federal Home Loan Bank Stock: The banks are members of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

8. Real Estate Owned: Real estate acquired through or instead of foreclosure is initially recorded at fair value less estimated selling expenses at the date of acquisition, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequently, the carrying value is adjusted through a valuation allowance and the amount is recorded through expense. Costs relating to holding real estate owned, net of rental income, are charged against earnings as incurred.

9. Premises and Equipment: Land is carried at cost. Premises and equipment are carried at cost less accumulated depreciation. The cost of premises and equipment includes expenditures which extend the useful lives of existing assets. Maintenance, repairs and minor renewals are expensed as incurred. For financial reporting, depreciation is provided on the straight-line method over the useful lives of the assets, estimated to be forty years for buildings, ten to forty years for building improvements, and five to ten years for furniture and equipment.

10. Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. Deferred tax assets are recorded only to the extent that the amount of net deductible temporary differences or carryforward attributes may be utilized against current period earnings, carried back against prior years’ earnings, offset against taxable temporary differences reversing in future periods, or utilized to the extent of management’s estimate of future taxable income. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. Deferred tax liabilities are provided on the total amount of net temporary differences taxable in the future.

A tax provision is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters as income tax expense.

Kentucky First Federal Bancorp and Frankfort First Bancorp, Inc., each are subject to state income taxes in the Commonwealth of Kentucky. Neither of the Banks are subject to state income tax in the Commonwealth. With few exceptions, the Company is no longer subject to U.S. federal, state and local tax examinations by tax authorities for years before 2011.

42

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

11. Retirement and Employee Benefit Plans: The Banks each participate in the Pentegra Defined Benefit Plan for Financial Institutions (“The Pentegra DB Plan”), which is a tax-qualified, multi-employer defined benefit pension fund covering all employees who qualify as to length of service. The Pentegra DB Plan’s Employer Identification Number is 13-5645888 and the Plan Number is 333. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code. The Pentegra DB Plan is a single plan under Internal Revenue Code Section 413(c) and, as a result, all of the assets stand behind all of the liabilities. Accordingly, under the Pentegra DB Plan contributions made by a participating employer may be used to provide benefits to participants of other participating employers. Total contributions made to the Pentegra DB Plan, as reported on Form 5500, equal $190.8 million and $136.5 million for the plan years ended June 30, 2014 and 2013, respectively. Our contributions for fiscal 2015 and 2014 were not more than 5% of the total contributions made to the Pentegra DB Plan. Pension expense is the net contributions, which are based upon covered employees’ ages and salaries and are dependent upon the ultimate prescribed benefits of the participants and the funded status of the plan. The Company recognized expense related to the plans totaling approximately $227,000 and $876,000 for the fiscal years ended June 30, 2015 and 2014. There are no collective bargaining agreements in place that require contributions to the Pentegra DB Plan. As of July 1, 2014, the most recent period for which information is available, First Federal of Hazard had an adjusted funding target attainment percentage (“AFTAP”) of 108.5%, while First Federal of Frankfort had an AFTAP of 111.9%. There are no funding improvement plans or surcharges to participants.

The Company also maintains a nonqualified deferred compensation plan for the benefit of certain directors, which is closed to any future deferrals. The expense incurred for the deferred compensation was $15,000 and $2,000 for the fiscal years ended June 30, 2015 and 2014, respectively, while the liabilities totaled $177,000 and $206,000 at June 30, 2015 and 2014, respectively.

First Federal of Hazard has an Employee Stock Ownership Plan (“ESOP”) which provides retirement benefits for substantially all full-time employees who have completed one year of service and have attained the age of 21. Annual contributions are made to the ESOP equal to the ESOP’s debt service less dividends received by the ESOP on unallocated shares. Shares in the ESOP were acquired using funds provided by a loan from the Company and, accordingly, the cost of those shares is shown as a reduction of stockholders’ equity. Shares are released to participants proportionately as the loan is repaid. Dividends on allocated shares are recorded as dividends and charged to retained earnings. Dividends on unallocated shares are used to repay loan principal and accrued interest. Compensation expense is recorded equal to the fair value of shares committed to be released during a given fiscal year. Allocation of shares to the ESOP participants is contingent upon the repayment of a loan to Kentucky First Federal Bancorp totaling $1.6 million and $1.8 million at June 30, 2015 and 2014, respectively. The Company recorded expense for the ESOP of approximately $154,000 and $155,000 for the years ended June 30, 2015 and 2014, respectively. Shares may be surrendered from the plan as employees leave employment. Total shares surrendered from the plan totaled 73,266 at both June 30, 2015 and 2014. The amounts contributed to the ESOP were $280,000 for each of the years 2015 and 2014.

43

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

11. Retirement and Employee Benefit Plans: (continued)

	For the fiscal year ended
	June 30,
	2015		2014
Allocated shares		132,058		116,028
Shares committed to be released		9,338		9,338
Unearned shares		122,311		140,987
Total ESOP shares		263,707		266,353
Fair value of unearned shares at End of period (dollars in thousands)	$	1,025	$	1,212

First Federal of Frankfort maintains a 401(k) plan for the benefit of all full-time employees. No employer contributions have been made to the 401(k) plan.

12. Share-Based Compensation Plans: Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of the grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of the grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. In fiscal 2006, the Company initiated the 2005 Equity Incentive Plan (“EIP” or the “Plan”) which provides for two share-based compensation plans, which are described below.

No compensation cost was charged against income for those share-based plans for the fiscal years ended June 30, 2015, or 2014 and, consequently, there was no income tax benefit recognized for either of the fiscal years then ended.

The EIP provides for grants of up to 421,216 stock options. It also provides that one-fifth of the options granted become vested and exercisable on the first five anniversaries of the date of grant. The contractual term of the options is ten years. All option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant.

At June 30, 2015, the only options outstanding are related to those granted in the fiscal year 2006.

44

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

12. Share-Based Compensation Plans: (continued)

A summary of the status of the Company’s stock option plan as of June 30, 2015, and changes during the year then ended is presented below:

			Weighted-		Aggregate
			average		Intrinsic
			exercise		Value
	Shares		price		($000)
Outstanding at beginning of year		325,800	$	10.10
Granted		-		-
Exercised		-		-
Forfeited		-		-
Outstanding at end of year		325,800	$	10.10	$	-
Options exercisable at end of year		325,800	$	10.10	$	-

As of June 30, 2015 and 2014, there was no unrecognized compensation cost related to nonvested stock options granted under the Plan.

The EIP also provides for the purchase of 168,486 shares of common stock and the issuance of such shares in the form of restricted stock awards to members of the board of directors, management and certain employees. Common shares awarded under the restricted stock plan vest over a five year period, commencing with the date of the grant and are expensed based on their fair value at the grant date.

As of June 30, 2015 and 2014, there were no grants, forfeitures or nonvested shares and no unrecognized compensation cost related to the restricted stock awards.

13. Earnings Per Share: Diluted earnings per share is computed taking into consideration common shares outstanding and dilutive potential common shares to be issued or released under the Company’s share-based compensation plans. There is no adjustment to net earnings for the calculation of diluted earnings per share. The factors used in the basic and diluted earnings per share computations for the fiscal years ended June 30 follow:

(in thousands)	2015		2014
Net income allocated to common shareholders, basic and diluted	$	2,069	$	1,934
	2015		2014
Basic
Weighted-average common shares outstanding		8,348,785		8,374,624
Diluted
Weighted-average common shares outstanding (diluted)		8,348,785		8,374,624

45

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

13. Earnings Per Share: (continued)

Basic earnings per share is computed based upon the weighted-average shares outstanding during the year less average shares in the ESOP that are unallocated and not committed to be released. For fiscal years 2015 and 2014 all options were antidilutive, as the exercise price was greater than the average market price of the common stock.

14. Fair Value of Assets and Liabilities: Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 - Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access as of the measurement date.

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Following is a description of the valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheet, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Securities

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 matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

46

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

14. Fair Value of Assets and Liabilities (continued)

The following table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis at June 30, 2015 and 2014. The securities represented are only those classified as available-for sale.

			Fair Value Measurements Using
			Quotes Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
2015
Agency mortgage-backed: residential	$	96	$	—	$	96	$	—
FHLMC stock		63		—		63		—
	$	159	$	—	$	159	$	—
2014
Agency mortgage-backed: residential	$	136	$	—	$	136	$	—
FHLMC stock		111		—		111		—
	$	247	$	—	$	247	$	—

There were no transfers between levels 1 and 2.

Impaired Loans

The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent independent 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 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. Independent appraisals for collateral-dependent loans are updated periodically (usually every 12-24 months depending on the size of the loan and the loan-to-value ratio).

Real Estate Owned

Real estate properties acquired through or instead of loan foreclosure are initially recorded as real estate owned (“REO”) 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 which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach with data from comparable properties. 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 were $87,000 and $101,000 for the fiscal years 2015 and 2014, respectively, and resulted in a Level 3 classification of the inputs for determining fair value.

47

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

14. Fair Value of Assets and Liabilities (continued)

The following table presents the fair value measurements of assets and liabilities measured at fair value on a nonrecurring basis at June 30, 2015 and 2014.

			Fair Value Measurements Using
			Quotes Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
2015
Other real estate owned, net
One- to four-family	$	525		-		-	$	525
Land		15		-		-		15
2014
Impaired loans
One- to four-family	$	186	$	-	$	-	$	186
Other real estate owned, net
One- to four-family		1,140		-		-		1,140
Land		15		-		-		15

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying value of $200,000, with a valuation allowance of $14,000 at June 30, 2014. At June 30, 2015, there were no impaired loans with a valuation allowance. There was no additional provision recorded for the fiscal years ended June 30, 2015 and 2014.

Other real estate owned measured at fair value less costs to sell, had a carrying amount of $540,000 and $1.2 million at June 30, 2015 and 2014, respectively, after write-down of $54,000 and $53,000 for the years ended June 30, 2015 and 2014, respectively.

48

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

14. Fair Value of Assets and Liabilities (continued)

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2015 and 2014:

					Range
	Fair Value		Valuation	Unobservable	(Weighted
June 30, 2015	(in thousands)		Technique(s)	Input(s)	Average)
Foreclosed and repossessed assets:
1-4 family	$	525	Sales comparison approach	Adjustments for differences between comparable sales	1.5% to 11.7% (2.9%)
Land		15	Sales comparison approach	Adjustments for differences between comparable sales	20.2% to 38.9% (20.8%)

					Range
	Fair Value		Valuation	Unobservable	(Weighted
June 30, 2014	(in thousands)		Technique(s)	Input(s)	Average)
Impaired Loans:
Residential real estate
1-4 family	$	186	Sales comparison approach	Adjustments for differences between comparable sales	3.1% to 19.8% (4.3%)
Foreclosed and repossessed assets:
1-4 family	$	1,140	Sales comparison approach	Adjustments for differences between comparable sales	-37.1% to 30.2% (1.1%)
Land		15	Sales comparison approach	Adjustments for differences between comparable sales	20.2% to 38.9% (20.8%)

The following disclosure of the fair value of financial instruments, both assets and liabilities, whether or not recognized in the consolidated balance sheet, is based on the assumptions presented for each particular item and 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.

49

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

14. Fair Value of Assets and Liabilities (continued)

The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying balance sheets at amounts other than fair value at June 30, 2015 and 2014:

Cash and cash equivalents: The carrying amounts presented in the consolidated balance sheets for cash and cash equivalents are deemed to approximate fair value.

Held-to-maturity securities: For held-to-maturity securities, fair value methods for securities were previously described.

Loans held for sale: Loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value determined by FHLB pricing schedules.

Loans: The loan portfolio has been segregated into categories with similar characteristics, such as one- to four-family residential, multi-family residential and nonresidential real estate. These loan categories were further delineated into fixed-rate and adjustable-rate loans. The fair values for the resultant loan categories were computed via discounted cash flow analysis, using current interest rates offered for loans with similar terms to borrowers of similar credit quality. For loans on deposit accounts and consumer and other loans, fair values were deemed to equal the historic carrying values. Impaired loans are valued at the lower of cost or fair value as previously described. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

Federal Home Loan Bank stock: It was not practicable to determine the fair value of FHLB stock due to restrictions placed on its transferability.

Accrued interest receivable and payable: The carrying amount is the estimated fair value.

Deposits: The fair value of NOW accounts, passbook accounts, and money market deposits are deemed to approximate the amount payable on demand. Fair values for fixed-rate certificates of deposit have been estimated using a discounted cash flow calculation using the interest rates currently offered for deposits of similar remaining maturities.

Federal Home Loan Bank advances: The fair value of these advances is estimated using the rates currently offered for similar advances of similar remaining maturities or, when available, quoted market prices.

Advances by borrowers for taxes and insurance and accrued interest payable: The carrying amount presented in the consolidated statement of financial condition is deemed to approximate fair value.

Commitments to extend credit: For fixed-rate and adjustable-rate loan commitments, the fair value estimate considers the difference between current levels of interest rates and committed rates. The fair value of outstanding loan commitments at June 30, 2015 and 2014, was not material.

50

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

14. Fair Value of Assets and Liabilities (continued)

Based on the foregoing methods and assumptions, the carrying value and fair value of the Company’s financial instruments at June 30, 2015 and June 30, 2014 are as follows:

			Fair Value Measurements at
(in thousands)			June 30, 2015 Using
	Carrying		Level 1		Level 2		Level 3		Total
	Value
Financial assets
Cash and cash equivalents	$	13,635	$	13,635					$	13,635
Available-for-sale securities		159			$	159				159
Held-to-maturity securities		6,423				6,534				6,534
Loans held for sale		100				101				101
Loans receivable - net		243,815					$	248,265		248,265
Federal Home Loan Bank stock		6,482								n/a
Accrued interest receivable		725				27		698		725
Financial liabilities
Deposits	$	199,701	$	83,603	$	116,304			$	199,907
Federal Home Loan Bank advances		26,635				27,265				27,265
Advances by borrowers for taxes and insurance		699				699				699
Accrued interest payable		32				32				32

The carrying amounts and estimated fair values of financial instruments at June 30, 2014, are as follows:

			Fair Value Measurements at
(in thousands)			June 30, 2014 Using
	Carrying		Level 1		Level 2		Level 3		Total
	Value
Financial assets
Cash and cash equivalents	$	11,511	$	11,511					$	11,511
Available-for-sale securities		247			$	247				247
Held-to-maturity securities		9,018				9,195				9,195
Loans held for sale		—				—				—
Loans receivable - net		246,788					$	253,780		253,780
Federal Home Loan Bank stock		6,482								n/a
Accrued interest receivable		891				891				891
Financial liabilities
Deposits	$	213,142	$	88,854	$	124,390			$	213,244
Federal Home Loan Bank advances		17,200				18,303				18,303
Advances by borrowers for taxes and insurance		616				616				616
Accrued interest payable		32				32				32

51

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

15. Cash and Cash Equivalents: For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks and interest-bearing deposits in other financial institutions with original maturities of less than ninety days.

16. Goodwill: Goodwill resulting from business combinations prior to January 1, 2009 represents the excess of the purchase price over the fair value of the net assets of businesses acquired. Goodwill resulting from business combinations after January 1, 2009, is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. The Company has selected March 31 as the date to perform the annual impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet.

17. Cash Surrender Value of Life Insurance: First Federal of Frankfort has purchased life insurance policies on certain key executives. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

18. Treasury Stock: Treasury stock is stated at cost. Cost is determined by the first-in, first-out method.

19. Related Party Transactions: Loans outstanding to executive officers, directors, significant shareholders and their affiliates (related parties) at June 30, 2015 and 2014 are summarized as follows:

(in thousands)	2015			2014
Outstanding principal, beginning of year	$	1,265		$	1,246
Changes in composition of related parties		157			447
Principal disbursed during the year		146			—
Principal repaid and refinanced during the year		(175	)		(428	)
Outstanding principal, end of year	$	1,393		$	1,265

Deposits from related parties held by the Company at June 30, 2015 and 2014 totaled $4.2 million and $4.5 million, respectively.

20. Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, net of tax, which are also recognized as separate components of equity.

21. Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

52

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

22. Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

23. Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the banks to the holding company or by the holding company to shareholders.

24. Operating Segments: While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

25. Reclassifications: Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity.

26. New Accounting Standards: In January 2014, FASB issued Accounting Standards Update (“ASU”) 2014-04, Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force). The ASU clarifies when an insubstance repossession or foreclosure occurs and a creditor is considered to have received physical possession of real estate property collateralizing a consumer mortgage loan. Specifically, the new ASU requires a creditor to reclassify a collateralized consumer mortgage loan to real estate property upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. Additional disclosures are required detailing the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgages collateralized by real estate property that are in the process of foreclosure. The new guidance is effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The adoption of this guidance will not have a material impact on the Company’s consolidated financial statements, but will result in additional disclosures.

In May 2014 the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The ASU amended existing guidance related to revenue from contracts with customers. This amendment supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. In addition, this amendment specifies the accounting for some costs to obtain or fulfill a contract with a customer. Although the new guidance was originally effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2016, with early adoption not permitted, in April 2015 the FASB deferred the effective date by one year. Therefore, ASU 2014-09 will be effective for the Company’s annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2017. Companies have the option to apply ASU 2014-09 as of the original effective date. Upon adoption, the amendments should be applied retrospectively to all periods presented or retrospectively with the cumulative effect recognized at the date of initial application. Management is currently evaluating the impact of the adoption of this guidance on the Company’s consolidated financial statements.

53

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

26. New Accounting Standards: (continued)

In June 2014 the FASB issued ASU 2014-12, Compensation-Stock Compensation (Topic 718) – Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period. The ASU amended existing guidance related to the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. These amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation-Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this amendment either: (a) prospectively to all awards granted or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of this standard is not expected to have a material effect on the Company’s operating results or financial condition.

In November 2014 the FASB issued ASU 2014-17, Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force), which relates to Business Combinations (Topic 805.) The ASU amended existing guidance related to the accounting by an acquired entity upon a change-in-control event. The amendments provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. An acquired entity should determine whether to elect to apply pushdown accounting for each individual change-in-control event in which an acquirer obtains control of the acquired entity. If pushdown accounting is not applied in the reporting period in which the change-in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity’s most recent change-in-control event. An election to apply pushdown accounting in a reporting period after the reporting period in which the change-in-control event occurred should be considered a change in accounting principle. If pushdown accounting is applied to an individual change-in-control event, that election is irrevocable. If an acquired entity elects the option to apply pushdown accounting in its separate financial statements, it should disclose information in the current reporting period that enables users of financial statements to evaluate the effect of pushdown accounting. The amendments are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The adoption of this standard did not have a material effect on the Company’s operating results or financial condition.

54

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

27. Purchased Credit Impaired Loans: The Company purchased groups of loans through its whole bank acquisition, some of which have shown evidence of credit deterioration since origination. These purchased credit impaired loans are recorded at the amount paid, such that there is no carryover of the seller’s allowance for loan losses. After acquisition, losses are recognized by an increase in the allowance for loan losses. Such purchased credit impaired loans are accounted for individually or aggregated into pools of loans based on common risk characteristics such as, credit score, loan type, and date of origination. The Company estimates the amount and timing of expected cash flows for each loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool (accretable yield). The excess of the loan’s or pool’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference). Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded. If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income.

NOTE B - SECURITIES

The following table summarizes the amortized cost and fair value of the available for sale securities and held to maturity investment securities portfolio at June 30, 2015 and 2014 and the corresponding amounts of gross unrealized or unrecognized gains and losses. Unrealized gains or losses apply to available-for-sale securities and are recognized in accumulated other comprehensive income, while unrecognized gains or losses on held-to-maturity securities are not recognized in the financial statements. The gains and losses are as follows:

	2015
(in thousands)	Amortized cost		Gross unrealized/ unrecognized gains		Gross unrealized/ unrecognized losses		Estimated fair value
Available-for-sale Securities
Agency mortgage-backed:residential	$	94	$	2	$	-	$	96
FHLMC stock		8		55		-		63
	$	102	$	57	$	-	$	159
Held-to-maturity Securities
Agency mortgage-backed: residential	$	2,821	$	112	$	2	$	2,931
Agency bonds		3,602		2		1		3,603
	$	6,423	$	114	$	3	$	6,534

55

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE B – SECURITIES (continued)

	2014
(in thousands)	Amortized cost		Gross unrealized/ unrecognized gains		Gross unrealized/ unrecognized losses		Estimated fair value
Available-for-sale Securities
Agency mortgage-backed:residential	$	134	$	2	$	-	$	136
FHLMC stock		8		103		-		111
	$	142	$	105	$	-	$	247
Held-to-maturity Securities
Agency mortgage-backed: residential	$	3,792	$	180	$	1	$	3,971
Agency bonds		5,226		3		5		5,224
	$	9,018	$	183	$	6	$	9,195

The amortized cost and estimated fair value of securities as of June 30, 2015, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities without a single maturity, primarily mortgage-backed, are not shown.

(in thousands)	Amortized Cost		Fair Value
Held to maturity:
Within one year	$	1,005	$	1,005
One to five years		2,597		2,598
	$	3,602	$	3,603

There were no sales of securities during the fiscal years ended June 30, 2015 or 2014. At June 30, 2015 the Company had $1.2 million in securities with unrealized losses totaling $3,000, while at June 30, 2014, the Company had $2.7 million in securities with unrealized losses totaling $6,000. Unrealized losses on corporate bonds have not been recognized into income because the issuers’ bonds are of high credit quality (rated AA or higher), management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The fair value is expected to recover as the bonds reach maturity.

At June 30, 2015 and 2014, pledged securities totaled $2.2 million and $2.6 million, respectively.

56

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE C - LOANS

The composition of the loan portfolio at June 30 was as follows:

(in thousands)	2015			2014
Residential real estate
One- to four-family	$	191,721		$	193,381
Multi-family		16,621			14,002
Construction		3,780			2,122
Land		2,021			2,362
Farm		1,567			1,644
Nonresidential real estate		22,118			21,945
Commercial and industrial		1,782			2,080
Consumer and other
Loans on deposits		2,262			2,564
Home equity		5,477			5,359
Automobile		73			64
Unsecured		605			638
		248,027			249,161
Undisbursed portion of loans in process		(2,753	)		(952	)
Deferred loan origination costs, net		109			52
Allowance for loan losses		(1,568	)		(1,473	)
	$	243,815		$	246,788

57

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE C - LOANS (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, 2015 and 2014. There were $3.5 million and $3.8 million in loans acquired with deteriorated credit quality at June 30, 2015 and 2014, respectively.

June 30, 2015:
(in thousands)	Loans individually evaluated		Loans acquired with deteriorated credit quality		Ending loans balance		Ending allowance attributed to loans		Unallocated allowance		Total allowance
Loans individually evaluated for impairment:
Residential real estate:
One- to four-family	$	1,743	$	2,565	$	4,308	$	—	$	—	$	—
Land		476		381		857		—		—		—
Nonresidential real estate		241		526		767		—		—		—
Consumer and other:
Home equity		28		—		28		—		—		—
Unsecured		18		—		18		—		—		—
		2506		3,472		5,978		—		—		—
Loans collectively evaluated for impairment:
Residential real estate:
One- to four-family					$	187,413	$	1,059	$	—	$	1,059
Multi-family						16,621		94		—		94
Construction						3,780		21		—		21
Land						1,164		7		—		7
Farm						1,567		9		—		9
Nonresidential real estate						21,351		121		—		121
Commercial and industrial						1,782		10		—		10
Consumer and other
Loans on deposits						2,262		13		—		13
Home equity						5,449		31		—		31
Automobile						73		—		—		—
Unsecured						587		3		—		3
Unallocated						—		—		200		200
						242,049		1,368		200		1,568
					$	248,027	$	1,368	$	200	$	1,568

58

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE C - LOANS (continued)

June 30, 2014:
(in thousands)	Loans individually evaluated		Loans acquired with deteriorated credit quality*		Ending loans balance		Ending allowance attributed to loans		Unallocated allowance		Total allowance
Loans individually evaluated for impairment:
Residential real estate:
One- to four-family	$	2,159	$	2,735	$	4,894	$	14	$	—	$	14
Farm		—		444		444		—		—		—
Nonresidential real estate		—		529		529		—		—		—
Commercial and industrial		—		68		68		—		—		—
		2,159		3,776		5,935		14		—		14
Loans collectively evaluated for impairment:
Residential real estate:
One- to four-family					$	191,487	$	989	$	—	$	989
Multi-family						14,002		73		—		73
Construction						2,122		11		—		11
Land						1,918		10		—		10
Farm						1,644		9		—		9
Nonresidential real estate						21,416		112		—		112
Commercial and industrial						2,012		11		—		11
Consumer and other
Loans on deposits						2,564		13		—		13
Home equity						5,359		28		—		28
Automobile						64		—		—		—
Unsecured						638		3		—		3
Unallocated						—		—		200		200
						243,226		1,259		200		1,459
					$	249,161	$	1,273	$	200	$	1,473

*These loans were evaluated at acquisition date at their estimated fair value and there has been no subsequent deterioration since acquisition.

59

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE C - LOANS (continued)

The following tables present impaired loans by class of loans as of and for the years ended June 30, 2015 and 2014:

June 30, 2015: (in thousands)	Unpaid Principal Balance and Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Income Recognized
With no related allowance recorded:
Residential real estate:
One- to four-family	$	4,308	$	—	$	4,075	$	84	$	84
Land		857		—		554		31		31
Nonresidential real estate		767		—		618		26		26
Commercial and industrial		—		—		19		6		6
Consumer and other
Home equity		28		—		28		—		—
Unsecured		18		—		7		—		—
Total	$	5,978	$	—	$	5,301	$	147	$	147

June 30, 2014: (in thousands)	Unpaid Principal Balance and Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Income Recognized
With no related allowance recorded:
Residential real estate:
One- to four-family	$	4,694	$	—	$	6,887	$	7	$	7
Farm		444		—		465		—		—
Nonresidential real estate		529		—		538		—		—
Commercial and industrial		68		—		94		—		—
	$	5,735	$	—	$	7,984	$	7	$	7
With an allowance recorded:
Residential real estate:
One- to four-family		200		14		206		—		—
Total	$	5,935	$	14	$	8,190	$	7	$	7

60

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE C - LOANS (continued)

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual status by class of loans as of June 30, 2015 and 2014. At June 30, 2015, the table below includes approximately $1.6 million of loans on nonaccrual and $1.5 million of loans past due over 90 days and still accruing that were acquired with deteriorated credit quality, while approximately $2.7 million of loans on nonaccrual and $1.7 million of loans past due over 90 days and still accruing that were acquired with deteriorated credit quality at June 30, 2014.

	June 30, 2015				June 30, 2014
(in thousands)	Nonaccrual		Loans Past Due Over 90 Days Still Accruing		Nonaccrual		Loans Past Due Over 90 Days Still Accruing
One- to four-family residential real estate	$	4,331	$	1,745	$	5,767	$	3,513
Nonresidential real estate		410		—		384		—
Commercial and industrial		—		—		47		—
Consumer		26		—		29		—
	$	4,767	$	1,745	$	6,227	$	3,513

Troubled Debt Restructurings:

During the year ended June 30, 2015, the terms of a single one- to four family residential real estate loan totaling $20,000 was modified as a troubled debt restructuring (“TDR.”) The loan was modified because the borrower was exhibiting financial difficulty in making the original debt payments. The borrower was allowed to pay interest only for five months and the maturity date of the loan was extended accordingly.

During the year ended June 30, 2014, the terms of ten one- to four family residential real estate loans totaling $511,000 were modified as TDRs. Five of the loans were classified as TDRs because the borrower filed Chapter 7 bankruptcy without reaffirming their personal obligation to pay the debt. The other loans were modified because the borrower was exhibiting financial difficulty in making the original debt payments. Some of the loans were modified to lower the interest rate to prevailing rates offered by the bank at the time, while some other loans had the terms extended to provide the borrower with lower monthly payments.

In order to determine whether a borrower is experiencing financial difficulty, we consider the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

61

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE C - LOANS (continued)

The following table presents loans classified as TDRs as of June 30, 2015 and 2014, and their performance, by modification type:

(Dollars in thousands)	Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms
June 30, 2015:
Residential Real Estate:
1-4 Family		38	$	2,110	$	1,851	$	1,710	$	141
June 30, 2014
Residential Real Estate:
1-4 Family		39	$	2,230	$	1,997	$	1,621	$	376

The Company had no allocated specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of June 30, 2015 or 2014. At June 30, 2015, $1.5 million in TDR loans were on nonaccrual status. The Company had no commitments to lend additional amounts as of June 30, 2015 and 2014, to customers with outstanding loans that are classified as troubled debt restructurings. The Company had no TDR loans default during fiscal 2015 and one TDR loan to default during the year ended June 30, 2014. The defaulted loan has not been included in the table above. The borrower had exhibited credit weaknesses when the loan was refinanced, which was the reason for the TDR classification initially. The borrower declared bankruptcy during fiscal 2014 and the loan, which had a carrying value of $486,000, was foreclosed upon in fiscal 2015 with the Company taking possession of the real estate property.

The following tables present the aging of the principal balance outstanding in past due loans as of June 30, 2015 and 2014, by class of loans. At June 30, 2015, the table below includes approximately $666,000 of loans 30-89 days past due and $1.0 million of loans past due over 90 days that were acquired with deteriorated credit quality, while approximately $978,000 of loans 30-89 days past due and $1.8 million of loans past due over 90 days that were acquired with deteriorated credit quality at June 30, 2014.

62

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE C - LOANS (continued)

June 30, 2015:

(in thousands)	30-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Total
Residential real estate:
One-to four-family	$	5,129	$	3,233	$	8,362	$	183,359	$	191,721
Multi-family		—		—		—		16,621		16,621
Construction		—		—		—		3,780		3,780
Land		344		262		606		1,415		2,021
Farm		—		—		—		1,567		1,567
Nonresidential real estate		142		388		530		21,588		22,118
Commercial and industrial		—		—		—		1,782		1,782
Consumer and other:
Loans on deposits		—		—		—		2,262		2,262
Home equity		20		—		20		5,457		5,477
Automobile		—		—		—		73		73
Unsecured		13		18		31		574		605
Total	$	5,648	$	3,901	$	9,549	$	238,478	$	248,027

June 30, 2014:
(in thousands)	30-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Total
Residential real estate:
One-to four-family	$	4,481	$	9,060	$	13,541	$	182,840	$	196,381
Multi-family		—		—		—		14,002		14,002
Construction		343		—		343		1,779		2,122
Land		—		364		364		1,998		2,362
Farm		—		—		—		1,644		1,644
Nonresidential real estate		375		396		771		21,174		21,945
Commercial and industrial		—		88		88		1,992		2,080
Consumer and other:
Loans on deposits		—		—		—		2,564		2,564
Home equity		—		33		33		5,326		5,359
Automobile		—		—		—		64		64
Unsecured		68		—		68		570		638
Total	$	5,267	$	9,941	$	15,208	$	233,953	$	249,161

63

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE C - LOANS (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. 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.

Substandard. 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.

Doubtful. 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 table above. As of June 30, 2015, and 2014, and based on the most recent analysis performed, the risk category of loans by class of loans was as follows:

64

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE C - LOANS (continued)

June 30, 2015:
(in thousands)	Pass		Special Mention		Substandard		Doubtful		Not rated
Residential real estate:
One- to four-family	$	—	$	6,914	$	9,371	$	—	$	175,436
Multi-family		16,621		—		—		—		—
Construction		3,780		—		—		—		—
Land		1,164		—		857		—		—
Farm		1,567		—		—		—		—
Nonresidential real estate		20,198		1,131		789		—		—
Commercial and industrial		1,750		32		—		—		—
Consumer and other:
Loans on deposits		2,262		—		—		—		—
Home equity		5,448		—		29		—		—
Automobile		73		—		—		—		—
Unsecured		605		—		—		—		—

June 30, 2014:
(in thousands)	Pass		Special Mention		Substandard		Doubtful		Not rated
Residential real estate:
One- to four-family	$	-	$	2,928	$	11,287	$	—	$	182,166
Multi-family		14,002		—		—		—		—
Construction		2,122		—		—		—		—
Land		1,366		—		996		—		—
Farm		1,644		—		—		—		—
Nonresidential real estate		18,920		965		2,060		—		—
Commercial and industrial		2,014		—		66		—		—
Consumer and other:
Loans on deposits		2,564		—		—		—		—
Home equity		5,359		—		—		—		—
Automobile		64		—		—		—		—
Unsecured		606		3		29		—		—

65

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE C - LOANS (continued)

The activity in the allowance for loan losses is summarized as follows for the years ended June 30:

(in thousands)	2015			2014
Balance at beginning of year	$	1,473		$	1,310
Provision for losses on loans		343			580
Charge-offs, net		(248	)		(417	)
Balance at end of year	$	1,568		$	1,473

The following tables present the activity in the allowance for loan losses by portfolio segment for the years ended June 30, 2015 and 2014:

June 30, 2015:

(in thousands)	Beginning balance		Provision for loan losses			Loans charged off			Recoveries		Ending balance
Residential real estate:
One- to four-family	$	999	$	307		$	(274	)	$	26	$	1,058
Multi-family		74		19			—			—		93
Construction		11		10			—			—		21
Land		10		(1	)		—			—		9
Farm		9		—			—			—		9
Nonresidential real estate		114		7			—			—		121
Commercial and industrial		11		(1	)		—			—		10
Consumer and other:
Loans on deposits		14		(1	)		—			—		13
Home equity		28		3			—			—		31
Automobile		—		—			—			—		—
Unsecured		3		—			—			—		3
Unallocated		200		—			—			—		200
Totals	$	1,473	$	343		$	(274	)	$	26	$	1,568

66

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE C - LOANS (continued)

June 30, 2014:

(in thousands)	Beginning balance		Provision for loan losses			Loans charged off			Recoveries		Ending balance
Residential real estate:
One- to four-family	$	871	$	546		$	(467	)	$	49	$	999
Multi-family		63		11			—			—		74
Construction		8		3			—			—		11
Land		12		(2	)		—			—		10
Farm		6		3			—			—		9
Nonresidential real estate		94		20			—			—		114
Commercial and industrial		13		(2	)		—			—		11
Consumer and other:
Loans on deposits		12		2			—			—		14
Home equity		25		3			—			—		28
Automobile		—		—			—			—		—
Unsecured		6		(4	)		—			1		3
Unallocated		200		—			—			—		200
Totals	$	1,310	$	580		$	(467	)	$	50	$	1,473

Purchased Loans:

The Company purchased loans during the fiscal year ended June 30, 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 credit quality component of $616,000 and $782,000, at June 30, 2015 and 2014, respectively, is as follows:

(in thousands)	2015		2014
Residential real estate:
One- to four-family	$	2,565	$	2,735
Land		381		444
Nonresidential real estate		526		529
Commercial non-mortgage loans		—		68
Outstanding balance	$	3,472	$	3,776

67

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE C - LOANS (continued)

Accretable yield, or income expected to be collected, for the years ended June 30 was as follows:

(in thousands)	2015			2014
Balance at beginning of year	$	1,478		$	1,294
Accretion of income		(457	)		(155	)
Reclassifications from nonaccretable difference		—			339
Disposals		—			—
Balance at end of year	$	1,021		$	1,478

For those purchased loans disclosed above, the Company made no increase in allowance for loan losses for the years ended June 30, 2015 or 2014, nor were any allowance for loan losses reversed during those years.

NOTE D – REAL ESTATE OWNED

Activity in real estate owned for the years ended June 30 was as follows:

(in thousands)	2015			2014
Balance at beginning of year	$	1,846		$	1,163
Loans transferred to real estate owned		2,065			1,491
Capitalized expenditures		57			—
Valuation adjustments		(87	)		(101	)
Disposals		(2,288	)		(707	)
Balance at end of year	$	1,593		$	1,846

68

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE E - PREMISES AND EQUIPMENT

Premises and equipment at June 30 are comprised of the following:

(in thousands)	2015		2014
Land	$	1,693	$	1,493
Buildings and improvements		7,104		6,491
Furniture and equipment		2,219		2,159
Automobiles		64		64
		11,080		10,207
Less: accumulated depreciation		5,845		5,578
Balance at end of year	$	5,235	$	4,629

NOTE F - DEPOSITS

Deposits consist of the following major classifications at June 30:

(in thousands)	2015		2014
Non-interest bearing checking accounts	$	4,073	$	3,786
Checking accounts		14,904		13,364
Savings accounts		51,371		46,277
Money market demand deposits		13,255		13,010
Total demand, transaction and passbook deposits		83,603		76,437
Certificates of deposit:
Original maturities of:
Less than 12 months		75,856		92,271
12 months to 36 months		35,616		38,705
More than 36 months		4,626		5,729
Total certificates of deposit		116,098		136,705
Total deposits	$	199,701	$	213,142

At June 30, 2015 and 2014, the Banks had certificate of deposit accounts with balances equal to or in excess of $250,000 totaling approximately $4.8 million and $5.2 million, respectively.

Maturities of outstanding certificates of deposit at June 30 are summarized as follows:

(in thousands)	2015
2016	$	75,856
2017		28,011
2018		7,605
2019		1,573
2020 and thereafter		3,053
	$	116,098

69

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE G - ADVANCES FROM THE FEDERAL HOME LOAN BANK

Advances from the Federal Home Loan Bank, collateralized at June 30, 2015 and 2014 by pledges of certain residential mortgage loans totaling $35.2 million and $22.7 million, respectively, and the Banks’ investment in Federal Home Loan Bank stock, are summarized as follows:

Maturing year ended June 30, 2015
(in thousands)
2016	$	13,923
2017		6,431
2018		2,328
2019		3,249
2020		189
2021		142
2022		107
2023-2032		266
	$	26,635

At June 30, 2015 interest rates for advances were fixed ranging from 0.15% to 6.95%, with a weighted-average interest rate of 1.04%.

Maturing year ended June 30, 2014
(in thousands)
2015	$	9,865
2016		623
2017		431
2018		2,328
2019		3,249
2020		189
2021		142
2022-2031		373
	$	17,200

At June 30, 2014 interest rates for advances were fixed ranging from 0.12% to 6.95%, with a weighted-average interest rate of 1.39%.

Each advance is payable at its maturity date, with a prepayment penalty for fixed rate advances. Based on collateral composed of first mortgage loans and the Company’s holdings of FHLB stock, the Company was eligible to borrow up to $99.5 million as of June 30, 2015.

At June 30, 2015, we had the ability to borrow a total $99.5 million from the FHLB, of which $26.6 million was outstanding. In addition, we have the ability to borrow from the Federal Reserve Bank Discount Window. At June 30, 2015, we had pledged collateral which would enable us to borrow up to $4.7 million.

70

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE H - FEDERAL INCOME TAXES

Federal income taxes on earnings differs from that computed at the statutory corporate tax rate for the years ended June 30, 2015 and 2014, as follows:

(in thousands)	2015			2014
Federal income taxes at the statutory rate	$	1,051		$	981
Increase (decrease) resulting primarily from:
Cash surrender value of life insurance		(31	)		(31	)
Other		1			2
	$	1,021		$	952

The composition of the Company’s net deferred tax liability at June 30 is as follows:

(in thousands)	2015			2014
Taxes (payable) refundable on temporary differences at estimated corporate tax rate:
Deferred tax assets:
General loan loss allowance	$	533		$	501
Deferred compensation and benefits		243			249
Charitable contributions		1			2
Fair value accounting adjustments on acquisition		604			887
Nonaccrued interest on loans		129			154
Other real estate owned adjustments		254			315
Other		15			2
Total deferred tax assets		1,779			2,110
Deferred tax liabilities:
Federal Home Loan Bank stock dividends		(1,337	)		(1,337	)
Deferred loan origination costs		(26	)		(21	)
Loan servicing rights		(29	)		(27	)
Fair value accounting adjustments on acquisition		(795	)		(795	)
Unrealized gain on investments		(19	)		(35	)
Depreciation		(62	)		(56	)
Other		—			(49	)
Total deferred tax liabilities		(2,268	)		(2,320	)
Net deferred tax liability	$	(489	)	$	(210	)

71

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE H – FEDERAL INCOME TAXES (continued)

Prior to 1997, the Banks were allowed a special bad debt deduction, generally limited to 8% of otherwise taxable income, and subject to certain limitations based on aggregate loans and deposit account balances at the end of the year. If the amounts that qualified as deductions for federal income taxes are later used for purposes other than bad debt losses, including distributions in excess of accumulated earnings and profits, such distributions will be subject to federal income taxes at the then current corporate income tax rate. Retained earnings at June 30, 2015, include approximately $5.2 million for which federal income taxes have not been provided. The amount of unrecognized deferred tax liability relating to the cumulative bad debt deduction was approximately $1.8 million at June 30, 2015.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(in thousands)	2015		2014
Balance at beginning of year	$	80	$	80
Additions/(reductions) based on tax positions for the current year		—		—
Balance at end of year	$	80	$	80

Cash settlements occurred during the period July 1, 2012, through June 30, 2013. Because of uncertainty regarding proper inclusion or exclusion of income from bank-owned life insurance (“BOLI”) in the earnings and profits calculation, the Company amended its June 30, 2009, federal income tax return to report reduced tax liability of $80,000 and established the corresponding reserve. Its unrecognized benefits are expected to change in the next twelve months.

NOTE I - LOAN COMMITMENTS

The Banks are a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of their customers, including commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amount recognized in the consolidated statements of financial condition. The contract or notional amounts of the commitments reflect the extent of the Banks’ involvement in such financial instruments.

The Banks’ exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. The Banks use the same credit policies in making commitments and conditional obligations as those utilized for on-balance-sheet instruments.

72

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE I - LOAN COMMITMENTS (continued)

At June 30, 2015 and 2014, the Banks had the following outstanding loan commitments:

	2015				2014
(in thousands)	Fixed		Variable		Fixed		Variable
Unused commitment:
Revolving, open-end lines secured by real estate	$	—	$	8,153	$	—	$	8,543
Commitments to fund real estate construction loans		715		2,974		779		1,426
Other unused commitment:
Commercial and industrial loans		1,299		—		1,379		—
Other		631		415		225		1,034
Letters of credit		—		—		—		—

Commitments to make loans are generally made for periods of 60 days or less. The fixed rate loan commitments at June 30, 2015 totaled $1.0 million and had interest rates ranging from 3.50% to 5.18% and maturities ranging from 10 years to 30 years. The fixed rate loan commitments at June 30, 2014 totaled $336,000 and had interest rates ranging from 4.81% to 5.75% with maturities ranging from 10 years to 30 years.

NOTE J – STOCKHOLDERS’ EQUITY AND REGULATORY CAPITAL

Dividend Restrictions – Dividends from the Banks are the primary source of funds for the Company. Banking regulations limit the amount of dividends that may be paid to the Company by the Banks without prior approval of the Office of the Controller of the Currency (the “OCC.”) Under these regulations the amount of dividends that may be paid in any calendar year is limited to the current year’s net profits, combined with the retained net profits of the preceding two years. At June 30, 2015, the Banks could, without prior approval, declare dividends of approximately $3.0 million.

Regulatory Capital Requirements The Banks are subject to minimum regulatory capital standards promulgated by the OCC. Failure to meet minimum capital requirements can initiate certain mandatory — and possibly additional discretionary — actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Banks must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Prompt corrective action regulations provide five classifications: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

73

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE J - REGULATORY CAPITAL (continued)

New Capital Rules – Effective January 1, 2015, the Company and the Banks became subject to the new capital regulations in accordance with Basel III. The new regulations establish higher minimum risk-based capital ratio requirements, a new common equity Tier 1 risk-based capital ratio and a new capital conversation buffer. The new regulations also include revisions to the definition of capital and changes in the risk-weighting of certain assets. For prompt corrective action, the new regulations establish definitions of “well capitalized” as a 6.5% common equity Tier 1 risk-based capital ratio, an 8.0% Tier 1 risk-based capital ratio, a 10.0% total risk-based capital ratio and a 5.0% Tier 1 leverage ratio. Additionally, a 2.5% capital conservation buffer will be effective under Basel III when effective and fully implemented in 2019.

To be categorized as “well-capitalized” the Banks must maintain minimum capital ratios as set forth in the following tables:

	As of June 30, 2015
											Minimum
											Requirement
						Minimum					To be “Well-
						Requirement					Capitalized” Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
						(Dollars in thousands)
Risk-based capital:
Common Equity Tier 1 capital ratio
Kentucky First Federal	$	52,768		31.9	%	$	7,443		4.5	%		N/A		N/A
First Federal of Hazard		16,478		43.8			1,694		4.5		$	2,447		6.5	%
First Federal of Frankfort		32,104		25.1			5,763		4.5			8,324		6.5
Tier 1 (core) capital ratio
Kentucky First Federal		52,768		31.9			9,923		6.0			N/A		N/A
First Federal of Hazard		16,478		43.8			2,259		6.0			3,012		8.0
First Federal of Frankfort		32,104		25.1			7,684		6.0			10,245		8.0
Total capital ratio
Kentucky First Federal		54,386		32.9			13,231		8.0			N/A		N/A
First Federal of Hazard		16,950		45.0			3,012		8.0			3,765		10.0
First Federal of Frankfort		33,101		25.9			10,245		8.0			12,806		10.0
Leverage capital:
Tier 1 leverage capital to average assets
Kentucky First Federal		52,768		18.7			11,312		4.0			N/A		N/A
First Federal of Hazard		16,478		21.8			3,023		4.0			3,779		5.0
First Federal of Frankfort		32,104		14.9			8,645		4.0			10,807		5.0

74

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE J - REGULATORY CAPITAL (continued)

	As of June 30, 2014
											To be “well-
											capitalized” under
						For capital					prompt corrective
	Actual					adequacy purposes					action provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
						(Dollars in thousands)
Tier 1 core capital
First Federal of Hazard	$	15,880		19.8	%	≥$	3,206		≥4.0	%	≥$	4,007		≥5.0	%
First Federal of Frankfort	$	31,647		14.8	%	≥$	9,154		≥4.0	%	≥$	11,443		≥5.0	%
Total risk-based capital
First Federal of Hazard	$	16,368		42.0	%	≥$	3,116		≥8.0	%	≥$	3,895		≥10.0	%
First Federal of Frankfort	$	32,531		26.4	%	≥$	9,845		≥8.0	%	≥$	12,306		≥10.0	%
Tier 1 risk-based capital
First Federal of Hazard	$	15,880		40.8	%	≥$	3,206		≥4.0	%	≥$	2,337		≥6.0	%
First Federal of Frankfort	$	31,647		25.7	%	≥$	9,154		≥4.0	%	≥$	7,384		≥6.0	%

As of June 30, 2015 and 2014, management believes that First Federal of Hazard and First Federal of Frankfort met all capital adequacy requirements to which the Banks were subject. There are no conditions or subsequent events that have occurred that managements believes have changed the Banks’ categories.

Regulations of the Board of Governors of the Federal Reserve System governing mutual holding companies require First Federal MHC to meet certain criteria before the company may waive the receipt by it of any common stock dividend declared by Kentucky First Federal Bancorp. During each of the fiscal years ended June 30, 2015 and 2014, and pursuant to the provisions allowed by the Board of Governors of the Federal Reserve System, First Federal MHC waived $1.9 million in dividends.

75

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE K - CONDENSED FINANCIAL STATEMENTS OF KENTUCKY FIRST FEDERAL BANCORP

The following condensed financial statements summarize the financial position of Kentucky First Federal Bancorp as of June 30, 2015 and 2014, and the results of its operations and its cash flows for the fiscal years ended June 30, 2015 and 2014.

KENTUCKY FIRST FEDERAL BANCORP

BALANCE SHEETS

June 30, 2015 and 2014

(In thousands)

	2015			2014
ASSETS
Interest-bearing deposits in First Federal of Hazard	$	572		$	869
Interest-bearing deposits in First Federal of Frankfort		985			1,133
Other interest-bearing deposits		15			13
Investment in First Federal of Hazard		17,795			17,384
Investment in Frankfort First		47,539			47,200
Prepaid expenses and other assets		580			639
Total assets	$	67,486		$	67,238
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and other liabilities	$	173		$	33
Total liabilities		173			33
Shareholders’ equity
Common stock		86			86
Additional paid-in capital		34,638			34,671
Retained earnings		34,711			34,027
Unearned employee stock ownership plan (ESOP)		(1,223	)		(1,410	)
Treasury shares at cost, 112,563 and 27,886 common shares at June 30, 2015 and 2014, respectively		(937	)		(239	)
Accumulated other comprehensive income		38			70
Total shareholders’ equity		67,313			67,205
Total liabilities and shareholders’ equity	$	67,486		$	67,238

76

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE K - CONDENSED FINANCIAL STATEMENTS OF KENTUCKY FIRST FEDERAL BANCORP (continued)

KENTUCKY FIRST FEDERAL BANCORP

STATEMENTS OF INCOME

Years ended June 30, 2015 and 2014

(Dollar amounts in thousands)

	2015			2014
Income
Interest income	$	99		$	110
Dividends from First Federal of Hazard		—			—
Equity in undistributed (excess distributed) earnings of First Federal of Hazard		354			417
Dividends from Frankfort First		1,612			1,795
Equity in undistributed earnings of Frankfort First		370			(116	)
Total income		2,435			2,206
Non-interest expenses		495			387
Earnings before income taxes		1,940			1,819
Federal income tax expense (benefit)		(129	)		(115	)
NET INCOME	$	2,069		$	1,934

KENTUCKY FIRST FEDERAL BANCORP

STATEMENTS OF CASH FLOWS

For Years ended June 30, 2015 and 2014

(Dollar amounts in thousands)

	2015			2014
Cash flows from operating activities:
Net earnings for the year	$	2,069		$	1,934
Adjustments to reconcile net earnings to net cash provided by operating activities:
Excess (deficit) distributions over earnings (undistributed earnings) from consolidated subsidiaries		(815	)		(332	)
Noncash compensation expense		187			187
Increase (decrease) in cash due to changes in:
Prepaid expenses and other assets		59			(104	)
Other liabilities		140			(7	)
Net cash provided by operating activities		1,640			1,678

77

KENTUCKY FIRST FEDERAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2015 and 2014

NOTE K - CONDENSED FINANCIAL STATEMENTS OF KENTUCKY FIRST FEDERAL BANCORP (continued)

KENTUCKY FIRST FEDERAL BANCORP

STATEMENTS OF CASH FLOWS (continued)

For Years ended June 30, 2015 and 2014

(Dollar Amounts in thousands)

	2015			2014
Cash flows from financing activities:
Dividends paid on common stock		(1,385	)		(1,511	)
Repurchase of treasury shares		(698	)		(42	)
Net cash used in financing activities		(2,083	)		(1,553	)
Net increase (decrease) in cash and cash equivalents		(443	)		125
Cash and cash equivalents at beginning of year		2,015			1,890
Cash and cash equivalents at end of year	$	1,572		$	2,015

78

Kentucky First Federal Bancorp would like to recognize our employees who work hard every day to maximize the value of your investment:

First Federal Savings Bank
Frankfort-Danville-Lancaster Lesa Asbery, Customer Service Manager	Nancy Long, Assistant Vice President/Customer Service Manager
Wick Asbury, Vice President/Head of Lending	Patty Luttrell, Compliance Assistant
Brenda Baldwin, Assistant Vice President/Chief Accountant	Kathy McBee, Branch Manager Tracey McCoun, Deposit Compliance Officer
James Baxter, Vice President/Lending Stan Betsworth, Vice President/Lending/	Katina Mickens, Customer Service Samantha Miller, Assistant Vice President/Loan
Head of Special Projects	Compliance and Loan Analysis
Phyllis Bowman, Loan Servicing	Kim Moore, Vice President/Deposit Operations
Lisa Brinley, Branch Manager Russell Brooks, Vice President/Chief Financial	Manager Carolyn Mulcahy, Accounting Assistant
Officer	Jeanie Murphy, Customer Service
Phyllis Bryant, Customer Service
Andrea Cline, Accounting	J. David Semones, Loan Processing
Becky Crowe, Customer Service	Cynthia Shank, Customer Service
Deryl Curtis, Loan Servicing
Betty Doolin, Customer Service	Martha Sowders, Customer Service
Carolyn Eades, Receptionist Diana Eads, Customer Service Supervisor	Jenny Stump, Loan Processing Virginia Stump, Vice President/Lancaster Branch
Tiffaney Elliott, Accounting/Human Resources Jamey Ensley, Information Technology Operations	Manager Yvonne Thornberry, Assistant Vice
Debra Freeman, Customer Service Manager/Training	President/Head of Loan Processing & Servicing
Coordinator	Mike Ware, Information Technology Manager
Matt Freire, Customer Service	Nancy Watts, Loan Processing
Stacey Greenawalt, Vice President/Lending	Jennifer Whalen, Loan Processing
Stan Harmon, Lending	Tiffany Williams, Customer Service
Karen Hatfield, Assistant Vice President/Customer
Service Manager Judy Hicks, Customer Service	First Federal Savings and Loan Association of Hazard
Lee Ann Hockensmith, Assistant Vice President/	Missy Kay Asher, Customer Service
Head of Credit Administration	Deborah C. Bersaglia, Vice President/Secretary
Barry Holder, Branch Manager Ronald Howard, Vice President/Lending	Holly Caudill, Vice President Jaime S. Coffey, Lending/Compliance Officer
Brittany Hulette, Lending Compliance and Loan	Kaye Craft, Vice President/Accounting
Analysis Clay Hulette, Frankfort Area President	Sandra C. Craft, Vice President/Lending Carlen Dixon, Information Technology/Lending
Teresa Hulette, Executive Vice President	Lou Ella Farler, Chief Executive Officer
Tammy Jeffries, Customer Service	Margaret P. Pelley, Vice President/Cashier
Don Jennings, Chief Executive Officer	Lauren Riley, Collection Manager/Customer
Kathy Johnica, Vice President/ Internal Audit	Service
Coordinator	Eliza Stacy, Customer Service
Bill Johnson, Danville Area President	Peggy H. Steele, Assistant Vice President/
Janet Lewis, Customer Service

79

Kentucky First Federal Bancorp Board of Directors:

Stephen G. Barker, Attorney and Executive Vice President and General Counsel to Kentucky River Properties, LLC

Walter G. Ecton, Jr., Attorney and principal of Ecton, Murphy and Shannon, PLLC

C. Michael Davenport, President/CEO of C. Michael Davenport, Inc.

William D. Gorman, Jr., former President and CEO of Hazard Insurance Agency

David R. Harrod, CPA, principal of Harrod and Associates, PSC

W. Banks Hudson, Retired Attorney

William H. Johnson, Danville/Lancaster area President, First Federal Savings Bank of Frankfort

Don D. Jennings, President, Kentucky First Federal Bancorp

Tony D. Whitaker, Chairman, Kentucky First Federal Bancorp

First Federal Savings and Loan Association of Hazard Board of Directors: 

Stephen G. Barker	Walter G. Ecton, Jr.	William D. Gorman, Jr.
Lou Ella Farler		Tony D. Whitaker, Chairman

First Federal Savings Bank Board of Directors:

Russell M. Brooks	Don D. Jennings, Chairman	Herman D. Regan, Jr.,
C. Michael Davenport	William H. Johnson	Director Emeritus
Danny A. Garland	William C. Jennings, Frankfort	Virginia R.S. Stump
J. Mark Goggans	Committee Chair	Charles A. Cotton, III
David R. Harrod	William M. Johnson	Director Emeritus
R. Clay Hulette	Yvonne Y. Morley
W. Banks Hudson, Danville	Jerry M. Purcell
Committee Chair

Special Counsel	Kilpatrick, Townsend, and Stockton  LLP
	Suite 900
	607 14th Street NW
	Washington, DC  20005-2018
Transfer Agent and	American Stock Transfer & Trust Company, LLC
Registrar	6201 15th Avenue
	Brooklyn, NY 11219
	(718) 921-8124

The Annual Meeting of Shareholders will be held on November 12, 2015 at 3:30 p.m. at the First

Federal Center on the campus of Hazard Community and Technical College located at

One Community College Drive in Hazard, KY.

Shareholder Inquiries and Availability of 10-K Reports: A COPY OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JUNE 30, 2015, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO SHAREHOLDERS AS OF THE RECORD DATE FOR THE NOVEMBER 12, 2015, ANNUAL MEETING, UPON WRITTEN REQUEST TO

Investor Relations:	Don Jennings	djennings@ffsbfrankfort.com
	Clay Hulette	chulette@ffsbfrankfort.com
	(502) 223-1638  or  1-888-818-3372
	216 W Main St
	PO Box 535
	Frankfort, KY  40602

80

EX-21

EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

	State or Other
	Jurisdiction of	Percentage
	Incorporation	Ownership
Parent
Kentucky First Federal Bancorp	United States		N/A
Subsidiaries (1)
First Federal Savings and Loan Association of Hazard	United States		100	%
Frankfort First Bancorp, Inc.	Delaware		100	%
First Federal Savings Bank of Frankfort (2)	United States		100	%

(1) The assets, liabilities and operations of the subsidiaries are included in the consolidated financial statements contained in the Annual Report to Stockholders attached hereto as Exhibit 13.

(2) Wholly owned subsidiary of Frankfort First Bancorp, Inc., which is a wholly-owned subsidiary of Parent.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-130243 on Form S-8 of Kentucky First Federal Bancorp of our report dated September 28, 2015 appearing in this 2015 Annual Report on Form 10-K of Kentucky First Federal Bancorp .

/s/ Crowe Horwath LLP

Louisville, Kentucky

September 28, 2015

EX-31.1

EXHIBIT 31.1

Certification

I, Don D. Jennings, certify that:

1.            I have reviewed this Annual Report on Form 10-K of Kentucky First Federal Bancorp;

2.            Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.            Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.            The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-(15)(f) and 15d-15(f)) for the registrant and have:

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)          Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.            The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)          All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 28, 2015

/s/ Don D. Jennings

Don D. Jennings

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification

I, R. Clay Hulette, certify that:

1.            I have reviewed this Annual Report on Form 10-K of Kentucky First Federal Bancorp;

2.            Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.            Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.            The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-(15)(f) and 15d-15(f)) for the registrant and have:

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)          Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.            The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)          All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 28, 2015

/s/ R. Clay Hulette

R. Clay Hulette

Vice President, Chief Financial Officer and Treasurer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

The undersigned executive officers of Kentucky First Federal Bancorp (the “Registrant”) hereby certify that this Annual Report on Form 10-K for the year ended June 30, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

By:	/s/ Don D. Jennings
	Name:	Don D. Jennings
	Title:	Chief Executive Officer
By:	/s/ R. Clay Hulette
	Name:	R. Clay Hulette
	Title:	Vice President, Chief Financial Officer and
		Treasurer

Date: September 28, 2015

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 6) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2013
Assets [Abstract]
Cash and cash equivalents, Carrying Value	$ 13,635	$ 11,511	$ 16,540
Available-for-sale securities, Carrying Value	159	247
Held-to-maturity securities, Carrying Value	6,423	9,018
Loans held for sale, Carrying Value	100	0
Loans receivable - net, Carrying Value	243,815	246,788
Federal Home Loan Bank stock, Carrying Value	6,482	6,482
Accrued interest receivable, Carrying Value	725	891
Cash and Cash Equivalents, Fair Value	13,635	11,511
Available For Sale Securities Fair Value	159	247
Held-To-Maturity Securities, Fair Value	6,534	9,195
Loans Held-for-sale, Fair Value	101	0
Loans receivable - net, Fair Value	248,265	253,780
Accrued interest receivable, Fair Value	725	891
Financial liabilities
Deposits, Carrying Value	199,701	213,142
Federal Home Loan Bank advances, Carrying Value	26,635	17,200
Advances by borrowers for taxes and insurance, Carrying Value	699	616
Accrued interest payable, Carrying Value	32	32
Deposits, Fair Value	199,907	213,244
Federal Home Loan Bank advances, Fair Value	27,265	18,303
Advances by borrowers for taxes and insurance, Fair Value	699	616
Accrued interest payable, Fair Value	32	32
Fair Value, Inputs, Level 1 [Member]
Assets [Abstract]
Available-for-sale securities, Carrying Value	0	0
Cash and Cash Equivalents, Fair Value	13,635	11,511
Financial liabilities
Deposits, Fair Value	83,603	88,854
Fair Value, Inputs, Level 2 [Member]
Assets [Abstract]
Available-for-sale securities, Carrying Value	159	247
Available For Sale Securities Fair Value	159	247
Held-To-Maturity Securities, Fair Value	6,534	9,195
Loans Held-for-sale, Fair Value	101	0
Accrued interest receivable, Fair Value	27	891
Financial liabilities
Deposits, Fair Value	116,304	124,390
Federal Home Loan Bank advances, Fair Value	27,265	18,303
Advances by borrowers for taxes and insurance, Fair Value	699	616
Accrued interest payable, Fair Value	32	32
Fair Value, Inputs, Level 3 [Member]
Assets [Abstract]
Available-for-sale securities, Carrying Value	0	0
Loans receivable - net, Fair Value	248,265	$ 253,780
Accrued interest receivable, Fair Value	$ 698

XML

LOANS (Details 9) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Financing Receivable, Recorded Investment [Line Items]
Outstanding balance	$ 3,472	$ 3,776
Residential Real Estate One To Four Family [Member]
Financing Receivable, Recorded Investment [Line Items]
Outstanding balance	2,565	2,735
Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Outstanding balance	381	444
Non residential real estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Outstanding balance	526	529
Commercial Non-mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Outstanding balance	$ 0	$ 68

XML

LOANS (Details 3) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Financing Receivable, Modifications [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual	$ 4,767	$ 6,227
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	1,745	3,513
Residential Real Estate One To Four Family [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual	4,331	5,767
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	1,745	3,513
Non residential real estate and land [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual	410	384
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	0	0
Consumer [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual	26	29
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	0	0
Commercial and industrial [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual	0	47
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	$ 0	$ 0

XML

STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Kentucky First Federal [Member]
Tier 1 risk-based capital, Common Equity Actual Amount	$ 52,768
Tier 1 risk-based capital, Common Equity Actual Ratio	31.90%
Tier 1 risk-based capital, Common Equity for capital adequacy purposes Amount	$ 7,443
Tier 1 risk-based capital, Common Equity For capital adequacy purposes Ratio	4.50%
Total risk-based capital, Common Equity To be Well capitalized under prompt corrective action provisions Amount	$ 0
Total risk-based capital, Common Equity To be Well capitalized under prompt corrective action provisions Ratio	0.00%
Tier 1 core capital, Actual Amount	$ 52,768
Tier 1 core capital, Actual Ratio	31.90%
Tier 1 core capital, For capital adequacy purposes Amount	$ 9,923
Tier 1 core capital, For capital adequacy purposes Ratio	6.00%
Tier 1 core capital, To be Well capitalized under prompt corrective action provisions Amount	$ 0
Tier 1 core capital, To be Well capitalized under prompt corrective action provisions Ratio	0.00%
Total risk-based capital, Actual Amount	$ 54,386
Total risk-based capital, Actual Ratio	32.90%
Total risk-based capital, For capital adequacy purposes Amount	$ 13,231
Total risk-based capital, For capital adequacy purposes Ratio	8.00%
Total risk-based capital, To be Well capitalized under prompt corrective action provisions Amount	$ 0
Total risk-based capital, To be Well capitalized under prompt corrective action provisions Ratio	0.00%
Tier 1 risk-based capital, Actual Amount	$ 52,768
Tier 1 risk-based capital, Actual Ratio	18.70%
Tier 1 risk-based capital, For capital adequacy purposes Amount	$ 11,312
Tier 1 risk-based capital, For capital adequacy purposes Ratio	4.00%
Tier 1 risk-based capital, To be Well capitalized under prompt corrective action provisions Amount	$ 0
Tier 1 risk-based capital, To be Well capitalized under prompt corrective action provisions Ratio	0.00%
First Federal of Hazard [Member]
Tier 1 risk-based capital, Common Equity Actual Amount	$ 16,478
Tier 1 risk-based capital, Common Equity Actual Ratio	43.80%
Tier 1 risk-based capital, Common Equity for capital adequacy purposes Amount	$ 1,694
Tier 1 risk-based capital, Common Equity For capital adequacy purposes Ratio	4.50%
Total risk-based capital, Common Equity To be Well capitalized under prompt corrective action provisions Amount	$ 2,447
Total risk-based capital, Common Equity To be Well capitalized under prompt corrective action provisions Ratio	6.50%
Tier 1 core capital, Actual Amount	$ 16,478	$ 15,880
Tier 1 core capital, Actual Ratio	43.80%	19.80%
Tier 1 core capital, For capital adequacy purposes Amount	$ 2,259	$ 3,206
Tier 1 core capital, For capital adequacy purposes Ratio	6.00%	4.00%
Tier 1 core capital, To be Well capitalized under prompt corrective action provisions Amount	$ 3,012	$ 4,007
Tier 1 core capital, To be Well capitalized under prompt corrective action provisions Ratio	8.00%	5.00%
Total risk-based capital, Actual Amount	$ 16,950	$ 16,368
Total risk-based capital, Actual Ratio	45.00%	42.00%
Total risk-based capital, For capital adequacy purposes Amount	$ 3,012	$ 3,116
Total risk-based capital, For capital adequacy purposes Ratio	8.00%	8.00%
Total risk-based capital, To be Well capitalized under prompt corrective action provisions Amount	$ 3,765	$ 3,895
Total risk-based capital, To be Well capitalized under prompt corrective action provisions Ratio	10.00%	10.00%
Tier 1 risk-based capital, Actual Amount	$ 16,478	$ 15,880
Tier 1 risk-based capital, Actual Ratio	21.80%	40.80%
Tier 1 risk-based capital, For capital adequacy purposes Amount	$ 3,023	$ 3,206
Tier 1 risk-based capital, For capital adequacy purposes Ratio	4.00%	4.00%
Tier 1 risk-based capital, To be Well capitalized under prompt corrective action provisions Amount	$ 3,779	$ 2,337
Tier 1 risk-based capital, To be Well capitalized under prompt corrective action provisions Ratio	5.00%	6.00%
First Federal of Frankfort [Member]
Tier 1 risk-based capital, Common Equity Actual Amount	$ 32,104
Tier 1 risk-based capital, Common Equity Actual Ratio	25.10%
Tier 1 risk-based capital, Common Equity for capital adequacy purposes Amount	$ 5,763
Tier 1 risk-based capital, Common Equity For capital adequacy purposes Ratio	4.50%
Total risk-based capital, Common Equity To be Well capitalized under prompt corrective action provisions Amount	$ 8,324
Total risk-based capital, Common Equity To be Well capitalized under prompt corrective action provisions Ratio	6.50%
Tier 1 core capital, Actual Amount	$ 32,104	$ 31,647
Tier 1 core capital, Actual Ratio	25.10%	14.80%
Tier 1 core capital, For capital adequacy purposes Amount	$ 7,684	$ 9,154
Tier 1 core capital, For capital adequacy purposes Ratio	6.00%	4.00%
Tier 1 core capital, To be Well capitalized under prompt corrective action provisions Amount	$ 10,245	$ 11,443
Tier 1 core capital, To be Well capitalized under prompt corrective action provisions Ratio	8.00%	5.00%
Total risk-based capital, Actual Amount	$ 33,101	$ 32,531
Total risk-based capital, Actual Ratio	25.90%	26.40%
Total risk-based capital, For capital adequacy purposes Amount	$ 10,245	$ 9,845
Total risk-based capital, For capital adequacy purposes Ratio	8.00%	8.00%
Total risk-based capital, To be Well capitalized under prompt corrective action provisions Amount	$ 12,806	$ 12,306
Total risk-based capital, To be Well capitalized under prompt corrective action provisions Ratio	10.00%	10.00%
Tier 1 risk-based capital, Actual Amount	$ 32,104	$ 31,647
Tier 1 risk-based capital, Actual Ratio	14.90%	25.70%
Tier 1 risk-based capital, For capital adequacy purposes Amount	$ 8,645	$ 9,154
Tier 1 risk-based capital, For capital adequacy purposes Ratio	4.00%	4.00%
Tier 1 risk-based capital, To be Well capitalized under prompt corrective action provisions Amount	$ 10,807	$ 7,384
Tier 1 risk-based capital, To be Well capitalized under prompt corrective action provisions Ratio	5.00%	6.00%

XML

LOANS (Details 10) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period	$ 1,478	$ 1,294
Accretion of income	(457)	(155)
Reclassifications from nonaccretable difference	0	339
Disposals	0	0
Balance at end of period	$ 1,021	$ 1,478

XML

LOANS (Details 1) - USD ($) $ in Thousands		Jun. 30, 2015	Jun. 30, 2014		Jun. 30, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Individually evaluated		$ 2,506	$ 2,159
Loans individually evaluated for impairment, Acquired with deteriorated credit quality		3,472	3,776	[1]
Loans individually evaluated for impairment, Ending loans balance		5,978	5,935
Loans individually evaluated for impairment, Total allowance		0	14
Loans collectively evaluated for impairment, Total allowance		1,568	1,459
Allowance for loan losses		1,568	1,473		$ 1,310
Consumer and other Home Equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Individually evaluated		28
Loans individually evaluated for impairment, Acquired with deteriorated credit quality		0
Loans individually evaluated for impairment, Total allowance		0
Consumer And Other unsecured [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Individually evaluated		18
Loans individually evaluated for impairment, Acquired with deteriorated credit quality		0
Loans individually evaluated for impairment, Total allowance		0
Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		0	14
Loans collectively evaluated for impairment, Total allowance		1,368	1,259
Allowance for loan losses		1,368	1,273
Ending allowance attributed to loans [Member] | Consumer and other Home Equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		0
Ending allowance attributed to loans [Member] | Consumer And Other unsecured [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		0
Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Ending loans balance		5,978	5,935
Loans collectively evaluated for impairment, Total allowance		242,049	243,226
Allowance for loan losses		248,027	249,161
Ending loans balance [Member] | Consumer and other Home Equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		28
Ending loans balance [Member] | Consumer And Other unsecured [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		18
Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		0	0
Loans collectively evaluated for impairment, Total allowance		200	200
Allowance for loan losses		200	200
Unallocated Allowance [Member] | Consumer and other Home Equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		0
Unallocated Allowance [Member] | Consumer And Other unsecured [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		0
Residential Real Estate One To Four Family [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Individually evaluated		1,743	2,159
Loans individually evaluated for impairment, Acquired with deteriorated credit quality		2,565	2,735	[1]
Loans individually evaluated for impairment, Total allowance		0	14
Loans collectively evaluated for impairment, Total allowance		1,059	989
Allowance for loan losses		1,058	999		871
Residential Real Estate One To Four Family [Member] | Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		0	14
Loans collectively evaluated for impairment, Total allowance		1,059	989
Residential Real Estate One To Four Family [Member] | Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Ending loans balance		4,308	4,894
Loans collectively evaluated for impairment, Ending loans balance			191,487
Loans collectively evaluated for impairment, Total allowance		187,413
Residential Real Estate One To Four Family [Member] | Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		0	0
Loans collectively evaluated for impairment, Total allowance		0	0
Residential Real Estate Multi Family [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		94	73
Allowance for loan losses		93	74		63
Residential Real Estate Multi Family [Member] | Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		94	73
Residential Real Estate Multi Family [Member] | Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Ending loans balance			14,002
Loans collectively evaluated for impairment, Total allowance		16,621
Residential Real Estate Multi Family [Member] | Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		0	0
Residential Real Estate Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		21	11
Allowance for loan losses		21	11		8
Residential Real Estate Construction [Member] | Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		21	11
Residential Real Estate Construction [Member] | Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Ending loans balance			2,122
Loans collectively evaluated for impairment, Total allowance		3,780
Residential Real Estate Construction [Member] | Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		0	0
Land [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Individually evaluated		476
Loans individually evaluated for impairment, Acquired with deteriorated credit quality		381
Loans individually evaluated for impairment, Total allowance		0
Loans collectively evaluated for impairment, Total allowance		7	10
Allowance for loan losses		9	10		12
Land [Member] | Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		0
Loans collectively evaluated for impairment, Total allowance		7	10
Land [Member] | Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Ending loans balance		857
Loans collectively evaluated for impairment, Ending loans balance			1,918
Loans collectively evaluated for impairment, Total allowance		1,164
Land [Member] | Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		0
Loans collectively evaluated for impairment, Total allowance		0	0
Farm [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Individually evaluated			0
Loans individually evaluated for impairment, Acquired with deteriorated credit quality	[1]		444
Loans individually evaluated for impairment, Total allowance			0
Loans collectively evaluated for impairment, Total allowance		9	9
Allowance for loan losses		9	9		6
Farm [Member] | Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance			0
Loans collectively evaluated for impairment, Total allowance		9	9
Farm [Member] | Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Ending loans balance			444
Loans collectively evaluated for impairment, Ending loans balance			1,644
Loans collectively evaluated for impairment, Total allowance		1,567
Farm [Member] | Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance			0
Loans collectively evaluated for impairment, Total allowance		0	0
Non residential real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Individually evaluated		241	0
Loans individually evaluated for impairment, Acquired with deteriorated credit quality		526	529	[1]
Loans individually evaluated for impairment, Total allowance		0	0
Loans collectively evaluated for impairment, Total allowance		121	112
Non residential real estate [Member] | Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		0	0
Loans collectively evaluated for impairment, Total allowance		121	112
Non residential real estate [Member] | Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Ending loans balance		767	529
Loans collectively evaluated for impairment, Ending loans balance			21,416
Loans collectively evaluated for impairment, Total allowance		21,351
Non residential real estate [Member] | Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance		0	0
Loans collectively evaluated for impairment, Total allowance		0	0
Commercial and industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Individually evaluated			0
Loans individually evaluated for impairment, Acquired with deteriorated credit quality	[1]		68
Loans individually evaluated for impairment, Total allowance			0
Loans collectively evaluated for impairment, Total allowance		10	11
Allowance for loan losses		10	11		13
Commercial and industrial [Member] | Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance			0
Loans collectively evaluated for impairment, Total allowance		10	11
Commercial and industrial [Member] | Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Ending loans balance			68
Loans collectively evaluated for impairment, Ending loans balance			2,012
Loans collectively evaluated for impairment, Total allowance		1,782
Commercial and industrial [Member] | Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for impairment, Total allowance			0
Loans collectively evaluated for impairment, Total allowance		0	0
Loans on deposits [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		13	13
Allowance for loan losses		13	14		12
Loans on deposits [Member] | Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		13	13
Loans on deposits [Member] | Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Ending loans balance			2,564
Loans collectively evaluated for impairment, Total allowance		2,262
Loans on deposits [Member] | Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		0	0
Home equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		31	28
Allowance for loan losses		31	28		25
Home equity [Member] | Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		31	28
Home equity [Member] | Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Ending loans balance			5,359
Loans collectively evaluated for impairment, Total allowance		5,449
Home equity [Member] | Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		0	0
Unsecured [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		3	3
Allowance for loan losses		3	3		6
Unsecured [Member] | Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		3	3
Unsecured [Member] | Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Ending loans balance			638
Loans collectively evaluated for impairment, Total allowance		587
Unsecured [Member] | Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		0	0
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		200	200
Allowance for loan losses		200	200		200
Unallocated [Member] | Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		0	0
Unallocated [Member] | Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Ending loans balance			0
Loans collectively evaluated for impairment, Total allowance		0
Unallocated [Member] | Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		200	200
Automobile [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		0	0
Allowance for loan losses		0	0		$ 0
Automobile [Member] | Ending allowance attributed to loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		0	0
Automobile [Member] | Ending loans balance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Ending loans balance			64
Loans collectively evaluated for impairment, Total allowance		73
Automobile [Member] | Unallocated Allowance [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment, Total allowance		$ 0	$ 0

[1] These loans were evaluated at acquisition date at their estimated fair value and there has been no subsequent deterioration since acquisition.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Allocated shares	132,058	116,028
Shares committed to be released	9,338	9,338
Unearned shares	122,311	140,987
Total ESOP shares	263,707	266,353
Fair value of unearned shares at End of period (dollars in thousands)	$ 1,025	$ 1,212

XML

CONDENSED FINANCIAL STATEMENTS OF KENTUCKY FIRST FEDERAL BANCORP (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Interest income
Interest income	$ 11,996	$ 12,681
Total income	12,389	13,150
Non-interest expenses	8,042	8,410
Earnings before income taxes	3,090	2,886
Federal income tax expense (benefit)	1,021	952
NET INCOME	2,069	1,934
Parent Company [Member]
Interest income
Interest income	99	110
Total income	2,435	2,206
Non-interest expenses	495	387
Earnings before income taxes	1,940	1,819
Federal income tax expense (benefit)	(129)	(115)
NET INCOME	2,069	1,934
First Federal of Hazard [Member] | Parent Company [Member]
Interest income
Dividends	0	0
Equity in undistributed earnings	354	417
First Federal of Frankfort [Member] | Parent Company [Member]
Interest income
Dividends	1,612	1,795
Equity in undistributed earnings	$ 370	$ (116)

XML

REAL ESTATE OWNED (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Rea Estate Owned [Line Items]
Balance at beginning of year	$ 1,846	$ 1,163
Loans transferred to real estate owned	2,065	1,491
Capitalized expenditures	57	0
Valuation adjustments	(87)	(101)
Disposals	(2,288)	(707)
Balance at end of year	$ 1,593	$ 1,846

XML

STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL (Details Textual) $ in Millions	12 Months Ended
	Jun. 30, 2015 USD ($)
Dividends Waived	$ 1.9
Dividends Payable	$ 3.0
2019 [Member]
Percentage of Capital Conservation	2.50%
New Capital Rules [Member]
Tier One Leverage Capital to Average Assets	5.00%
Tier One Risk Based Capital to Risk Weighted Assets	8.00%
Capital to Risk Weighted Assets	10.00%
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	6.50%

XML

REAL ESTATE OWNED (Tables)

12 Months Ended

Jun. 30, 2015

Real Estate [Abstract]

Other Real Estate, Roll Forward [Table Text Block]

Activity in real estate owned for the years ended June 30 was as follows:

(in thousands)	2015		2014
Balance at beginning of year	$	1,846	$	1,163
Loans transferred to real estate owned		2,065		1,491
Capitalized expenditures		57		—
Valuation adjustments		(87)		(101)
Disposals		(2,288)		(707)
Balance at end of year	$	1,593	$	1,846

XML

LOANS (Details 5) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	$ 9,549	$ 15,208
Loans Receivable, Recorded Investment, Loans Not Past Due	238,478	233,953
Loans Receivable, Recorded Investment, Total	248,027	249,161
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	3,901	9,941
Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	5,648	5,267
Residential Real Estate One To Four Family [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	8,362	13,541
Loans Receivable, Recorded Investment, Loans Not Past Due	183,359	182,840
Loans Receivable, Recorded Investment, Total	191,721	193,381
Residential Real Estate One To Four Family [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	3,233	9,060
Residential Real Estate One To Four Family [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	5,129	4,481
Residential Real Estate Multi Family [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Loans Receivable, Recorded Investment, Loans Not Past Due	16,621	14,002
Loans Receivable, Recorded Investment, Total	16,621	14,002
Residential Real Estate Multi Family [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Residential Real Estate Multi Family [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Residential Real Estate Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	343
Loans Receivable, Recorded Investment, Loans Not Past Due	3,780	1,779
Loans Receivable, Recorded Investment, Total	3,780	2,122
Residential Real Estate Construction [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Residential Real Estate Construction [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	343
Land [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	606	364
Loans Receivable, Recorded Investment, Loans Not Past Due	1,415	1,998
Loans Receivable, Recorded Investment, Total	2,021	2,362
Land [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	262	364
Land [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	344	0
Farm [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Loans Receivable, Recorded Investment, Loans Not Past Due	1,567	1,644
Loans Receivable, Recorded Investment, Total	1,567	1,644
Farm [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Farm [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Non residential real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	530	771
Loans Receivable, Recorded Investment, Loans Not Past Due	21,588	21,174
Loans Receivable, Recorded Investment, Total	22,118	21,945
Non residential real estate [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	388	396
Non residential real estate [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	142	375
Commercial and industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	88
Loans Receivable, Recorded Investment, Loans Not Past Due	1,782	1,992
Loans Receivable, Recorded Investment, Total	1,782	2,080
Commercial and industrial [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	88
Commercial and industrial [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Loans on deposits [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Loans Receivable, Recorded Investment, Loans Not Past Due	2,262	2,564
Loans Receivable, Recorded Investment, Total	2,262	2,564
Loans on deposits [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Loans on deposits [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Home equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	20	33
Loans Receivable, Recorded Investment, Loans Not Past Due	5,457	5,326
Loans Receivable, Recorded Investment, Total	5,477	5,359
Home equity [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	33
Home equity [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	20	0
Unsecured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	31	68
Loans Receivable, Recorded Investment, Loans Not Past Due	574	570
Loans Receivable, Recorded Investment, Total	605	638
Unsecured [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	18	0
Unsecured [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	13	68
Automobile [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Loans Receivable, Recorded Investment, Loans Not Past Due	73	64
Loans Receivable, Recorded Investment, Total	73	64
Automobile [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	0	0
Automobile [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable, Recorded Investment, Total Past Due	$ 0	$ 0

XML

SECURITIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Available-for-sale Securities
Available-for-sale Securities, Amortized cost	$ 102	$ 142
Available-for-sale Securities, Gross unrealized/ unrecognized gains	57	105
Available-for-sale Securities, Gross unrealized/ unrecognized Losses	0	0
Available-for-sale Securities, Estimated fair value	159	247
Held-to-maturity Securities
Held-to-maturity Securities, Amortized cost	6,423	9,018
Held-to-maturity Securities, Gross unrealized/ unrecognized gains	114	183
Held-to-maturity Securities, Gross unrealized/ unrecognized losses	3	6
Held-to-maturity Securities, Estimated fair value	6,534	9,195
Agency mortgage-backed:residential [Member]
Available-for-sale Securities
Available-for-sale Securities, Amortized cost	94	134
Available-for-sale Securities, Gross unrealized/ unrecognized gains	2	2
Available-for-sale Securities, Gross unrealized/ unrecognized Losses	0	0
Available-for-sale Securities, Estimated fair value	96	136
Held-to-maturity Securities
Held-to-maturity Securities, Amortized cost	2,821	3,792
Held-to-maturity Securities, Gross unrealized/ unrecognized gains	112	180
Held-to-maturity Securities, Gross unrealized/ unrecognized losses	2	1
Held-to-maturity Securities, Estimated fair value	2,931	3,971
FHLMC stock [Member]
Available-for-sale Securities
Available-for-sale Securities, Amortized cost	8	8
Available-for-sale Securities, Gross unrealized/ unrecognized gains	55	103
Available-for-sale Securities, Gross unrealized/ unrecognized Losses	0	0
Available-for-sale Securities, Estimated fair value	63	111
Agency bonds [Member]
Held-to-maturity Securities
Held-to-maturity Securities, Amortized cost	3,602	5,226
Held-to-maturity Securities, Gross unrealized/ unrecognized gains	2	3
Held-to-maturity Securities, Gross unrealized/ unrecognized losses	1	5
Held-to-maturity Securities, Estimated fair value	$ 3,603	$ 5,224

XML

CONDENSED FINANCIAL STATEMENTS OF KENTUCKY FIRST FEDERAL BANCORP (Details Textual) - shares	Jun. 30, 2015	Jun. 30, 2014
Treasury Stock, Shares	112,563	27,886
Parent Company [Member]
Treasury Stock, Shares	112,563	27,886

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	$ 159	$ 247
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	159	247
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	0	0
Impaired Loans [Member] | Residential Real Estate One To Four Family [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total		186
Impaired Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Residential Real Estate One To Four Family [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total		0
Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Residential Real Estate One To Four Family [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total		0
Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Residential Real Estate One To Four Family [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total		186
Other Real Estate Owned [Member] | Residential Real Estate One To Four Family [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	525	1,140
Other Real Estate Owned [Member] | Residential Real Estate Land [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	15	15
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 1 [Member] | Residential Real Estate One To Four Family [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	0	0
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 1 [Member] | Residential Real Estate Land [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	0	0
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 2 [Member] | Residential Real Estate One To Four Family [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	0	0
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 2 [Member] | Residential Real Estate Land [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	0	0
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | Residential Real Estate One To Four Family [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	525	1,140
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | Residential Real Estate Land [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	$ 15	$ 15

XML

LOANS (Details 7) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	$ 1,473	$ 1,310
Provision for losses on loans	343	580
Charge-offs, net	(248)	(417)
Allowances for loan and lease losses, Ending balance	$ 1,568	$ 1,473

XML

FEDERAL INCOME TAXES (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2015	Jun. 30, 1997
Income Tax Disclosure [Line Items]
Effective Income Tax Rate Reconciliation Deductions Bad Debt		8.00%
Retained Earnings Not Recognized Federal Income Taxes	$ 5,200,000
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Bad Debt Reserve for Tax Purposes of Qualified Lender	1,800,000
Taxes Payable	$ 80,000

XML

DEPOSITS (Details Textual) - USD ($) $ in Millions	Jun. 30, 2015	Jun. 30, 2014
Time Deposits, 250,000 or More	$ 4.8	$ 5.2

XML

LOANS (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Financing Receivable, Impaired [Line Items]
Impaired loans, Unpaid Principal Balance and Recorded Investment, With No Related Allowance		$ 5,735
Impaired loans, Unpaid Principal Balance and Recorded Investment	$ 5,978	5,935
Impaired loans, Allowance for Loan Losses Allocated, With No Related Allowance		0
Impaired loans, Allowance for Loan Losses Allocated	0	14
Impaired loans, Average Recorded Investment, With No Related Allowance		7,984
Impaired loans, Average Recorded Investment	5,301	8,190
Impaired loans, Interest Income Recognized, With No Related Allowance		7
Impaired loans, Interest Income Recognized	147	7
Impaired loans, Cash Basis Income Recognized, With No Related Allowance		7
Impaired loans, Cash Basis Income Recognized	147	7
Residential Real Estate One To Four Family [Member]
Financing Receivable, Impaired [Line Items]
Impaired loans, Unpaid Principal Balance and Recorded Investment, With No Related Allowance	4,308	4,694
Impaired loans, Unpaid Principal Balance and Recorded Investment, With An Allowance		200
Impaired loans, Allowance for Loan Losses Allocated, With No Related Allowance	0	0
Impaired loans, Allowance for Loan Losses Allocated, With An Allowance		14
Impaired loans, Average Recorded Investment, With No Related Allowance	4,075	6,887
Impaired loans, Average Recorded Investment, With An Allowance		206
Impaired loans, Interest Income Recognized, With No Related Allowance	84	7
Impaired loans, Interest Income Recognized, With An Allowance		0
Impaired loans, Cash Basis Income Recognized, With No Related Allowance	84	7
Impaired loans, Cash Basis Income Recognized, With An Allowance		0
Land [Member]
Financing Receivable, Impaired [Line Items]
Impaired loans, Unpaid Principal Balance and Recorded Investment, With No Related Allowance	857
Impaired loans, Allowance for Loan Losses Allocated, With No Related Allowance	0
Impaired loans, Average Recorded Investment, With No Related Allowance	554
Impaired loans, Interest Income Recognized, With No Related Allowance	31
Impaired loans, Cash Basis Income Recognized, With No Related Allowance	31
Commercial and industrial [Member]
Financing Receivable, Impaired [Line Items]
Impaired loans, Unpaid Principal Balance and Recorded Investment, With No Related Allowance	0	68
Impaired loans, Allowance for Loan Losses Allocated, With No Related Allowance	0	0
Impaired loans, Average Recorded Investment, With No Related Allowance	19	94
Impaired loans, Interest Income Recognized, With No Related Allowance	6	0
Impaired loans, Cash Basis Income Recognized, With No Related Allowance	6	0
Consumer and other Home Equity [Member]
Financing Receivable, Impaired [Line Items]
Impaired loans, Unpaid Principal Balance and Recorded Investment, With An Allowance	28
Impaired loans, Allowance for Loan Losses Allocated, With An Allowance	0
Impaired loans, Average Recorded Investment, With An Allowance	28
Impaired loans, Interest Income Recognized, With An Allowance	0
Impaired loans, Cash Basis Income Recognized, With An Allowance	0
Consumer and other Unsecured [Member]
Financing Receivable, Impaired [Line Items]
Impaired loans, Unpaid Principal Balance and Recorded Investment, With An Allowance	18
Impaired loans, Allowance for Loan Losses Allocated, With An Allowance	0
Impaired loans, Average Recorded Investment, With An Allowance	7
Impaired loans, Interest Income Recognized, With An Allowance	0
Impaired loans, Cash Basis Income Recognized, With An Allowance	0
Non Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Impaired loans, Unpaid Principal Balance and Recorded Investment, With No Related Allowance	767	529
Impaired loans, Allowance for Loan Losses Allocated, With No Related Allowance	0	0
Impaired loans, Average Recorded Investment, With No Related Allowance	618	538
Impaired loans, Interest Income Recognized, With No Related Allowance	26	0
Impaired loans, Cash Basis Income Recognized, With No Related Allowance	$ 26	0
Farm [Member]
Financing Receivable, Impaired [Line Items]
Impaired loans, Unpaid Principal Balance and Recorded Investment, With No Related Allowance		444
Impaired loans, Allowance for Loan Losses Allocated, With No Related Allowance		0
Impaired loans, Average Recorded Investment, With No Related Allowance		465
Impaired loans, Interest Income Recognized, With No Related Allowance		0
Impaired loans, Cash Basis Income Recognized, With No Related Allowance		$ 0

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net income	$ 2,069	$ 1,934
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	278	288
Accretion of purchased loan discount	(310)	(155)
Amortization of purchased loan premium	18	11
Amortization of discounts and premiums on investment securities, net	148	216
Amortization (accretion) of deferred loan origination costs (fees)	55	(18)
Accretion of premiums on Federal Home Loan Bank advances	0	(56)
Accretion of premiums on deposits	(212)	(414)
Net gain on sale of loans	(28)	(55)
Valuation adjustment of REO	87	101
Net loss (gain) on real estate owned	(186)	7
Deferred gain on sale of real estate owned	(21)	(10)
ESOP compensation expense	154	155
Earnings on bank-owned life insurance	(93)	(91)
Provision for loan losses	343	580
Origination of loans held for sale	(699)	(1,420)
Proceeds from loans held for sale	627	1,671
Increase (decrease) in cash, due to changes in:
Accrued interest receivable	166	28
Prepaid expenses and other assets	(22)	51
Accrued interest payable	0	(4)
Accounts payable and other liabilities	42	(5)
Federal income tax (benefit)
Current	305	(223)
Deferred	375	(104)
Net cash provided by operating activities	3,096	2,487
Cash flows from investing activities:
Purchase of investment securities held to maturity	(8,500)	(10,000)
Investment securities maturities, prepayments and calls:
Held to maturity	10,947	13,000
Available for sale	40	27
Loans originated for investment, net of principal collected	1,388	13,794
Proceeds from Federal Home Loan Bank stock repurchase	0	1,250
Proceeds from sale of real estate owned	1,831	700
Additions to premises and equipment, net	(884)	(309)
Net cash provided by investing activities	4,822	18,462
Cash flows from financing activities:
Net change in deposits	(13,229)	(17,425)
Payments by borrowers for taxes and insurance, net	83	54
Proceeds from Federal Home Loan Bank advances	23,800	10,000
Repayments on Federal Home Loan Bank advances	(14,365)	(17,054)
Treasury stock repurchases	(698)	(42)
Dividends paid on common stock	(1,385)	(1,511)
Net cash used in financing activities	(5,794)	(25,978)
Net increase (decrease) in cash and cash equivalents	2,124	(5,029)
Beginning cash and cash equivalents	11,511	16,540
Ending cash and cash equivalents	13,635	11,511
Supplemental disclosure of cash flow information:
Federal income taxes	330	1,275
Interest on deposits and borrowings	1,640	2,092
Supplemental disclosure of noncash investing activities:
Transfers from loans to real estate acquired through foreclosure	2,123	1,684
Loans disbursed upon sales of real estate acquired through foreclosure	$ 643	$ 198

XML

ADVANCES FROM THE FEDERAL HOME LOAN BANK (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Federal Home Loan Bank, Advances [Line Items]
2016	$ 13,923	$ 9,865
2017	6,431	623
2018	2,328	431
2019	3,249	2,328
2020	189	3,249
2021	142	189
2022	107	142
2023-2032	266	373
Advances from Federal Home Loan Banks	$ 26,635	$ 17,200

XML

SECURITIES (Details 1) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Held to maturity, Amortized Cost
Amortized Cost, Total	$ 6,423	$ 9,018
Held-to-maturity, Fair Value
Fair Value, Total	6,534	$ 9,195
US Government Agencies Short-term Debt Securities [Member]
Held to maturity, Amortized Cost
Amortized Cost, Within One Year	1,005
Amortized Cost, One to five Years	2,597
Amortized Cost, Total	3,602
Held-to-maturity, Fair Value
Fair Value, Within one year	1,005
Fair Value, One to five years	2,598
Fair Value, Total	$ 3,603

XML

FEDERAL INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

Federal income taxes on earnings differs from that computed at the statutory corporate tax rate for the years ended June 30, 2015 and 2014, as follows:

(in thousands)	2015		2014
Federal income taxes at the statutory rate	$	1,051	$	981
Increase (decrease) resulting primarily from:
Cash surrender value of life insurance		(31)		(31)
Other		1		2
	$	1,021	$	952

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The composition of the Company’s net deferred tax liability at June 30 is as follows:

(in thousands)	2015		2014
Taxes (payable) refundable on temporary differences at estimated corporate tax rate:
Deferred tax assets:
General loan loss allowance	$	533	$	501
Deferred compensation and benefits		243		249
Charitable contributions		1		2
Fair value accounting adjustments on acquisition		604		887
Nonaccrued interest on loans		129		154
Other real estate owned adjustments		254		315
Other		15		2
Total deferred tax assets		1,779		2,110
Deferred tax liabilities:
Federal Home Loan Bank stock dividends		(1,337)		(1,337)
Deferred loan origination costs		(26)		(21)
Loan servicing rights		(29)		(27)
Fair value accounting adjustments on acquisition		(795)		(795)
Unrealized gain on investments		(19)		(35)
Depreciation		(62)		(56)
Other		—		(49)
Total deferred tax liabilities		(2,268)		(2,320)
Net deferred tax liability	$	(489)	$	(210)

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(in thousands)	2015		2014
Balance at beginning of year	$	80	$	80
Additions/(reductions) based on tax positions for the current year		—		—
Balance at end of year	$	80	$	80

XML

ADVANCES FROM THE FEDERAL HOME LOAN BANK (Tables)

12 Months Ended

Jun. 30, 2015

Federal Home Loan Banks [Abstract]

Federal Home Loan Bank, Advances [Table Text Block]

Advances from the Federal Home Loan Bank, collateralized at June 30, 2015 and 2014 by pledges of certain residential mortgage loans totaling $35.2 million and $22.7 million, respectively, and the Banks’ investment in Federal Home Loan Bank stock, are summarized as follows:

Maturing year ended June 30, 2015
(in thousands)
2016	$	13,923
2017		6,431
2018		2,328
2019		3,249
2020		189
2021		142
2022		107
2023-2032		266
	$	26,635

At June 30, 2015 interest rates for advances were fixed ranging from 0.15% to 6.95%, with a weighted-average interest rate of 1.04%.

Maturing year ended June 30, 2014
(in thousands)
2015	$	9,865
2016		623
2017		431
2018		2,328
2019		3,249
2020		189
2021		142
2022-2031		373
	$	17,200

XML

LOANS (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Financing Receivable, Modifications [Line Items]
Certain Loans and Debt Securities Acquired in Transfer, Allowance for Credit Losses Due to Subsequent Impairment	$ 616,000	$ 782,000
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down	1,500,000
Financing Receivable, Net	3,500,000	3,800,000
Financing Receivable, Recorded Investment, Nonaccrual Status	4,767,000	6,227,000
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	1,745,000	3,513,000
Financing Receivable, Recorded Investment, Past Due	9,549,000	15,208,000
Loans Payable, Current, Total	486,000
Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Recorded Investment, Past Due	5,648,000	5,267,000
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Recorded Investment, Past Due	3,901,000	9,941,000
Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1,600,000	2,700,000
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	1,500,000	1,700,000
Residential Real Estate One To Four Family [Member]
Financing Receivable, Modifications [Line Items]
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	20,000	511,000
Financing Receivable, Recorded Investment, Nonaccrual Status	4,331,000	5,767,000
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	1,745,000	3,513,000
Financing Receivable, Recorded Investment, Past Due	8,362,000	13,541,000
Residential Real Estate One To Four Family [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Recorded Investment, Past Due	5,129,000	4,481,000
Residential Real Estate One To Four Family [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Recorded Investment, Past Due	3,233,000	9,060,000
Troubled Debt Restructuring [Member] | Financing Receivables 30 To 89 Days Past Due [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Recorded Investment, Past Due	666,000	978,000
Troubled Debt Restructuring [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Recorded Investment, Past Due	$ 1,000,000	$ 1,800,000

XML

SECURITIES (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Schedule Of Available For Sale Securities And Held To Maturity [Line Items]
Securities Held as Collateral, at Fair Value	$ 1,200,000	$ 2,700,000
Unrealized Gain (Loss) on Securities	3,000	6,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss	$ 2,200,000	$ 2,600,000

XML

LOAN COMMITMENTS (Tables)

12 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Unused Commitments [Table Text Block]

At June 30, 2015 and 2014, the Banks had the following outstanding loan commitments:

	2015				2014
(in thousands)	Fixed		Variable		Fixed		Variable
Unused commitment:
Revolving, open-end lines secured by real estate	$	—	$	8,153	$	—	$	8,543
Commitments to fund real estate construction loans		715		2,974		779		1,426
Other unused commitment:
Commercial and industrial loans		1,299		—		1,379		—
Other		631		415		225		1,034
Letters of credit		—		—		—		—

XML

STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL (Tables)

12 Months Ended

Jun. 30, 2015

Banking and Thrift [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

To be categorized as “well-capitalized” the Banks must maintain minimum capital ratios as set forth in the following tables:

	As of June 30, 2015
											Minimum
											Requirement
						Minimum					To be “Well-
						Requirement					Capitalized” Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
Risk-based capital:
Common Equity Tier 1 capital ratio
Kentucky First Federal	$	52,768		31.9	%	$	7,443		4.5	%		N/A		N/A
First Federal of Hazard		16,478		43.8			1,694		4.5		$	2,447		6.5	%
First Federal of Frankfort		32,104		25.1			5,763		4.5			8,324		6.5
Tier 1 (core) capital ratio
Kentucky First Federal		52,768		31.9			9,923		6.0			N/A		N/A
First Federal of Hazard		16,478		43.8			2,259		6.0			3,012		8.0
First Federal of Frankfort		32,104		25.1			7,684		6.0			10,245		8.0
Total capital ratio
Kentucky First Federal		54,386		32.9			13,231		8.0			N/A		N/A
First Federal of Hazard		16,950		45.0			3,012		8.0			3,765		10.0
First Federal of Frankfort		33,101		25.9			10,245		8.0			12,806		10.0
Leverage capital:
Tier 1 leverage capital to average assets
Kentucky First Federal		52,768		18.7			11,312		4.0			N/A		N/A
First Federal of Hazard		16,478		21.8			3,023		4.0			3,779		5.0
First Federal of Frankfort		32,104		14.9			8,645		4.0			10,807		5.0

	As of June 30, 2014
											To be “well-
											capitalized” under
						For capital					prompt corrective
	Actual					adequacy purposes					action provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
Tier 1 core capital
First Federal of Hazard	$	15,880		19.8	%	≥$	3,206		≥4.0	%	≥$	4,007		≥5.0	%
First Federal of Frankfort	$	31,647		14.8	%	≥$	9,154		≥4.0	%	≥$	11,443		≥5.0	%
Total risk-based capital
First Federal of Hazard	$	16,368		42.0	%	≥$	3,116		≥8.0	%	≥$	3,895		≥10.0	%
First Federal of Frankfort	$	32,531		26.4	%	≥$	9,845		≥8.0	%	≥$	12,306		≥10.0	%
Tier 1 risk-based capital
First Federal of Hazard	$	15,880		40.8	%	≥$	3,206		≥4.0	%	≥$	2,337		≥6.0	%
First Federal of Frankfort	$	31,647		25.7	%	≥$	9,154		≥4.0	%	≥$	7,384		≥6.0	%

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY [Parenthetical] - $ / shares shares in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Common Stock, Dividends, Per Share, Cash Paid	$ 0.40	$ 0.40
Treasury Stock, Shares, Acquired	84,677	5,000

XML

CONDENSED FINANCIAL STATEMENTS OF KENTUCKY FIRST FEDERAL BANCORP (Tables)

12 Months Ended

Jun. 30, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Balance Sheet [Table Text Block]

The following condensed financial statements summarize the financial position of Kentucky First Federal Bancorp as of June 30, 2015 and 2014, and the results of its operations and its cash flows for the fiscal years ended June 30, 2015 and 2014.

KENTUCKY FIRST FEDERAL BANCORP

BALANCE SHEETS

June 30, 2015 and 2014

(In thousands)

	2015		2014
ASSETS
Interest-bearing deposits in First Federal of Hazard	$	572	$	869
Interest-bearing deposits in First Federal of Frankfort		985		1,133
Other interest-bearing deposits		15		13
Investment in First Federal of Hazard		17,795		17,384
Investment in Frankfort First		47,539		47,200
Prepaid expenses and other assets		580		639
Total assets	$	67,486	$	67,238
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and other liabilities	$	173	$	33
Total liabilities		173		33
Shareholders’ equity
Common stock		86		86
Additional paid-in capital		34,638		34,671
Retained earnings		34,711		34,027
Unearned employee stock ownership plan (ESOP)		(1,223)		(1,410)
Treasury shares at cost, 112,563 and 27,886 common shares at June 30, 2015 and 2014, respectively		(937)		(239)
Accumulated other comprehensive income		38		70
Total shareholders’ equity		67,313		67,205
Total liabilities and shareholders’ equity	$	67,486	$	67,238

Condensed Income Statement [Table Text Block]

KENTUCKY FIRST FEDERAL BANCORP

STATEMENTS OF INCOME

Years ended June 30, 2015 and 2014

(Dollar amounts in thousands)

	2015		2014
Income
Interest income	$	99	$	110
Dividends from First Federal of Hazard		—		—
Equity in undistributed (excess distributed) earnings of First Federal of Hazard		354		417
Dividends from Frankfort First		1,612		1,795
Equity in undistributed earnings of Frankfort First		370		(116)
Total income		2,435		2,206
Non-interest expenses		495		387
Earnings before income taxes		1,940		1,819
Federal income tax expense (benefit)		(129)		(115)
NET INCOME	$	2,069	$	1,934

Condensed Cash Flow Statement [Table Text Block]

KENTUCKY FIRST FEDERAL BANCORP

STATEMENTS OF CASH FLOWS

For Years ended June 30, 2015 and 2014

(Dollar amounts in thousands)

	2015		2014
Cash flows from operating activities:
Net earnings for the year	$	2,069	$	1,934
Adjustments to reconcile net earnings to net cash provided by operating activities:
Excess (deficit) distributions over earnings (undistributed earnings) from consolidated subsidiaries		(815)		(332)
Noncash compensation expense		187		187
Increase (decrease) in cash due to changes in:
Prepaid expenses and other assets		59		(104)
Other liabilities		140		(7)
Net cash provided by operating activities		1,640		1,678

	2015		2014
Cash flows from financing activities:
Dividends paid on common stock		(1,385)		(1,511)
Repurchase of treasury shares		(698)		(42)
Net cash used in financing activities		(2,083)		(1,553)
Net increase (decrease) in cash and cash equivalents		(443)		125
Cash and cash equivalents at beginning of year		2,015		1,890
Cash and cash equivalents at end of year	$	1,572	$	2,015

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 7) - Management [Member] - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Related Party Transaction [Line Items]
Outstanding principal, beginning of year	$ 1,265	$ 1,246
Changes in composition of related parties	157	447
Principal disbursed during the year	146	0
Principal repaid and refinanced during the year	(175)	(428)
Outstanding principal, end of year	$ 1,393	$ 1,265

XML

LOANS (Details 8) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	$ 1,473	$ 1,310
Allowance for Loan and Lease Losses, Provision for loan losses	343	580
Allowance for Loan and Lease Losses, Loans charged off	(274)	(467)
Allowance for Loan and Lease Losses, Recoveries	26	50
Allowances for loan and lease losses, Ending balance	1,568	1,473
Residential Real Estate One To Four Family [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	999	871
Allowance for Loan and Lease Losses, Provision for loan losses	307	546
Allowance for Loan and Lease Losses, Loans charged off	(274)	(467)
Allowance for Loan and Lease Losses, Recoveries	26	49
Allowances for loan and lease losses, Ending balance	1,058	999
Residential Real Estate Multi Family [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	74	63
Allowance for Loan and Lease Losses, Provision for loan losses	19	11
Allowance for Loan and Lease Losses, Loans charged off	0	0
Allowance for Loan and Lease Losses, Recoveries	0	0
Allowances for loan and lease losses, Ending balance	93	74
Residential Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	11	8
Allowance for Loan and Lease Losses, Provision for loan losses	10	3
Allowance for Loan and Lease Losses, Loans charged off	0	0
Allowance for Loan and Lease Losses, Recoveries	0	0
Allowances for loan and lease losses, Ending balance	21	11
Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	10	12
Allowance for Loan and Lease Losses, Provision for loan losses	(1)	(2)
Allowance for Loan and Lease Losses, Loans charged off	0	0
Allowance for Loan and Lease Losses, Recoveries	0	0
Allowances for loan and lease losses, Ending balance	9	10
Non residential real estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	114	94
Allowance for Loan and Lease Losses, Provision for loan losses	7	20
Allowance for Loan and Lease Losses, Loans charged off	0	0
Allowance for Loan and Lease Losses, Recoveries	0	0
Allowances for loan and lease losses, Ending balance	121	114
Farm [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	9	6
Allowance for Loan and Lease Losses, Provision for loan losses	0	3
Allowance for Loan and Lease Losses, Loans charged off	0	0
Allowance for Loan and Lease Losses, Recoveries	0	0
Allowances for loan and lease losses, Ending balance	9	9
Loans on deposits [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	14	12
Allowance for Loan and Lease Losses, Provision for loan losses	(1)	2
Allowance for Loan and Lease Losses, Loans charged off	0	0
Allowance for Loan and Lease Losses, Recoveries	0	0
Allowances for loan and lease losses, Ending balance	13	14
Home equity [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	28	25
Allowance for Loan and Lease Losses, Provision for loan losses	3	3
Allowance for Loan and Lease Losses, Loans charged off	0	0
Allowance for Loan and Lease Losses, Recoveries	0	0
Allowances for loan and lease losses, Ending balance	31	28
Unsecured [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	3	6
Allowance for Loan and Lease Losses, Provision for loan losses	0	(4)
Allowance for Loan and Lease Losses, Loans charged off	0	0
Allowance for Loan and Lease Losses, Recoveries	0	1
Allowances for loan and lease losses, Ending balance	3	3
Unallocated [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	200	200
Allowance for Loan and Lease Losses, Provision for loan losses	0	0
Allowance for Loan and Lease Losses, Loans charged off	0	0
Allowance for Loan and Lease Losses, Recoveries	0	0
Allowances for loan and lease losses, Ending balance	200	200
Commercial and industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	11	13
Allowance for Loan and Lease Losses, Provision for loan losses	(1)	(2)
Allowance for Loan and Lease Losses, Loans charged off	0	0
Allowance for Loan and Lease Losses, Recoveries	0	0
Allowances for loan and lease losses, Ending balance	10	11
Automobile [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowances for loan and lease losses, Beginning balance	0	0
Allowance for Loan and Lease Losses, Provision for loan losses	0	0
Allowance for Loan and Lease Losses, Loans charged off	0	0
Allowance for Loan and Lease Losses, Recoveries	0	0
Allowances for loan and lease losses, Ending balance	$ 0	$ 0

XML

CONDENSED FINANCIAL STATEMENTS OF KENTUCKY FIRST FEDERAL BANCORP (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2013
ASSETS
Interest-bearing deposits	$ 9,771	$ 7,320
Prepaid expenses and other assets	653	631
Total assets	296,298	299,655
LIABILITIES AND SHAREHOLDERS’ EQUITY
Total liabilities	228,985	232,450
Shareholders’ equity
Common stock	86	86
Additional paid-in capital	34,638	34,671
Retained earnings	34,711	34,027
Unearned employee stock ownership plan (ESOP)	(1,223)	(1,410)
Treasury shares at cost, 112,563 and 27,886 common shares at June 30, 2015 and 2014, respectively	(937)	(239)
Accumulated other comprehensive income	38	70
Total shareholders’ equity	67,313	67,205	$ 66,622
Total liabilities and shareholders’ equity	296,298	299,655
Parent Company [Member]
ASSETS
Interest-bearing deposits	15	13
Prepaid expenses and other assets	580	639
Total assets	67,486	67,238
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and other liabilities	173	33
Total liabilities	173	33
Shareholders’ equity
Common stock	86	86
Additional paid-in capital	34,638	34,671
Retained earnings	34,711	34,027
Unearned employee stock ownership plan (ESOP)	(1,223)	(1,410)
Treasury shares at cost, 112,563 and 27,886 common shares at June 30, 2015 and 2014, respectively	(937)	(239)
Accumulated other comprehensive income	38	70
Total shareholders’ equity	67,313	67,205
Total liabilities and shareholders’ equity	67,486	67,238
Parent Company [Member] | First Federal of Hazard [Member]
ASSETS
Interest-bearing deposits	572	869
Investment	17,795	17,384
Parent Company [Member] | First Federal of Frankfort [Member]
ASSETS
Interest-bearing deposits	985	1,133
Investment	$ 47,539	$ 47,200

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
ASSETS
Cash and due from financial institutions	$ 3,864	$ 4,191
Interest-bearing demand deposits	9,771	7,320
Cash and cash equivalents	13,635	11,511
Securities available for sale	159	247
Securities held-to-maturity, at amortized cost- approximate fair value of $6,534 and $9,195 at June 30, 2015 and 2014, respectively	6,423	9,018
Loans held for sale	100	0
Loans, net of allowance of $1,568 and $1,473 at June 30, 2015 and 2014, respectively	243,815	246,788
Real estate owned, net	1,593	1,846
Premises and equipment, net	5,235	4,629
Federal Home Loan Bank stock, at cost	6,482	6,482
Accrued interest receivable	725	891
Bank-owned life insurance	2,971	2,878
Goodwill	14,507	14,507
Prepaid federal income taxes	0	227
Prepaid expenses and other assets	653	631
Total assets	296,298	299,655
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits	199,701	213,142
Federal Home Loan Bank advances	26,635	17,200
Advances by borrowers for taxes and insurance	699	616
Accrued interest payable	32	32
Accrued federal income taxes	78	0
Deferred federal income taxes	569	210
Deferred revenue	610	631
Other liabilities	661	619
Total liabilities	228,985	232,450
Commitments and contingencies	0	0
Shareholders’ equity
Preferred stock, 500,000 shares authorized, $.01 par value; no shares issued and outstanding	0	0
Common stock, 20,000,000 shares authorized, $.01 par value; 8,596,064 shares issued	86	86
Additional paid-in capital	34,638	34,671
Retained earnings	34,711	34,027
Unearned employee stock ownership plan (ESOP)	(1,223)	(1,410)
Treasury shares at cost, 112,563 and 27,886 common shares at June 30, 2015 and 2014, respectively	(937)	(239)
Accumulated other comprehensive income	38	70
Total shareholders’ equity	67,313	67,205
Total liabilities and shareholders’ equity	$ 296,298	$ 299,655

XML

LOANS (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2013
Financing Receivable, Recorded Investment [Line Items]
Construction	$ 3,780	$ 2,122
Land	2,021	2,362
Farm	1,567	1,644
Nonresidential real estate	22,118	21,945
Commercial and industrial	1,782	2,080
Consumer and other, Loans on deposits	2,262	2,564
Consumer and other, Home equity	5,477	5,359
Consumer and other, Automobile	73	64
Consumer and other, Unsecured	605	638
Loans Receivable, Recorded Investment	248,027	249,161
Undisbursed portion of loans in process	(2,753)	(952)
Deferred loan origination costs, net	109	52
Allowance for loan losses	(1,568)	(1,473)	$ (1,310)
Loans receivable - net, Carrying Value	243,815	246,788
Residential Real Estate One To Four Family [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	191,721	193,381
Allowance for loan losses	(1,058)	(999)	(871)
Residential Real Estate Multi Family [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	16,621	14,002
Allowance for loan losses	$ (93)	$ (74)	$ (63)

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Parenthetical] - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Tax portion of unrealized holding gains (losses) on securities designated as available for sale	$ (16)	$ 24

XML

DEPOSITS (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Schedule Of Deposit Liabilities [Line Items]
Non-interest bearing checking accounts	$ 4,073	$ 3,786
Checking accounts	14,904	13,364
Savings accounts	51,371	46,277
Money market demand deposits	13,255	13,010
Total demand, transaction and passbook deposits	83,603	76,437
Original maturities of:
Less than 12 months	75,856	92,271
12 months to 36 months	35,616	38,705
More than 36 months	4,626	5,729
Total certificates of deposit	116,098	136,705
Total deposits	$ 199,701	$ 213,142

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income allocated to common shareholders, basic and diluted	$ 2,069	$ 1,934
Basic
Weighted-average common shares outstanding	8,348,785	8,374,624
Diluted
Weighted-average common shares outstanding (diluted)	8,348,785	8,374,624

XML

FEDERAL INCOME TAXES (Details 1) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Deferred tax assets:
General loan loss allowance	$ 533	$ 501
Deferred compensation and benefits	243	249
Charitable contributions	1	2
Fair value accounting adjustments on acquisition	604	887
Nonaccrued interest on loans	129	154
Other real estate owned adjustments	254	315
Other	15	2
Total deferred tax assets	1,779	2,110
Deferred tax liabilities:
Federal Home Loan Bank stock dividends	(1,337)	(1,337)
Deferred loan origination costs	(26)	(21)
Loan servicing rights	(29)	(27)
Fair value accounting adjustments on acquisition	(795)	(795)
Unrealized gain on investments	(19)	(35)
Depreciation	(62)	(56)
Other	0	(49)
Total deferred tax liabilities	(2,268)	(2,320)
Net deferred tax liability	$ (489)	$ (210)

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Schedule of Costs of Retirement Plans [Table Text Block]

	For the fiscal year ended
	June 30,
	2015		2014
Allocated shares		132,058		116,028
Shares committed to be released		9,338		9,338
Unearned shares		122,311		140,987
Total ESOP shares		263,707		266,353
Fair value of unearned shares at End of period (dollars in thousands)	$	1,025	$	1,212

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

A summary of the status of the Company’s stock option plan as of June 30, 2015, and changes during the year then ended is presented below:

			Weighted-		Aggregate
			average		Intrinsic
			exercise		Value
	Shares		price		($000)
Outstanding at beginning of year		325,800	$	10.10
Granted		-		-
Exercised		-		-
Forfeited		-		-
Outstanding at end of year		325,800	$	10.10	$	-
Options exercisable at end of year		325,800	$	10.10	$	-

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The factors used in the basic and diluted earnings per share computations for the fiscal years ended June 30 follow:

(in thousands)	2015		2014
Net income allocated to common shareholders, basic and diluted	$	2,069	$	1,934

	2015		2014
Basic
Weighted-average common shares outstanding		8,348,785		8,374,624
Diluted
Weighted-average common shares outstanding (diluted)		8,348,785		8,374,624

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following  table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis at June 30, 2015 and 2014. The securities represented are only those classified as available-for sale.

			Fair Value Measurements Using
			Quotes Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
2015
Agency mortgage-backed: residential	$	96	$	—	$	96	$	—
FHLMC stock		63		—		63		—
	$	159	$	—	$	159	$	—
2014
Agency mortgage-backed: residential	$	136	$	—	$	136	$	—
FHLMC stock		111		—		111		—
	$	247	$	—	$	247	$	—

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

The following table presents the fair value measurements of assets and liabilities measured at fair value on a nonrecurring basis at June 30, 2015 and 2014.

			Fair Value Measurements Using
			Quotes Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
2015
Other real estate owned, net
One- to four-family	$	525		-		-	$	525
Land		15		-		-		15
2014
Impaired loans
One- to four-family	$	186	$	-	$	-	$	186
Other real estate owned, net
One- to four-family		1,140		-		-		1,140
Land		15		-		-		15

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block]

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, 2015 and 2014:

					Range
	Fair Value		Valuation	Unobservable	(Weighted
June 30, 2015	(in thousands)		Technique(s)	Input(s)	Average)
Foreclosed and repossessed assets:
1-4 family	$	525	Sales comparison approach	Adjustments for differences between comparable sales	1.5% to 11.7% (2.9%)
Land		15	Sales comparison approach	Adjustments for differences between comparable sales	20.2% to 38.9% (20.8%)

					Range
	Fair Value		Valuation	Unobservable	(Weighted
June 30, 2014	(in thousands)		Technique(s)	Input(s)	Average)
Impaired Loans:
Residential real estate
1-4 family	$	186	Sales comparison approach	Adjustments for differences between comparable sales	3.1% to 19.8% (4.3%)
Foreclosed and repossessed assets:
1-4 family	$	1,140	Sales comparison approach	Adjustments for differences between comparable sales	-37.1% to 30.2% (1.1%)
Land		15	Sales comparison approach	Adjustments for differences between comparable sales	20.2% to 38.9% (20.8%)

Fair Value, by Balance Sheet Grouping [Table Text Block]

Based on the foregoing methods and assumptions, the carrying value and fair value of the Company’s financial instruments at June 30, 2015 and June 30, 2014 are as follows:

			Fair Value Measurements at
(in thousands)			June 30, 2015 Using
	Carrying		Level 1		Level 2		Level 3		Total
	Value
Financial assets
Cash and cash equivalents	$	13,635	$	13,635					$	13,635
Available-for-sale securities		159			$	159				159
Held-to-maturity securities		6,423				6,534				6,534
Loans held for sale		100				101				101
Loans receivable - net		243,815					$	248,265		248,265
Federal Home Loan Bank stock		6,482								n/a
Accrued interest receivable		725				27		698		725
Financial liabilities
Deposits	$	199,701	$	83,603	$	116,304			$	199,907
Federal Home Loan Bank advances		26,635				27,265				27,265
Advances by borrowers for taxes and insurance		699				699				699
Accrued interest payable		32				32				32

The carrying amounts and estimated fair values of financial instruments at June 30, 2014, are as follows:

			Fair Value Measurements at
(in thousands)			June 30, 2014 Using
	Carrying		Level 1		Level 2		Level 3		Total
	Value
Financial assets
Cash and cash equivalents	$	11,511	$	11,511					$	11,511
Available-for-sale securities		247			$	247				247
Held-to-maturity securities		9,018				9,195				9,195
Loans held for sale		—				—				—
Loans receivable - net		246,788					$	253,780		253,780
Federal Home Loan Bank stock		6,482								n/a
Accrued interest receivable		891				891				891
Financial liabilities
Deposits	$	213,142	$	88,854	$	124,390			$	213,244
Federal Home Loan Bank advances		17,200				18,303				18,303
Advances by borrowers for taxes and insurance		616				616				616
Accrued interest payable		32				32				32

Schedule of Related Party Transactions [Table Text Block]

Loans outstanding to executive officers, directors, significant shareholders and their affiliates (related parties) at June 30, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Outstanding principal, beginning of year	$	1,265	$	1,246
Changes in composition of related parties		157		447
Principal disbursed during the year		146		—
Principal repaid and refinanced during the year		(175)		(428)
Outstanding principal, end of year	$	1,393	$	1,265

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	$ 159	$ 247
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	159	247
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	0	0
Federal Home Loan Mortgage Corporation Certificates and Obligations (FHLMC) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	63	111
Federal Home Loan Mortgage Corporation Certificates and Obligations (FHLMC) [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	0	0
Federal Home Loan Mortgage Corporation Certificates and Obligations (FHLMC) [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	63	111
Federal Home Loan Mortgage Corporation Certificates and Obligations (FHLMC) [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	0	0
Residential Mortgage Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	96	136
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	0	0
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	96	136
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Total	$ 0	$ 0

XML

LOANS (Tables)

12 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Schedule Of Classification Of Loans Receivable [Table Text Block]

The composition of the loan portfolio at June 30 was as follows:

(in thousands)	2015		2014
Residential real estate
One- to four-family	$	191,721	$	193,381
Multi-family		16,621		14,002
Construction		3,780		2,122
Land		2,021		2,362
Farm		1,567		1,644
Nonresidential real estate		22,118		21,945
Commercial and industrial		1,782		2,080
Consumer and other
Loans on deposits		2,262		2,564
Home equity		5,477		5,359
Automobile		73		64
Unsecured		605		638
		248,027		249,161
Undisbursed portion of loans in process		(2,753)		(952)
Deferred loan origination costs, net		109		52
Allowance for loan losses		(1,568)		(1,473)
	$	243,815	$	246,788

Schedule Of Impaired Loans Receivable Additional Information [Table Text Block]

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, 2015 and 2014. There were $3.5 million and $3.8 million in loans acquired with deteriorated credit quality at June 30, 2015 and 2014, respectively.

June 30, 2015:
			Loans
			acquired
			with				Ending
	Loans		deteriorated		Ending		allowance
	individually		credit		loans		attributed to		Unallocated		Total
(in thousands)	evaluated		quality		balance		loans		allowance		allowance
Loans individually evaluated for impairment:
Residential real estate:
One- to four-family	$	1,743	$	2,565	$	4,308	$	—	$	—	$	—
Land		476		381		857		—		—		—
Nonresidential real estate		241		526		767		—		—		—
Consumer and other:
Home equity		28		—		28		—		—		—
Unsecured		18		—		18		—		—		—
		2,506		3,472		5,978		—		—		—
Loans collectively evaluated for impairment:
Residential real estate:
One- to four-family					$	187,413	$	1,059	$	—	$	1,059
Multi-family						16,621		94		—		94
Construction						3,780		21		—		21
Land						1,164		7		—		7
Farm						1,567		9		—		9
Nonresidential real estate						21,351		121		—		121
Commercial and industrial						1,782		10		—		10
Consumer and other
Loans on deposits						2,262		13		—		13
Home equity						5,449		31		—		31
Automobile						73		—		—		—
Unsecured						587		3		—		3
Unallocated						—		—		200		200
						242,049		1,368		200		1,568
					$	248,027	$	1,368	$	200	$	1,568

June 30, 2014:
			Loans
			acquired
			with					Ending
	Loans		deteriorated		Ending			allowance
	individually		credit		loans			attributed to	Unallocated		Total
(in thousands)	evaluated		quality*		balance			loans	allowance		allowance
Loans individually evaluated for impairment:
Residential real estate:
One- to four-family	$	2,159	$	2,735	$	4,894	$	14	$	—	$	14
Farm		—		444		444		—		—		—
Nonresidential real estate		—		529		529		—		—		—
Commercial and industrial		—		68		68		—		—		—
		2,159		3,776		5,935		14		—		14
Loans collectively evaluated for impairment:
Residential real estate:
One- to four-family					$	191,487	$	989	$	—	$	989
Multi-family						14,002		73		—		73
Construction						2,122		11		—		11
Land						1,918		10		—		10
Farm						1,644		9		—		9
Nonresidential real estate						21,416		112		—		112
Commercial and industrial						2,012		11		—		11
Consumer and other
Loans on deposits						2,564		13		—		13
Home equity						5,359		28		—		28
Automobile						64		—		—		—
Unsecured						638		3		—		3
Unallocated						—		—		200		200
						243,226		1,259		200		1,459
					$	249,161	$	1,273	$	200	$	1,473

*These loans were evaluated at acquisition date at their estimated fair value and there has been no subsequent deterioration since acquisition.

Impaired Financing Receivables [Table Text Block]

The following tables present impaired loans by class of loans as of and for the years ended June 30, 2015 and 2014:

	Unpaid
	Principal		Allowance
June 30, 2015:	Balance and		for Loan		Average		Interest		Cash Basis
	Recorded		Losses		Recorded		Income		Income
(in thousands)	Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Residential real estate:
One- to four-family	$	4,308	$	—	$	4,075	$	84	$	84
Land		857		—		554		31		31
Nonresidential real estate		767		—		618		26		26
Commercial and industrial		—		—		19		6		6
Consumer and other
Home equity		28		—		28		—		—
Unsecured		18		—		7		—		—
Total	$	5,978	$	—	$	5,301	$	147	$	147

	Unpaid
	Principal		Allowance
June 30, 2014:	Balance and		for Loan		Average		Interest		Cash Basis
	Recorded		Losses		Recorded		Income		Income
(in thousands)	Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Residential real estate:
One- to four-family	$	4,694	$	—	$	6,887	$	7	$	7
Farm		444		—		465		—		—
Nonresidential real estate		529		—		538		—		—
Commercial and industrial		68		—		94		—		—
	$	5,735	$	—	$	7,984	$	7	$	7
With an allowance recorded:
Residential real estate:
One- to four-family		200		14		206		—		—
Total	$	5,935	$	14	$	8,190	$	7	$	7

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	June 30, 2015				June 30, 2014
			Loans Past				Loans Past
			Due Over 90				Due Over 90
			Days Still				Days Still
(in thousands)	Nonaccrual		Accruing		Nonaccrual		Accruing
One- to four-family residential real estate	$	4,331	$	1,745	$	5,767	$	3,513
Nonresidential real estate		410		—		384		—
Commercial and industrial		—		—		47		—
Consumer		26		—		29		—
	$	4,767	$	1,745	$	6,227	$	3,513

Schedule Of Troubled Debt Restructurings Modified Terms [Table Text Block]

The following table presents loans classified as TDRs as of June 30, 2015 and 2014, and their performance, by modification type:

			Pre-		Post-				TDRs Not
			Modification		Modification		TDRs		Performing
			Outstanding		Outstanding		Performing		to
	Number		Recorded		Recorded		to Modified		Modified
(Dollars in thousands)	of Loans		Investment		Investment		Terms		Terms
June 30, 2015:
Residential Real Estate:
1-4 Family		38	$	2,110	$	1,851	$	1,710	$	141
June 30, 2014
Residential Real Estate:
1-4 Family		39	$	2,230	$	1,997	$	1,621	$	376

Past Due Financing Receivables [Table Text Block]

June 30, 2015:

			Greater				Loans
			than 90		Total		Not
	30-89 Days		Days Past		Past		Past
(in thousands)	Past Due		Due		Due		Due		Total
Residential real estate:
One-to four-family	$	5,129	$	3,233	$	8,362	$	183,359	$	191,721
Multi-family		—		—		—		16,621		16,621
Construction		—		—		—		3,780		3,780
Land		344		262		606		1,415		2,021
Farm		—		—		—		1,567		1,567
Nonresidential real estate		142		388		530		21,588		22,118
Commercial and industrial		—		—		—		1,782		1,782
Consumer and other:
Loans on deposits		—		—		—		2,262		2,262
Home equity		20		—		20		5,457		5,477
Automobile		—		—		—		73		73
Unsecured		13		18		31		574		605
Total	$	5,648	$	3,901	$	9,549	$	238,478	$	248,027

June 30, 2014:
			Greater
			than 90		Total		Loans
	30-89 Days		Days		Past		Not Past
(in thousands)	Past Due		Past Due		Due		Due		Total
Residential real estate:
One-to four-family	$	4,481	$	9,060	$	13,541	$	182,840	$	196,381
Multi-family		—		—		—		14,002		14,002
Construction		343		—		343		1,779		2,122
Land		—		364		364		1,998		2,362
Farm		—		—		—		1,644		1,644
Nonresidential real estate		375		396		771		21,174		21,945
Commercial and industrial		—		88		88		1,992		2,080
Consumer and other:
Loans on deposits		—		—		—		2,564		2,564
Home equity		—		33		33		5,326		5,359
Automobile		—		—		—		64		64
Unsecured		68		—		68		570		638
Total	$	5,267	$	9,941	$	15,208	$	233,953	$	249,161

Financing Receivable Credit Quality Indicators [Table Text Block]

June 30, 2015:
			Special						Not
(in thousands)	Pass		Mention		Substandard		Doubtful		rated
Residential real estate:
One- to four-family	$	—	$	6,914	$	9,371	$	—	$	175,436
Multi-family		16,621		—		—		—		—
Construction		3,780		—		—		—		—
Land		1,164		—		857		—		—
Farm		1,567		—		—		—		—
Nonresidential real estate		20,198		1,131		789		—		—
Commercial and industrial		1,750		32		—		—		—
Consumer and other:
Loans on deposits		2,262		—		—		—		—
Home equity		5,448		—		29		—		—
Automobile		73		—		—		—		—
Unsecured		605		—		—		—		—

June 30, 2014:
			Special						Not
(in thousands)	Pass		Mention		Substandard		Doubtful		rated
Residential real estate:
One- to four-family	$	-	$	2,928	$	11,287	$	—	$	182,166
Multi-family		14,002		—		—		—		—
Construction		2,122		—		—		—		—
Land		1,366		—		996		—		—
Farm		1,644		—		—		—		—
Nonresidential real estate		18,920		965		2,060		—		—
Commercial and industrial		2,014		—		66		—		—
Consumer and other:
Loans on deposits		2,564		—		—		—		—
Home equity		5,359		—		—		—		—
Automobile		64		—		—		—		—
Unsecured		606		3		29		—		—

Allowance for Credit Losses on Financing Receivables [Table Text Block]

The activity in the allowance for loan losses is summarized as follows for the years ended June 30:

(in thousands)	2015		2014
Balance at beginning of year	$	1,473	$	1,310
Provision for losses on loans		343		580
Charge-offs, net		(248)		(417)
Balance at end of year	$	1,568	$	1,473

The following tables present the activity in the allowance for loan losses by portfolio segment for the years ended June 30, 2015 and 2014:

June 30, 2015:

			Provision
	Beginning		for loan		Loans				Ending
(in thousands)	balance		losses		charged off		Recoveries		balance
Residential real estate:
One- to four-family	$	999	$	307	$	(274)	$	26	$	1,058
Multi-family		74		19		—		—		93
Construction		11		10		—		—		21
Land		10		(1)		—		—		9
Farm		9		—		—		—		9
Nonresidential real estate		114		7		—		—		121
Commercial and industrial		11		(1)		—		—		10
Consumer and other:
Loans on deposits		14		(1)		—		—		13
Home equity		28		3		—		—		31
Automobile		—		—		—		—		—
Unsecured		3		—		—		—		3
Unallocated		200		—		—		—		200
Totals	$	1,473	$	343	$	(274)	$	26	$	1,568

June 30, 2014:

			Provision
	Beginning		for loan		Loans				Ending
(in thousands)	balance		losses		charged off		Recoveries		balance
Residential real estate:
One- to four-family	$	871	$	546	$	(467)	$	49	$	999
Multi-family		63		11		—		—		74
Construction		8		3		—		—		11
Land		12		(2)		—		—		10
Farm		6		3		—		—		9
Nonresidential real estate		94		20		—		—		114
Commercial and industrial		13		(2)		—		—		11
Consumer and other:
Loans on deposits		12		2		—		—		14
Home equity		25		3		—		—		28
Automobile		—		—		—		—		—
Unsecured		6		(4)		—		1		3
Unallocated		200		—		—		—		200
Totals	$	1,310	$	580	$	(467)	$	50	$	1,473

Certain Loans Acquired In Transfer Accounted For As Debt Securities [Table Text Block]

The carrying amount of those loans, net of a credit quality component of $616,000 and $782,000, at June 30, 2015 and 2014, respectively, is as follows:

(in thousands)	2015		2014
Residential real estate:
One- to four-family	$	2,565	$	2,735
Land		381		444
Nonresidential real estate		526		529
Commercial non-mortgage loans		—		68
Outstanding balance	$	3,472	$	3,776

Certain Loans Acquired In Transfer Accounted For As Debt Securities Accretable Yield [Table Text Block]

Accretable yield, or income expected to be collected, for the years ended June 30 was as follows:

(in thousands)	2015		2014
Balance at beginning of year	$	1,478	$	1,294
Accretion of income		(457)		(155)
Reclassifications from nonaccretable difference		—		339
Disposals		—		—
Balance at end of year	$	1,021	$	1,478

XML

LOAN COMMITMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Unused commitments, Revolving, open-end lines secured by real estate [Member] | Fixed [Member]
Unused Commitments to Extend Credit	$ 0	$ 0
Unused commitments, Revolving, open-end lines secured by real estate [Member] | Variable [Member]
Unused Commitments to Extend Credit	8,153	8,543
Unused commitments, Commitments to fund real estate construction loans [Member] | Fixed [Member]
Unused Commitments to Extend Credit	715	779
Unused commitments, Commitments to fund real estate construction loans [Member] | Variable [Member]
Unused Commitments to Extend Credit	2,974	1,426
Other unused commitments, Commercial and industrial loans [Member] | Fixed [Member]
Unused Commitments to Extend Credit	1,299	1,379
Other unused commitments, Commercial and industrial loans [Member] | Variable [Member]
Unused Commitments to Extend Credit	0	0
Other unused commitments, Other [Member] | Fixed [Member]
Unused Commitments to Extend Credit	631	225
Other unused commitments, Other [Member] | Variable [Member]
Unused Commitments to Extend Credit	415	1,034
Other unused commitments, Letters of credit [Member] | Fixed [Member]
Unused Commitments to Extend Credit	0	0
Other unused commitments, Letters of credit [Member] | Variable [Member]
Unused Commitments to Extend Credit	$ 0	$ 0

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated other comprehensive income [Member]	Unearned employee stock ownership plan (ESOP) [Member]
Balance at Jun. 30, 2013	$ 66,622	$ 86	$ 34,732	$ 33,604	$ (197)	$ 23	$ (1,626)
Net income	1,934	0	0	1,934	0	0	0
Allocation of ESOP shares	155	0	(61)	0	0	0	216
Acquisition of shares for Treasury	(42)	0	0	0	(42)	0	0
Unrealized gains on securities designated as available for sale, net of related tax effects	47	0	0	0	0	47	0
Cash dividends of $0.40 per common share	(1,511)	0	0	(1,511)	0	0	0
Balance at Jun. 30, 2014	67,205	86	34,671	34,027	(239)	70	(1,410)
Net income	2,069	0	0	2,069	0	0	0
Allocation of ESOP shares	154	0	(33)	0	0	0	187
Acquisition of shares for Treasury	(698)	0	0	0	(698)	0	0
Unrealized gains on securities designated as available for sale, net of related tax effects	(32)	0	0	0	0	(32)	0
Cash dividends of $0.40 per common share	(1,385)	0	0	(1,385)	0	0	0
Balance at Jun. 30, 2015	$ 67,313	$ 86	$ 34,638	$ 34,711	$ (937)	$ 38	$ (1,223)

XML

CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Held-to-maturity securities, fair value (in dollars)	$ 6,534	$ 9,195
Loans and leases receivable, allowance (in dollars)	$ 1,568	$ 1,473
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	8,596,064	8,596,064
Treasury stock, shares	112,563	27,886

XML

FEDERAL INCOME TAXES

12 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE H - FEDERAL INCOME TAXES

Federal income taxes on earnings differs from that computed at the statutory corporate tax rate for the years ended June 30, 2015 and 2014, as follows:

(in thousands)	2015		2014
Federal income taxes at the statutory rate	$	1,051	$	981
Increase (decrease) resulting primarily from:
Cash surrender value of life insurance		(31)		(31)
Other		1		2
	$	1,021	$	952

The composition of the Company’s net deferred tax liability at June 30 is as follows:

(in thousands)	2015		2014
Taxes (payable) refundable on temporary differences at estimated corporate tax rate:
Deferred tax assets:
General loan loss allowance	$	533	$	501
Deferred compensation and benefits		243		249
Charitable contributions		1		2
Fair value accounting adjustments on acquisition		604		887
Nonaccrued interest on loans		129		154
Other real estate owned adjustments		254		315
Other		15		2
Total deferred tax assets		1,779		2,110
Deferred tax liabilities:
Federal Home Loan Bank stock dividends		(1,337)		(1,337)
Deferred loan origination costs		(26)		(21)
Loan servicing rights		(29)		(27)
Fair value accounting adjustments on acquisition		(795)		(795)
Unrealized gain on investments		(19)		(35)
Depreciation		(62)		(56)
Other		—		(49)
Total deferred tax liabilities		(2,268)		(2,320)
Net deferred tax liability	$	(489)	$	(210)

Prior to 1997, the Banks were allowed a special bad debt deduction, generally limited to 8% of otherwise taxable income, and subject to certain limitations based on aggregate loans and deposit account balances at the end of the year. If the amounts that qualified as deductions for federal income taxes are later used for purposes other than bad debt losses, including distributions in excess of accumulated earnings and profits, such distributions will be subject to federal income taxes at the then current corporate income tax rate. Retained earnings at June 30, 2015, include approximately $5.2 million for which federal income taxes have not been provided. The amount of unrecognized deferred tax liability relating to the cumulative bad debt deduction was approximately $1.8 million at June 30, 2015.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(in thousands)	2015		2014
Balance at beginning of year	$	80	$	80
Additions/(reductions) based on tax positions for the current year		—		—
Balance at end of year	$	80	$	80

Cash settlements occurred during the period July 1, 2012, through June 30, 2013. Because of uncertainty regarding proper inclusion or exclusion of income from bank-owned life insurance (“BOLI”) in the earnings and profits calculation, the Company amended its June 30, 2009, federal income tax return to report reduced tax liability of $80,000 and established the corresponding reserve. Its unrecognized benefits are expected to change in the next twelve months.

XML

Document And Entity Information - USD ($) $ in Millions	12 Months Ended
	Jun. 30, 2015	Sep. 18, 2015	Dec. 31, 2014
Document Information [Line Items]
Entity Registrant Name	Kentucky First Federal Bancorp
Entity Central Index Key	0001297341
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Trading Symbol	KFFB
Entity Common Stock, Shares Outstanding		8,439,515
Document Type	10-K
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2015
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 27.9

XML

LOAN COMMITMENTS

12 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments Disclosure [Text Block]

NOTE I - LOAN COMMITMENTS

The Banks are a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of their customers, including commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amount recognized in the consolidated statements of financial condition. The contract or notional amounts of the commitments reflect the extent of the Banks’ involvement in such financial instruments.

The Banks’ exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. The Banks use the same credit policies in making commitments and conditional obligations as those utilized for on-balance-sheet instruments.

At June 30, 2015 and 2014, the Banks had the following outstanding loan commitments:

	2015				2014
(in thousands)	Fixed		Variable		Fixed		Variable
Unused commitment:
Revolving, open-end lines secured by real estate	$	—	$	8,153	$	—	$	8,543
Commitments to fund real estate construction loans		715		2,974		779		1,426
Other unused commitment:
Commercial and industrial loans		1,299		—		1,379		—
Other		631		415		225		1,034
Letters of credit		—		—		—		—

Commitments to make loans are generally made for periods of 60 days or less. The fixed rate loan commitments at June 30, 2015 totaled $1.0 million and had interest rates ranging from 3.50% to 5.18% and maturities ranging from 10 years to 30 years. The fixed rate loan commitments at June 30, 2014 totaled $336,000 and had interest rates ranging from 4.81% to 5.75% with maturities ranging from 10 years to 30 years.

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Interest income
Loans, including fees	$ 11,996	$ 12,681
Mortgage-backed securities	110	132
Other securities	25	29
Interest-bearing deposits and other	258	308
Total interest income	12,389	13,150
Interest expense
Deposits	1,190	1,341
Borrowings	238	277
Total interest expense	1,428	1,618
Net interest income	10,961	11,532
Provision for loan losses	343	580
Net interest income after provision for loan losses	10,618	10,952
Non-interest income
Net gains on sales of loans	28	55
Earnings on bank-owned life insurance	93	91
Net gain (loss) on sales of REO	207	(14)
Valuation adjustment for REO	(87)	(101)
Other	273	313
Total non-interest income	514	344
Non-interest expense
Employee compensation and benefits	4,859	5,353
Occupancy and equipment	610	552
Legal fees	94	35
Outside service fees	198	140
Data processing	429	457
Audit and accounting	252	263
FDIC insurance premiums	230	230
Franchise and other taxes	261	269
Foreclosure and REO expense, net	180	160
Other	929	951
Total non-interest expense	8,042	8,410
Income before income taxes	3,090	2,886
Federal income tax expense (benefit)
Current	646	1,056
Deferred	375	(104)
Total federal income taxes	1,021	952
NET INCOME	$ 2,069	$ 1,934
EARNINGS PER SHARE
Basic and diluted (in dollars per share)	$ 0.25	$ 0.23

XML

LOANS

12 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Financing Receivables [Text Block]

NOTE C - LOANS

The composition of the loan portfolio at June 30 was as follows:

(in thousands)	2015		2014
Residential real estate
One- to four-family	$	191,721	$	193,381
Multi-family		16,621		14,002
Construction		3,780		2,122
Land		2,021		2,362
Farm		1,567		1,644
Nonresidential real estate		22,118		21,945
Commercial and industrial		1,782		2,080
Consumer and other
Loans on deposits		2,262		2,564
Home equity		5,477		5,359
Automobile		73		64
Unsecured		605		638
		248,027		249,161
Undisbursed portion of loans in process		(2,753)		(952)
Deferred loan origination costs, net		109		52
Allowance for loan losses		(1,568)		(1,473)
	$	243,815	$	246,788

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, 2015 and 2014. There were $3.5 million and $3.8 million in loans acquired with deteriorated credit quality at June 30, 2015 and 2014, respectively.

June 30, 2015:
			Loans
			acquired
			with				Ending
	Loans		deteriorated		Ending		allowance
	individually		credit		loans		attributed to		Unallocated		Total
(in thousands)	evaluated		quality		balance		loans		allowance		allowance
Loans individually evaluated for impairment:
Residential real estate:
One- to four-family	$	1,743	$	2,565	$	4,308	$	—	$	—	$	—
Land		476		381		857		—		—		—
Nonresidential real estate		241		526		767		—		—		—
Consumer and other:
Home equity		28		—		28		—		—		—
Unsecured		18		—		18		—		—		—
		2,506		3,472		5,978		—		—		—
Loans collectively evaluated for impairment:
Residential real estate:
One- to four-family					$	187,413	$	1,059	$	—	$	1,059
Multi-family						16,621		94		—		94
Construction						3,780		21		—		21
Land						1,164		7		—		7
Farm						1,567		9		—		9
Nonresidential real estate						21,351		121		—		121
Commercial and industrial						1,782		10		—		10
Consumer and other
Loans on deposits						2,262		13		—		13
Home equity						5,449		31		—		31
Automobile						73		—		—		—
Unsecured						587		3		—		3
Unallocated						—		—		200		200
						242,049		1,368		200		1,568
					$	248,027	$	1,368	$	200	$	1,568

June 30, 2014:
			Loans
			acquired
			with					Ending
	Loans		deteriorated		Ending			allowance
	individually		credit		loans			attributed to	Unallocated		Total
(in thousands)	evaluated		quality*		balance			loans	allowance		allowance
Loans individually evaluated for impairment:
Residential real estate:
One- to four-family	$	2,159	$	2,735	$	4,894	$	14	$	—	$	14
Farm		—		444		444		—		—		—
Nonresidential real estate		—		529		529		—		—		—
Commercial and industrial		—		68		68		—		—		—
		2,159		3,776		5,935		14		—		14
Loans collectively evaluated for impairment:
Residential real estate:
One- to four-family					$	191,487	$	989	$	—	$	989
Multi-family						14,002		73		—		73
Construction						2,122		11		—		11
Land						1,918		10		—		10
Farm						1,644		9		—		9
Nonresidential real estate						21,416		112		—		112
Commercial and industrial						2,012		11		—		11
Consumer and other
Loans on deposits						2,564		13		—		13
Home equity						5,359		28		—		28
Automobile						64		—		—		—
Unsecured						638		3		—		3
Unallocated						—		—		200		200
						243,226		1,259		200		1,459
					$	249,161	$	1,273	$	200	$	1,473

*These loans were evaluated at acquisition date at their estimated fair value and there has been no subsequent deterioration since acquisition.

The following tables present impaired loans by class of loans as of and for the years ended June 30, 2015 and 2014:

	Unpaid
	Principal		Allowance
June 30, 2015:	Balance and		for Loan		Average		Interest		Cash Basis
	Recorded		Losses		Recorded		Income		Income
(in thousands)	Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Residential real estate:
One- to four-family	$	4,308	$	—	$	4,075	$	84	$	84
Land		857		—		554		31		31
Nonresidential real estate		767		—		618		26		26
Commercial and industrial		—		—		19		6		6
Consumer and other
Home equity		28		—		28		—		—
Unsecured		18		—		7		—		—
Total	$	5,978	$	—	$	5,301	$	147	$	147

	Unpaid
	Principal		Allowance
June 30, 2014:	Balance and		for Loan		Average		Interest		Cash Basis
	Recorded		Losses		Recorded		Income		Income
(in thousands)	Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Residential real estate:
One- to four-family	$	4,694	$	—	$	6,887	$	7	$	7
Farm		444		—		465		—		—
Nonresidential real estate		529		—		538		—		—
Commercial and industrial		68		—		94		—		—
	$	5,735	$	—	$	7,984	$	7	$	7
With an allowance recorded:
Residential real estate:
One- to four-family		200		14		206		—		—
Total	$	5,935	$	14	$	8,190	$	7	$	7

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual status by class of loans as of June 30, 2015 and 2014. At June 30, 2015, the table below includes approximately $1.6 million of loans on nonaccrual and $1.5 million of loans past due over 90 days and still accruing that were acquired with deteriorated credit quality, while approximately $2.7 million of loans on nonaccrual and $1.7 million of loans past due over 90 days and still accruing that were acquired with deteriorated credit quality at June 30, 2014.

	June 30, 2015				June 30, 2014
			Loans Past				Loans Past
			Due Over 90				Due Over 90
			Days Still				Days Still
(in thousands)	Nonaccrual		Accruing		Nonaccrual		Accruing
One- to four-family residential real estate	$	4,331	$	1,745	$	5,767	$	3,513
Nonresidential real estate		410		—		384		—
Commercial and industrial		—		—		47		—
Consumer		26		—		29		—
	$	4,767	$	1,745	$	6,227	$	3,513

Troubled Debt Restructurings:

During the year ended June 30, 2015, the terms of a single one- to four family residential real estate loan totaling $20,000 was modified as a troubled debt restructuring (“TDR.”) The loan was modified because the borrower was exhibiting financial difficulty in making the original debt payments. The borrower was allowed to pay interest only for five months and the maturity date of the loan was extended accordingly.

During the year ended June 30, 2014, the terms of ten one- to four family residential real estate loans totaling $511,000 were modified as TDRs. Five of the loans were classified as TDRs because the borrower filed Chapter 7 bankruptcy without reaffirming their personal obligation to pay the debt. The other loans were modified because the borrower was exhibiting financial difficulty in making the original debt payments. Some of the loans were modified to lower the interest rate to prevailing rates offered by the bank at the time, while some other loans had the terms extended to provide the borrower with lower monthly payments.

In order to determine whether a borrower is experiencing financial difficulty, we consider the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

The following table presents loans classified as TDRs as of June 30, 2015 and 2014, and their performance, by modification type:

			Pre-		Post-				TDRs Not
			Modification		Modification		TDRs		Performing
			Outstanding		Outstanding		Performing		to
	Number		Recorded		Recorded		to Modified		Modified
(Dollars in thousands)	of Loans		Investment		Investment		Terms		Terms
June 30, 2015:
Residential Real Estate:
1-4 Family		38	$	2,110	$	1,851	$	1,710	$	141
June 30, 2014
Residential Real Estate:
1-4 Family		39	$	2,230	$	1,997	$	1,621	$	376

The Company had no allocated specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of June 30, 2015 or 2014. At June 30, 2015, $1.5 million in TDR loans were on nonaccrual status. The Company had no commitments to lend additional amounts as of June 30, 2015 and 2014, to customers with outstanding loans that are classified as troubled debt restructurings. The Company had no TDR loans default during fiscal 2015 and one TDR loan to default during the year ended June 30, 2014. The defaulted loan has not been included in the table above. The borrower had exhibited credit weaknesses when the loan was refinanced, which was the reason for the TDR classification initially. The borrower declared bankruptcy during fiscal 2014 and the loan, which had a carrying value of $486,000, was foreclosed upon in fiscal 2015 with the Company taking possession of the real estate property.

The following tables present the aging of the principal balance outstanding in past due loans as of June 30, 2015 and 2014, by class of loans. At June 30, 2015, the table below includes approximately $666,000 of loans 30-89 days past due and $1.0 million of loans past due over 90 days that were acquired with deteriorated credit quality, while approximately $978,000 of loans 30-89 days past due and $1.8 million of loans past due over 90 days that were acquired with deteriorated credit quality at June 30, 2014.

June 30, 2015:

			Greater				Loans
			than 90		Total		Not
	30-89 Days		Days Past		Past		Past
(in thousands)	Past Due		Due		Due		Due		Total
Residential real estate:
One-to four-family	$	5,129	$	3,233	$	8,362	$	183,359	$	191,721
Multi-family		—		—		—		16,621		16,621
Construction		—		—		—		3,780		3,780
Land		344		262		606		1,415		2,021
Farm		—		—		—		1,567		1,567
Nonresidential real estate		142		388		530		21,588		22,118
Commercial and industrial		—		—		—		1,782		1,782
Consumer and other:
Loans on deposits		—		—		—		2,262		2,262
Home equity		20		—		20		5,457		5,477
Automobile		—		—		—		73		73
Unsecured		13		18		31		574		605
Total	$	5,648	$	3,901	$	9,549	$	238,478	$	248,027

June 30, 2014:
			Greater
			than 90		Total		Loans
	30-89 Days		Days		Past		Not Past
(in thousands)	Past Due		Past Due		Due		Due		Total
Residential real estate:
One-to four-family	$	4,481	$	9,060	$	13,541	$	182,840	$	196,381
Multi-family		—		—		—		14,002		14,002
Construction		343		—		343		1,779		2,122
Land		—		364		364		1,998		2,362
Farm		—		—		—		1,644		1,644
Nonresidential real estate		375		396		771		21,174		21,945
Commercial and industrial		—		88		88		1,992		2,080
Consumer and other:
Loans on deposits		—		—		—		2,564		2,564
Home equity		—		33		33		5,326		5,359
Automobile		—		—		—		64		64
Unsecured		68		—		68		570		638
Total	$	5,267	$	9,941	$	15,208	$	233,953	$	249,161

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.

Substandard. 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.

Doubtful. 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 table above. As of June 30, 2015, and 2014, and based on the most recent analysis performed, the risk category of loans by class of loans was as follows:

June 30, 2015:
			Special						Not
(in thousands)	Pass		Mention		Substandard		Doubtful		rated
Residential real estate:
One- to four-family	$	—	$	6,914	$	9,371	$	—	$	175,436
Multi-family		16,621		—		—		—		—
Construction		3,780		—		—		—		—
Land		1,164		—		857		—		—
Farm		1,567		—		—		—		—
Nonresidential real estate		20,198		1,131		789		—		—
Commercial and industrial		1,750		32		—		—		—
Consumer and other:
Loans on deposits		2,262		—		—		—		—
Home equity		5,448		—		29		—		—
Automobile		73		—		—		—		—
Unsecured		605		—		—		—		—

June 30, 2014:
			Special						Not
(in thousands)	Pass		Mention		Substandard		Doubtful		rated
Residential real estate:
One- to four-family	$	-	$	2,928	$	11,287	$	—	$	182,166
Multi-family		14,002		—		—		—		—
Construction		2,122		—		—		—		—
Land		1,366		—		996		—		—
Farm		1,644		—		—		—		—
Nonresidential real estate		18,920		965		2,060		—		—
Commercial and industrial		2,014		—		66		—		—
Consumer and other:
Loans on deposits		2,564		—		—		—		—
Home equity		5,359		—		—		—		—
Automobile		64		—		—		—		—
Unsecured		606		3		29		—		—

The activity in the allowance for loan losses is summarized as follows for the years ended June 30:

(in thousands)	2015		2014
Balance at beginning of year	$	1,473	$	1,310
Provision for losses on loans		343		580
Charge-offs, net		(248)		(417)
Balance at end of year	$	1,568	$	1,473

The following tables present the activity in the allowance for loan losses by portfolio segment for the years ended June 30, 2015 and 2014:

June 30, 2015:

			Provision
	Beginning		for loan		Loans				Ending
(in thousands)	balance		losses		charged off		Recoveries		balance
Residential real estate:
One- to four-family	$	999	$	307	$	(274)	$	26	$	1,058
Multi-family		74		19		—		—		93
Construction		11		10		—		—		21
Land		10		(1)		—		—		9
Farm		9		—		—		—		9
Nonresidential real estate		114		7		—		—		121
Commercial and industrial		11		(1)		—		—		10
Consumer and other:
Loans on deposits		14		(1)		—		—		13
Home equity		28		3		—		—		31
Automobile		—		—		—		—		—
Unsecured		3		—		—		—		3
Unallocated		200		—		—		—		200
Totals	$	1,473	$	343	$	(274)	$	26	$	1,568

June 30, 2014:

			Provision
	Beginning		for loan		Loans				Ending
(in thousands)	balance		losses		charged off		Recoveries		balance
Residential real estate:
One- to four-family	$	871	$	546	$	(467)	$	49	$	999
Multi-family		63		11		—		—		74
Construction		8		3		—		—		11
Land		12		(2)		—		—		10
Farm		6		3		—		—		9
Nonresidential real estate		94		20		—		—		114
Commercial and industrial		13		(2)		—		—		11
Consumer and other:
Loans on deposits		12		2		—		—		14
Home equity		25		3		—		—		28
Automobile		—		—		—		—		—
Unsecured		6		(4)		—		1		3
Unallocated		200		—		—		—		200
Totals	$	1,310	$	580	$	(467)	$	50	$	1,473

Purchased Loans:

The Company purchased loans during the fiscal year ended June 30, 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 credit quality component of $616,000 and $782,000, at June 30, 2015 and 2014, respectively, is as follows:

(in thousands)	2015		2014
Residential real estate:
One- to four-family	$	2,565	$	2,735
Land		381		444
Nonresidential real estate		526		529
Commercial non-mortgage loans		—		68
Outstanding balance	$	3,472	$	3,776

Accretable yield, or income expected to be collected, for the years ended June 30 was as follows:

(in thousands)	2015		2014
Balance at beginning of year	$	1,478	$	1,294
Accretion of income		(457)		(155)
Reclassifications from nonaccretable difference		—		339
Disposals		—		—
Balance at end of year	$	1,021	$	1,478

For those purchased loans disclosed above, the Company made no increase in allowance for loan losses for the years ended June 30, 2015 or 2014, nor were any allowance for loan losses reversed during those years.

XML

SECURITIES

12 Months Ended

Jun. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE B - SECURITIES

The following table summarizes the amortized cost and fair value of the available for sale securities and held to maturity investment securities portfolio at June 30, 2015 and 2014 and the corresponding amounts of gross unrealized or unrecognized gains and losses. Unrealized gains or losses apply to available-for-sale securities and are recognized in accumulated other comprehensive income, while unrecognized gains or losses on held-to-maturity securities are not recognized in the financial statements. The gains and losses are as follows:

	2015
			Gross		Gross
			unrealized/		unrealized/
	Amortized		unrecognized		unrecognized		Estimated
(in thousands)	cost		gains		losses		fair value
Available-for-sale Securities
Agency mortgage-backed:residential	$	94	$	2	$	-	$	96
FHLMC stock		8		55		-		63
	$	102	$	57	$	-	$	159
Held-to-maturity Securities
Agency mortgage-backed: residential	$	2,821	$	112	$	2	$	2,931
Agency bonds		3,602		2		1		3,603
	$	6,423	$	114	$	3	$	6,534

	2014
			Gross		Gross
			unrealized/		unrealized/
	Amortized		unrecognized		unrecognized		Estimated
(in thousands)	cost		gains		losses		fair value
Available-for-sale Securities
Agency mortgage-backed:residential	$	134	$	2	$	-	$	136
FHLMC stock		8		103		-		111
	$	142	$	105	$	-	$	247
Held-to-maturity Securities
Agency mortgage-backed: residential	$	3,792	$	180	$	1	$	3,971
Agency bonds		5,226		3		5		5,224
	$	9,018	$	183	$	6	$	9,195

The amortized cost and estimated fair value of securities as of June 30, 2015, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities without a single maturity, primarily mortgage-backed, are not shown.

(in thousands)	Amortized Cost		Fair Value
Held to maturity:
Within one year	$	1,005	$	1,005
One to five years		2,597		2,598
	$	3,602	$	3,603

There were no sales of securities during the fiscal years ended June 30, 2015 or 2014. At June 30, 2015 the Company had $1.2 million in securities with unrealized losses totaling $3,000, while at June 30, 2014, the Company had $2.7 million in securities with unrealized losses totaling $6,000. Unrealized losses on corporate bonds have not been recognized into income because the issuers’ bonds are of high credit quality (rated AA or higher), management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The fair value is expected to recover as the bonds reach maturity.

At June 30, 2015 and 2014, pledged securities totaled $2.2 million and $2.6 million, respectively.

XML

SECURITIES (Tables)

12 Months Ended

Jun. 30, 2015

Actual Maturities [Member]

Marketable Securities [Table Text Block]

The following table summarizes the amortized cost and fair value of the available for sale securities and held to maturity investment securities portfolio at June 30, 2015 and 2014 and the corresponding amounts of gross unrealized or unrecognized gains and losses. Unrealized gains or losses apply to available-for-sale securities and are recognized in accumulated other comprehensive income, while unrecognized gains or losses on held-to-maturity securities are not recognized in the financial statements. The gains and losses are as follows:

	2015
			Gross		Gross
			unrealized/		unrealized/
	Amortized		unrecognized		unrecognized		Estimated
(in thousands)	cost		gains		losses		fair value
Available-for-sale Securities
Agency mortgage-backed:residential	$	94	$	2	$	-	$	96
FHLMC stock		8		55		-		63
	$	102	$	57	$	-	$	159
Held-to-maturity Securities
Agency mortgage-backed: residential	$	2,821	$	112	$	2	$	2,931
Agency bonds		3,602		2		1		3,603
	$	6,423	$	114	$	3	$	6,534

	2014
			Gross		Gross
			unrealized/		unrealized/
	Amortized		unrecognized		unrecognized		Estimated
(in thousands)	cost		gains		losses		fair value
Available-for-sale Securities
Agency mortgage-backed:residential	$	134	$	2	$	-	$	136
FHLMC stock		8		103		-		111
	$	142	$	105	$	-	$	247
Held-to-maturity Securities
Agency mortgage-backed: residential	$	3,792	$	180	$	1	$	3,971
Agency bonds		5,226		3		5		5,224
	$	9,018	$	183	$	6	$	9,195

Contractual Maturities [Member]

Marketable Securities [Table Text Block]

The amortized cost and estimated fair value of securities as of June 30, 2015, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities without a single maturity, primarily mortgage-backed, are not shown.

(in thousands)	Amortized Cost		Fair Value
Held to maturity:
Within one year	$	1,005	$	1,005
One to five years		2,597		2,598
	$	3,602	$	3,603

XML

STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL

12 Months Ended

Jun. 30, 2015

Banking and Thrift [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

NOTE J – STOCKHOLDERS’ EQUITY AND REGULATORY CAPITAL

Dividend Restrictions – Dividends from the Banks are the primary source of funds for the Company. Banking regulations limit the amount of dividends that may be paid to the Company by the Banks without prior approval of the Office of the Controller of the Currency (the “OCC.”) Under these regulations the amount of dividends that may be paid in any calendar year is limited to the current year’s net profits, combined with the retained net profits of the preceding two years. At June 30, 2015, the Banks could, without prior approval, declare dividends of approximately $3.0 million.

Regulatory Capital Requirements - The Banks are subject to minimum regulatory capital standards promulgated by the OCC. Failure to meet minimum capital requirements can initiate certain mandatory — and possibly additional discretionary — actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Banks must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Prompt corrective action regulations provide five classifications: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

New Capital Rules – Effective January 1, 2015, the Company and the Banks became subject to the new capital regulations in accordance with Basel III. The new regulations establish higher minimum risk-based capital ratio requirements, a new common equity Tier 1 risk-based capital ratio and a new capital conversation buffer. The new regulations also include revisions to the definition of capital and changes in the risk-weighting of certain assets. For prompt corrective action, the new regulations establish definitions of “well capitalized” as a 6.5% common equity Tier 1 risk-based capital ratio, an 8.0% Tier 1 risk-based capital ratio, a 10.0% total risk-based capital ratio and a 5.0% Tier 1 leverage ratio. Additionally, a 2.5% capital conservation buffer will be effective under Basel III when effective and fully implemented in 2019.

To be categorized as “well-capitalized” the Banks must maintain minimum capital ratios as set forth in the following tables:

	As of June 30, 2015
											Minimum
											Requirement
						Minimum					To be “Well-
						Requirement					Capitalized” Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
Risk-based capital:
Common Equity Tier 1 capital ratio
Kentucky First Federal	$	52,768		31.9	%	$	7,443		4.5	%		N/A		N/A
First Federal of Hazard		16,478		43.8			1,694		4.5		$	2,447		6.5	%
First Federal of Frankfort		32,104		25.1			5,763		4.5			8,324		6.5
Tier 1 (core) capital ratio
Kentucky First Federal		52,768		31.9			9,923		6.0			N/A		N/A
First Federal of Hazard		16,478		43.8			2,259		6.0			3,012		8.0
First Federal of Frankfort		32,104		25.1			7,684		6.0			10,245		8.0
Total capital ratio
Kentucky First Federal		54,386		32.9			13,231		8.0			N/A		N/A
First Federal of Hazard		16,950		45.0			3,012		8.0			3,765		10.0
First Federal of Frankfort		33,101		25.9			10,245		8.0			12,806		10.0
Leverage capital:
Tier 1 leverage capital to average assets
Kentucky First Federal		52,768		18.7			11,312		4.0			N/A		N/A
First Federal of Hazard		16,478		21.8			3,023		4.0			3,779		5.0
First Federal of Frankfort		32,104		14.9			8,645		4.0			10,807		5.0

	As of June 30, 2014
											To be “well-
											capitalized” under
						For capital					prompt corrective
	Actual					adequacy purposes					action provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
Tier 1 core capital
First Federal of Hazard	$	15,880		19.8	%	≥$	3,206		≥4.0	%	≥$	4,007		≥5.0	%
First Federal of Frankfort	$	31,647		14.8	%	≥$	9,154		≥4.0	%	≥$	11,443		≥5.0	%
Total risk-based capital
First Federal of Hazard	$	16,368		42.0	%	≥$	3,116		≥8.0	%	≥$	3,895		≥10.0	%
First Federal of Frankfort	$	32,531		26.4	%	≥$	9,845		≥8.0	%	≥$	12,306		≥10.0	%
Tier 1 risk-based capital
First Federal of Hazard	$	15,880		40.8	%	≥$	3,206		≥4.0	%	≥$	2,337		≥6.0	%
First Federal of Frankfort	$	31,647		25.7	%	≥$	9,154		≥4.0	%	≥$	7,384		≥6.0	%

As of June 30, 2015 and 2014, management believes that First Federal of Hazard and First Federal of Frankfort met all capital adequacy requirements to which the Banks were subject. There are no conditions or subsequent events that have occurred that managements believes have changed the Banks’ categories.

Regulations of the Board of Governors of the Federal Reserve System governing mutual holding companies require First Federal MHC to meet certain criteria before the company may waive the receipt by it of any common stock dividend declared by Kentucky First Federal Bancorp. During each of the fiscal years ended June 30, 2015 and 2014, and pursuant to the provisions allowed by the Board of Governors of the Federal Reserve System, First Federal MHC waived $1.9 million in dividends.

XML

DEPOSITS

12 Months Ended

Jun. 30, 2015

Banking and Thrift [Abstract]

Deposit Liabilities Disclosures [Text Block]

NOTE F - DEPOSITS

Deposits consist of the following major classifications at June 30:

(in thousands)	2015		2014
Non-interest bearing checking accounts	$	4,073	$	3,786
Checking accounts		14,904		13,364
Savings accounts		51,371		46,277
Money market demand deposits		13,255		13,010
Total demand, transaction and passbook deposits		83,603		76,437
Certificates of deposit:
Original maturities of:
Less than 12 months		75,856		92,271
12 months to 36 months		35,616		38,705
More than 36 months		4,626		5,729
Total certificates of deposit		116,098		136,705
Total deposits	$	199,701	$	213,142

At June 30, 2015 and 2014, the Banks had certificate of deposit accounts with balances equal to or in excess of $250,000 totaling approximately $4.8 million and $5.2 million, respectively.

Maturities of outstanding certificates of deposit at June 30 are summarized as follows:

(in thousands)	2015
2016	$	75,856
2017		28,011
2018		7,605
2019		1,573
2020 and thereafter		3,053
	$	116,098

XML

DEPOSITS (Details 1) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Schedule Of Certificates Of Deposit Fiscal Year Maturity [Line Items]
2016	$ 75,856
2017	28,011
2018	7,605
2019	1,573
2020 and thereafter	3,053
Time Deposits	$ 116,098	$ 136,705

XML

REAL ESTATE OWNED

12 Months Ended

Jun. 30, 2015

Real Estate [Abstract]

Real Estate Owned [Text Block]

NOTE D – REAL ESTATE OWNED

Activity in real estate owned for the years ended June 30 was as follows:

(in thousands)	2015		2014
Balance at beginning of year	$	1,846	$	1,163
Loans transferred to real estate owned		2,065		1,491
Capitalized expenditures		57		—
Valuation adjustments		(87)		(101)
Disposals		(2,288)		(707)
Balance at end of year	$	1,593	$	1,846

XML

PREMISES AND EQUIPMENT

12 Months Ended

Jun. 30, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NOTE E - PREMISES AND EQUIPMENT

Premises and equipment at June 30 are comprised of the following:

(in thousands)	2015		2014
Land	$	1,693	$	1,493
Buildings and improvements		7,104		6,491
Furniture and equipment		2,219		2,159
Automobiles		64		64
		11,080		10,207
Less: accumulated depreciation		5,845		5,578
Balance at end of year	$	5,235	$	4,629

XML

ADVANCES FROM THE FEDERAL HOME LOAN BANK

12 Months Ended

Jun. 30, 2015

Federal Home Loan Banks [Abstract]

Federal Home Loan Bank, Advances [Text Block]

NOTE G - ADVANCES FROM THE FEDERAL HOME LOAN BANK

Advances from the Federal Home Loan Bank, collateralized at June 30, 2015 and 2014 by pledges of certain residential mortgage loans totaling $35.2 million and $22.7 million, respectively, and the Banks’ investment in Federal Home Loan Bank stock, are summarized as follows:

Maturing year ended June 30, 2015
(in thousands)
2016	$	13,923
2017		6,431
2018		2,328
2019		3,249
2020		189
2021		142
2022		107
2023-2032		266
	$	26,635

At June 30, 2015 interest rates for advances were fixed ranging from 0.15% to 6.95%, with a weighted-average interest rate of 1.04%.

Maturing year ended June 30, 2014
(in thousands)
2015	$	9,865
2016		623
2017		431
2018		2,328
2019		3,249
2020		189
2021		142
2022-2031		373
	$	17,200

At June 30, 2014 interest rates for advances were fixed ranging from 0.12% to 6.95%, with a weighted-average interest rate of 1.39%.

Each advance is payable at its maturity date, with a prepayment penalty for fixed rate advances. Based on collateral composed of first mortgage loans and the Company’s holdings of FHLB stock, the Company was eligible to borrow up to $99.5 million as of June 30, 2015.

At June 30, 2015, we had the ability to borrow a total $99.5 million from the FHLB, of which $26.6 million was outstanding. In addition, we have the ability to borrow from the Federal Reserve Bank Discount Window. At June 30, 2015, we had pledged collateral which would enable us to borrow up to $4.7 million.

XML

FEDERAL INCOME TAXES (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Income Tax Disclosure [Line Items]
Federal income taxes at the statutory rate	$ 1,051	$ 981
Increase (decrease) resulting primarily from:
Cash surrender value of life insurance	(31)	(31)
Other	1	2
Total federal income taxes	$ 1,021	$ 952

XML

FEDERAL INCOME TAXES (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Balance at beginning of year	$ 80	$ 80
Additions/(reductions) based on tax positions for the current year	0	0
Balance at end of year	$ 80	$ 80

XML

ADVANCES FROM THE FEDERAL HOME LOAN BANK (Details Textual) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Federal Home Loan Bank, Advances [Line Items]
Advances from Federal Home Loan Banks	$ 26,635	$ 17,200
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Interest Rate, Range from	0.15%	0.12%
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Interest Rate, Range to	6.95%	6.95%
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Weighted Average Interest Rate	1.04%	1.39%
Federal Home Loan Bank, Advances, General Debt Obligations, Maximum Amount Available	$ 99,500
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	4,700
Residential Mortgage [Member]
Federal Home Loan Bank, Advances [Line Items]
Advances from Federal Home Loan Banks	$ 35,200	$ 22,700

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) $ / shares in Units, $ in Thousands	12 Months Ended
	Jun. 30, 2015 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares,Outstanding at beginning of year | shares	325,800
Shares, Granted | shares	0
Shares, Exercised | shares	0
Shares, Forfeited | shares	0
Shares, Outstanding at end of year | shares	325,800
Shares, Options exercisable at end of year | shares	325,800
Weighted-average exercise price, Outstanding at beginning of year (in dollars per share)	$ 10.10
Weighted-average exercise price, Granted (in dollars per share)	0
Weighted-average exercise price, Exercised (in dollars per share)	0
Weighted-average exercise price, Forfeited (in dollars per share)	0
Weighted-average exercise price, Outstanding at end of year (in dollars per share)	10.10
Weighted-average exercise price, Options exercisable at end of year (in dollars per share)	$ 10.10
Aggregate Intrinsic Value, Outstanding at end of year (in dollars) | $	$ 0
Aggregate Intrinsic Value, Options exercisable at end of year (in dollars) | $	$ 0

XML

LOANS (Details 6) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	$ 248,027	$ 249,161
Residential Real Estate One To Four Family [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	191,721	193,381
Residential Real Estate One To Four Family [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Residential Real Estate One To Four Family [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	6,914	2,928
Residential Real Estate One To Four Family [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	9,371	11,287
Residential Real Estate One To Four Family [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Residential Real Estate One To Four Family [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	175,436	182,166
Residential Real Estate Multi Family [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	16,621	14,002
Residential Real Estate Multi Family [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	16,621	14,002
Residential Real Estate Multi Family [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Residential Real Estate Multi Family [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Residential Real Estate Multi Family [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Residential Real Estate Multi Family [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Residential Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	3,780	2,122
Residential Real Estate Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	3,780	2,122
Residential Real Estate Construction [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Residential Real Estate Construction [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Residential Real Estate Construction [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Residential Real Estate Construction [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Non residential real estate [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	20,198	18,920
Non residential real estate [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	1,131	965
Non residential real estate [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	789	2,060
Non residential real estate [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Non residential real estate [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	2,021	2,362
Land [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	1,164	1,366
Land [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Land [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	857	996
Land [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Land [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Farm [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	1,567	1,644
Farm [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	1,567	1,644
Farm [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Farm [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Farm [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Farm [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Loans on deposits [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	2,262	2,564
Loans on deposits [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	2,262	2,564
Loans on deposits [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Loans on deposits [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Loans on deposits [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Loans on deposits [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Commercial and industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	1,782	2,080
Commercial and industrial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	1,750	2,014
Commercial and industrial [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	32	0
Commercial and industrial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	66
Commercial and industrial [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Commercial and industrial [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Home equity [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	5,477	5,359
Home equity [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	5,448	5,359
Home equity [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Home equity [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	29	0
Home equity [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Home equity [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Unsecured [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	605	638
Unsecured [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	605	606
Unsecured [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	3
Unsecured [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	29
Unsecured [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Unsecured [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Automobile [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	73	64
Automobile [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	73	64
Automobile [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Automobile [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Automobile [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	0	0
Automobile [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Recorded Investment	$ 0	$ 0

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

1.   Principles of Consolidation: The consolidated financial statements include the accounts of the Company, First Federal of Hazard, Frankfort First and First Federal of Frankfort. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

2.   Use of Estimates: The consolidated financial information presented herein has been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP.”) To prepare financial statements in conformity with U.S. GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

Marketable Securities, Policy [Policy Text Block]

3.   Securities: Debt securities are classified as held to maturity or available for sale. Securities classified as held to maturity are to be carried at cost only if the Company has the positive intent and ability to hold these securities to maturity. Securities designated as available for sale are carried at fair value with resulting unrealized gains or losses recorded to shareholders’ equity, net of tax.

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

Finance, Loan and Lease Receivables, Held for Investments, Foreclosed Assets Policy [Policy Text Block]

4.    Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal amount outstanding, adjusted for deferred loan origination fees, discounts on purchased loans, and the allowance for loan losses. Interest income is accrued on the unpaid principal balance unless the collectability of the loan is in doubt. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. Interest income on one- to four-family residential loans is generally discontinued at the time a loan is 180 days delinquent and on other loans at the time a loan is 90 days delinquent. All other loans are moved to non-accrual status in accordance with the Company’s policy, typically 90 days after the loan becomes delinquent. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Finance, Loan and Lease Receivables, Held-for-sale, Policy [Policy Text Block]

5.   Loans held for sale and Mortgage Servicing Rights: Loans held for sale are carried at the lower of cost (less principal payments received) or fair value, calculated on an aggregate basis. At June 30, 2015 the Company had $100,000 in loans held for sale, while at June 30, 2014 the Company had no loans held for sale.

In selling loans, the Company utilizes a program with the Federal Home Loan Bank, retaining servicing on loans sold. Mortgage servicing rights on originated loans that have been sold are initially recorded at fair value. Capitalized servicing rights are amortized in proportion to and over the period of estimated servicing revenues. The Company recorded amortization related to mortgage servicing rights totaling $14,000 during each of the years ended June 30, 2015 and 2014. The carrying value of the Company’s mortgage servicing rights, which approximated fair value, totaled approximately $96,000 and $104,000 at June 30, 2015 and 2014, respectively.

The Company was servicing mortgage loans of approximately $11.9 million and $13.0 million that had been sold to the Federal Home Loan Bank at June 30, 2015 and 2014, respectively. During the fiscal year ended June 30, 2015, we sold $599,000 in loans under the FHLB program and the average balance of loans serviced was $12.3 million.

Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income. Changes in valuation allowances are reported with other non-interest income on the income statement. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses.

Servicing fee income which is reported on the income statement as other non-interest income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing fee income. Servicing fees totaled $20,000 and $35,000 for the fiscal years ended June 30, 2015 and 2014, respectively. Late fees and ancillary fees related to loan servicing are not material.

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

6.   Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loss experience, the nature and volume of the portfolio, trends in the level of delinquent and problem loans, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and current and anticipated economic conditions in the primary lending area. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired or loans otherwise classified as substandard or doubtful. The general component covers all loans and is based on historical loss experience adjusted for current factors. In consultation with regulators, the Company considers a time frame of two years when estimating the appropriate level of allowance for loan losses. This period may be shortened or extended based on anticipated trends in the banks or in the banks’ markets.

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent eight quarters. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.

These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; economic trends and conditions; industry conditions; and effects of changes in credit concentrations. Our portfolio segments include residential real estate, nonresidential real estate and land, loans on deposits and consumer and other loans. Risk factors associated with our portfolio segments are as follows:

Residential Real Estate

Our primary lending activity is the origination of mortgage loans, which enable a borrower to purchase or refinance existing homes in the Banks’ respective market areas. We further classify our residential real estate loans as one- to four-family (owner-occupied vs nonowner-occupied), multi-family or construction. We believe that our first mortgage position on loans secured by residential real estate presents lower risk than our other loans, with the exception of loans on deposits.

We offer a mix of adjustable-rate and fixed-rate mortgage loans with terms up to 30 years for owner-occupied properties. For these properties a borrower may be able to borrow up to 95% of the value with private mortgage insurance. Alternatively, the borrower may be able to borrow up to 90% of the value with a traditional first mortgage and a second mortgage (bearing a higher rate of interest) on the additional 10% of the value.

We offer loans on one- to four-family rental properties at a maximum of 80% loan-to-value (“LTV”) ratio and we generally charge a slightly higher interest rate on such loans.

We also originate loans to individuals to finance the construction of residential dwellings for personal use or for use as rental property. We occasionally lend to builders for construction of speculative or custom residential properties for resale, but on a limited basis. Construction loans are generally less than one year in length, do not exceed 80% of the appraised value, and provide for the payment of interest only during the construction phase. Funds are disbursed as progress is made toward completion of the construction.

Multi-family and Nonresidential Loans

We offer mortgage loans secured by residential multi-family (five or more units), and nonresidential real estate. Nonresidential real estate loans are comprised generally of commercial office buildings, churches and properties used for other purposes. Generally, these loans are originated for 25 years or less and do not exceed 80% of the appraised value. Loans secured by multi-family and commercial real estate generally have larger balances and involve a greater degree of risk than one- to four-family residential mortgage loans. These loans depend on the borrower’s creditworthiness and the feasibility and cash flow potential of the project. Payments on loans secured by income properties often depend on successful operation and management of the properties. As a result, repayment on such loans may be subject to a greater extent to adverse conditions in the real estate market or economy than owner-occupied residential loans.

Consumer lending

Our consumer loans include home equity lines of credit, loans secured by savings deposits, automobile loans, and unsecured loans. Home equity loans are generally second mortgage loans subordinate only to first mortgages also held by the bank and do not exceed 80% of the estimated value of the property. We do offer home equity loans up to 90% of the estimated value to qualified borrowers and these loans carry a premium rate. Loans secured by savings are originated up to 90% of the depositor’s savings account balance and bear interest at a rate higher than the rate paid on the deposit account. Because the deposit account must be pledged as collateral to secure the loan, the inherent risk of this type of loan is minimal. Loans secured by automobiles are made directly to consumers (there are no relationships with dealers) and are based on the value of the vehicle and the borrower’s creditworthiness. Vehicle loans present a higher level of risk because of the natural decline in the value of the property as well as its mobility. Unsecured loans are based entirely on the borrower’s creditworthiness and present the highest level of risk to the bank.

The Banks account for impaired loans by determining the present value of expected future cash flows discounted at the loan’s effective interest rate or, as an alternative, at the loan’s observable market price or fair value of the collateral, reduced by estimated selling costs.

A loan is considered impaired when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. Although most of our loans are secured by collateral, we rely heavily on the capacity of our borrowers to generate sufficient cash flow to service their debt. As a result, our loans do not become collateral-dependent until there is deterioration in the borrower’s cash flow and financial condition, which makes it necessary for us to look to the collateral for our sole source of repayment. Collateral-dependent loans which are more than ninety days delinquent are considered to constitute more than a minimum delay in repayment and are evaluated for impairment under the policy at that time.

We utilize updated independent appraisals to determine fair value for collateral-dependent loans, adjusted for estimated selling costs, in determining our specific reserve. In some situations management does not secure an updated independent appraisal. These situations may involve small loan amounts or loans that, in management’s opinion, have an abnormally low loan-to-value ratio.

With respect to the Banks’ investment in troubled debt restructurings, multi-family and nonresidential loans, and the evaluation of impairment thereof, such loans are nonhomogenous and, as such, may be deemed to be collateral-dependent when they become more than ninety days delinquent. We obtain updated independent appraisals in these situations or when we suspect that the previous appraisal may no longer be reflective of the property’s current fair value. This process varies from loan to loan, borrower to borrower, and also varies based on the nature of the collateral.

Federal Home Loan Bank Stock [Policy Text Block]

7. Federal Home Loan Bank Stock: The banks are members of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

Loans and Leases Receivable, Real Estate Acquired Through Foreclosure, Policy [Policy Text Block]

8. Real Estate Owned: Real estate acquired through or instead of foreclosure is initially recorded at fair value less estimated selling expenses at the date of acquisition, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequently, the carrying value is adjusted through a valuation allowance and the amount is recorded through expense. Costs relating to holding real estate owned, net of rental income, are charged against earnings as incurred.

Property, Plant and Equipment, Policy [Policy Text Block]

9. Premises and Equipment: Land is carried at cost. Premises and equipment are carried at cost less accumulated depreciation. The cost of premises and equipment includes expenditures which extend the useful lives of existing assets. Maintenance, repairs and minor renewals are expensed as incurred. For financial reporting, depreciation is provided on the straight-line method over the useful lives of the assets, estimated to be forty years for buildings, ten to forty years for building improvements, and five to ten years for furniture and equipment.

Income Tax, Policy [Policy Text Block]

10. Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. Deferred tax assets are recorded only to the extent that the amount of net deductible temporary differences or carryforward attributes may be utilized against current period earnings, carried back against prior years’ earnings, offset against taxable temporary differences reversing in future periods, or utilized to the extent of management’s estimate of future taxable income. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. Deferred tax liabilities are provided on the total amount of net temporary differences taxable in the future.

A tax provision is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters as income tax expense.

Kentucky First Federal Bancorp and Frankfort First Bancorp, Inc., each are subject to state income taxes in the Commonwealth of Kentucky. Neither of the Banks are subject to state income tax in the Commonwealth. With few exceptions, the Company is no longer subject to U.S. federal, state and local tax examinations by tax authorities for years before 2011.

Postemployment Benefit Plans, Policy [Policy Text Block]

11. Retirement and Employee Benefit Plans: The Banks each participate in the Pentegra Defined Benefit Plan for Financial Institutions (“The Pentegra DB Plan”), which is a tax-qualified, multi-employer defined benefit pension fund covering all employees who qualify as to length of service. The Pentegra DB Plan’s Employer Identification Number is 13-5645888 and the Plan Number is 333. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code. The Pentegra DB Plan is a single plan under Internal Revenue Code Section 413(c) and, as a result, all of the assets stand behind all of the liabilities. Accordingly, under the Pentegra DB Plan contributions made by a participating employer may be used to provide benefits to participants of other participating employers. Total contributions made to the Pentegra DB Plan, as reported on Form 5500, equal $190.8 million and $136.5 million for the plan years ended June 30, 2014 and 2013, respectively. Our contributions for fiscal 2015 and 2014 were not more than 5% of the total contributions made to the Pentegra DB Plan. Pension expense is the net contributions, which are based upon covered employees’ ages and salaries and are dependent upon the ultimate prescribed benefits of the participants and the funded status of the plan. The Company recognized expense related to the plans totaling approximately $227,000 and $876,000 for the fiscal years ended June 30, 2015 and 2014. There are no collective bargaining agreements in place that require contributions to the Pentegra DB Plan. As of July 1, 2014, the most recent period for which information is available, First Federal of Hazard had an adjusted funding target attainment percentage (“AFTAP”) of 108.5%, while First Federal of Frankfort had an AFTAP of 111.9%. There are no funding improvement plans or surcharges to participants.

The Company also maintains a nonqualified deferred compensation plan for the benefit of certain directors, which is closed to any future deferrals. The expense incurred for the deferred compensation was $15,000 and $2,000 for the fiscal years ended June 30, 2015 and 2014, respectively, while the liabilities totaled $177,000 and $206,000 at June 30, 2015 and 2014, respectively.

First Federal of Hazard has an Employee Stock Ownership Plan (“ESOP”) which provides retirement benefits for substantially all full-time employees who have completed one year of service and have attained the age of 21. Annual contributions are made to the ESOP equal to the ESOP’s debt service less dividends received by the ESOP on unallocated shares. Shares in the ESOP were acquired using funds provided by a loan from the Company and, accordingly, the cost of those shares is shown as a reduction of stockholders’ equity. Shares are released to participants proportionately as the loan is repaid. Dividends on allocated shares are recorded as dividends and charged to retained earnings. Dividends on unallocated shares are used to repay loan principal and accrued interest. Compensation expense is recorded equal to the fair value of shares committed to be released during a given fiscal year. Allocation of shares to the ESOP participants is contingent upon the repayment of a loan to Kentucky First Federal Bancorp totaling $1.6 million and $1.8 million at June 30, 2015 and 2014, respectively. The Company recorded expense for the ESOP of approximately $154,000 and $155,000 for the years ended June 30, 2015 and 2014, respectively. Shares may be surrendered from the plan as employees leave employment. Total shares surrendered from the plan totaled 73,266 at both June 30, 2015 and 2014. The amounts contributed to the ESOP were $280,000 for each of the years 2015 and 2014.

	For the fiscal year ended
	June 30,
	2015		2014
Allocated shares		132,058		116,028
Shares committed to be released		9,338		9,338
Unearned shares		122,311		140,987
Total ESOP shares		263,707		266,353
Fair value of unearned shares at End of period (dollars in thousands)	$	1,025	$	1,212

First Federal of Frankfort maintains a 401(k) plan for the benefit of all full-time employees. No employer contributions have been made to the 401(k) plan.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

12. Share-Based Compensation Plans: Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of the grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of the grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. In fiscal 2006, the Company initiated the 2005 Equity Incentive Plan (“EIP” or the “Plan”) which provides for two share-based compensation plans, which are described below.

No compensation cost was charged against income for those share-based plans for the fiscal years ended June 30, 2015, or 2014 and, consequently, there was no income tax benefit recognized for either of the fiscal years then ended.

The EIP provides for grants of up to 421,216 stock options. It also provides that one-fifth of the options granted become vested and exercisable on the first five anniversaries of the date of grant. The contractual term of the options is ten years. All option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant.

At June 30, 2015, the only options outstanding are related to those granted in the fiscal year 2006.

A summary of the status of the Company’s stock option plan as of June 30, 2015, and changes during the year then ended is presented below:

			Weighted-		Aggregate
			average		Intrinsic
			exercise		Value
	Shares		price		($000)
Outstanding at beginning of year		325,800	$	10.10
Granted		-		-
Exercised		-		-
Forfeited		-		-
Outstanding at end of year		325,800	$	10.10	$	-
Options exercisable at end of year		325,800	$	10.10	$	-

As of June 30, 2015 and 2014, there was no unrecognized compensation cost related to nonvested stock options granted under the Plan.

The EIP also provides for the purchase of 168,486 shares of common stock and the issuance of such shares in the form of restricted stock awards to members of the board of directors, management and certain employees. Common shares awarded under the restricted stock plan vest over a five year period, commencing with the date of the grant and are expensed based on their fair value at the grant date.

As of June 30, 2015 and 2014, there were no grants, forfeitures or nonvested shares and no unrecognized compensation cost related to the restricted stock awards.

Earnings Per Share, Policy [Policy Text Block]

13. Earnings Per Share: Diluted earnings per share is computed taking into consideration common shares outstanding and dilutive potential common shares to be issued or released under the Company’s share-based compensation plans. There is no adjustment to net earnings for the calculation of diluted earnings per share. The factors used in the basic and diluted earnings per share computations for the fiscal years ended June 30 follow:

(in thousands)	2015		2014
Net income allocated to common shareholders, basic and diluted	$	2,069	$	1,934

	2015		2014
Basic
Weighted-average common shares outstanding		8,348,785		8,374,624
Diluted
Weighted-average common shares outstanding (diluted)		8,348,785		8,374,624

Basic earnings per share is computed based upon the weighted-average shares outstanding during the year less average shares in the ESOP that are unallocated and not committed to be released. For fiscal years 2015 and 2014 all options were antidilutive, as the exercise price was greater than the average market price of the common stock.

Fair Value Measurement, Policy [Policy Text Block]

14. Fair Value of Assets and Liabilities: Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 - Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access as of the measurement date.

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Following is a description of the valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheet, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Securities

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 matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

The following  table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis at June 30, 2015 and 2014. The securities represented are only those classified as available-for sale.

			Fair Value Measurements Using
			Quotes Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
2015
Agency mortgage-backed: residential	$	96	$	—	$	96	$	—
FHLMC stock		63		—		63		—
	$	159	$	—	$	159	$	—
2014
Agency mortgage-backed: residential	$	136	$	—	$	136	$	—
FHLMC stock		111		—		111		—
	$	247	$	—	$	247	$	—

There were no transfers between levels 1 and 2.

Impaired Loans

The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent independent 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 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. Independent appraisals for collateral-dependent loans are updated periodically (usually every 12-24 months depending on the size of the loan and the loan-to-value ratio).

Real Estate Owned

Real estate properties acquired through or instead of loan foreclosure are initially recorded as real estate owned (“REO”) 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 which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach with data from comparable properties. 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 were $87,000 and $101,000 for the fiscal years 2015 and 2014, respectively, and resulted in a Level 3 classification of the inputs for determining fair value.

The following table presents the fair value measurements of assets and liabilities measured at fair value on a nonrecurring basis at June 30, 2015 and 2014.

			Fair Value Measurements Using
			Quotes Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
2015
Other real estate owned, net
One- to four-family	$	525		-		-	$	525
Land		15		-		-		15
2014
Impaired loans
One- to four-family	$	186	$	-	$	-	$	186
Other real estate owned, net
One- to four-family		1,140		-		-		1,140
Land		15		-		-		15

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying value of $200,000, with a valuation allowance of $14,000  at June 30, 2014. At June 30, 2015, there were no impaired loans with a valuation allowance. There was no additional provision recorded for the fiscal years ended June 30, 2015 and 2014.

Other real estate owned measured at fair value less costs to sell, had a carrying amount of $540,000 and $1.2 million at June 30, 2015 and 2014, respectively, after write-down of $54,000 and $53,000 for the years ended June 30, 2015 and 2014, respectively.

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, 2015 and 2014:

					Range
	Fair Value		Valuation	Unobservable	(Weighted
June 30, 2015	(in thousands)		Technique(s)	Input(s)	Average)
Foreclosed and repossessed assets:
1-4 family	$	525	Sales comparison approach	Adjustments for differences between comparable sales	1.5% to 11.7% (2.9%)
Land		15	Sales comparison approach	Adjustments for differences between comparable sales	20.2% to 38.9% (20.8%)

					Range
	Fair Value		Valuation	Unobservable	(Weighted
June 30, 2014	(in thousands)		Technique(s)	Input(s)	Average)
Impaired Loans:
Residential real estate
1-4 family	$	186	Sales comparison approach	Adjustments for differences between comparable sales	3.1% to 19.8% (4.3%)
Foreclosed and repossessed assets:
1-4 family	$	1,140	Sales comparison approach	Adjustments for differences between comparable sales	-37.1% to 30.2% (1.1%)
Land		15	Sales comparison approach	Adjustments for differences between comparable sales	20.2% to 38.9% (20.8%)

The following disclosure of the fair value of financial instruments, both assets and liabilities, whether or not recognized in the consolidated balance sheet, is based on the assumptions presented for each particular item and 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 methods were used to estimate the fair value of all other financial instruments recognized in the accompanying balance sheets at amounts other than fair value at June 30, 2015 and 2014:

 

Cash and cash equivalents: The carrying amounts presented in the consolidated balance sheets for cash and cash equivalents are deemed to approximate fair value.

Held-to-maturity securities: For held-to-maturity securities, fair value methods for securities were previously described.

Loans held for sale: Loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value determined by FHLB pricing schedules.

Loans: The loan portfolio has been segregated into categories with similar characteristics, such as one- to four-family residential, multi-family residential and nonresidential real estate. These loan categories were further delineated into fixed-rate and adjustable-rate loans. The fair values for the resultant loan categories were computed via discounted cash flow analysis, using current interest rates offered for loans with similar terms to borrowers of similar credit quality. For loans on deposit accounts and consumer and other loans, fair values were deemed to equal the historic carrying values. Impaired loans are valued at the lower of cost or fair value as previously described. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

Federal Home Loan Bank stock: It was not practicable to determine the fair value of FHLB stock due to restrictions placed on its transferability.

Accrued interest receivable and payable: The carrying amount is the estimated fair value.

Deposits: The fair value of NOW accounts, passbook accounts, and money market deposits are deemed to approximate the amount payable on demand. Fair values for fixed-rate certificates of deposit have been estimated using a discounted cash flow calculation using the interest rates currently offered for deposits of similar remaining maturities.

Federal Home Loan Bank advances: The fair value of these advances is estimated using the rates currently offered for similar advances of similar remaining maturities or, when available, quoted market prices.

Advances by borrowers for taxes and insurance and accrued interest payable: The carrying amount presented in the consolidated statement of financial condition is deemed to approximate fair value.

Commitments to extend credit: For fixed-rate and adjustable-rate loan commitments, the fair value estimate considers the difference between current levels of interest rates and committed rates. The fair value of outstanding loan commitments at June 30, 2015 and 2014, was not material.

Based on the foregoing methods and assumptions, the carrying value and fair value of the Company’s financial instruments at June 30, 2015 and June 30, 2014 are as follows:

			Fair Value Measurements at
(in thousands)			June 30, 2015 Using
	Carrying		Level 1		Level 2		Level 3		Total
	Value
Financial assets
Cash and cash equivalents	$	13,635	$	13,635					$	13,635
Available-for-sale securities		159			$	159				159
Held-to-maturity securities		6,423				6,534				6,534
Loans held for sale		100				101				101
Loans receivable - net		243,815					$	248,265		248,265
Federal Home Loan Bank stock		6,482								n/a
Accrued interest receivable		725				27		698		725
Financial liabilities
Deposits	$	199,701	$	83,603	$	116,304			$	199,907
Federal Home Loan Bank advances		26,635				27,265				27,265
Advances by borrowers for taxes and insurance		699				699				699
Accrued interest payable		32				32				32

The carrying amounts and estimated fair values of financial instruments at June 30, 2014, are as follows:

			Fair Value Measurements at
(in thousands)			June 30, 2014 Using
	Carrying		Level 1		Level 2		Level 3		Total
	Value
Financial assets
Cash and cash equivalents	$	11,511	$	11,511					$	11,511
Available-for-sale securities		247			$	247				247
Held-to-maturity securities		9,018				9,195				9,195
Loans held for sale		—				—				—
Loans receivable - net		246,788					$	253,780		253,780
Federal Home Loan Bank stock		6,482								n/a
Accrued interest receivable		891				891				891
Financial liabilities
Deposits	$	213,142	$	88,854	$	124,390			$	213,244
Federal Home Loan Bank advances		17,200				18,303				18,303
Advances by borrowers for taxes and insurance		616				616				616
Accrued interest payable		32				32				32

Cash and Cash Equivalents, Policy [Policy Text Block]

15. Cash and Cash Equivalents: For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks and interest-bearing deposits in other financial institutions with original maturities of less than ninety days.

Goodwill and Intangible Assets, Policy [Policy Text Block]

16. Goodwill: Goodwill resulting from business combinations prior to January 1, 2009 represents the excess of the purchase price over the fair value of the net assets of businesses acquired. Goodwill resulting from business combinations after January 1, 2009, is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. The Company has selected March 31 as the date to perform the annual impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet.

Cash Surrender Value Of Life Insurance [Policy Text Block]

17. Cash Surrender Value of Life Insurance: First Federal of Frankfort has purchased life insurance policies on certain key executives. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Treasury Stock [Policy Text Block]

18. Treasury Stock: Treasury stock is stated at cost. Cost is determined by the first-in, first-out method.

Related Party Transaction [Policy Text Block]

19. Related Party Transactions: Loans outstanding to executive officers, directors, significant shareholders and their affiliates (related parties) at June 30, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Outstanding principal, beginning of year	$	1,265	$	1,246
Changes in composition of related parties		157		447
Principal disbursed during the year		146		—
Principal repaid and refinanced during the year		(175)		(428)
Outstanding principal, end of year	$	1,393	$	1,265

Deposits from related parties held by the Company at June 30, 2015 and 2014 totaled $4.2 million and $4.5 million, respectively.

Comprehensive Income, Policy [Policy Text Block]

20. Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, net of tax, which are also recognized as separate components of equity.

Contingent Liability Reserve Estimate, Policy [Policy Text Block]

21. Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Loan Commitments, Policy [Policy Text Block]

22. Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Policyholders' Dividend, Policy [Policy Text Block]

23. Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the banks to the holding company or by the holding company to shareholders.

Segment Reporting, Policy [Policy Text Block]

24.    Operating Segments: While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

Reclassification, Policy [Policy Text Block]

25.    Reclassifications: Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity.

New Accounting Pronouncements, Policy [Policy Text Block]

26. New Accounting Standards: In January 2014, FASB issued Accounting Standards Update (“ASU”) 2014-04,  Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force). The ASU clarifies when an insubstance repossession or foreclosure occurs and a creditor is considered to have received physical possession of real estate property collateralizing a consumer mortgage loan. Specifically, the new ASU requires a creditor to reclassify a collateralized consumer mortgage loan to real estate property upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. Additional disclosures are required detailing the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgages collateralized by real estate property that are in the process of foreclosure. The new guidance is effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The adoption of this guidance will not have a material impact on the Company’s consolidated financial statements, but will result in additional disclosures.

In May 2014 the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The ASU amended existing guidance related to revenue from contracts with customers. This amendment supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. In addition, this amendment specifies the accounting for some costs to obtain or fulfill a contract with a customer. Although the new guidance was originally effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2016, with early adoption not permitted, in April 2015 the FASB deferred the effective date by one year. Therefore, ASU 2014-09 will be effective for the Company’s annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2017. Companies have the option to apply ASU 2014-09 as of the original effective date. Upon adoption, the amendments should be applied retrospectively to all periods presented or retrospectively with the cumulative effect recognized at the date of initial application. Management is currently evaluating the impact of the adoption of this guidance on the Company’s consolidated financial statements.

In June 2014 the FASB issued ASU 2014-12, Compensation-Stock Compensation (Topic 718) – Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period. The ASU amended existing guidance related to the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. These amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation-Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this amendment either: (a) prospectively to all awards granted or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of this standard is not expected to have a material effect on the Company’s operating results or financial condition.

In November 2014 the FASB issued ASU 2014-17, Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force), which relates to Business Combinations (Topic 805.) The ASU amended existing guidance related to the accounting by an acquired entity upon a change-in-control event. The amendments provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. An acquired entity should determine whether to elect to apply pushdown accounting for each individual change-in-control event in which an acquirer obtains control of the acquired entity. If pushdown accounting is not applied in the reporting period in which the change-in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity’s most recent change-in-control event. An election to apply pushdown accounting in a reporting period after the reporting period in which the change-in-control event occurred should be considered a change in accounting principle. If pushdown accounting is applied to an individual change-in-control event, that election is irrevocable. If an acquired entity elects the option to apply pushdown accounting in its separate financial statements, it should disclose information in the current reporting period that enables users of financial statements to evaluate the effect of pushdown accounting. The amendments are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The adoption of this standard did not have a material effect on the Company’s operating results or  financial condition.

Impaired Financing Receivable, Policy [Policy Text Block]

27. Purchased Credit Impaired Loans: The Company purchased groups of loans through its whole bank acquisition, some of which have shown evidence of credit deterioration since origination. These purchased credit impaired loans are recorded at the amount paid, such that there is no carryover of the seller’s allowance for loan losses. After acquisition, losses are recognized by an increase in the allowance for loan losses. Such purchased credit impaired loans are accounted for individually or aggregated into pools of loans based on common risk characteristics such as, credit score, loan type, and date of origination. The Company estimates the amount and timing of expected cash flows for each loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool (accretable yield). The excess of the loan’s or pool’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference). Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded. If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income.

XML

PREMISES AND EQUIPMENT (Tables)

12 Months Ended

Jun. 30, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Premises and equipment at June 30 are comprised of the following:

(in thousands)	2015		2014
Land	$	1,693	$	1,493
Buildings and improvements		7,104		6,491
Furniture and equipment		2,219		2,159
Automobiles		64		64
		11,080		10,207
Less: accumulated depreciation		5,845		5,578
Balance at end of year	$	5,235	$	4,629

XML

LOANS (Details 4) - Residential Real Estate One To Four Family [Member] - Troubled Debt Restructuring [Member] $ in Thousands	12 Months Ended
	Jun. 30, 2015 USD ($) Loan	Jun. 30, 2014 USD ($) Loan
Financing Receivable, Recorded Investment [Line Items]
TDRs, Number of Loans | Loan	38	39
TDRs, Pre Modification Outstanding Recorded Investment	$ 2,110	$ 2,230
TDRs, Post Modification Outstanding Recorded Investment	1,851	1,997
Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Modifications, Recorded Investment	1,710	1,621
Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 141	$ 376

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2013
Loans held for sale, Carrying Value	$ 100,000
Amortization of Mortgage Servicing Rights (MSRs)	14,000	$ 14,000
Proceeds from Sale of Mortgage Servicing Rights (MSR)	11,900,000	13,000,000
Loan Sold Under Fhlb Program	599,000
Average Loan Serviced	12,300,000
Bank Servicing Fees	$ 20,000	35,000
Mortgage Loans on Real Estate, Periodic Payment Terms	30
Mortgage Loans On Real Estate Borrowing Capacity Percentage	95.00%
Loans And Leases Receivable Consumer Home Equity Borrowing Capacity Percentage	80.00%
Deferred Compensation Arrangement with Individual, Compensation Expense	$ 15,000	2,000
Employee Stock Ownership Plan (ESOP), Debt Structure, Direct Loan, Amount	1,600,000	1,800,000
Employee Stock Ownership Plan (Esop), Compensation Expense	$ 154,000	$ 155,000
Employee Stock Ownership Plan (ESOP), Number of Suspense Shares	122,311	140,987
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	$ 280,000	$ 280,000
SEC Schedule III, Real Estate, Gross	540,000	1,200,000
SEC Schedule III, Real Estate, Write-down or Reserve, Amount	87,000	101,000
Additional Collateral, Aggregate Fair Value		0
Other Real Estate, Valuation Adjustments	87,000	101,000
Deferred Compensation Liability, Current and Noncurrent	$ 177,000	$ 206,000
Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	421,216
Equity Incentive Plan [Member] | Management [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	168,486
Employee Stock Ownership Plan [Member]
Employee Stock Ownership Plan (ESOP), Number of Suspense Shares	73,266	73,266
First Federal of Hazard [Member]
Defined Benefit Plan, Funded Percentage		108.50%
First Federal of Frankfort [Member]
Defined Benefit Plan, Funded Percentage		111.90%
Pentegra Db Plan [Member]
Multiemployer Plans, Plan Contributions		$ 190,800,000	$ 136,500,000
Multiemployer Plans, Collective-Bargaining Arrangement, Percentage of Contributions	5.00%	5.00%
Pension and Other Postretirement Benefit Expense, Total	$ 227,000	$ 876,000
Employee Stock Ownership Plan (Esop), Compensation Expense	$ 154,000	156,000
Multiemployer Plan Number	333
Multi Family and Nonresidential Loans [Member]
Mortgage Loans on Real Estate, Periodic Payment Terms	25
Mortgage Loans On Real Estate Borrowing Capacity Percentage	80.00%
Loans To Qualified Borrowers [Member]
Loans And Leases Receivable Consumer Home Equity Borrowing Capacity Percentage	90.00%
Loans Secured By Savings [Member]
Loans And Leases Receivable Consumer Home Equity Borrowing Capacity Percentage	90.00%
Securities Pledged as Collateral [Member]
Impaired Financing Receivable, Recorded Investment, Total			200,000
Impaired Financing Receivable, Related Allowance			$ 14,000
Mortgage Servicing Rights [Member]
Disposal Group, Including Discontinued Operation, Mortgage Loans	$ 96,000	$ 104,000
First Mortgage [Member]
Mortgage Loans On Real Estate Alternate Borrowing Capacity Percentage	90.00%
Second Mortgage [Member]
Loans And Leases Receivable Consumer Home Equity Borrowing Capacity Percentage	10.00%
Construction Loans [Member]
Mortgage Loans On Real Estate Alternate Borrowing Capacity Percentage	80.00%

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Net income	$ 2,069	$ 1,934
Other comprehensive income (loss), net of tax-related effects:
Unrealized holding gains (losses) on securities available for sale during the year, net of tax expense (benefit) of $(16) and $24 in 2015 and 2014, respectively	(32)	47
Comprehensive income	$ 2,037	$ 1,981

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Kentucky First Federal Bancorp (the “Company”) is a savings and loan holding company whose activities are primarily limited to holding the stock and managing the operations of First Federal Savings and Loan Association of Hazard, Kentucky (“First Federal of Hazard”) and Frankfort First Bancorp, Inc., (“Frankfort First”) the holding company for First Federal Savings Bank of Frankfort (“First Federal of Frankfort”). First Federal of Hazard and First Federal of Frankfort are collectively referred to herein as “the Banks.” First Federal of Hazard is a community-oriented savings and loan association dedicated to serving consumers in Perry and surrounding counties in eastern Kentucky, while First Federal of Frankfort operates through six banking offices located in Frankfort, Danville and Lancaster, Kentucky. Both institutions engage primarily in the business of attracting deposits from the general public and applying those funds to the origination of loans for residential and consumer purposes. First Federal of Frankfort also originates, to a lesser extent, church loans, home equity and other loans. Other than a predominance of one- to four-family residential property, which is common in most thrifts, there are no significant concentrations of loans to any one industry or customer. However, the customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the Banks’ specific operating areas. The Banks’ profitability is significantly dependent on net interest income, which is the difference between interest income generated from interest-earning assets (i.e. loans and investments) and the interest expense paid on interest-bearing liabilities (i.e. customer deposits and borrowed funds). Net interest income is affected by the relative amount of interest-earning assets and interest-bearing liabilities and the interest received or paid on these balances. The level of interest rates paid or received by the Banks can be significantly influenced by a number of environmental factors, such as governmental monetary policy, that are outside of management’s control.

The following is a summary of the Company’s significant accounting policies which have been consistently applied in the preparation of the accompanying consolidated financial statements.

1.   Principles of Consolidation: The consolidated financial statements include the accounts of the Company, First Federal of Hazard, Frankfort First and First Federal of Frankfort. All significant intercompany accounts and transactions have been eliminated in consolidation.

2.   Use of Estimates: The consolidated financial information presented herein has been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP.”) To prepare financial statements in conformity with U.S. GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ.

3.   Securities: Debt securities are classified as held to maturity or available for sale. Securities classified as held to maturity are to be carried at cost only if the Company has the positive intent and ability to hold these securities to maturity. Securities designated as available for sale are carried at fair value with resulting unrealized gains or losses recorded to shareholders’ equity, net of tax.

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

4.    Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal amount outstanding, adjusted for deferred loan origination fees, discounts on purchased loans, and the allowance for loan losses. Interest income is accrued on the unpaid principal balance unless the collectability of the loan is in doubt. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. Interest income on one- to four-family residential loans is generally discontinued at the time a loan is 180 days delinquent and on other loans at the time a loan is 90 days delinquent. All other loans are moved to non-accrual status in accordance with the Company’s policy, typically 90 days after the loan becomes delinquent. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

5.   Loans held for sale and Mortgage Servicing Rights: Loans held for sale are carried at the lower of cost (less principal payments received) or fair value, calculated on an aggregate basis. At June 30, 2015 the Company had $100,000 in loans held for sale, while at June 30, 2014 the Company had no loans held for sale.

In selling loans, the Company utilizes a program with the Federal Home Loan Bank, retaining servicing on loans sold. Mortgage servicing rights on originated loans that have been sold are initially recorded at fair value. Capitalized servicing rights are amortized in proportion to and over the period of estimated servicing revenues. The Company recorded amortization related to mortgage servicing rights totaling $14,000 during each of the years ended June 30, 2015 and 2014. The carrying value of the Company’s mortgage servicing rights, which approximated fair value, totaled approximately $96,000 and $104,000 at June 30, 2015 and 2014, respectively.

The Company was servicing mortgage loans of approximately $11.9 million and $13.0 million that had been sold to the Federal Home Loan Bank at June 30, 2015 and 2014, respectively. During the fiscal year ended June 30, 2015, we sold $599,000 in loans under the FHLB program and the average balance of loans serviced was $12.3 million.

Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income. Changes in valuation allowances are reported with other non-interest income on the income statement. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses.

Servicing fee income which is reported on the income statement as other non-interest income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing fee income. Servicing fees totaled $20,000 and $35,000 for the fiscal years ended June 30, 2015 and 2014, respectively. Late fees and ancillary fees related to loan servicing are not material.

6.   Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loss experience, the nature and volume of the portfolio, trends in the level of delinquent and problem loans, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and current and anticipated economic conditions in the primary lending area. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired or loans otherwise classified as substandard or doubtful. The general component covers all loans and is based on historical loss experience adjusted for current factors. In consultation with regulators, the Company considers a time frame of two years when estimating the appropriate level of allowance for loan losses. This period may be shortened or extended based on anticipated trends in the banks or in the banks’ markets.

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent eight quarters. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.

These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; economic trends and conditions; industry conditions; and effects of changes in credit concentrations. Our portfolio segments include residential real estate, nonresidential real estate and land, loans on deposits and consumer and other loans. Risk factors associated with our portfolio segments are as follows:

Residential Real Estate

Our primary lending activity is the origination of mortgage loans, which enable a borrower to purchase or refinance existing homes in the Banks’ respective market areas. We further classify our residential real estate loans as one- to four-family (owner-occupied vs nonowner-occupied), multi-family or construction. We believe that our first mortgage position on loans secured by residential real estate presents lower risk than our other loans, with the exception of loans on deposits.

We offer a mix of adjustable-rate and fixed-rate mortgage loans with terms up to 30 years for owner-occupied properties. For these properties a borrower may be able to borrow up to 95% of the value with private mortgage insurance. Alternatively, the borrower may be able to borrow up to 90% of the value with a traditional first mortgage and a second mortgage (bearing a higher rate of interest) on the additional 10% of the value.

We offer loans on one- to four-family rental properties at a maximum of 80% loan-to-value (“LTV”) ratio and we generally charge a slightly higher interest rate on such loans.

We also originate loans to individuals to finance the construction of residential dwellings for personal use or for use as rental property. We occasionally lend to builders for construction of speculative or custom residential properties for resale, but on a limited basis. Construction loans are generally less than one year in length, do not exceed 80% of the appraised value, and provide for the payment of interest only during the construction phase. Funds are disbursed as progress is made toward completion of the construction.

Multi-family and Nonresidential Loans

We offer mortgage loans secured by residential multi-family (five or more units), and nonresidential real estate. Nonresidential real estate loans are comprised generally of commercial office buildings, churches and properties used for other purposes. Generally, these loans are originated for 25 years or less and do not exceed 80% of the appraised value. Loans secured by multi-family and commercial real estate generally have larger balances and involve a greater degree of risk than one- to four-family residential mortgage loans. These loans depend on the borrower’s creditworthiness and the feasibility and cash flow potential of the project. Payments on loans secured by income properties often depend on successful operation and management of the properties. As a result, repayment on such loans may be subject to a greater extent to adverse conditions in the real estate market or economy than owner-occupied residential loans.

Consumer lending

Our consumer loans include home equity lines of credit, loans secured by savings deposits, automobile loans, and unsecured loans. Home equity loans are generally second mortgage loans subordinate only to first mortgages also held by the bank and do not exceed 80% of the estimated value of the property. We do offer home equity loans up to 90% of the estimated value to qualified borrowers and these loans carry a premium rate. Loans secured by savings are originated up to 90% of the depositor’s savings account balance and bear interest at a rate higher than the rate paid on the deposit account. Because the deposit account must be pledged as collateral to secure the loan, the inherent risk of this type of loan is minimal. Loans secured by automobiles are made directly to consumers (there are no relationships with dealers) and are based on the value of the vehicle and the borrower’s creditworthiness. Vehicle loans present a higher level of risk because of the natural decline in the value of the property as well as its mobility. Unsecured loans are based entirely on the borrower’s creditworthiness and present the highest level of risk to the bank.

The Banks account for impaired loans by determining the present value of expected future cash flows discounted at the loan’s effective interest rate or, as an alternative, at the loan’s observable market price or fair value of the collateral, reduced by estimated selling costs.

A loan is considered impaired when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. Although most of our loans are secured by collateral, we rely heavily on the capacity of our borrowers to generate sufficient cash flow to service their debt. As a result, our loans do not become collateral-dependent until there is deterioration in the borrower’s cash flow and financial condition, which makes it necessary for us to look to the collateral for our sole source of repayment. Collateral-dependent loans which are more than ninety days delinquent are considered to constitute more than a minimum delay in repayment and are evaluated for impairment under the policy at that time.

We utilize updated independent appraisals to determine fair value for collateral-dependent loans, adjusted for estimated selling costs, in determining our specific reserve. In some situations management does not secure an updated independent appraisal. These situations may involve small loan amounts or loans that, in management’s opinion, have an abnormally low loan-to-value ratio.

With respect to the Banks’ investment in troubled debt restructurings, multi-family and nonresidential loans, and the evaluation of impairment thereof, such loans are nonhomogenous and, as such, may be deemed to be collateral-dependent when they become more than ninety days delinquent. We obtain updated independent appraisals in these situations or when we suspect that the previous appraisal may no longer be reflective of the property’s current fair value. This process varies from loan to loan, borrower to borrower, and also varies based on the nature of the collateral.

7. Federal Home Loan Bank Stock: The banks are members of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

8. Real Estate Owned: Real estate acquired through or instead of foreclosure is initially recorded at fair value less estimated selling expenses at the date of acquisition, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequently, the carrying value is adjusted through a valuation allowance and the amount is recorded through expense. Costs relating to holding real estate owned, net of rental income, are charged against earnings as incurred.

9. Premises and Equipment: Land is carried at cost. Premises and equipment are carried at cost less accumulated depreciation. The cost of premises and equipment includes expenditures which extend the useful lives of existing assets. Maintenance, repairs and minor renewals are expensed as incurred. For financial reporting, depreciation is provided on the straight-line method over the useful lives of the assets, estimated to be forty years for buildings, ten to forty years for building improvements, and five to ten years for furniture and equipment.

10. Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. Deferred tax assets are recorded only to the extent that the amount of net deductible temporary differences or carryforward attributes may be utilized against current period earnings, carried back against prior years’ earnings, offset against taxable temporary differences reversing in future periods, or utilized to the extent of management’s estimate of future taxable income. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. Deferred tax liabilities are provided on the total amount of net temporary differences taxable in the future.

A tax provision is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters as income tax expense.

Kentucky First Federal Bancorp and Frankfort First Bancorp, Inc., each are subject to state income taxes in the Commonwealth of Kentucky. Neither of the Banks are subject to state income tax in the Commonwealth. With few exceptions, the Company is no longer subject to U.S. federal, state and local tax examinations by tax authorities for years before 2011.

11. Retirement and Employee Benefit Plans: The Banks each participate in the Pentegra Defined Benefit Plan for Financial Institutions (“The Pentegra DB Plan”), which is a tax-qualified, multi-employer defined benefit pension fund covering all employees who qualify as to length of service. The Pentegra DB Plan’s Employer Identification Number is 13-5645888 and the Plan Number is 333. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code. The Pentegra DB Plan is a single plan under Internal Revenue Code Section 413(c) and, as a result, all of the assets stand behind all of the liabilities. Accordingly, under the Pentegra DB Plan contributions made by a participating employer may be used to provide benefits to participants of other participating employers. Total contributions made to the Pentegra DB Plan, as reported on Form 5500, equal $190.8 million and $136.5 million for the plan years ended June 30, 2014 and 2013, respectively. Our contributions for fiscal 2015 and 2014 were not more than 5% of the total contributions made to the Pentegra DB Plan. Pension expense is the net contributions, which are based upon covered employees’ ages and salaries and are dependent upon the ultimate prescribed benefits of the participants and the funded status of the plan. The Company recognized expense related to the plans totaling approximately $227,000 and $876,000 for the fiscal years ended June 30, 2015 and 2014. There are no collective bargaining agreements in place that require contributions to the Pentegra DB Plan. As of July 1, 2014, the most recent period for which information is available, First Federal of Hazard had an adjusted funding target attainment percentage (“AFTAP”) of 108.5%, while First Federal of Frankfort had an AFTAP of 111.9%. There are no funding improvement plans or surcharges to participants.

The Company also maintains a nonqualified deferred compensation plan for the benefit of certain directors, which is closed to any future deferrals. The expense incurred for the deferred compensation was $15,000 and $2,000 for the fiscal years ended June 30, 2015 and 2014, respectively, while the liabilities totaled $177,000 and $206,000 at June 30, 2015 and 2014, respectively.

First Federal of Hazard has an Employee Stock Ownership Plan (“ESOP”) which provides retirement benefits for substantially all full-time employees who have completed one year of service and have attained the age of 21. Annual contributions are made to the ESOP equal to the ESOP’s debt service less dividends received by the ESOP on unallocated shares. Shares in the ESOP were acquired using funds provided by a loan from the Company and, accordingly, the cost of those shares is shown as a reduction of stockholders’ equity. Shares are released to participants proportionately as the loan is repaid. Dividends on allocated shares are recorded as dividends and charged to retained earnings. Dividends on unallocated shares are used to repay loan principal and accrued interest. Compensation expense is recorded equal to the fair value of shares committed to be released during a given fiscal year. Allocation of shares to the ESOP participants is contingent upon the repayment of a loan to Kentucky First Federal Bancorp totaling $1.6 million and $1.8 million at June 30, 2015 and 2014, respectively. The Company recorded expense for the ESOP of approximately $154,000 and $155,000 for the years ended June 30, 2015 and 2014, respectively. Shares may be surrendered from the plan as employees leave employment. Total shares surrendered from the plan totaled 73,266 at both June 30, 2015 and 2014. The amounts contributed to the ESOP were $280,000 for each of the years 2015 and 2014.

	For the fiscal year ended
	June 30,
	2015		2014
Allocated shares		132,058		116,028
Shares committed to be released		9,338		9,338
Unearned shares		122,311		140,987
Total ESOP shares		263,707		266,353
Fair value of unearned shares at End of period (dollars in thousands)	$	1,025	$	1,212

First Federal of Frankfort maintains a 401(k) plan for the benefit of all full-time employees. No employer contributions have been made to the 401(k) plan.

12. Share-Based Compensation Plans: Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of the grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of the grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. In fiscal 2006, the Company initiated the 2005 Equity Incentive Plan (“EIP” or the “Plan”) which provides for two share-based compensation plans, which are described below.

No compensation cost was charged against income for those share-based plans for the fiscal years ended June 30, 2015, or 2014 and, consequently, there was no income tax benefit recognized for either of the fiscal years then ended.

The EIP provides for grants of up to 421,216 stock options. It also provides that one-fifth of the options granted become vested and exercisable on the first five anniversaries of the date of grant. The contractual term of the options is ten years. All option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant.

At June 30, 2015, the only options outstanding are related to those granted in the fiscal year 2006.

A summary of the status of the Company’s stock option plan as of June 30, 2015, and changes during the year then ended is presented below:

			Weighted-		Aggregate
			average		Intrinsic
			exercise		Value
	Shares		price		($000)
Outstanding at beginning of year		325,800	$	10.10
Granted		-		-
Exercised		-		-
Forfeited		-		-
Outstanding at end of year		325,800	$	10.10	$	-
Options exercisable at end of year		325,800	$	10.10	$	-

As of June 30, 2015 and 2014, there was no unrecognized compensation cost related to nonvested stock options granted under the Plan.

The EIP also provides for the purchase of 168,486 shares of common stock and the issuance of such shares in the form of restricted stock awards to members of the board of directors, management and certain employees. Common shares awarded under the restricted stock plan vest over a five year period, commencing with the date of the grant and are expensed based on their fair value at the grant date.

As of June 30, 2015 and 2014, there were no grants, forfeitures or nonvested shares and no unrecognized compensation cost related to the restricted stock awards.

13. Earnings Per Share: Diluted earnings per share is computed taking into consideration common shares outstanding and dilutive potential common shares to be issued or released under the Company’s share-based compensation plans. There is no adjustment to net earnings for the calculation of diluted earnings per share. The factors used in the basic and diluted earnings per share computations for the fiscal years ended June 30 follow:

(in thousands)	2015		2014
Net income allocated to common shareholders, basic and diluted	$	2,069	$	1,934

	2015		2014
Basic
Weighted-average common shares outstanding		8,348,785		8,374,624
Diluted
Weighted-average common shares outstanding (diluted)		8,348,785		8,374,624

Basic earnings per share is computed based upon the weighted-average shares outstanding during the year less average shares in the ESOP that are unallocated and not committed to be released. For fiscal years 2015 and 2014 all options were antidilutive, as the exercise price was greater than the average market price of the common stock.

14. Fair Value of Assets and Liabilities: Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 - Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access as of the measurement date.

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Following is a description of the valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheet, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Securities

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 matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

The following  table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis at June 30, 2015 and 2014. The securities represented are only those classified as available-for sale.

			Fair Value Measurements Using
			Quotes Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
2015
Agency mortgage-backed: residential	$	96	$	—	$	96	$	—
FHLMC stock		63		—		63		—
	$	159	$	—	$	159	$	—
2014
Agency mortgage-backed: residential	$	136	$	—	$	136	$	—
FHLMC stock		111		—		111		—
	$	247	$	—	$	247	$	—

There were no transfers between levels 1 and 2.

Impaired Loans

The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent independent 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 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. Independent appraisals for collateral-dependent loans are updated periodically (usually every 12-24 months depending on the size of the loan and the loan-to-value ratio).

Real Estate Owned

Real estate properties acquired through or instead of loan foreclosure are initially recorded as real estate owned (“REO”) 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 which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach with data from comparable properties. 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 were $87,000 and $101,000 for the fiscal years 2015 and 2014, respectively, and resulted in a Level 3 classification of the inputs for determining fair value.

The following table presents the fair value measurements of assets and liabilities measured at fair value on a nonrecurring basis at June 30, 2015 and 2014.

			Fair Value Measurements Using
			Quotes Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
2015
Other real estate owned, net
One- to four-family	$	525		-		-	$	525
Land		15		-		-		15
2014
Impaired loans
One- to four-family	$	186	$	-	$	-	$	186
Other real estate owned, net
One- to four-family		1,140		-		-		1,140
Land		15		-		-		15

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying value of $200,000, with a valuation allowance of $14,000  at June 30, 2014. At June 30, 2015, there were no impaired loans with a valuation allowance. There was no additional provision recorded for the fiscal years ended June 30, 2015 and 2014.

Other real estate owned measured at fair value less costs to sell, had a carrying amount of $540,000 and $1.2 million at June 30, 2015 and 2014, respectively, after write-down of $54,000 and $53,000 for the years ended June 30, 2015 and 2014, respectively.

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, 2015 and 2014:

					Range
	Fair Value		Valuation	Unobservable	(Weighted
June 30, 2015	(in thousands)		Technique(s)	Input(s)	Average)
Foreclosed and repossessed assets:
1-4 family	$	525	Sales comparison approach	Adjustments for differences between comparable sales	1.5% to 11.7% (2.9%)
Land		15	Sales comparison approach	Adjustments for differences between comparable sales	20.2% to 38.9% (20.8%)

					Range
	Fair Value		Valuation	Unobservable	(Weighted
June 30, 2014	(in thousands)		Technique(s)	Input(s)	Average)
Impaired Loans:
Residential real estate
1-4 family	$	186	Sales comparison approach	Adjustments for differences between comparable sales	3.1% to 19.8% (4.3%)
Foreclosed and repossessed assets:
1-4 family	$	1,140	Sales comparison approach	Adjustments for differences between comparable sales	-37.1% to 30.2% (1.1%)
Land		15	Sales comparison approach	Adjustments for differences between comparable sales	20.2% to 38.9% (20.8%)

The following disclosure of the fair value of financial instruments, both assets and liabilities, whether or not recognized in the consolidated balance sheet, is based on the assumptions presented for each particular item and 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 methods were used to estimate the fair value of all other financial instruments recognized in the accompanying balance sheets at amounts other than fair value at June 30, 2015 and 2014:

 

Cash and cash equivalents: The carrying amounts presented in the consolidated balance sheets for cash and cash equivalents are deemed to approximate fair value.

Held-to-maturity securities: For held-to-maturity securities, fair value methods for securities were previously described.

Loans held for sale: Loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value determined by FHLB pricing schedules.

Loans: The loan portfolio has been segregated into categories with similar characteristics, such as one- to four-family residential, multi-family residential and nonresidential real estate. These loan categories were further delineated into fixed-rate and adjustable-rate loans. The fair values for the resultant loan categories were computed via discounted cash flow analysis, using current interest rates offered for loans with similar terms to borrowers of similar credit quality. For loans on deposit accounts and consumer and other loans, fair values were deemed to equal the historic carrying values. Impaired loans are valued at the lower of cost or fair value as previously described. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

Federal Home Loan Bank stock: It was not practicable to determine the fair value of FHLB stock due to restrictions placed on its transferability.

Accrued interest receivable and payable: The carrying amount is the estimated fair value.

Deposits: The fair value of NOW accounts, passbook accounts, and money market deposits are deemed to approximate the amount payable on demand. Fair values for fixed-rate certificates of deposit have been estimated using a discounted cash flow calculation using the interest rates currently offered for deposits of similar remaining maturities.

Federal Home Loan Bank advances: The fair value of these advances is estimated using the rates currently offered for similar advances of similar remaining maturities or, when available, quoted market prices.

Advances by borrowers for taxes and insurance and accrued interest payable: The carrying amount presented in the consolidated statement of financial condition is deemed to approximate fair value.

Commitments to extend credit: For fixed-rate and adjustable-rate loan commitments, the fair value estimate considers the difference between current levels of interest rates and committed rates. The fair value of outstanding loan commitments at June 30, 2015 and 2014, was not material.

Based on the foregoing methods and assumptions, the carrying value and fair value of the Company’s financial instruments at June 30, 2015 and June 30, 2014 are as follows:

			Fair Value Measurements at
(in thousands)			June 30, 2015 Using
	Carrying		Level 1		Level 2		Level 3		Total
	Value
Financial assets
Cash and cash equivalents	$	13,635	$	13,635					$	13,635
Available-for-sale securities		159			$	159				159
Held-to-maturity securities		6,423				6,534				6,534
Loans held for sale		100				101				101
Loans receivable - net		243,815					$	248,265		248,265
Federal Home Loan Bank stock		6,482								n/a
Accrued interest receivable		725				27		698		725
Financial liabilities
Deposits	$	199,701	$	83,603	$	116,304			$	199,907
Federal Home Loan Bank advances		26,635				27,265				27,265
Advances by borrowers for taxes and insurance		699				699				699
Accrued interest payable		32				32				32

The carrying amounts and estimated fair values of financial instruments at June 30, 2014, are as follows:

			Fair Value Measurements at
(in thousands)			June 30, 2014 Using
	Carrying		Level 1		Level 2		Level 3		Total
	Value
Financial assets
Cash and cash equivalents	$	11,511	$	11,511					$	11,511
Available-for-sale securities		247			$	247				247
Held-to-maturity securities		9,018				9,195				9,195
Loans held for sale		—				—				—
Loans receivable - net		246,788					$	253,780		253,780
Federal Home Loan Bank stock		6,482								n/a
Accrued interest receivable		891				891				891
Financial liabilities
Deposits	$	213,142	$	88,854	$	124,390			$	213,244
Federal Home Loan Bank advances		17,200				18,303				18,303
Advances by borrowers for taxes and insurance		616				616				616
Accrued interest payable		32				32				32

15. Cash and Cash Equivalents: For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks and interest-bearing deposits in other financial institutions with original maturities of less than ninety days.

16. Goodwill: Goodwill resulting from business combinations prior to January 1, 2009 represents the excess of the purchase price over the fair value of the net assets of businesses acquired. Goodwill resulting from business combinations after January 1, 2009, is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. The Company has selected March 31 as the date to perform the annual impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet.

17. Cash Surrender Value of Life Insurance: First Federal of Frankfort has purchased life insurance policies on certain key executives. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

18. Treasury Stock: Treasury stock is stated at cost. Cost is determined by the first-in, first-out method.

19. Related Party Transactions: Loans outstanding to executive officers, directors, significant shareholders and their affiliates (related parties) at June 30, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Outstanding principal, beginning of year	$	1,265	$	1,246
Changes in composition of related parties		157		447
Principal disbursed during the year		146		—
Principal repaid and refinanced during the year		(175)		(428)
Outstanding principal, end of year	$	1,393	$	1,265

Deposits from related parties held by the Company at June 30, 2015 and 2014 totaled $4.2 million and $4.5 million, respectively.

20. Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, net of tax, which are also recognized as separate components of equity.

21. Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

22. Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

23. Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the banks to the holding company or by the holding company to shareholders.

24.    Operating Segments: While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

25.    Reclassifications: Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity.

26. New Accounting Standards: In January 2014, FASB issued Accounting Standards Update (“ASU”) 2014-04,  Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force). The ASU clarifies when an insubstance repossession or foreclosure occurs and a creditor is considered to have received physical possession of real estate property collateralizing a consumer mortgage loan. Specifically, the new ASU requires a creditor to reclassify a collateralized consumer mortgage loan to real estate property upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. Additional disclosures are required detailing the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgages collateralized by real estate property that are in the process of foreclosure. The new guidance is effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The adoption of this guidance will not have a material impact on the Company’s consolidated financial statements, but will result in additional disclosures.

In May 2014 the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The ASU amended existing guidance related to revenue from contracts with customers. This amendment supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. In addition, this amendment specifies the accounting for some costs to obtain or fulfill a contract with a customer. Although the new guidance was originally effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2016, with early adoption not permitted, in April 2015 the FASB deferred the effective date by one year. Therefore, ASU 2014-09 will be effective for the Company’s annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2017. Companies have the option to apply ASU 2014-09 as of the original effective date. Upon adoption, the amendments should be applied retrospectively to all periods presented or retrospectively with the cumulative effect recognized at the date of initial application. Management is currently evaluating the impact of the adoption of this guidance on the Company’s consolidated financial statements.

In June 2014 the FASB issued ASU 2014-12, Compensation-Stock Compensation (Topic 718) – Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period. The ASU amended existing guidance related to the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. These amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation-Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this amendment either: (a) prospectively to all awards granted or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of this standard is not expected to have a material effect on the Company’s operating results or financial condition.

In November 2014 the FASB issued ASU 2014-17, Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force), which relates to Business Combinations (Topic 805.) The ASU amended existing guidance related to the accounting by an acquired entity upon a change-in-control event. The amendments provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. An acquired entity should determine whether to elect to apply pushdown accounting for each individual change-in-control event in which an acquirer obtains control of the acquired entity. If pushdown accounting is not applied in the reporting period in which the change-in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity’s most recent change-in-control event. An election to apply pushdown accounting in a reporting period after the reporting period in which the change-in-control event occurred should be considered a change in accounting principle. If pushdown accounting is applied to an individual change-in-control event, that election is irrevocable. If an acquired entity elects the option to apply pushdown accounting in its separate financial statements, it should disclose information in the current reporting period that enables users of financial statements to evaluate the effect of pushdown accounting. The amendments are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The adoption of this standard did not have a material effect on the Company’s operating results or  financial condition.

27. Purchased Credit Impaired Loans: The Company purchased groups of loans through its whole bank acquisition, some of which have shown evidence of credit deterioration since origination. These purchased credit impaired loans are recorded at the amount paid, such that there is no carryover of the seller’s allowance for loan losses. After acquisition, losses are recognized by an increase in the allowance for loan losses. Such purchased credit impaired loans are accounted for individually or aggregated into pools of loans based on common risk characteristics such as, credit score, loan type, and date of origination. The Company estimates the amount and timing of expected cash flows for each loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool (accretable yield). The excess of the loan’s or pool’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference). Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded. If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income.

XML

PREMISES AND EQUIPMENT (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Jun. 30, 2014
Property, Plant and Equipment [Line Items]
Land	$ 1,693	$ 1,493
Buildings and improvements	7,104	6,491
Furniture and equipment	2,219	2,159
Automobiles	64	64
Property, Plant and Equipment, Gross	11,080	10,207
Less: accumulated depreciation	5,845	5,578
Balance at end of year	$ 5,235	$ 4,629

XML

LOAN COMMITMENTS (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Mortgage Loans on Real Estate, Face Amount of Mortgages	$ 1,000,000	$ 336,000
Mortgage Loans on Real Estate, Minimum Interest Rate in Range	3.50%	4.81%
Mortgage Loans on Real Estate, Maximum Interest Rate in Range	5.18%	5.75%
Maximum [Member]
Mortgage Loans On Real Estate Maturity Term	30 years	30 years
Minimum [Member]
Mortgage Loans On Real Estate Maturity Term	10 years	10 years

XML

DEPOSITS (Tables)

12 Months Ended

Jun. 30, 2015

Banking and Thrift [Abstract]

Schedule Of Deposit Liabilities Disclosures [Table Text Block]

Deposits consist of the following major classifications at June 30:

(in thousands)	2015		2014
Non-interest bearing checking accounts	$	4,073	$	3,786
Checking accounts		14,904		13,364
Savings accounts		51,371		46,277
Money market demand deposits		13,255		13,010
Total demand, transaction and passbook deposits		83,603		76,437
Certificates of deposit:
Original maturities of:
Less than 12 months		75,856		92,271
12 months to 36 months		35,616		38,705
More than 36 months		4,626		5,729
Total certificates of deposit		116,098		136,705
Total deposits	$	199,701	$	213,142

Schedule Of Certificates Of Deposit Fiscal Year Maturity [Table Text Block]

Maturities of outstanding certificates of deposit at June 30 are summarized as follows:

(in thousands)	2015
2016	$	75,856
2017		28,011
2018		7,605
2019		1,573
2020 and thereafter		3,053
	$	116,098

XML

CONDENSED FINANCIAL STATEMENTS OF KENTUCKY FIRST FEDERAL BANCORP (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net earnings for the year	$ 2,069	$ 1,934
Adjustments to reconcile net earnings to net cash provided by operating activities:
Noncash compensation expense	154	155
Increase (decrease) in cash, due to changes in:
Prepaid expenses and other assets	(22)	51
Other liabilities	42	(5)
Net cash provided by operating activities	3,096	2,487
Cash flows from financing activities:
Dividends paid on common stock	(1,385)	(1,511)
Repurchase of treasury shares	(698)	(42)
Net cash used in financing activities	(5,794)	(25,978)
Net increase (decrease) in cash and cash equivalents	2,124	(5,029)
Beginning cash and cash equivalents	11,511	16,540
Ending cash and cash equivalents	13,635	11,511
Parent Company [Member]
Cash flows from operating activities:
Net earnings for the year	2,069	1,934
Adjustments to reconcile net earnings to net cash provided by operating activities:
Excess (deficit) distributions over earnings (undistributed earnings) from consolidated subsidiaries	(815)	(332)
Noncash compensation expense	187	187
Increase (decrease) in cash, due to changes in:
Prepaid expenses and other assets	59	(104)
Other liabilities	140	(7)
Net cash provided by operating activities	1,640	1,678
Cash flows from financing activities:
Dividends paid on common stock	(1,385)	(1,511)
Repurchase of treasury shares	(698)	(42)
Net cash used in financing activities	(2,083)	(1,553)
Net increase (decrease) in cash and cash equivalents	(443)	125
Beginning cash and cash equivalents	2,015	1,890
Ending cash and cash equivalents	$ 1,572	$ 2,015

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Residential Real Estate One To Four Family [Member] | Impaired Loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Impaired Loans, Fair value		$ 186
Valuation Technique(s)		Sales comparison approach
Unobservable Input(s)		Adjustments for differences between comparable sales
Range (Weighted Average)		4.30%
Residential Real Estate One To Four Family [Member] | Impaired Loans [Member] | Minimum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range (Weighted Average)		3.10%
Residential Real Estate One To Four Family [Member] | Impaired Loans [Member] | Maximum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range (Weighted Average)		19.80%
Residential Real Estate One To Four Family [Member] | Repossessed Assets [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Impaired Loans, Fair value	$ 525	$ 1,140
Valuation Technique(s)	Sales comparison approach	Sales comparison approach
Unobservable Input(s)	Adjustments for differences between comparable sales	Adjustments for differences between comparable sales
Range (Weighted Average)	2.90%	1.10%
Residential Real Estate One To Four Family [Member] | Repossessed Assets [Member] | Minimum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range (Weighted Average)	1.50%	(37.10%)
Residential Real Estate One To Four Family [Member] | Repossessed Assets [Member] | Maximum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range (Weighted Average)	11.70%	30.20%
Residential Real Estate Land [Member] | Repossessed Assets [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Impaired Loans, Fair value	$ 15	$ 15
Valuation Technique(s)	Sales comparison approach	Sales comparison approach
Unobservable Input(s)	Adjustments for differences between comparable sales	Adjustments for differences between comparable sales
Range (Weighted Average)	20.80%	20.80%
Residential Real Estate Land [Member] | Repossessed Assets [Member] | Minimum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range (Weighted Average)	20.20%	20.20%
Residential Real Estate Land [Member] | Repossessed Assets [Member] | Maximum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range (Weighted Average)	38.90%	38.90%

XML

CONDENSED FINANCIAL STATEMENTS OF KENTUCKY FIRST FEDERAL BANCORP

12 Months Ended

Jun. 30, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

NOTE K - CONDENSED FINANCIAL STATEMENTS OF KENTUCKY FIRST FEDERAL BANCORP

The following condensed financial statements summarize the financial position of Kentucky First Federal Bancorp as of June 30, 2015 and 2014, and the results of its operations and its cash flows for the fiscal years ended June 30, 2015 and 2014.

KENTUCKY FIRST FEDERAL BANCORP

BALANCE SHEETS

June 30, 2015 and 2014

(In thousands)

	2015		2014
ASSETS
Interest-bearing deposits in First Federal of Hazard	$	572	$	869
Interest-bearing deposits in First Federal of Frankfort		985		1,133
Other interest-bearing deposits		15		13
Investment in First Federal of Hazard		17,795		17,384
Investment in Frankfort First		47,539		47,200
Prepaid expenses and other assets		580		639
Total assets	$	67,486	$	67,238
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and other liabilities	$	173	$	33
Total liabilities		173		33
Shareholders’ equity
Common stock		86		86
Additional paid-in capital		34,638		34,671
Retained earnings		34,711		34,027
Unearned employee stock ownership plan (ESOP)		(1,223)		(1,410)
Treasury shares at cost, 112,563 and 27,886 common shares at June 30, 2015 and 2014, respectively		(937)		(239)
Accumulated other comprehensive income		38		70
Total shareholders’ equity		67,313		67,205
Total liabilities and shareholders’ equity	$	67,486	$	67,238

KENTUCKY FIRST FEDERAL BANCORP

STATEMENTS OF INCOME

Years ended June 30, 2015 and 2014

(Dollar amounts in thousands)

	2015		2014
Income
Interest income	$	99	$	110
Dividends from First Federal of Hazard		—		—
Equity in undistributed (excess distributed) earnings of First Federal of Hazard		354		417
Dividends from Frankfort First		1,612		1,795
Equity in undistributed earnings of Frankfort First		370		(116)
Total income		2,435		2,206
Non-interest expenses		495		387
Earnings before income taxes		1,940		1,819
Federal income tax expense (benefit)		(129)		(115)
NET INCOME	$	2,069	$	1,934

KENTUCKY FIRST FEDERAL BANCORP

STATEMENTS OF CASH FLOWS

For Years ended June 30, 2015 and 2014

(Dollar amounts in thousands)

	2015		2014
Cash flows from operating activities:
Net earnings for the year	$	2,069	$	1,934
Adjustments to reconcile net earnings to net cash provided by operating activities:
Excess (deficit) distributions over earnings (undistributed earnings) from consolidated subsidiaries		(815)		(332)
Noncash compensation expense		187		187
Increase (decrease) in cash due to changes in:
Prepaid expenses and other assets		59		(104)
Other liabilities		140		(7)
Net cash provided by operating activities		1,640		1,678

	2015		2014
Cash flows from financing activities:
Dividends paid on common stock		(1,385)		(1,511)
Repurchase of treasury shares		(698)		(42)
Net cash used in financing activities		(2,083)		(1,553)
Net increase (decrease) in cash and cash equivalents		(443)		125
Cash and cash equivalents at beginning of year		2,015		1,890
Cash and cash equivalents at end of year	$	1,572	$	2,015