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HAZARD, Ky. and
Feb. 8, 2011 /PRNewswire/ -- Kentucky First Federal Bancorp (Nasdaq: KFFB), the holding company for First Federal Savings and Loan Association of
Hazard, Kentucky and First Federal Savings Bank of
Frankfort, Kentucky, announced that the Company has reached a settlement with the Internal Revenue Service in
the United States Tax Court allowing a
$1.4 million deduction that was previously disallowed by the Service. The Company had filed a petition with the United States Tax Court claiming that the Company was entitled to a deduction related to payments it made with regard to stock options in
March 2005. The payments were coincident with the initial transactions which were executed for the creation of the Company and the joining of the business entities of the two subsidiary banks. The Company recorded an additional
$443,000 provision for income tax in the fiscal year ended
June 30, 2009, in response to the preliminary results of the IRS audit. The Company anticipates that the tax benefit from the court decision will be recognized in its statement of operations for the three-month period ending
March 31, 2011.
The court decision, which was signed by Judge
Robert P. Ruwe on
February 3, 2011, states that the Company is entitled to a refund of
$403,706 plus interest. Tony D. Whitaker, in commenting about the court decision, said "we have always been confident in the validity of the deduction and are indeed thankful to have received a favorable decision from the court."
This press release may contain statements that are forward-looking, as that term is defined by the Private Securities Litigation Act of 1995 or the Securities and Exchange Commission in its rules, regulations and releases. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. All forward-looking statements are based on current expectations regarding important risk factors including, but not limited to, real estate values, the impact of interest rates on financing, changes in general economic conditions, legislative and regulatory changes that adversely affect the business of the Company and changes in the securities markets. Accordingly, actual results may differ from those expressed in the forward-looking statements, and the making of such statements should not be regarded as a representation by the Company or any other person that results expressed therein will be achieved.