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HAZARD, FRANKFORT, DANVILLE, and LANCASTER, Ky., Feb. 22, 2013 (GLOBE NEWSWIRE) -- Kentucky First Federal Bancorp (Nasdaq:KFFB), the holding company for First Federal Savings and Loan Association of Hazard and First Federal Savings Bank of Frankfort, Kentucky, announced net earnings of $927,000 or $0.12 diluted earnings per share for the three months ended December 31, 2012, compared to net earnings of $388,000 or $0.05 diluted earnings per share for the three months ended December 31, 2011, an increase of $539,000 or 138.9%.
The increase in net earnings for the quarter ended December 31, 2012, was primarily attributable to a $958,000 bargain purchase gain recorded on December 31, 2012, when the Company completed its acquisition of CKF Bancorp, Inc. ("CKF Bancorp,") the parent company for Central Kentucky Federal Savings Bank (Central Kentucky FSB") pursuant to the provisions of the Agreement of Merger dated as of November 3, 2011, and amended as of September 28, 2012. The acquisition was accounted for using the acquisition method of accounting. Because the acquisition occurred on December 31, 2012, there are no results of operations of CKF Bancorp included in the Company's reported earnings.
Net interest income before provision for loan loss decreased $1,000 for the quarter ended December 31, 2012, remaining at $2.0 million for the December 31, 2012 and 2011 quarterly periods. A provision for losses on loans of $392,000 in the recent quarter ended resulted in a decrease in net interest income after provision for loan losses of $311,000 or 15.9%, which totaled $1.6 million at December 31, 2012, compared to $2.0 million for the prior year period. The provision for losses on loans during the recent quarter ended was intended to increase the allowance to a level that management determined appropriate after charging off $85,000 in loans during the quarter and after considering changes in the composition of the loan portfolio, which include additional non-owner-occupied one- to four-family residential loans. The change in the allowance level was made without consideration of the loan portfolio acquired in the merger, as purchased loans are recorded at their estimated fair value, which considers credit. Noninterest income totaled $1.0 million for the three months ended December 31, 2012, an increase of $986,000 from the same period in 2011, primarily due to the bargain purchase gain noted previously. Noninterest expense increased $19,000 or 1.3% to $1.4 million for the recent period due primarily to higher retirement expense.