EPS of $0.00 increased by 91.2% from previous year
Gross margin of 100.0%
Net income of -15.00K
"N/A" - N/A
Kentucky First Federal Bancorp (KFFB) QQ1 2025 Earnings Review: Positive Operating Profit Amid Net Income Pressure from Non-Operating Items
Executive Summary
Kentucky First Federal Bancorp (KFFB) reported QQ1 2025 results showing a positive operating performance but a small net loss driven primarily by non-operating items. Revenue stood at $2.01 million with gross profit of $2.01 million and an operating income of $1.80 million, yielding an operating margin of approximately 89.5%. However, total other income/expenses totaled $(1.817) million, resulting in a pre-tax loss of $(0.021) million and a net loss of $(0.015) million for the quarter. The reported EPS was $(0.0019).
From a balance sheet perspective, total assets reached $375.65 million, supported by a large long-term investments portfolio (~$334.88 million) and liquidity, as cash and cash equivalents plus short-term investments totaled $25.97 million. Total liabilities were $327.43 million and stockholders’ equity was $48.22 million, indicating a tangible balance sheet with modest leverage relative to asset size but a concentration in investment securities.
On a trailing basis, four-quarter momentum shows revenue down year-over-year (YoY) by approximately 46% with a stark contrast in profitability driven by non-operating items. Management commentary on the call (not available in the transcript dataset) is not provided here; as such, our view emphasizes the need for a stabilization of non-interest income/expense items and a clearer path to sustainable net income through Net Interest Income (NII) enhancement and expense discipline. The company’s valuation metrics imply a battered earnings base but a relatively low price-to-book multiple, suggesting a potential upside if operating profitability and capital deployment optimize in a higher-rate environment.
Key takeaways for investors: (1) the core operating business generates solid profitability (operating income ~ $1.80m on $2.01m revenue); (2) the bottom line remains negative due to sizeable non-operating charges; (3) balance sheet demonstrates substantial investment holdings and liquidity with manageable leverage; (4) valuation remains depressed versus peers, offering potential upside if NII improves and non-operating headwinds abate.
Net Income: -$0.015 million; YoY: +91.43%; QoQ: +98.61%
EPS: -$0.0019; YoY: +91.20%; QoQ: +98.54%
Financial Highlights
Overview of the quarter with YoY and QoQ context where available:
- Revenue: $2.007 million; YoY change: -46.25%; QoQ change: +4.69%
- Gross Profit: $2.007 million; YoY: -46.25%; QoQ: +6.76%
- Operating Income: $1.796 million; YoY: +836.07%; QoQ: +260.79%
- Net Income: -$0.015 million; YoY: +91.43%; QoQ: +98.61%
- EPS: -$0.0019; YoY: +91.20%; QoQ: +98.54%
Balance sheet and liquidity highlights:
- Total assets: $375.65 million; Total liabilities: $327.43 million; Stockholders’ equity: $48.22 million
- Cash and cash equivalents: $16.55 million; Short-term investments: $9.42 million; Long-term investments: $334.88 million
- Net debt: $53.51 million (approx. total debt $70.06 million less cash on hand $16.55 million)
- Total current assets: $27.44 million; Total current liabilities: $255.16 million (note: ratio calculations in the dataset show an unusual current ratio of 56.07, which is inconsistent with the underlying balance sheet figures and likely unauditable in this snapshot)
- Long-term debt: $70.06 million; Debt to capitalization: 59.2%; Debt to assets: 0.186; Equity multiplier: 7.79
Cash flow and capital allocation:
- Net cash provided by operating activities: $(1.41) million; Free cash flow: $(1.41) million
- Net cash used for investing activities: $(0.21) million; Net cash provided by financing activities: $0.18 million
- Cash at end of period: $17.27 million; Beginning cash: $18.29 million
- Capex: $0.002 million; Funded via net debt issuances and equity activity (common stock issued: $0.133 million)
Efficiency and margins (per the reported metrics):
- Gross margin: 100.0%; Operating margin: 89.5%; Net margin: -0.75% (net income / revenue)
- Return on assets (ROA): approximately -0.004%; Return on equity (ROE): approximately -0.31% (based on reported negative net income and equity base)
- Price-to-book ratio: ~0.46; Price-to-sales ratio: ~11.01; Earnings multiple (P/E): negative (loss in quarter)
Notes on data quality:
- Several ratio fields in the dataset (e.g., current ratio, quick ratio) appear inconsistent with the balance sheet figures. The narrative figures above reflect the disclosed dollar amounts and should be considered more reliable than the ratio placeholders in the provided data.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.01M
-46.25%
4.69%
Gross Profit
2.01M
-46.25%
6.76%
Operating Income
1.80M
836.07%
260.79%
Net Income
-15.00K
91.43%
98.61%
EPS
0.00
91.20%
98.54%
Key Financial Ratios
currentRatio
56.07
grossProfitMargin
100%
operatingProfitMargin
89.5%
netProfitMargin
-0.75%
returnOnAssets
-0%
returnOnEquity
-0.03%
debtEquityRatio
1.45
operatingCashFlowPerShare
$-0.17
freeCashFlowPerShare
$-0.17
priceToBookRatio
0.46
priceEarningsRatio
-368.12
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Earnings call transcript data not provided in the input. As a result, no management quotes or theme-based highlights can be robustly extracted. If you can supply the QQ1 2025 earnings call transcript or a link to the audio/text, I will extract management themes (strategy, operations, market conditions), provide context for each quote, and align them with the financial results.
N/A
— N/A
N/A
— N/A
Forward Guidance
No explicit forward guidance was included in the provided data for QQ1 2025. In forming a view on the outlook, consider the following qualitative factors:
- Revenue trajectory and mix: Revenue declined YoY by ~46% in the trailing period, with QoQ growth of 4.7% in QQ1 2025. Investment-heavy balance sheet and potential variability in securities income imply sensitivity to interest rate movements and market conditions.
- Interest income and funding: The quarter shows substantial interest expense ($2.75 million) relative to operating income, suggesting that net interest income and the yield on the investment portfolio are critical to sustaining profitability. A normalization of non-operating charges and a favorable shift in asset mix could materially improve net income.
- Balance sheet stability: A large long-term investment portfolio (~$335 million) dominates assets. If the investment portfolio is modestly marked by rates or credit changes, it could impact earnings volatility. Liquidity appears adequate by cash-on-hand and deposit funding, but the ratio data provided is inconsistent; verify with the 10-Q/q-series for liquidity metrics.
- Potential catalysts and risks: Key catalysts include a favorable rate environment improving NII, disciplined expense management, and any strategic deployment of capital that enhances ROE. Risks include ongoing pressure from high non-interest expenses and potential credit quality pressures in a tightening macro backdrop.
Overall, absent explicit guidance, the investment thesis centers on stabilizing net interest income, pruning non-operating headwinds, and improving efficiency to convert the operating margin advantage into a positive bottom line.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
KFFB Focus
1.00%
89.50%
-0.03%
-368.12%
OFED
1.00%
14.20%
0.95%
23.10%
IROQ
1.00%
13.70%
0.80%
25.66%
LNKB
0.00%
19.30%
5.22%
4.10%
PBHC
58.90%
18.00%
2.38%
6.56%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Verdict: Cautiously constructive but contingent. KFFB exhibits a favorable operating profit framework, but the bottom line remains adversely affected by non-operating items. The stock trades at a modest P/B (~0.46) with a negative P/E due to the quarterly loss, suggesting limited downside if earnings visibility improves. The primary catalysts are a stabilization or expansion of net interest income, a reduction in non-operating expenses, and a disciplined capital deployment strategy. Investors should monitor: (1) progression of NII as rate dynamics evolve, (2) quarterly trend in other income/expenses to determine if headwinds abate, (3) loan growth in Kentucky, and (4) balance sheet quality and credit metrics. In a scenario where non-operating charges normalize and net income turns positive while ROE stabilizes, the valuation could re-rate closer to regional peers. Given the current earnings profile, the stock may appeal to patient value investors who can tolerate earnings volatility and focus on balance sheet strength and potential earnings normalization over a 12-24 month horizon.
Key Investment Factors
Growth Potential
Potential growth drivers include improving net interest income as rates normalize, targeted loan growth in Kentucky's regional markets, and optimization of the investment portfolio to balance yield with risk. A potential strategic move could be selective balance sheet enhancements or acquisitions that leverage existing franchise reach in Kentucky.
Profitability Risk
Key risks include: (1) continued reliance on a large securities portfolio which can magnify earnings volatility in rate moves; (2) negative net income driven by non-operating items that could recur; (3) liquidity and funding dynamics if deposit growth slows; (4) credit risk in regional Kentucky markets and concentration risk; (5) regulatory/compliance costs for a small-cap bank in a competitive regional banking environment.
Financial Position
Solid balance sheet structure with substantial long-term investments and moderate leverage. Liquidity appears adequate in cash and securities, but the heavy investment holdings imply earnings are closely linked to market movements and rate cycles. The company’s equity base (~$48.2m) supports a debt load of ~$70.1m, yielding a debt-to-capitalization near 59%. The P/B ratio (~0.46) signals a market discount relative to tangible assets, which may reflect earnings volatility and growth uncertainty.
SWOT Analysis
Strengths
Positive operating profitability in QQ1 2025 (operating income $1.80m on $2.01m revenue) indicating a solid core banking operation.
Large, liquid balance sheet with substantial cash and long-term investments support.
Low implied capital costs and potential efficiency gains from non-interest expense management.
Depressed market valuation (P/B around 0.46) may reflect earnings volatility, creating potential upside if earnings stabilize.
Weaknesses
Net income is negative for the quarter due to sizeable other income/expenses ($-1.817m).
Reliance on a large securities/investment portfolio introduces earnings volatility tied to rate and market conditions.
Reported ratio metrics in the dataset appear inconsistent with underlying balance sheet figures, raising data-quality concerns.
Negative earnings and limited deposit growth can constrain the stock’s appeal to income-focused investors.
Opportunities
Rising-rate environment could improve net interest margin and NII if asset mix shifts favorably.
Potential strategic initiatives to optimize capital deployment and reduce non-operating headwinds.
Opportunities to expand market share in Kentucky through deposits growth and targeted lending.
Threats
Interest rate volatility and credit cycle risks impacting NII and loan performance.
Competition from larger regional banks and fintechs affecting deposit growth and pricing power.
Regulatory changes and cost of compliance for small-cap banks.
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