**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-Q**


(Mark
      One)


x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
                ACT OF 1934





For
      the
      quarterly period
      ended September
      30,
      2008




OR




 ̈
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                ACT





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 of America
            
            61-1484858(State
                or other jurisdiction of
            
            (I.R.S.
                Employer Identification No.)incorporation
                or organization)





479
      Main
      Street, Hazard, Kentucky 41702





(Address
      of principal executive offices)(Zip Code)





(606)
      436-3860


(Registrant’s
      telephone number, including area code)








(Former
      name, former address and former fiscal year, if changed since last
      report)





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 such shorter period that the issuer was required to
      file
      such reports and (2) has been subject to such filing requirements for the past
      ninety days:  Yes x  No  ̈





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or 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 Companyx(Do
                not check if a smaller reporting company)





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act.)


Yes  ̈  No x





APPLICABLE
      ONLY TO CORPORATE ISSUERS





Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date: At November 9, 2008, the latest
      practicable date, the Corporation had 7,540,164 shares of $.01 par value common
      stock outstanding.









INDEX





PagePART
                I -
            ITEM
                1
            FINANCIAL
                INFORMATIONCondensed
                Consolidated Statements of Financial Condition
            3Condensed
                Consolidated Statements of Earnings
            4Condensed
                Consolidated Statements of Comprehensive Income
            5Condensed
                Consolidated Statements of Cash Flows
            6Notes
                to Condensed Consolidated Financial Statements
            8ITEM
                2
            Management’s
                Discussion and Analysis ofFinancial
                Condition and Results ofOperations
            12ITEM
                3
            Quantitative
                and Qualitative DisclosuresAbout
                Market Risk
            17ITEM
                4
            Controls
                and Procedures
            17PART
                II -
            OTHER
                  INFORMATION
            18SIGNATURES
            20




2




PART
      I


ITEM
      1: Financial
      Information


**Kentucky
      First Federal Bancorp**





**CONDENSED
      CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION**





(In
      thousands, except per share data)




**September 30,**
            
            **June 30,****2008**
            
            **2008****(Unaudited)****ASSETS**Cash
                and due from banks
            
            $
            1,191
            
            $
            790Interest-bearing
                demand deposits
            
            
            4,831
            
            
            15,176Cash
                and cash equivalents
            
            
            6,022
            
            
            15,966Interest-bearing
                deposits
            
            
            100
            
            
            100Available-for-sale
                securities
            
            
            5,435
            
            
            5,480Held-to-maturity
                securities, at amortized cost- approximate fair value of $15,909
                and
                $16,409 at September 30, and June 30, 2008, respectively
            
            
            16,291
            
            
            16,959Loans
                available for sale
            
            
            300
            
            
            86Loans
                receivable
            
            
            186,776
            
            
            182,717Allowance
                for loan losses
            
            
            (681
            )
            
            (666
            )Real
                estate acquired through foreclosure
            
            
            21
            
            
            21Office
                premises and equipment, net
            
            
            2,813
            
            
            2,727Federal
                Home Loan Bank stock
            
            
            5,641
            
            
            5,566Accrued
                interest receivable
            
            
            711
            
            
            628Bank-owned
                life insurance
            
            
            2,357
            
            
            2,339Goodwill
            
            
            14,507
            
            
            14,507Other
                intangible assets, net
            
            
            448
            
            
            480Prepaid
                expenses and other assets
            
            
            248
            
            
            266Prepaid
                federal income taxes
            
            
            693
            
            
            479Total
                assets
            
            **$**
            **241,682**
            
            **$**
            **247,655****LIABILITIES
                AND SHAREHOLDERS’ EQUITY**Deposits
            
            $
            137,022
            
            $
            137,634Advances
                from the Federal Home Loan Bank
            
            
            42,125
            
            
            47,801Advances
                by borrowers for taxes and insurance
            
            
            457
            
            
            331Accrued
                interest payable
            
            
            248
            
            
            245Deferred
                federal income taxes
            
            
            1,597
            
            
            1,234Other
                liabilities
            
            
            777
            
            
            617Total
                liabilities
            
            
            182,226
            
            
            187,862Commitments
                and contingencies
            
            
            -
            
            
            -Shareholders’
                equityPreferred
                stock, 500,000 shares authorized, $.01 par value;no shares
                issued
            
            
            -
            
            
            -Common
                stock, 20,000,000 shares authorized, $.01 par value; 8,596,064 shares
                issued
            
            
            86
            
            
            86Additional
                paid-in capital
            
            
            35,864
            
            
            35,834Retained
                earnings
            
            
            32,298
            
            
            32,291Shares
                acquired by stock benefit plans
            
            
            (2,687
            )
            
            (2,735
            )Treasury
                shares at cost, 601,830 and 559,330 common shares atSeptember
                30, and June 30, 2008, respectively
            
            
            (6,114
            )
            
            (5,700
            )Accumulated
                other comprehensive income
            
            
            9
            
            
            17Total
                shareholders’ equity
            
            
            59,456
            
            
            59,793Total
                liabilities and shareholders’ equity
            
            **$**
            **241,682**
            
            **$**
            **247,655**





See
      Notes
      to Condensed Consolidated Financial Statements.




3




**Kentucky
      First Federal Bancorp**


**CONDENSED
      CONSOLIDATED STATEMENTS OF EARNINGS**





(Unaudited)


(In
      thousands, except per share data)




**Three
                months ended****September
                30,****2008**
            
            **2007**Interest
                incomeLoans
            
            $
            2,779
            
            $
            2,565Mortgage-backed
                securities
            
            
            149
            
            
            174Investment
                securities
            
            
            68
            
            
            505Interest-bearing
                deposits and other
            
            
            135
            
            
            100Total
                interest income
            
            
            3,131
            
            
            3,344Interest
                expenseDeposits
            
            
            1,080
            
            
            1,273Borrowings
            
            
            480
            
            
            787Total
                interest expense
            
            
            1,560
            
            
            2,060Net
                interest income
            
            
            1,571
            
            
            1,284Provision
                for losses on loans
            
            
            15
            
            
            -Net
                interest income after provision for losses on loans
            
            
            1,556
            
            
            1,284Other
                operating incomeEarnings
                on bank-owned life insurance
            
            
            18
            
            
            21Gain
                on sale of loans
            
            
            12
            
            
            -Other
                operating
            
            
            25
            
            
            24Total
                other income
            
            
            55
            
            
            45General,
                administrative and other expenseEmployee
                compensation and benefits
            
            
            700
            
            
            766Occupancy
                and equipment
            
            
            88
            
            
            80Franchise
                taxes
            
            
            40
            
            
            39Data
                processing
            
            
            42
            
            
            35Other
                operating
            
            
            276
            
            
            190Total
                general, administrative and other expense
            
            
            1,146
            
            
            1,110Earnings
                before income taxes
            
            
            465
            
            
            219Federal
                income taxesCurrent
            
            
            (214
            )
            
            36Deferred
            
            
            367
            
            
            31Total
                federal income taxes
            
            
            153
            
            
            67NET
                EARNINGS
            
            **$**
            **312**
            
            **$**
            **152**EARNINGS
                PER SHAREBasic
            
            **$**
            **0.04**
            
            **$**
            **0.02**Diluted
            
            **$**
            **0.04**
            
            **$**
            **0.02**DIVIDENDS
                PER SHARE
            
            **$**
            **0.10**
            
            **$**
            **0.10**





See
      Notes
      to Condensed Conolidated Financial Statements.


4


**Kentucky
      First Federal Bancorp**





**CONDENSED
      CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**





(Unaudited)


(In
      thousands)





**Three months ended****September 30,****2008**
            
            **2007**Net
                earnings
            
            $
            312
            
            $
            152Other
                comprehensive income, net of taxes (benefits):Unrealized
                holding gains (losses) on securities during the period, net of taxes
                (benefits) of $(3) and $52 during the respective periods
            
            
            (8
            )
            
            101Comprehensive
                income
            
            **$**
            **304**
            
            **$**
            **253**Accumulated
                comprehensive income (loss)
            
            **$**
            **9**
            
            **$**
            **(186**
            **)**





See
      Notes
      to Condensed Consolidated Financial Statements.


5


**Kentucky
      First Federal Bancorp**





**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**





(Unaudited)


(In
      thousands)




**Three months ended****September 30,****2008**
            
            **2007**Cash
                flows from operating activities:Net
                earnings for the period
            
            $
            312
            
            $
            152Adjustments
                to reconcile net earnings to net cash provided by operating
                activities:Amortization
                of discounts and premiums on loans, investments and mortgage-backed
                securities – net
            
            
            1
            
            
            1Amortization
                of deferred loan origination fees
            
            
            (9
            )
            
            (7
            )Amortization
                of premiums on FHLB advances
            
            
            (128
            )
            
            (133
            )Amortization
                of core deposit intangibles
            
            
            32
            
            
            33Depreciation
                and amortization
            
            
            40
            
            
            36Amortization
                of stock benefit plans
            
            
            143
            
            
            137Provision
                for losses on loans
            
            
            15
            
            
            -Federal
                Home Loan Bank stock dividends
            
            
            (75
            )
            
            -Bank-owned
                life insurance earnings
            
            
            (18
            )
            
            (21
            )Mortgage
                loans originated for sale
            
            
            (884
            )
            
            (80
            )Gain
                on sale of loans
            
            
            (12
            )
            
            -Proceeds
                from sale of mortgage loans
            
            
            682
            
            
            80Increase
                (decrease) in cash, due to changes in:Accrued
                interest receivable
            
            
            (83
            )
            
            (289
            )Prepaid
                expenses and other assets
            
            
            18
            
            
            21Accrued
                interest payable
            
            
            3
            
            
            133Other
                liabilities
            
            
            95
            
            
            65Federal
                income taxesCurrent
            
            
            (214
            )
            
            131Deferred
            
            
            367
            
            
            (66
            )Net
                cash provided by operating activities
            
            
            285
            
            
            193Cash
                flows provided by (used in) investing activities:Investment
                securities maturities, prepayments and calls:Held
                to maturity
            
            
            668
            
            
            459Available
                for sale
            
            
            33
            
            
            128Loan
                principal repayments
            
            
            16,728
            
            
            12,391Loan
                disbursements
            
            
            (20,778
            )
            
            (17,553
            )Purchase
                of office equipment
            
            
            (126
            )
            
            (1
            )Net
                cash used in investing activities
            
            
            (3,475
            )
            
            (4,576
            )Cash
                flows provided by (used in) financing activities:Net
                decrease in deposit accounts
            
            
            (612
            )
            
            50Proceeds
                from Federal Home Loan Bank advances
            
            
            8,500
            
            
            6,850Repayment
                of Federal Home Loan Bank advances
            
            
            (14,049
            )
            
            (3,111
            )Advances
                by borrowers for taxes and insurance
            
            
            126
            
            
            161Dividends
                paid on common stock
            
            
            (305
            )
            
            (263
            )Treasury
                stock repurchases
            
            
            (414
            )
            
            (782
            )Net
                cash provided by (used in) financing activities
            
            
            (6,754
            )
            
            2,905Net
                decrease in cash and cash equivalents
            
            
            (9,944
            )
            
            (1,478
            )Cash
                and cash equivalents at beginning of period
            
            
            15,966
            
            
            2,720Cash
                and cash equivalents at end of period
            
            **$**
            **6,022**
            
            **$**
            **1,242**





See
      Notes
      to Condensed Consolidated Financial Statements.




6


**Kentucky
      First Federal Bancorp**





**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)**





(Unaudited)


(In
      thousands)





**Three months ended****September 30,****2008**
            
            **2007**Supplemental
                disclosure of cash flow information:Cash
                paid during the period for:Federal
                income taxes
            
            **$**
            **-**
            
            **$**
            **-**Interest
                on deposits and borrowings
            
            **$**
            **1,684**
            
            **$**
            **2,061**




See
      Notes
      to Condensed Consolidated Financial Statements.


7




**Kentucky
      First Federal Bancorp**





**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





Three-months
      ended September 30, 2008 and 2007





(unaudited)





On
      March
      2, 2005, First Federal Savings and Loan Association of Hazard (“First Federal of
      Hazard” or the “Association”) completed a Plan of Reorganization (the “Plan” or
      the “Reorganization”) pursuant to which the Association reorganized into the
      mutual holding company form of ownership with the incorporation of a stock
      holding company, Kentucky First Federal Bancorp (the “Company”) as parent of the
      Association. Coincident with the Reorganization, the Association converted
      to
      the stock form of ownership, followed by the issuance of all the Association’s
      outstanding stock to Kentucky First Federal Bancorp. Completion of the Plan
      of
      Reorganization culminated with Kentucky First Federal Bancorp issuing 4,727,938
      common shares, or 55% of its common shares, to First Federal Mutual Holding
      Company (“First Federal MHC”), a federally chartered mutual holding company,
      with 2,127,572 common shares, or 24.8% of its shares offered for sale at $10.00
      per share to the public and a newly formed Employee Stock Ownership Plan
      (“ESOP”). The Company received net cash proceeds of $16.1 million from the
      public sale of its common shares. The Company’s remaining 1,740,554 common
      shares were issued as part of the $31.4 million cash and stock consideration
      paid for 100% of the common shares of Frankfort First Bancorp (“Frankfort
      First”) and its wholly-owned subsidiary, First Federal Savings Bank of Frankfort
      (“First Federal of Frankfort”). The acquisition was accounted for using the
      purchase method of accounting and resulted in the recordation of goodwill and
      other intangible assets totaling $15.4 million.





1. Basis
      of Presentation





The
      accompanying unaudited condensed consolidated financial statements, which
      represent the condensed consolidated financial condition and results of
      operations of the Company, were prepared in accordance with the instructions
      for
      Form 10-Q and, therefore, do not include information or footnotes necessary
      for
      a complete presentation of financial position, results of operations and cash
      flows in conformity with accounting principles generally accepted in the United
      States of America. However, in the opinion of management, all adjustments
      (consisting of only normal recurring adjustments) which are necessary for a
      fair
      presentation of the condensed consolidated financial statements have been
      included. The results of operations for the three-month period ended September
      30, 2008, are not necessarily indicative of the results which may be expected
      for an entire fiscal year. The condensed consolidated balance sheet as of June
      30, 2008 has been derived from the audited consolidated balance sheet as of
      that
      date. Certain information and note disclosures normally included in the
      Company’s annual financial statements prepared in accordance with generally
      accepted accounting principles have been condensed or omitted. These condensed
      consolidated financial statements should be read in conjunction with the
      consolidated financial statements and notes thereto included in the Company’s
      Form 10-K annual report for 2008 filed with the Securities and Exchange
      Commission.





2. Principles
      of Consolidation





The
      condensed consolidated financial statements include the accounts of the Company,
      Frankfort First, and its wholly-owned banking subsidiaries, First Federal of
      Hazard and First Federal of Frankfort (collectively hereinafter “the Banks”).
      All intercompany transactions and balances have been eliminated in
      consolidation.


8


**Kentucky
      First Federal Bancorp**





**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)**





Three-months
      ended September 30, 2008 and 2007





(unaudited)




4. Earnings
      Per Share





Basic
      earnings per share is computed based upon the weighted-average common shares
      outstanding during the period less shares in the Company’s ESOP that are
      unallocated and not committed to be released. Weighted average common shares
      deemed outstanding give effect to 282,484 and 301,262 unallocated ESOP shares
      for the three-month periods ended September 30, 2008, and 2007, respectively.





Three months ended September 30,2008
            
            2007Weighted-average
                common shares outstanding (basic)
            
            
            7,615,310
            
            
            7,817,377Dilutive
                effect of:Non-vested
                restricted stock awards
            
            
            -
            
            
            -Assumed
                exercise of stock options
            
            
            -
            
            
            -Weighted-average
                common shares outstanding (diluted)
            
            
            7,615,310
            
            
            7,817,377





There
      were 416,900 share-based awards representing non-dilutive shares outstanding
      for
      the three-month period ended September 30, 2008, compared to 339,200 share-based
      awards representing non-dilutive shares outstanding for the three-month period
      ended September 30, 2007.





5. Recent
      Accounting Pronouncements




In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards (“SFAS”) No. 157, *Fair
      Value Measurements* (FAS
      157). This Statement defines fair value, establishes a framework for measuring
      fair value and expands disclosures about fair value measurements. This Statement
      emphasizes that fair value is a market-based measurement and should be
      determined based on assumptions that a market participant would use when pricing
      an asset or liability. This Statement clarifies that market participant
      assumptions should include assumptions about risk as well as the effect of
      a
      restriction on the sale or use of an asset. Additionally, this Statement
      establishes a fair value hierarchy that provides the highest priority to quoted
      prices in active markets and the lowest priority to unobservable data. This
      Statement is effective for fiscal years beginning after November 15, 2007,
      or July 1, 2008 for the Company, and interim periods within that year. The
      adoption of this Statement did not have a material adverse effect on the
      Company’s financial position or results of operations.





In
      December 2007, the FASB issued SFAS No 141 (revised 2007), “Business
      Combinations,” which replaces SFAS 141. This Statement applies to all
      transactions or other events in which one entity obtains control of one or
      more
      businesses. It requires all assets acquired, liabilities assumed and any
      noncontrolling interest to be measured at fair value at the acquisition date.
      The Statement requires certain costs such as acquisition-related costs that
      were
      previously recognized as a component of the purchase price, and expected
      restructuring costs that were previously recognized as an assumed liability,
      to
      be recognized separately from the acquisition as an expense when
      incurred.


9





**Kentucky
      First Federal Bancorp**





**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)**





Three-months
      ended September 30, 2008 and 2007




(unaudited)





5. Recent
      Accounting Pronouncements (continued)





FAS
      141(R) applies prospectively to business combinations for which the acquisition
      date is on or after the beginning of the first annual reporting period beginning
      on or after December 15, 2008 and may not be applied before that date. The
      initial adoption of this statement is not expected to have a material adverse
      effect on the Company’s financial position or results of
      operations.





Concurrent
      with SFAS No. 141 (R), the FASB issued SFAS No. 160, “Noncontrolling Interests
      in Condensed consolidated financial Statements, an Amendment of ARB 51.” SFAS
      No. 160 amends ARB 51 to establish accounting and reporting standards for the
      noncontrolling interest (formeraly known as minority interest) in a subsidiary
      and for the deconsolidation of a subsidiary. A subsidiary, as defined by SFAS
      No. 160, includes a variable interest entity that is consolidated by a primary
      beneficiary.


A
      noncontrolling interest in a subsidiary, previously reported in the statement
      of
      financial position as a liability or in the mezzanine section outside of
      permanent equity, will be included within consolidated equity as a separate
      line
      item upon adoption of SFAS No. 160. Further, consolidated net income will be
      reported at amounts that include both the parent (or primary beneficiary) and
      the noncontrolling interest with separate disclosure on the face of the
      consolidated statement of income of the amounts attributable to the parent
      and
      to the noncontrolling interest. SFAS No. 160 is effective for fiscal years,
      and
      interim periods within those fiscal years, beginning on or after December 15,
      2008. The initial adoption of this statement is not expected to have a material
      adverse effect on the Company’s financial position or results of
      operations.





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities - Including Amendment of FASB
      Statement No. 115.” This Statement allows companies the choice to measure many
      financial instruments and certain other items at fair value. The objective
      is to
      improve financial reporting by providing entities with the opportunity to
      mitigate volatility in reported earnings caused by measuring related assets
      and
      liabilities differently without having to apply complex hedge accounting
      provisions. This Statement is expected to expand the use of fair value
      measurement, which is consistent with the Board’s long-term measurement
      objectives for accounting for financial instruments. This Statement is effective
      as of the beginning of an entity’s first fiscal year that begins after November
      15, 2007, or July 1, 2008, as to the Company, and interim periods within that
      fiscal year. The adoption of this statement did not have a material adverse
      effect on the Company’s financial position or results of
      operations.




6.
            Commitments




As
      of
      September 30, 2008, loan commitments and unused lines of credit totaled $11.7
      million, including $491,000 in undisbursed construction loans, $1.8 million
      in
      one- to four-family mortgage loans and $9.4 million in lines of credit secured
      by equity in real property.


10





**Kentucky
      First Federal Bancorp**





**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)**





Three-months
      ended September 30, 2008 and 2007


(unaudited)




7. Disclosures
      About Fair Value of Assets and Liabilities




Effective
      July 1, 2008, the Company adopted Statement of Financial Accounting Standard
      No.
      157, “Fair Value Measurements” (FAS157). FAS 157 defines fair value, establishes
      a framework for measuring fair value and expands disclosures about fair value
      measurements.




FAS
      157
      defines fair value as the price that would be received to sell an asset or
      paid
      to transfer a liability in an orderly transaction between market participants
      at
      the measurement date. FAS 157 also establishes a fair value hierarchy which
      requires an entity to maximize the use of observable inputs and minimize the
      use
      of unobservable inputs when measuring fair value. The standard describes three
      levels of inputs that may be used to measure fair value:




**Level
      1**  -
      Quoted
      prices in active markets for identical assets or liabilities.




**Level
      2**  -
      Observable inputs other than Level 1 prices, such as quoted prices for similar
      assets or liabilities; quoted prices in active 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 –** Unobservable inputs that are supported by little or no market activity and
      that
      are significant to the fair value of the assets or liabilities.




Following
      is a description of the valuation methodologies used for instruments measured
      at
      fair value, 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 pricing models,
      quoted prices of securities with similar characteristics or discounted cash
      flows. Level 2 securities include mortgage products.




The
      following table presents the fair value measurements of assets and liabilities
      measured at fair value on a recurring basis and the level within the FAS 157
      fair value hierarchy in which the fair value measurements fall at September
      30,
      2008:





Fair Value Measurements Using(in thousands)Quotes Pricesin Active
            
            SignificantMarkets for
            
            Other
            
            SignificantIdentical
            
            Observable
            
            UnobservableAssets
            
            Inputs
            
            InputsFair Value
            
            (Level 1)
            
            (Level 2)
            
            (Level 3)Available-for-sale
                securities
            
            $
            5,435
            
            $
            -
            
            $
            5,435
            
            $
            -


11





**Kentucky
      First Federal Bancorp**





**ITEM
      2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION**


**AND
      RESULTS OF OPERATIONS**





Forward-Looking
      Statements





Certain
      statements contained in this 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 Kentucky First Federal Bancorp or its
      management are intended to identify such forward looking statements. Kentucky
      First Federal Bancorp’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, and rapidly changing technology
      affecting financial services.





Critical
      Accounting Policies





We
      consider accounting policies involving significant judgments and assumptions
      by
      management that have, or could have, a material impact on the carrying value
      of
      certain assets or on income to be critical accounting policies. We consider
      the
      allowance for loan losses and accounting for goodwill to be critical accounting
      policies.





The
      allowance for loan losses is the estimated amount considered necessary to cover
      probable incurred credit 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. In determining the allowance for loan losses, management
      makes significant estimates and has identified this accounting policy as one
      of
      the most critical for the Company.





Management
      of the Banks perform a monthly evaluation of the allowance for loan losses.
      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 lending areas to be among the factors most likely to have an
      impact on the level of the required allowance for loan losses. However, in
      view
      of the fact that the Banks’ local economies are diverse, without significant
      dependence on a single industry or employer, the economic climate in the Banks’
market areas are considered to be stable. Nevertheless, management continues
      to
      monitor and evaluate factors which could have an impact on the required level
      of
      the allowance. Nationally, management will watch for 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
      rate in the Banks’ lending areas to be acceptable in relation to historical
      trends. Given the aforementioned indicators of economic stability, management
      does not foresee in the near term, any significant increases in the required
      allowance for loan losses related to economic factors. Finally, Company
      management has no current plans to alter the type of lending offered or
      collateral accepted by the Banks, 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.


12


**Kentucky
      First Federal Bancorp**





**MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION**


**AND
      RESULTS OF OPERATIONS (continued)**





Critical
      Accounting Policies (continued)





The
      allowance for loan losses analysis has two components, specific and general
      allocations. 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. The general
      allocation is determined by segregating the remaining loans by type of loan,
      risk-weighting (if applicable) and payment history. Historical loss experience,
      delinquency trends, general economic conditions and geographic and industry
      concentrations are also analyzed. 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 allowance established,
      which could have a material negative effect on the Company’s condensed
      consolidated financial results.





The
      Company has recorded goodwill and core deposit intangibles as a result of its
      acquisition of Frankfort First. Goodwill represents the excess purchase price
      paid over the net book value of the assets acquired in a merger or acquisition.
      Pursuant to SFAS No. 142, “Goodwill and Intangible Assets,” goodwill is not
      amortized, but is tested for impairment at the reporting unit annually or
      whenever an impairment indicator arises. The evaluation involves assigning
      assets and liabilities to reporting units and comparing the fair value of each
      reporting unit to its carrying value including goodwill. If the fair value
      of a
      reporting unit exceeds its carrying amount, goodwill is not considered impaired.
      However, if the carrying amount of the reporting unit exceeds the fair value,
      goodwill is considered impaired. The impairment loss equals the excess of
      carrying value over fair value.





Core
      deposit intangibles represent the value of long-term deposit relationships
      and
      are amortized over their estimated useful lives. The Company annually evaluates
      these estimated useful lives. If the Company determines hat events or
      circumstances warrant a change in these estimated useful lifes, the Company
      will
      adjust the amortization of the core deposit intangibles, which could affect
      future amortization expense.





Discussion
      of Financial Condition Changes from June 30, 2008 to September 30,
      2008





***Assets:*** At
      September 30, 2008, the Company’s assets totaled $241.7 million, a decrease of
      $6.0 million, or 2.4%, from total assets at June 30, 2008. This decrease was
      attributed primarily to the Company’s efforts to effectively utilize liquidity
      by continuing its strategy of funding loans to the extent possible and then
      paying down borrowings. It is management’s intention to continue deploying
      excess liquidity into mortgage loans to the extent possible.





***Cash
      and cash equivalents:*** **** Cash
      and
      cash equivalents decreased $9.9 million to $6.0 million at September 30, 2008.
      It is the Company’s preference to minimize the level of cash and cash
      equivalents and invest liquidity into higher-yielding assets, when
      possible.





***Loans*** *:* Loans
      receivable, net, increased by $4.0 million or 2.2% to $186.1 million at
      September 30, 2008. Management believes that the successful redeployment of
      the
      Company’s funds from lower-yielding cash, cash equivalents and investment
      securities to higher-yielding mortgage loans is important for the long-term
      success of the Company. The Company will continue to emphasize loan originations
      to the extent that it is profitable and prudent.


13


**Kentucky
      First Federal Bancorp**





**MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION**


**AND
      RESULTS OF OPERATIONS (continued)**





Discussion
      of Financial Condition Changes from June 30, 2008 to September 30, 2008
      (continued)





***Non-Performing
      Loans:*** **** At
      September 30, 2008, the Company had approximately $1.9 million, or 1.0% of
      net
      loans, in loans 90 days or more past due, compared to $1.3 million or 0.7%,
      of
      net loans at June 30, 2008.  At September 30, 2008, the Company’s allowance
      for loan losses of $681,000 represented 36.0% of nonperforming loans and 0.4%
      of
      total loans.





The
      Company had $2.3 million in loans classified as substandard for regulatory
      purposes at September 30, 2008. Classified loans as a percentage of net loans
      was 1.2% and 0.9% at September 30, 2008 and June 30, 2008, respectively.
      Substandard assets included 35 single-family home loans with loan-to-value
      ratios (percentage of loan balance to the original or an updated appraisal)
      ranging from 4% to 105%*; three home equity loan second mortgages secured by
      single-family homes; and three single-family homes acquired through foreclosure
      (with an aggregate fair value of $21,000). At September 30, 2008, the Company
      had $681,000 in loans classified as special mention. This category includes
      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.


* *Of
      the substandard assets, three loans exceeded a 90% loan-to-value ratio, one
      of
      which was covered by private mortgage insurance.*





***Non-Performing
      Loans***


At
      September 30, 2008, no loans were classified as doubtful or loss for regulatory
      purposes.





***Investment
      and Mortgage-Backed Securities*** *:* At
      September 30, 2008, the Company’s investment and mortgage-backed securities had
      decreased $713,000 or 3.2% to $21.7 million. Approximately $8.0 million of
      the
      Company’s remaining investment and agency securities are scheduled to mature
      within the next two years.





***Liabilities:*** **** At
      September 30, 2008, the Company’s liabilities totaled $182.2 million, a decrease
      of $5.6 million, or 3.0%, from total liabilities at June 30, 2008. The decrease
      in liabilities was attributed primarily to a $5.7 million, or 11.9%, decrease
      in
      Federal Home Loan Bank advances , which decreased to $42.1 million at September
      30, 2008. In addition, the Company had a decline of $612,000 or 0.4%, in
      deposits, which totaled $137.0 million at September 30, 2008. Of the $42.1
      million in advances, approximately $4.5 million were in overnight advances.
      As
      stated previously, management plans to continue reducing the level of Federal
      Home Loan Bank advances as lower-yielding investment securities mature over
      the
      next two years.





***Shareholders’
      Equity:*** At
      September 30, 2008, the Company’s shareholders’ equity totaled $59.5 million, a
      decrease of $337,000 or 0.6% from the June 30, 2008 total. The primary reason
      for the decrease in shareholders’ equity was the acquisition of $414,000 of
      treasury shares at an average cost of $9.74 per share.





Comparison
      of Operating Results for the Three-Month Periods Ended September 30, 2008 and
      2007





General





Net
      earnings totaled $312,000 for the three months ended September 30, 2008, an
      increase of $160,000, or 105.3% from the $152,000 in net earnings for the same
      period in 2007. The increase was primarily attributable to an increase in net
      interest income.


14


**Kentucky
      First Federal Bancorp**





**MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION**


**AND
      RESULTS OF OPERATIONS (continued)**





Comparison
      of Operating Results for the Three-Month Periods Ended September 30, 2008 and
      2007 (continued)





Net
      Interest Income





Net
      interest income increased $287,000 or 22.4% to $1.6 million for the three month
      period ended September 30, 2008, compared to the 2007 period, due to the cost
      of
      funds decreasing at a faster pace than interest income. Interest income
      decreased by $213,000, or 6.4%, to $3.1 million, while interest expense
      decreased $500,000 or 24.3% to $1.6 million for the three months ended September
      30, 2008. The reduction in interest expense was attributable to decreased costs
      for both deposits and advances.





Interest
      income on loans increased $214,000 or 8.3% to $2.8 million, while interest
      income on investment securities decreased $437,000, or 86.5%, to $68,000 for
      the
      2008 period compared to the prior year period. The increase in interest income
      on loans was due primarily to an increase in the average balance of the loan
      portfolio, as the average balance increased $12.9 million or 7.7% year over
      year
      to an average of $181.9 million for the most recent quarter end. Interest income
      on investment securities decreased primarily as a result of a reduced volume,
      as
      the average balance outstanding declined $48.4 million or 85.8% to $8.0 million
      for the quarter ended September 30, 2008.





Interest
      expense on deposits and borrowings both declined year over year. Interest
      expense on borrowings decreased $307,000 or 39.0% to 480,000 for the three-month
      period ended September 30, 2008, while interest expense on deposits declined
      $193,000 or 15.2% to $1.1 million for the same period. The decline in interst
      expense on borrowings was attributed primarily to a reduction in the average
      outstanding balance, although average rate paid on borrowings also declined
      period to period. The average balance of borrowing outstanding declined $20.1
      million or 30.8% to $45.3 million for the recently ended quarter. The average
      rate paid on deposits declined 58 basis points to 4.24% for the quarter ended
      September 30, 2008. The decline in interest expense on deposits was attributed
      to lower cost on certificates of deposits, as the interest expense on
      certificates of deposits declined $198,000 or 15.2% to $965,000 for the most
      recent quarter. The decrease in interest expense on certificates of deposits
      was
      attributed primarily to a decrease in the average rate paid on certificates,
      which declined 77 basis points to 4.02% for the three months ended September
      30,
      2008. The average balance of certificates of deposit outstanding declined for
      the threee-month period year over year by $1.2 million or 1.3% to $96.0 million
      for the recently ended quarter.





Provision
      for Losses on Loans





The
      Company charges a provision for losses on loans to earnings to bring the total
      allowance for loan losses to a level considered appropriate 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, general economic
      conditions, particularly as such conditions relate to the Banks’ market areas
      and other factors related to the collectibility of the Banks’ loan portfolio.
      The Company recorded a provision for losses on loans of $15,000 during the
      three
      months ended September 30, 2008, while no provision was recorded for the three
      months ended September 30, 2007. Based on management’s analysis of the loan
      portfolio, it was determined that the Allowance for Loan and Lease Losses was
      slightly underfunded and an addition during the three months ended September
      30,
      2008 was appropriate. Still, the overall level of nonperforming loans, discussed
      above (See “Critical Accounting Policies,”) remains relatively stable. There can
      be no assurance that the loan loss allowance will be adequate to absorb
      unidentified losses on loans in the portfolio, which could adversely affect
      the
      Company’s results of operations.





Other
      Income





Other
      income totaled $55,000 for the three months ended September 30, 2008, an
      increase of $10,000 from the same period in 2007.


15





**Kentucky
      First Federal Bancorp**





**MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION**


**AND
      RESULTS OF OPERATIONS (continued)**





Comparison
      of Operating Results for the Three-Month Periods Ended September 30, 2008 and
      2007 (continued)





General,
      Administrative and Other Expense





General,
      administrative and other expense totaled $1.1 million for the three months
      ended
      September 30, 2008, an increase of $36,000, or 3.2%, compared to the same period
      in 2007. The increase was due primarily to an increase in other operating
      expense, which totaled $276,000 for the three months ended September 30, 2008,
      an increase of $86,000, or 45.3%, from the same period in 2007. The increase
      in
      other operating expense was related primarily to expenses associated with the
      Company’s costs to comply with the Sarbanes-Oxley Act of 2002.





Federal
      Income Taxes





The
      provision for federal income taxes totaled $153,000 for the three months ended
      September 30, 2008, an increase of $86,000, or 128.4%, compared to the same
      period in 2007. The effective tax rates were 32.9% and 30.6% for the
      threee-month periods ended September 30, 2008 and 2007,
      respectively.





Recent
      Regulatory Initiatives





On
      October 14, 2008 the United States Treasury announced a voluntary Capital
      Purchase Program to encourage U.S. financial institutions to build capital
      to
      increase the flow of financing to U.S. businesses and consumers and to support
      the U.S. economy. Under the program, Treasury will purchase up to $250 billion
      of senior preferred shares on standardized terms as described in the program’s
      term sheet. The program will be available to qualifying U.S.-controlled banks,
      savings associations, and certain bank and savings and loan holding companies
      engaged only in financial activities and which elect to participate before
      5:00
      p.m. (EDT) on November 14, 2008. Treasury will determine eligibility and
      allocations for interested parties after consultation with the appropriate
      federal banking agency. Given the restrictions placed on participation in this
      plan, including the grant of warrants to the federal government which could
      result in dilution of our shareholders’ value, the Company probably will not
      participate in this program, but management continues to weigh the
      options.





Also
      announced on October 14, 2008 by the FDIC was a Temporary Liquidity Guarantee
      Program designed to strengthen confidence and encourage liquidity in the banking
      system. The new program will guarantee newly issued senior unsecured debt of
      eligible institutions, including FDIC-insured banks and thrifts, as well as
      certain holding companies. The program will also provide full deposit coverage
      for non-interest bearing deposit transaction accounts in FDIC-insured
      institutions, regardless of the dollar amount. As the company does not issue
      debt and has no deposit relationshps that entail non-interest bearing deposit
      accounts in excess of current FDIC limits, the Company will not participate
      in
      this program.


16





**Kentucky
      First Federal Bancorp**





**MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION**


**AND
      RESULTS OF OPERATIONS (CONTINUED)**





ITEM
      3: Quantitative
      and Qualitative Disclosures About Market Risk





There
      has
      been no material change in the Company’s market risk since the disclosure
      included under the heading “Management’s Discussion and Analysis of Financial
      Condition and Results of Operations - Asset and Liability Management” in the
      Company’s Form 10-K filed September 29, 2008.





ITEM
      4: Controls
      and Procedures





The
      Company’s Chief Executive Officer and Chief Financial Officer have evaluated the
      Company’s disclosure controls and procedures (as defined under Rules 13a-15(e)
      and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of the
      end
      of the period covered by this report. Based upon that evaluation, the Chief
      Executive Officer and Chief Financial Officer have concluded that the Company’s
      disclosure controls and procedures are effective. During the quarterly period
      ended September 30, 2008, there were no changes in the Company’s internal
      control over financial reporting which materially affected, or are reasonably
      likely to materially affect, the Company’s internal controls over financial
      reporting, except for a change related to accrual of mortgage loan interest
      receivable. During the course of our external audit for the fiscal year ended
      June 30, 2008, we noted an adjustment identified by our external auditors and
      made the appropriate changes to correct the material weakness in the current
      period.


17





**Kentucky
      First Federal Bancorp**





PART
      II





ITEM
      1.  Legal
      Proceedings




Not
      applicable.





ITEM
      1A.  Risk
      Factors





The
      Registrant’s risk factors have not changed from those set forth in the Annual
      Report on Form 10-K.





ITEM
      2.  Unregistered
      Sales of Equity Securities and Use of Proceeds




(c)  The
      following table sets forth information regarding Company’s repurchases of its
      common stock during the quarter ended September 30, 2008.





Total # ofAverage
            
            shares purchased
            
            Maximum # of sharesTotal
            
            price paid
            
            as part of publicly
            
            that may yet be# of shares
            
            per share
            
            announced plans
            
            purchased underPeriod
            
            purchased
            
            (incl commissions)
            
            or programs
            
            the plans or programsJuly
                1-31, 2008
            
            
            18,900
            
            $
            9.74
            
            
            18,900
            
            
            51,600August
                1-31, 2008
            
            
            7,500
            
            $
            9.75
            
            
            7,500
            
            
            44,100September
                1-30, 2008
            
            
            16,100
            
            $
            9.72
            
            
            16,100
            
            
            28,000





(1) 
      On August 17, 2007, the Company announced a program to repurchase up to 150,000
      shares of its Common Stock.  This program was terminated on February 13,
      2008 when the Company completed the repurchase of substantially all shares
      authorized under this program, and announced another program to repurchase
      up to
      150,000 shares of its Common Stock.  On
      October 17, 2008, the Company announced the completion of the stock repurchase
      program begun on February 13, 2008 and initiated another program for the
      repurchase of up to 150,000 shares of its Common Stock




ITEM
      3.  Defaults
      Upon Senior Securities




Not
      applicable.





ITEM
      4.  Submission
      of Matters to a Vote of Security Holders




None.


18





**Kentucky
      First Federal Bancorp**





PART
      II
      (continued)




ITEM
      5.  Other
      Information




None.





ITEM
      6.  Exhibits





31.1
            CEO
                Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
                200231.2
            CFO
                Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
                200232.1
            CEO
                Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
                200232.2
            CFO
                Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002


19


**Kentucky
      First Federal Bancorp**





SIGNATURES





Pursuant
      to the requirements 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 BANCORPDate:
                November 14, 2008
            By:
            /s/Tony
                D. WhitakerTony
                D. WhitakerChairman
                of the Board and Chief Executive OfficerDate:
                November 14, 2008
            By:
            /s/R.
                Clay HuletteR.
                Clay HuletteVice
                President and Chief Financial
                Officer


20