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 SECURITIES


EXCHANGE ACT OF
1934





For the
quarterly period ended December
31,
2009





OR





o           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 xNo o





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 (Section 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).  Yes o    No
o




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 o                                                                              Accelerated
filer o


Non-accelerated
filer o                                                                               
Smaller Reporting Company x


(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 o                             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 February 9, 2010, the
latest practicable date, the Corporation had 7,853,934 shares of $.01 par value
common stock outstanding.








INDEX




PagePART I   -
                                    ITEM
      1
                                    FINANCIAL
      INFORMATIONConsolidated
      Balance Sheets
                                    3Consolidated
      Statements of Operations
                                    4Consolidated
      Statements of Comprehensive Income (Loss)
                                    5Consolidated
      Statements of Cash Flows
                                    6Notes
      to Consolidated Financial Statements
                                    8ITEM
      2
                                    Management’s
      Discussion and Analysis ofFinancial
      Condition and Results of Operations
                                    19ITEM
      3
                                    Quantitative
      and Qualitative DisclosuresAbout
      Market Risk
                                    24ITEM
      4
                                    Controls
      and Procedures
                                    24PART II  -
      OTHER INFORMATION
                                    26SIGNATURES
                                    27


2





PART
I


ITEM 1:
Financial
Information


Kentucky
First Federal Bancorp





CONSOLIDATED
BALANCE SHEETS


(Unaudited)


(Dollars
in thousands, except per share data)





December
      31,
                                          
                                          
                                          June
      30,2009
                                          
                                          
                                          2009ASSETSCash
      and due from financial institutions
                                          
                                          $
                                          968
                                          
                                          
                                          $
                                          1,548Interest-bearing
      demand deposits
                                          
                                          
                                          3,133
                                          
                                          
                                          
                                          2,669Cash
      and cash equivalents
                                          
                                          
                                          4,101
                                          
                                          
                                          
                                          4,217Interest-bearing
      deposits
                                          
                                          
                                          100
                                          
                                          
                                          
                                          100Available-for-sale
      securities
                                          
                                          
                                          5,327
                                          
                                          
                                          
                                          5,451Held-to-maturity
      securities, at amortized cost- approximatefair
      value of $11,316 and $15,317 at December 31, and June 30,2009,
      respectively
                                          
                                          
                                          10,972
                                          
                                          
                                          
                                          14,999Loans
      held for sale
                                          
                                          
                                          105
                                          
                                          
                                          
                                          230Loans
      receivable
                                          
                                          
                                          192,520
                                          
                                          
                                          
                                          189,609Allowance
      for loan losses
                                          
                                          
                                          (1,618
                                          )
                                          
                                          
                                          (678
                                          )Real
      estate acquired through foreclosure
                                          
                                          
                                          110
                                          
                                          
                                          
                                          109Office
      premises and equipment, net
                                          
                                          
                                          2,794
                                          
                                          
                                          
                                          2,844Federal
      Home Loan Bank stock
                                          
                                          
                                          5,641
                                          
                                          
                                          
                                          5,641Accrued
      interest receivable
                                          
                                          
                                          613
                                          
                                          
                                          
                                          750Bank-owned
      life insurance
                                          
                                          
                                          2,473
                                          
                                          
                                          
                                          2,428Goodwill
                                          
                                          
                                          14,507
                                          
                                          
                                          
                                          14,507Other
      intangible assets, net
                                          
                                          
                                          284
                                          
                                          
                                          
                                          349Advances
      to borrowers for taxes and insurance
                                          
                                          
                                          22
                                          
                                          
                                          
                                          —Prepaid
      federal income taxes
                                          
                                          
                                          473
                                          
                                          
                                          
                                          —Prepaid
      expenses and other assets
                                          
                                          
                                          1,049
                                          
                                          
                                          
                                          345Total
      assets
                                          
                                          $
                                          239,473
                                          
                                          
                                          $
                                          240,901LIABILITIES
      AND SHAREHOLDERS’ EQUITYDeposits
                                          
                                          $
                                          142,552
                                          
                                          
                                          $
                                          139,743Advances
      from the Federal Home Loan Bank
                                          
                                          
                                          36,837
                                          
                                          
                                          
                                          40,156Advances
      by borrowers for taxes and insurance
                                          
                                          
                                          —
                                          
                                          
                                          
                                          290Accrued
      interest payable
                                          
                                          
                                          173
                                          
                                          
                                          
                                          189Accrued
      federal income taxes
                                          
                                          
                                          —
                                          
                                          
                                          
                                          67Deferred
      federal income taxes
                                          
                                          
                                          1,449
                                          
                                          
                                          
                                          1,339Other
      liabilities
                                          
                                          
                                          478
                                          
                                          
                                          
                                          723Total
      liabilities
                                          
                                          
                                          181,489
                                          
                                          
                                          
                                          182,507Commitments
      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 and outstanding
                                          
                                          
                                          86
                                          
                                          
                                          
                                          86Additional
      paid-in capital
                                          
                                          
                                          36,537
                                          
                                          
                                          
                                          36,223Retained
      earnings
                                          
                                          
                                          31,216
                                          
                                          
                                          
                                          31,930Shares
      acquired by stock benefit plans
                                          
                                          
                                          (2,457
                                          )
                                          
                                          
                                          (2,557
                                          )Treasury
      shares at cost, 734,930 and 728,930 common shares atDecember
      31, and June 30, 2009, respectively
                                          
                                          
                                          (7,446
                                          )
                                          
                                          
                                          (7,379
                                          )Accumulated
      other comprehensive income
                                          
                                          
                                          48
                                          
                                          
                                          
                                          91Total
      shareholders’ equity
                                          
                                          
                                          57,984
                                          
                                          
                                          
                                          58,394Total
      liabilities and shareholders’ equity
                                          
                                          $
                                          239,473
                                          
                                          
                                          $
                                          240,901





See
accompanying notes.


3





Kentucky
First Federal Bancorp





CONSOLIDATED
STATEMENTS OF OPERATIONS


(Unaudited)


(Dollars
in thousands, except per share data)


Six
      months ended
                                          
                                          
                                          Three
      months endedDecember
      31,
                                          
                                          
                                          December
      31,2009
                                          
                                          
                                          2008
                                          
                                          
                                          2009
                                          
                                          
                                          2008Interest
      incomeLoans
                                          
                                          $
                                          5,282
                                          
                                          
                                          $
                                          5,555
                                          
                                          
                                          $
                                          2,634
                                          
                                          
                                          $
                                          2,776Mortgage-backed
      securities
                                          
                                          
                                          252
                                          
                                          
                                          
                                          292
                                          
                                          
                                          
                                          123
                                          
                                          
                                          
                                          143Investment
      securities
                                          
                                          
                                          91
                                          
                                          
                                          
                                          135
                                          
                                          
                                          
                                          44
                                          
                                          
                                          
                                          67Interest-bearing
      deposits and other
                                          
                                          
                                          134
                                          
                                          
                                          
                                          207
                                          
                                          
                                          
                                          64
                                          
                                          
                                          
                                          72Total
      interest income
                                          
                                          
                                          5,759
                                          
                                          
                                          
                                          6,189
                                          
                                          
                                          
                                          2,865
                                          
                                          
                                          
                                          3,058Interest
      expenseDeposits
                                          
                                          
                                          1,841
                                          
                                          
                                          
                                          2,135
                                          
                                          
                                          
                                          891
                                          
                                          
                                          
                                          1,055Borrowings
                                          
                                          
                                          807
                                          
                                          
                                          
                                          922
                                          
                                          
                                          
                                          391
                                          
                                          
                                          
                                          442Total
      interest expense
                                          
                                          
                                          2,648
                                          
                                          
                                          
                                          3,057
                                          
                                          
                                          
                                          1,282
                                          
                                          
                                          
                                          1,497Net
      interest income
                                          
                                          
                                          3,111
                                          
                                          
                                          
                                          3,132
                                          
                                          
                                          
                                          1,583
                                          
                                          
                                          
                                          1,561Provision
      for losses on loans
                                          
                                          
                                          1,028
                                          
                                          
                                          
                                          15
                                          
                                          
                                          
                                          60
                                          
                                          
                                          
                                          -Net
      interest income after provision for losses on loans
                                          
                                          
                                          2,083
                                          
                                          
                                          
                                          3,117
                                          
                                          
                                          
                                          1,523
                                          
                                          
                                          
                                          1,561Non-interest
      incomeEarnings
      on bank-owned life insurance
                                          
                                          
                                          45
                                          
                                          
                                          
                                          47
                                          
                                          
                                          
                                          22
                                          
                                          
                                          
                                          29Gain
      on sale of loans
                                          
                                          
                                          59
                                          
                                          
                                          
                                          18
                                          
                                          
                                          
                                          31
                                          
                                          
                                          
                                          6Loss
      on sale of real estate acquired through foreclosure
                                          
                                          
                                          (27
                                          )
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (15
                                          )
                                          
                                          
                                          -Other
      operating
                                          
                                          
                                          51
                                          
                                          
                                          
                                          49
                                          
                                          
                                          
                                          23
                                          
                                          
                                          
                                          24Total
      non-interest income
                                          
                                          
                                          128
                                          
                                          
                                          
                                          114
                                          
                                          
                                          
                                          61
                                          
                                          
                                          
                                          59Non-interest
      expenseEmployee
      compensation and benefits
                                          
                                          
                                          1,526
                                          
                                          
                                          
                                          1,412
                                          
                                          
                                          
                                          780
                                          
                                          
                                          
                                          712Occupancy
      and equipment
                                          
                                          
                                          145
                                          
                                          
                                          
                                          204
                                          
                                          
                                          
                                          74
                                          
                                          
                                          
                                          116Franchise
      taxes
                                          
                                          
                                          92
                                          
                                          
                                          
                                          87
                                          
                                          
                                          
                                          46
                                          
                                          
                                          
                                          47Data
      processing
                                          
                                          
                                          112
                                          
                                          
                                          
                                          81
                                          
                                          
                                          
                                          59
                                          
                                          
                                          
                                          39FDIC
      insurance premiums
                                          
                                          
                                          93
                                          
                                          
                                          
                                          12
                                          
                                          
                                          
                                          51
                                          
                                          
                                          
                                          6Amortization
      of intangible assets
                                          
                                          
                                          65
                                          
                                          
                                          
                                          33
                                          
                                          
                                          
                                          65
                                          
                                          
                                          
                                          33Other
      operating
                                          
                                          
                                          403
                                          
                                          
                                          
                                          463
                                          
                                          
                                          
                                          184
                                          
                                          
                                          
                                          193Total
      non-interest expense
                                          
                                          
                                          2,436
                                          
                                          
                                          
                                          2,292
                                          
                                          
                                          
                                          1,259
                                          
                                          
                                          
                                          1,146Income
      (loss) before income taxes
                                          
                                          
                                          (225
                                          )
                                          
                                          
                                          939
                                          
                                          
                                          
                                          325
                                          
                                          
                                          
                                          474Federal
      income tax expense (benefit)Current
                                          
                                          
                                          (210
                                          )
                                          
                                          
                                          (66
                                          )
                                          
                                          
                                          (30
                                          )
                                          
                                          
                                          148Deferred
                                          
                                          
                                          132
                                          
                                          
                                          
                                          370
                                          
                                          
                                          
                                          140
                                          
                                          
                                          
                                          3Total
      federal income tax expense (benefit)
                                          
                                          
                                          (78
                                          )
                                          
                                          
                                          304
                                          
                                          
                                          
                                          110
                                          
                                          
                                          
                                          151NET
      INCOME (LOSS)
                                          
                                          $
                                          (147
                                          )
                                          
                                          $
                                          635
                                          
                                          
                                          $
                                          215
                                          
                                          
                                          $
                                          323EARNINGS
      (LOSS) PER SHAREBasic
                                          
                                          $
                                          (0.02
                                          )
                                          
                                          $
                                          0.08
                                          
                                          
                                          $
                                          0.03
                                          
                                          
                                          $
                                          0.04Diluted
                                          
                                          $
                                          (0.02
                                          )
                                          
                                          $
                                          0.08
                                          
                                          
                                          $
                                          0.03
                                          
                                          
                                          $
                                          0.04DIVIDENDS
      PER SHARE
                                          
                                          $
                                          0.20
                                          
                                          
                                          $
                                          0.20
                                          
                                          
                                          $
                                          0.10
                                          
                                          
                                          $
                                          0.10





See
accompanying notes.


4


Kentucky
First Federal Bancorp





CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)





(Unaudited)


(In
thousands)





Six
      months ended
                    
                    
                    Three
      months endedDecember
      31,
                    
                    
                    December
      31,2009
                    
                    
                    2008
                    
                    
                    2009
                    
                    
                    2008Net
      income (loss)
                    
                    $
                    (147
                    )
                    
                    $
                    635
                    
                    
                    $
                    215
                    
                    
                    $
                    323Other
      comprehensive income (loss), net of taxes (benefits):Unrealized
      holding gains (losses) on securities designated as available for sale, net
      of taxes (benefits) of $(22), $42, $(11) and $46 during the respective
      periods
                    
                    
                    (43
                    )
                    
                    
                    82
                    
                    
                    
                    (21
                    )
                    
                    
                    90Comprehensive
      income (loss)
                    
                    $
                    (190
                    )
                    
                    $
                    717
                    
                    
                    $
                    194
                    
                    
                    $
                    413





See
accompanying notes.


5





Kentucky
First Federal Bancorp





CONSOLIDATED
STATEMENTS OF CASH FLOWS





(Unaudited)


(In
thousands)


Six
      months endedDecember
      31,2009
                                  
                                  
                                  2008Cash
      flows from operating activities:Net
      income (loss) for the period
                                  
                                  $
                                  (147
                                  )
                                  
                                  $
                                  635Adjustments
      to reconcile net earnings to net cashprovided
      by operating activities:Amortization
      of discounts and premiums on loans,investments
      and mortgage-backed securities – net
                                  
                                  
                                  —
                                  
                                  
                                  
                                  1Amortization
      of deferred loan origination fees
                                  
                                  
                                  (1
                                  )
                                  
                                  
                                  33Amortization
      of premiums on FHLB advances
                                  
                                  
                                  (226
                                  )
                                  
                                  
                                  (255
                                  )Amortization
      of core deposit intangibles
                                  
                                  
                                  65
                                  
                                  
                                  
                                  65Depreciation
      and amortization
                                  
                                  
                                  85
                                  
                                  
                                  
                                  76Amortization
      of stock benefit plans
                                  
                                  
                                  283
                                  
                                  
                                  
                                  284Provision
      for losses on loans
                                  
                                  
                                  1,028
                                  
                                  
                                  
                                  15Federal
      Home Loan Bank stock dividends
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (75
                                  )Bank-owned
      life insurance earnings
                                  
                                  
                                  (45
                                  )
                                  
                                  
                                  (47
                                  )Mortgage
      loans originated for sale
                                  
                                  
                                  (2,141
                                  )
                                  
                                  
                                  (1,210
                                  )Gain
      on sale of loans
                                  
                                  
                                  (59
                                  )
                                  
                                  
                                  (18
                                  )Loss
      on sale of real estate acquired through foreclosure
                                  
                                  
                                  27
                                  
                                  
                                  
                                  —Proceeds
      from sale of mortgage loans
                                  
                                  
                                  2,325
                                  
                                  
                                  
                                  1,314Increase
      (decrease) in cash, due to changes in:Accrued
      interest receivable
                                  
                                  
                                  137
                                  
                                  
                                  
                                  (43
                                  )Prepaid
      expenses and other assets
                                  
                                  
                                  (726
                                  )
                                  
                                  
                                  50Accrued
      interest payable
                                  
                                  
                                  (16
                                  )
                                  
                                  
                                  (13
                                  )Other
      liabilities
                                  
                                  
                                  (114
                                  )
                                  
                                  
                                  69Federal
      income taxesCurrent
                                  
                                  
                                  (540
                                  )
                                  
                                  
                                  (262
                                  )Deferred
                                  
                                  
                                  132
                                  
                                  
                                  
                                  370Net
      cash provided by operating activities
                                  
                                  
                                  67
                                  
                                  
                                  
                                  989Cash
      flows provided by (used in) investing activities:Investment
      securities maturities, prepayments and calls:Held
      to maturity
                                  
                                  
                                  4,027
                                  
                                  
                                  
                                  975Available
      for sale
                                  
                                  
                                  59
                                  
                                  
                                  
                                  50Proceeds
      from sale of real estate acquired through foreclosure
                                  
                                  
                                  223
                                  
                                  
                                  
                                  8Loan
      principal repayments
                                  
                                  
                                  18,403
                                  
                                  
                                  
                                  26,495Loan
      disbursements
                                  
                                  
                                  (21,652
                                  )
                                  
                                  
                                  (35,589
                                  )Purchase
      of office equipment
                                  
                                  
                                  (35
                                  )
                                  
                                  
                                  (212
                                  )Net
      cash provided by (used in)  investing activities
                                  
                                  
                                  1,025
                                  
                                  
                                  
                                  (8,273
                                  )Cash
      flows provided by (used in) financing activities:Net
      increase (decrease) in deposit accounts
                                  
                                  
                                  2,809
                                  
                                  
                                  
                                  (1,717
                                  )Proceeds
      from Federal Home Loan Bank advances
                                  
                                  
                                  4,000
                                  
                                  
                                  
                                  15,800Repayment
      of Federal Home Loan Bank advances
                                  
                                  
                                  (7,093
                                  )
                                  
                                  
                                  (16,091
                                  )Advances
      by borrowers for taxes and insurance
                                  
                                  
                                  (290
                                  )
                                  
                                  
                                  (329
                                  )Dividends
      paid on common stock
                                  
                                  
                                  (567
                                  )
                                  
                                  
                                  (582
                                  )Treasury
      stock repurchases
                                  
                                  
                                  (67
                                  )
                                  
                                  
                                  (1,056
                                  )Net
      cash used in financing activities
                                  
                                  
                                  (1,208
                                  )
                                  
                                  
                                  (3,975
                                  )Net
      decrease in cash and cash equivalents
                                  
                                  
                                  (116
                                  )
                                  
                                  
                                  (11,259
                                  )Cash
      and cash equivalents at beginning of period
                                  
                                  
                                  4,217
                                  
                                  
                                  
                                  15,966Cash
      and cash equivalents at end of period
                                  
                                  $
                                  4,101
                                  
                                  
                                  $
                                  4,707





See
accompanying notes.


6





Kentucky
First Federal Bancorp





CONSOLIDATED
STATEMENTS OF CASH FLOWS (CONTINUED)





(Unaudited)


(In
thousands)




Six
      months endedDecember
      31,2009
                    
                    
                    2008Supplemental
      disclosure of cash flow information:Cash
      paid during the period for:Federal
      income taxes
                    
                    $
                    330
                    
                    
                    $
                    205Interest
      on deposits and borrowings
                    
                    $
                    2,890
                    
                    
                    $
                    3,325





See
accompanying notes.


7





Kentucky
First Federal Bancorp





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





Six-
and three-months ended December 31, 2009 and 2008


(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 consolidated financial statements, which represent the
consolidated balance sheets 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 consolidated financial statements have been
included.  The results of operations for the six- and three-month
periods ended December 31, 2009, are not necessarily indicative of the results
which may be expected for an entire fiscal year.  The consolidated
balance sheet as of June 30, 2009 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 U.S. generally accepted accounting principles have
been condensed or omitted.  These 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 2009 filed
with the Securities and Exchange Commission.





2.  Principles of
Consolidation





The
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 CONSOLIDATED FINANCIAL STATEMENTS (continued)





Six- and
three-months ended December 31, 2009 and 2008


(unaudited)





3.  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 263,572 and 282,484 unallocated ESOP
shares for the  six- and three-month periods ended December 31, 2009,
and 2008, respectively.




Six months ended December 31,2009
                            
                            
                            2008Weighted-average
      common shares outstanding (basic)
                            
                            
                            7,562,968
                            
                            
                            
                            7,663,001Dilutive
      effect of:Assumed
      exercise of stock options
                            
                            
                            -
                            
                            
                            
                            -Weighted-average
      common shares outstanding (diluted)
                            
                            
                            7,562,968
                            
                            
                            
                            7,663,001Three months ended December 31,2009
                            
                            
                            2008Weighted-average
      common shares outstanding (basic)
                            
                            
                            7,561,360
                            
                            
                            
                            7,643,602Dilutive
      effect of:Assumed
      exercise of stock options
                            
                            
                            36,566
                            
                            
                            
                            -Weighted-average
      common shares outstanding (diluted)
                            
                            
                            7,597,926
                            
                            
                            
                            7,643,602





There
were 339,200 stock option shares outstanding for both of the six- and
three-month periods ended December 31, 2009 and 2008, but the stock option
shares in the 2008 and year-to-date 2009 periods were not considered in
computing diluted earnings per share, because they were
anti-dilutive.





4.  New Accounting
Standards





FASB
Staff Position (“FSP”) ASC 260-10 is effective for fiscal years beginning after
December 15, 2008 and is to be applied retrospectively.  This FSP
requires share-based compensation awards that qualify as participating
securities to be included in basic EPS using the two-class method.  A
share-based compensation award is considered a participating security if it
receives non-forfeitable dividends.  A non-forfeitable dividend would
be a dividend that the participant receives before the award is vested and if
the participant forfeits the actual shares awarded the dividends he/she has
received do not have to be paid back to the company.  This guidance
was adopted in the first quarter and has been applied to all periods
shown.





In
connection with our adoption of FSP ASC 260-10, weighted average voting and
unvested common shares outstanding include unvested shares issued through the
year 2010 incentive compensation plan shares of 25,900 and 51,800 at December
31, 2009 and 2008, respectively.  This FSP requires share-based
compensation awards that qualify as participating securities to be included in
basis EPS using the two-class method.  Adoption of this FSP had no
effect on the basic and diluted EPS for either of the six- or three-month
periods ended December 31, 2008.


9





Kentucky
First Federal Bancorp





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)





Six- and
three-months ended December 31, 2009 and 2008


(unaudited)





4.  New Accounting Standards
(continued)





In April
2009, the FASB issued FSP No. 107-1 and APB 28-1, “Interim Disclosures about
Fair Value of Financial Instruments,” which was subsequently incorporated into
ASC Topic 825, “Financial Instruments.”  This guidance amended FASB
Statement No. 107, “Disclosures about Fair Value of Financial Instruments,” to
require disclosures about fair value of financial instruments for interim
reporting periods of publicly traded companies that were previously only
required in annual financial statements.  The adoption of this
guidance at December 31, 2009, did not impact our results of operations or
financial position, as it only required disclosures, which are included in the
following section.





In May
2009, the FASB issued ASC 855, “Subsequent Events,” which establishes general
standards of accounting for and disclosures of events that occur after the
balance sheet date but before financial statements are issued or are available
to be issued.  In particular, this Statement sets forth the period
after the balance sheet date during which management of a reporting entity
should evaluate events or transactions that may occur for potential recognition
or disclosure in the financial statements, the circumstances under which an
entity should recognize events or transactions occurring after the balance sheet
date in its financial statements, and the disclosures that an entity should make
about events or transactions that occurred after the balance sheet
date.  In accordance with this Statement, an entity should apply the
requirements to interim or annual financial periods ending after June 15,
2009.  Subsequent events were evaluated through February 12, 2010,
which is the date the financial statements were issued.  The impact of
the adoption did not have a material impact on the results of operations or
financial position of the Company.





In June
2009 the FASB issued Statement No. 168 (ASC 105-10), “The FASB Accounting
Standards Codification and Hierarchy of Generally Accepted Accounting
Principles-a replacement of FASB Statement No. 162,” Which was subsequently
incorporated into ASC 405.  This Statement has become the source of
authoritative U.S. generally accepted accounting principles (“GAAP”) recognized
by the FASB to be applied by nongovernmental entities.  Rules and
interpretive releases of the Securities and Exchange Commission (“SEC”) under
authority of federal securities laws are also sources of authoritative GAAP for
SEC registrants.  On the effective date of this Statement, the
Codification superseded all then-existing non-SEC accounting and reporting
standards.  All other non-grandfathered non-SEC accounting literature
not included in the Codification will become
non-authoritative.  Management has adopted this Statement for the
period ended December 31, 2009.  All authoritative language has been
updated to comply with ASC 405.





On June
12, 2009, the FASB issued new guidance impacting FASB ASC 860, Transfers and
Servicing.The new
guidance amends ASC 860, and will require more information about transfers of
financial assets, including securitization transactions, and where entities have
continuing exposure to the risks related to transferred financial assets. It
eliminates the concept of a “qualifying special-purpose entity,” changes the
requirements for derecognizing financial assets, and requires additional
disclosures. The new standard will be effective January 1, 2010 and the adoption
of this standard is not expected to have a material effect on the Company’s
results of operations or financial position.


10





Kentucky
First Federal Bancorp





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)





Six- and
three-months ended December 31, 2009 and 2008


(unaudited)





4.  New Accounting Standards
(continued)





On June
12, 2009, the FASB issued new guidance impacting FASB ASC 810-10, Consolidation
(Statement No. 167 amends FIN 46(R)).  The new guidance replaces the
quantitative-based risks and rewards calculation for determining which
enterprise, if any, has a controlling financial interest in a variable interest
entity with a qualitative approach focused on identifying which enterprise has
the power to direct the activities of a variable interest entity (VIE) that most
significantly impact the entity’s economic performance and (1) the obligation to
absorb losses of the entity or (2) the right to receive benefits from the
entity.   Unlike previous guidance, this Statement requires ongoing
reconsideration of whether (1) an entity is a VIE and (2) an enterprise is the
primary beneficiary of a VIE.  It is expected that the amendments will
result in more entities consolidating VIEs that previously were not consolidated
 This new guidance will also require additional disclosures about the
Company’s involvement in variable interest entities.   This new guidance
will be effective January 1, 2010 and the adoption of this standard is not
expected to have a material effect on the Company’s results of operations or
financial position.





5.  Investment
Securities





The
amortized cost, gross unrealized gains, gross unrealized losses and estimated
fair values of investment securities are summarized as follows:





December
      31, 2009Gross
                                                        
                                                        
                                                        Gross
                                                        
                                                        
                                                        EstimatedAmortized
                                                        
                                                        
                                                        unrealized
                                                        
                                                        
                                                        unrealized
                                                        
                                                        
                                                        faircost
                                                        
                                                        
                                                        gains
                                                        
                                                        
                                                        losses
                                                        
                                                        
                                                        value(In
      thousands)Available-for-sale
      SecuritiesU.S.
      Government and federal agency
                                                        
                                                        $
                                                        5,000
                                                        
                                                        
                                                        $
                                                        70
                                                        
                                                        
                                                        $
                                                        -
                                                        
                                                        
                                                        $
                                                        5,070Agency
      residential mortgage-backed securities
                                                        
                                                        
                                                        255
                                                        
                                                        
                                                        
                                                        3
                                                        
                                                        
                                                        
                                                        (1
                                                        )
                                                        
                                                        
                                                        257$
                                                        5,255
                                                        
                                                        
                                                        $
                                                        73
                                                        
                                                        
                                                        $
                                                        (1
                                                        )
                                                        
                                                        $
                                                        5,327Held-to-maturity
      SecuritiesU.S.
      Government and federal agency
                                                        
                                                        $
                                                        -
                                                        
                                                        
                                                        $
                                                        -
                                                        
                                                        
                                                        $
                                                        -
                                                        
                                                        
                                                        $
                                                        -Agency
      residential mortgage-backed securities
                                                        
                                                        
                                                        10,972
                                                        
                                                        
                                                        
                                                        344
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        11,316$
                                                        10,972
                                                        
                                                        
                                                        $
                                                        344
                                                        
                                                        
                                                        $
                                                        -
                                                        
                                                        
                                                        $
                                                        11,316June
      30, 2009Gross
                                                        
                                                        
                                                        Gross
                                                        
                                                        
                                                        EstimatedAmortized
                                                        
                                                        
                                                        unrealized
                                                        
                                                        
                                                        unrealized
                                                        
                                                        
                                                        faircost
                                                        
                                                        
                                                        gains
                                                        
                                                        
                                                        losses
                                                        
                                                        
                                                        value(In
      thousands)Available-for-sale
      SecuritiesU.S.
      Government and federal agency
                                                        
                                                        $
                                                        5,000
                                                        
                                                        
                                                        $
                                                        136
                                                        
                                                        
                                                        $
                                                        -
                                                        
                                                        
                                                        $
                                                        5,136Agency
      residential mortgage-backed securities
                                                        
                                                        
                                                        314
                                                        
                                                        
                                                        
                                                        2
                                                        
                                                        
                                                        
                                                        (1
                                                        )
                                                        
                                                        
                                                        315$
                                                        5,314
                                                        
                                                        
                                                        $
                                                        138
                                                        
                                                        
                                                        $
                                                        (1
                                                        )
                                                        
                                                        $
                                                        5,451Held-to-maturity
      SecuritiesU.S.
      Government and federal agency
                                                        
                                                        $
                                                        3,000
                                                        
                                                        
                                                        $
                                                        2
                                                        
                                                        
                                                        $
                                                        -
                                                        
                                                        
                                                        $
                                                        3,002Agency
      residential mortgage-backed securities
                                                        
                                                        
                                                        11,999
                                                        
                                                        
                                                        
                                                        316
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        12,315$
                                                        14,999
                                                        
                                                        
                                                        $
                                                        318
                                                        
                                                        
                                                        $
                                                        -
                                                        
                                                        
                                                        $
                                                        15,317


11





Kentucky
First Federal Bancorp





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)





Six- and
three-months ended December 31, 2009 and 2008


(unaudited)





5.  Investment Securities
(continued)





The
amortized cost and estimated fair value of investment securities 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.





December
      31,
                            
                            
                            June
      30,2009
                            
                            
                            2009Estimated
                            
                            
                            
                            
                            
                            Estimatedfair
                            
                            
                            Amortized
                            
                            
                            fair
                            
                            
                            Amortizedvalue
                            
                            
                            cost
                            
                            
                            value
                            
                            
                            cost(In
      thousands)Available-for-saleWithin
      one year
                            
                            $
                            5,070
                            
                            
                            $
                            5,000
                            
                            
                            $
                            5,136
                            
                            
                            $
                            5,000One
      year through five years
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -5,070
                            
                            
                            
                            5,000
                            
                            
                            
                            5,136
                            
                            
                            
                            5,000Mortgage-backed
      securities
                            
                            
                            257
                            
                            
                            
                            255
                            
                            
                            
                            315
                            
                            
                            
                            314Totals
                            
                            $
                            5,327
                            
                            
                            $
                            5,255
                            
                            
                            $
                            5,451
                            
                            
                            $
                            5,314Held-to-maturityWithin
      one year
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            3,002
                            
                            
                            $
                            3,000One
      year through five years
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            --
                            
                            
                            
                            -
                            
                            
                            
                            3,002
                            
                            
                            
                            3,000Mortgage-backed
      securities
                            
                            
                            11,316
                            
                            
                            
                            10,972
                            
                            
                            
                            12,315
                            
                            
                            
                            11,999Totals
                            
                            $
                            11,316
                            
                            
                            $
                            10,972
                            
                            
                            $
                            15,317
                            
                            
                            $
                            14,999





There
were no sales of investment securities during the fiscal year ended June 30,
2009 or the six- and three- month periods ended December 31, 2009.





We
evaluated securities in unrealized loss positions for evidence of
other-than-temporary impairment, considering duration, severity, financial
condition of the issuer, our intention to sell or requirement to
sell.  Management does not believe other-than-temporary impairment is
evident.


12





Kentucky
First Federal Bancorp





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)





Six- and
three-months ended December 31, 2009 and 2008


(unaudited)





6. 
Loans
Receivable





The
composition of the loan portfolio is as follows:




December
      31,
                                          
                                          
                                          June
      30,2009
                                          
                                          
                                          2009(In
      thousands)Residential
      real estateOne-
      to four-family
                                          
                                          $
                                          164,625
                                          
                                          
                                          $
                                          163,108Multi-family
                                          
                                          
                                          8,728
                                          
                                          
                                          
                                          7,303Construction
                                          
                                          
                                          1,175
                                          
                                          
                                          
                                          735Nonresidential
      real estate and land
                                          
                                          
                                          11,139
                                          
                                          
                                          
                                          11,460Loans
      on deposits
                                          
                                          
                                          2,736
                                          
                                          
                                          
                                          2,909Consumer
      and other
                                          
                                          
                                          4,698
                                          
                                          
                                          
                                          4,497193,101
                                          
                                          
                                          
                                          190,012Less:Undisbursed
      portion of loans in process
                                          
                                          
                                          576
                                          
                                          
                                          
                                          404Deferred
      loan origination fees (cost)
                                          
                                          
                                          5
                                          
                                          
                                          
                                          (1
                                          )Allowance
      for loan losses
                                          
                                          
                                          1,618
                                          
                                          
                                          
                                          678$
                                          190,902
                                          
                                          
                                          $
                                          188,931Impaired
      loans were as follows:December
      31,
                                          
                                          
                                          June
      30,2009
                                          
                                          
                                          2009(In
      thousands)Loans
      with no allocated allowance for loan losses
                                          
                                          $
                                          1,884
                                          
                                          
                                          $
                                          4,086Loans
      with allocated allowance for loan losses
                                          
                                          
                                          5,385
                                          
                                          
                                          
                                          1,153Total
                                          
                                          $
                                          7,269
                                          
                                          
                                          $
                                          5,239Amount
      of allowance for loan losses allocated
                                          
                                          $
                                          993
                                          
                                          
                                          $
                                          56





7.  Allowance for Loan
Losses





The
activity in the allowance for loan losses is summarized as follows:





For
      the Six Months EndedDecember
      31,
                    
                    
                    December
      31,2009
                    
                    
                    2008(In
      thousands)Beginning
      balance
                    
                    $
                    678
                    
                    
                    $
                    666Provision
      for losses on loans
                    
                    
                    1,028
                    
                    
                    
                    15Charge-offs
                    
                    
                    (88
                    )
                    
                    
                    -Ending
      balance
                    
                    $
                    1,618
                    
                    
                    $
                    681


13





Kentucky
First Federal Bancorp





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)





Six- and
three-months ended December 31, 2009 and 2008


(unaudited)





7.  Allowance for Loan Losses
(continued)


For
      the Three Months EndedDecember
      31,
                        
                        
                        December
      31,2009
                        
                        
                        2008(In
      thousands)Beginning
      balance
                        
                        $
                        1,599
                        
                        
                        $
                        681Provision
      for losses on loans
                        
                        
                        60
                        
                        
                        
                        -Charge-offs
                        
                        
                        (41
                        )
                        
                        
                        -Ending
      balance
                        
                        $
                        1,618
                        
                        
                        $
                        681




8.  Commitments




As of
December 31, 2009, loan commitments and unused lines of credit totaled $10.9
million, including $576,000 in undisbursed construction loans, $936,000 in one-
to four-family mortgage loans and $9.4 million in lines of credit secured by
equity in real property.




9.  Disclosures About Fair Value
of Assets and Liabilities




ASC topic
820 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.  ASC topic 820 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.


14





Kentucky
First Federal Bancorp





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)





Six- and
three-months ended December 31, 2009 and 2008


(unaudited)





9. Disclosures About Fair Value
of Assets and Liabilities (continued)




Impaired
Loans




Impaired
loans are evaluated at the time the loan is identified as impaired and are
recorded at fair value.  Market value is measured based on the value
of the collateral securing these loans and is classified as Level 3 in the fair
value hierarchy.  Fair value is determined using several
methods.  Generally, the fair value of real estate is determined based
on appraisals by qualified licensed appraisers.  If an appraisal is
not available, the fair value of the collateral may be determined by using a
cash flow analysis, a broker’s opinion of value, the net present value of future
cash flows, or an observable market price from an active market.  Fair
value on non-real estate collateral loans is determined using similar
methods.  In addition, business equipment may be valued by using the
net book value from the business’ financial statements.  Impaired
loans are evaluated quarterly for additional impairment.




Other
Real Estate Owned (“OREO”)




OREO is
evaluated at the time of acquisition and recorded at fair value as determined by
independent appraisal or internal market evaluation less cost to
sell.  OREO is further evaluated quarterly for
impairment.  The aggregate fair value of OREO acquired and/or written
down to fair value during the period is disclosed below.




Financial
assets measured at fair value on a recurring basis are summarized
below:


Fair Value Measurements at December 31, 2009(in thousands)Quotes Prices
                                                                    in Active
                                                                    Markets for
                                                                  
                                                                  
                                                                  Significant
                                                                    Other
                                                                  
                                                                  
                                                                  SignificantIdentical
                                                                  
                                                                  
                                                                  Observable
                                                                  
                                                                  
                                                                  UnobservableAssets
                                                                  
                                                                  
                                                                  Inputs
                                                                  
                                                                  
                                                                  InputsDescription
                                                                  
                                                                  Fair Value
                                                                  
                                                                  
                                                                  (Level 1)
                                                                  
                                                                  
                                                                  (Level 2)
                                                                  
                                                                  
                                                                  (Level 3)Available-for-sale
      securities:U.S.
      Government and federal agency
                                                                  
                                                                  $
                                                                  5,070
                                                                  
                                                                  
                                                                  $
                                                                  -
                                                                  
                                                                  
                                                                  $
                                                                  5,070
                                                                  
                                                                  
                                                                  $
                                                                  -Agency
      residential mortgage-backedsecurities
                                                                  
                                                                  
                                                                  257
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  257
                                                                  
                                                                  
                                                                  
                                                                  -Totals
                                                                  
                                                                  $
                                                                  5,327
                                                                  
                                                                  
                                                                  $
                                                                  -
                                                                  
                                                                  
                                                                  $
                                                                  5,327
                                                                  
                                                                  
                                                                  $
                                                                  -


Fair Value Measurements at June 30, 2009(in thousands)Quotes Prices
                                                                in Active
                                                                Markets for
                                                              
                                                              
                                                              Significant
                                                                Other
                                                              
                                                              
                                                              SignificantIdentical
                                                              
                                                              
                                                              Observable
                                                              
                                                              
                                                              UnobservableAssets
                                                              
                                                              
                                                              Inputs
                                                              
                                                              
                                                              InputsDescription
                                                              
                                                              Fair Value
                                                              
                                                              
                                                              (Level 1)
                                                              
                                                              
                                                              (Level 2)
                                                              
                                                              
                                                              (Level 3)Available-for-sale
      securities:U.S.
      Government and federal agency
                                                              
                                                              $
                                                              5,136
                                                              
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              5,136
                                                              
                                                              
                                                              $
                                                              -Agency
      residential mortgage-backedsecurities
                                                              
                                                              
                                                              315
                                                              
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              315
                                                              
                                                              
                                                              
                                                              -Totals
                                                              
                                                              $
                                                              5,451
                                                              
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              5,451
                                                              
                                                              
                                                              $
                                                              -


15





Kentucky
First Federal Bancorp





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)





Six- and
three-months ended December 31, 2009 and 2008


(unaudited)





9. Disclosures About Fair Value
of Assets and Liabilities (continued)





Assets
measured at fair value on a non-recurring basis are summarized
below:





Fair Value Measurements at December 31, 2009(in thousands)Quotes Prices
                                                                  in Active
                                                                  Markets for
                                                                
                                                                
                                                                SignificantOther
                                                                
                                                                
                                                                SignificantIdentical
                                                                
                                                                
                                                                Observable
                                                                
                                                                
                                                                UnobservableAssets
                                                                
                                                                
                                                                Inputs
                                                                
                                                                
                                                                InputsDescription
                                                                
                                                                Fair Value
                                                                
                                                                
                                                                (Level 1)
                                                                
                                                                
                                                                (Level 2)
                                                                
                                                                
                                                                (Level 3)Impaired
      loans
                                                                
                                                                $
                                                                6,276
                                                                
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                6,276Other
      real estate owned
                                                                
                                                                
                                                                110
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                110Totals
                                                                
                                                                $
                                                                6,386
                                                                
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                6,386





Impaired
loans had a carrying amount of $5.4 million and a valuation allowance of
$993,000 at December 31, 2009.  A charge of $16,000 was included in
earnings for the period.





Fair Value Measurements at June 30, 2009(in thousands)Quotes Prices
                                                              in Active
                                                              Markets for
                                                            
                                                            
                                                            SignificantOther
                                                            
                                                            
                                                            SignificantIdentical
                                                            
                                                            
                                                            Observable
                                                            
                                                            
                                                            UnobservableAssets
                                                            
                                                            
                                                            Inputs
                                                            
                                                            
                                                            InputsFair Value
                                                            
                                                            
                                                            (Level 1)
                                                            
                                                            
                                                            (Level 2)
                                                            
                                                            
                                                            (Level 3)Impaired
      loans
                                                            
                                                            $
                                                            5,183
                                                            
                                                            
                                                            $
                                                            -
                                                            
                                                            
                                                            $
                                                            -
                                                            
                                                            
                                                            $
                                                            5,183Other
      real estate owned
                                                            
                                                            
                                                            109
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            109Totals
                                                            
                                                            $
                                                            5,292
                                                            
                                                            
                                                            $
                                                            -
                                                            
                                                            
                                                            $
                                                            -
                                                            
                                                            
                                                            $
                                                            5,292





ASC 829,
“Disclosures about Fair Value of Financial Instruments,” requires disclosure of
the fair value of financial instruments, both assets and liabilities, whether or
not recognized in the consolidated statement of financial condition, 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 statements of financial condition at
amounts other than fair value at June 30, 2009 and 2008:





Cash and cash
      equivalents:  The carrying amounts presented in the
      consolidated statements of financial condition for cash and cash
      equivalents are deemed to approximate fair
  value.





Held-to-maturity
      securities:  For held-to-maturity securities, fair value
      is deemed to equal the quoted market price, which is level 2
      pricing.





16





Kentucky
First Federal Bancorp





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)





Six- and
three-months ended December 31, 2009 and 2008


(unaudited)





9. Disclosures About Fair Value
of Assets and Liabilities (continued)





Loans held for
      sale:  Loans originated and intended for sale in the
      secondary market are carried at the lower of cost or fair value, as
      determined by outstanding commitments from investors.  When the
      Bank decides to sell loans not previously classified as held for sale,
      such loans are transferred into a held-for-sale classification, and the
      recorded loan values are adjusted to the lower of cost or fair
      value.





Loans
      receivable:  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.





Federal Home Loan Bank
      stock, interest-earning deposits and accrued interest
      receivable:  It is not practicable to determine the fair
      value of FHLB stock due to restrictions placed on its transferability.
      The
      carrying amounts presented in the consolidated statements of financial
      condition for interest-earning deposits and accrued interest receivable
      are deemed to approximate fair
value.





Deposits:  The
      fair value of NOW accounts, passbook accounts, money market deposits and
      advances by borrowers for taxes and insurance 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.  The historical carrying amount of
      accrued interest payable on deposits is deemed to approximate fair
      value.





Advances from the
      Federal Home Loan Bank:  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 December 31, and June 30, 2009, was not
material.


17





Kentucky
First Federal Bancorp





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)





Six- and
three-months ended December 31, 2009 and 2008


(unaudited)





9. Disclosures About 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 December 31 and June 30, 2009 are as
follows:





December
      31, 2009
                    
                    
                    June
      30, 2009Carrying
                      value
                    
                    
                    Fair
                      value
                    
                    
                    Carrying
                      value
                    
                    
                    Fair
                      value(In
      Thousands)Financial
      assetsCash
      and cash equivalents
                    
                    $
                    4,101
                    
                    
                    $
                    4,101
                    
                    
                    $
                    4,217
                    
                    
                    $
                    4,217Interest-earning
      deposits
                    
                    
                    100
                    
                    
                    
                    100
                    
                    
                    
                    100
                    
                    
                    
                    100Available-for-sale
      securities
                    
                    
                    5,327
                    
                    
                    
                    5,327
                    
                    
                    
                    5,451
                    
                    
                    
                    5,451Held-to-maturity
      securities
                    
                    
                    10,972
                    
                    
                    
                    11,316
                    
                    
                    
                    14,999
                    
                    
                    
                    15,317Loans
      held for sale
                    
                    
                    105
                    
                    
                    
                    105
                    
                    
                    
                    230
                    
                    
                    
                    230Loans
      receivable - net
                    
                    
                    190,902
                    
                    
                    
                    196,123
                    
                    
                    
                    188,931
                    
                    
                    
                    193,165Federal
      Home Loan Bank stock
                    
                    
                    5,641
                    
                    
                    
                    n/a
                    
                    
                    
                    5,641
                    
                    
                    
                    n/aAccrued
      interest receivable
                    
                    
                    613
                    
                    
                    
                    613
                    
                    
                    
                    750
                    
                    
                    
                    750Advances
      to borrowers for taxes and insurance
                    
                    
                    22
                    
                    
                    
                    22
                    
                    
                    
                    -
                    
                    
                    
                    -Financial
      liabilitiesDeposits
                    
                    $
                    142,552
                    
                    
                    $
                    145,046
                    
                    
                    $
                    139,743
                    
                    
                    $
                    142,772Advances
      from the Federal Home Loan Bank
                    
                    
                    36,837
                    
                    
                    
                    36,762
                    
                    
                    
                    40,156
                    
                    
                    
                    41,613Advances
      by borrowers for taxes and insurance
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    290
                    
                    
                    
                    290Accrued
      interest payable
                    
                    
                    173
                    
                    
                    
                    173
                    
                    
                    
                    189
                    
                    
                    
                    189


18


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,
rapidly changing technology affecting financial services and the other matters
mentioned in Item 1A of the Company’s Annual Report on Form 10-K for the year
ended June 30, 2009.





Discussion of Financial
Condition Changes from June 30, 2009 to December 31, 2009





Assets:  At
December 31, 2009, the Company’s assets totaled $239.5 million, a decrease of
$1.4 million, or 0.6%, from total assets at June 30, 2009.  This
decrease was attributed primarily a decrease in investment securities as well as
an increase in the allowance for loan losses, offset by an increase in loans
receivable, net.





Cash and cash
equivalents:Cash and cash
equivalents slightly decreased by $116,000 to $4.1 million at December 31,
2009.  It is management’s intention to continue deploying excess
liquidity into mortgage loans to the extent possible.





Loans:  Loans
receivable, net, increased by $2.0 million or 1.0% to $190.9 million at December
31, 2009, despite an increased level of allowance for loan losses.  A
provision for loan losses of $1.0 million was made during the six months just
ended, chiefly to establish a specific valuation allowance in response to
deterioration in the financial position of a single
borrower.  Otherwise, gross loans receivable increased $2.9 million or
1.5% to $192.5 million at December 31, 2009.  Management believes that
the successful redeployment of the Company’s excess liquidity 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.





Non-Performing
Loans: At December 31,
2009, the Company had approximately $3.3 million, or 1.7% of net loans, in loans
90 days or more past due, compared to $3.9 million or 2.0%, of net loans at June
30, 2009.  At December 31, 2009, the Company’s allowance for loan losses of
$1.6 million represented 48.8% of nonperforming loans and 0.8% of net loans
compared to an allowance balance of $678,000 at June 30, 2009, representing
17.5% of nonperforming loans and 0.4% of net loans..


19


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, 2009 to December 31, 2009
(continued)





The
Company had $7.4 million in assets classified as substandard for regulatory
purposes at December 31, 2009, including loans and real estate acquired through
foreclosure (“REO”).  Classified assets as a percentage of net loans
was 3.8% and 4.2% at December 31, and June 30, 2009,
respectively.  REO at December 31, 2009, included four single-family
homes with an aggregate carrying value of $110,000.  All substandard
loans were secured by residential property on which the banks have priority lien
position.  The table below summarizes substandard loans at December
31, 2009:





Numberof
                    
                    
                    CarryingLoans
                    
                    
                    ValueSingle
      family, owner occupied
                    
                    
                    39
                    
                    
                    $
                    2,376Single
      family, non-owner occupied
                    
                    
                    5
                    
                    
                    
                    339More
      than one single family, non-owner occupied
                    
                    
                    3
                    
                    
                    
                    2,6382-4
      family, owner
      occupied
                    
                    
                    2
                    
                    
                    
                    412-4
      family, non-owner
      occupied
                    
                    
                    10
                    
                    
                    
                    1,4725
      or more family, non-owner occupied
                    
                    
                    1
                    
                    
                    
                    403Total
      substandard
      loans
                    
                    
                    60
                    
                    
                    $
                    7,269





Included
in classified loans is one credit relationship which, within the last six
months, experienced significant deterioration and is responsible for most of the
provision for losses during that period.  The loans to this borrower
totaled $4.7 million at December 31, 2009, and all of the underlying collateral
is comprised of 1-4 family residential rental units.  Management
determined this loan to be impaired under ASC 310 “Receivables” and that it
would be unable to collect all amounts due according to the contractual terms of
the loan agreement.  During the six month period ended December 31,
2009, a specific reserve of $925,000 was established based on the estimated fair
value of the underlying collateral less cost to sell.





At
December 31, 2009, the Company had $481,000 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.  At December 31, 2009, no loans were classified as doubtful
or loss for regulatory purposes.





Investment and
Mortgage-Backed Securities:  At December 31,
2009, the Company’s investment and mortgage-backed securities had decreased $4.2
million or 20.3% to $16.3 million.  Approximately $5.0 million of the
Company’s remaining investment and agency securities are scheduled to mature in
the current fiscal year.





Liabilities:At December 31, 2009,
the Company’s liabilities totaled $181.5 million, a decrease of $1.0 million, or
0.6%, from total liabilities at June 30, 2009.  The decrease in
liabilities was attributed primarily to a $3.3 million, or 8.3%, decrease in
Federal Home Loan Bank advances, which decreased to $36.8 million at December
31, 2009.  Approximately $25.0 million in advances will mature within
the next twelve months.   Management plans to refinance a portion
of its advances utilizing longer-term products at prevailing interest rates,
which are lower than the rates currently being paid on the
advances.





Shareholders’
Equity:  At December 31, 2009, the Company’s shareholders’
equity totaled $58.0 million, a decrease of $410,000 or 0.7% from the June 30,
2009 total.  The primary reasons for the decline were the net loss for
the six months of $147,000 and dividends paid of $567,000.


20


Kentucky
First Federal Bancorp





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION


AND
RESULTS OF OPERATIONS (continued)





Comparison of Operating
Results for the Six-Month Periods Ended December 31, 2009 and
2008





General





Net loss
totaled $(147,000) for the six months ended December 31, 2009, a decrease of
$782,000 from the $635,000 in net income for the same period in
2008.  The decrease was primarily attributable to a provision for loan
loss of $1.0 million during the period.  Also contributing to the
decrease in net income was a decrease in net interest income and an increase in
FDIC insurance premiums from period to period.





Net Interest
Income





Net
interest income decreased $21,000 or 0.7% to $3.1 million for the six month
period ended December 31, 2009, compared to the 2008 period, due to interest
income decreasing at a faster pace than interest expense.  Interest
income decreased by $430,000, or 6.9%, to $5.8 million, while interest expense
decreased $409,000 or 13.4% to $2.6 million for the six months ended December
31, 2009.





Interest
income on loans decreased $273,000 or 4.9% to $5.3 million, due primarily to a
decrease in the average rate earned on the loan portfolio.  The
average balance of loans outstanding for the six month period ended December 31,
2009, increased $2.9 million or 1.5% to an average of $189.8 million for the six
months just ended, while the average rate earned declined 38 basis points to
5.57% for the period just ended.  Interest income on interest-bearing
deposits and other decreased $73,000 or 35.3% to $134,000 for the six months
ended December 31, 2009, primarily as a result of reduced volume.  The
average balance outstanding declined $4.4 million or 34.5% to $8.3 million for
the six month period ended December 31, 2009, while the average rate earned on
those assets declined 4 basis points to 3.22%.





Interest
expense on deposits and borrowings both declined period to
period.  Interest expense on deposits decreased $294,000 or 13.8% to
$1.8 million for the six month period ended December 31, 2009, while interest
expense on borrowings declined $115,000 or 12.5% to $807,000 for the same
period.  The decline in interest expense on deposits was attributed
primarily to a reduction in the average rate paid on the deposits, as the
average balance of deposits increased period to period.  The average
rate paid on deposits decreased 51 basis points to 2.60% for the most recent
period, while the average balance of deposits increased $4.4 million or 3.2% to
$141.5 million.  The decline in interest expense on borrowings was
attributed to lower borrowings outstanding, as the average balance of borrowings
declined $9.3 million or 20.8% to $35.6 million for the most recent
period.  The average rate paid on borrowings increased 43 basis points
to 4.54% for the recently ended six-month period.





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 $1.0 million during the
six months ended December 31, 2009, compared to a provision of $15,000 for the
six months ended December 31, 2008.  Management determined that a
specific valuation allowance of $925,000 was appropriate in response to
deterioration in the financial position of a single borrower.  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.


21


Kentucky
First Federal Bancorp





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION


AND
RESULTS OF OPERATIONS (continued)





Comparison of Operating
Results for the Six-Month Periods Ended December 31, 2009 and 2008
(continued)





Non-interest
Income





Non-interest
income totaled $128,000 for the six months ended December 31, 2009, an increase
of $14,000 from the same period in 2008.





Non-interest
Expense





Non-interest
expense totaled $2.4 million for the six months ended December 31, 2009, an
increase of $144,000, or 6.3%, compared to the same period in
2008.  The increase was due primarily to an increase in employee
compensation and benefits and FDIC insurance premiums.  Employee
compensation and benefits increased 8.1% or $114,000 to $1.5 million for the six
month period just ended primarily as a result of lower levels of deferred loan
origination costs, which was attributed to a lower number of loan originations
during the period.  The Company defers certain costs, which are
attributable to the origination of loans, and amortizes those costs over the
lives of those loans.  When fewer loans are originated during a
period, a lower level of cost is deferred.  FDIC insurance premiums
totaled $93,000 for the six months ended December 31, 2009, an increase of
$81,000, or 675.0%, from the same period in 2008.  As is the case for
most FDIC-insured financial institutions, the two banks owned by the Company are
experiencing higher FDIC insurance premiums, which were mandated to increase
deposit insurance fund levels as a result of the recent increase in bank
failures.    Somewhat offsetting higher levels of expense in
other areas, occupancy and equipment expense decreased $59,000 or 28.9% to
$145,000 for the six months ended December 31, 2009.  During the
quarter ended December 31, 2008, the Company incurred expenses associated with
the conversion of one of its bank’s core data processing systems and those
nonrecurring costs were primarily responsible for the higher level of expense
during that period.





Federal Income Tax Expense
(Benefit)





As a
result of the net loss for the period, the benefit of federal income taxes
totaled $78,000 for the six months ended December 31, 2009, a decrease of
$382,000, compared to a provision of $304,000 for federal income tax expense in
the same period in 2008.  The effective tax rates were (34.7%) and
32.4% for the six month periods ended December 31, 2009 and 2008,
respectively.





Comparison of Operating
Results for the Three Month Periods Ended December 31, 2009 and
2008





General





Net
income totaled $215,000 for the three months ended December 31, 2009, a decrease
of $108,000 from the $323,000 in net income for the same period in
2008.  The decrease was primarily attributable to an increase in
non-interest expenses and provision for loan losses during the
period.





Net Interest
Income





Net
interest income increased $22,000 or 1.4% to $1.6 million for the three month
period ended December 31, 2009, compared to the 2008 period, due to interest
expense decreasing at a faster pace than interest income.  Interest
income decreased by $193,000, or 6.3%, to $2.9 million, while interest expense
decreased $215,000 or 14.4% to $1.3 million for the three months ended December
31, 2009.


22


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 December 31, 2009 and 2008
(continued)





Net Interest Income
(continued)





Interest
income on loans decreased $142,000 or 5.1% to $2.6 million, due to a decrease in
the average rate earned on the loan portfolio.  The average balance of
loans outstanding for the three month period ended December 31, 2009, increased
$3.0 million or 1.6% to an average of $190.0 million for the three months just
ended, while the average rate earned declined 40 basis points to 5.55% for the
period just ended.  Interest income on investment securities decreased
$23,000 or 34.3% to $44,000 for the three months ended December 31, 2009,
primarily as a result of reduced volume.  The average balance
outstanding declined $2.9 million or 36.1% to $5.2 million for the three month
period ended December 31, 2009, while the average rate earned on those assets
increased 9 basis points to 3.39%.





Interest
expense on deposits and borrowings both declined period to
period.  Interest expense on deposits decreased $164,000 or 15.5% to
$891,000 for the three month period ended December 31, 2009, while interest
expense on borrowings declined $51,000 or 11.5% to $391,000 for the same
period.  The decline in interest expense on deposits was attributed
primarily to a reduction in the average rate paid on the deposits, as the
average balance of deposits increased period to period.  The average
rate paid on deposits decreased 58 basis points to 2.51% for the most recent
period, while the average balance of deposits increased $5.2 million or 3.8% to
$141.9 million.  The decline in interest expense on borrowings was
attributed to lower borrowings outstanding, as the average balance of borrowings
declined $7.3 million or 17.2% to $35.2 million for the most recent
period.  The average rate paid on borrowings increased 29 basis points
to 4.44% for the recently ended three-month period.





Provision for Losses on
Loans





The
Company recorded a provision for losses on loans of $60,000 during the three
months ended December 31, 2009, compared to no provision for the three months
ended December 31, 2008.  The additional general provision was
necessary to reestablish the appropriate level subsequent to charge-offs related
to foreclosed properties acquired during the period.  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.





Non-interest
Income





Non-interest
income totaled $61,000 for the three months ended December 31, 2009, an increase
of $2,000 from the same period in 2008.


23


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 December 31, 2009 and 2008
(continued)





Non-interest
Expense





Non-interest
expense totaled $1.3 million for the three months ended December 31, 2009, an
increase of $113,000, or 9.9%, compared to the same period in
2008.  The increase was due primarily to an increase in employee
compensation and benefits and FDIC insurance premiums.  Employee
compensation and benefits increased 9.6% or $68,000 to $780,000 for the three
month period just ended primarily as a result of lower levels of deferred loan
origination costs, which was attributed to a lower number of loan originations
during the period.  FDIC insurance premiums totaled $51,000 for the
three months ended December 31, 2009, an increase of $45,000, or 750.0%, from
the same period in 2008.  Somewhat offsetting higher levels of expense
in other areas, occupancy and equipment expense decreased $42,000 or 36.2% to
$74,000 for the three months ended December 31, 2009.  During the
quarter ended December 31, 2008, the Company incurred expenses associated with
the conversion of one of its bank’s core data processing systems and those
nonrecurring costs were primarily responsible for the higher level of expense
during that period.





Federal Income Tax Expense
(Benefit)





Federal
income tax expense totaled $110,000 for the three months ended December 31,
2009, a decrease of $41,000, or 27.2% compared to the same period in
2008.  The effective tax rates were 33.8% and 31.9% for the three
month periods ended December 31, 2009 and 2008, respectively.





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 28, 2009.





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 December 31, 2009, 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.


24




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 December 31, 2009.





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 programsOctober
      1-31, 2009
                      
                      
                      —
                      
                      
                      $
                      —
                      
                      
                      
                      —
                      
                      
                      
                      42,500November
      1-30, 2009
                      
                      
                      6,000
                      
                      
                      $
                      11.30
                      
                      
                      
                      6,000
                      
                      
                      
                      36,500December
      1-31, 2009
                      
                      
                      —
                      
                      
                      $
                      —
                      
                      
                      
                      —
                      
                      
                      
                      36,500





(1) 
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
4T.           
 Submission of
Matters to a Vote of Security Holders




(a)     The
registrant held its Annual Meeting of Shareholders on November 10,
2009.


(b)     Not
applicable


(c)     Two
matters were voted upon at the Annual Meeting:


1)          
Election of three individuals as directors:





Votes
      For
                        
                        
                        Votes
      WithheldStephen
      G. Barker
                        
                        7,204,747
                        
                        
                        38,338David
      R. Harrod
                        
                        7,209,580
                        
                        
                        33,505Tony
      D. Whitaker
                        
                        7,232,675
                        
                        
                        10,410





2)           Ratification
of Crowe Horwath, LLP, as the Company’s independent registered public
accountants for the fiscal year ending June 30, 2010:





Votes For
                                  
                                  
                                  Votes Against
                                  
                                  
                                  Abstain7,198,886
                                  
                                  
                                  10,961
                                  
                                  
                                  33,238





There
were no broker nonvotes.


25





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


26


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:
                      February
      12, 2010
                      
                      By:
                      /s/Tony
      D. WhitakerTony
      D. WhitakerChairman
      of the Board and Chief Executive OfficerDate:
                      February
      12, 2010
                      
                      By:
                      /s/R.
      Clay HuletteR.
      Clay HuletteVice
      President and Chief Financial
Officer


27