Kentucky First Federal Bancorp (KFFB) risk factors, FY2024 10-K

Other

1. 01Rising interest rates may hurt our profits and asset values
2. 02Beginning in March, 2022, the Federal Reserve Board’s Open Market Committee (“FOMC”) started raising interest rates to combat elevated inflation and a strong labor market. Rates continued to increase through August 2023
3. 03Rising interest rates may adversely affect the ability of borrowers to repay loans

Risks Related to Our Lending Activities

1. 04Inflationary pressures and rising prices may affect our results of operations and financial condition
2. 05If our allowance for credit losses is not sufficient to cover actual loan losses, our results of operations would be negatively affected
3. 06A large percentage of our loans are collateralized by real estate and disruptions in the real estate market may result in losses and hurt our earnings
4. 07Our concentration of residential mortgage loans exposes us to increased lending risks
5. 08The distressed economy in First Federal of Hazard’s market area could hurt our profits and slow our growth
6. 09Our mortgage banking revenue and the value of our mortgage servicing rights can be volatile
7. 10Financial challenges at other banking institutions could lead to depositor concerns that spread within the banking industry causing disruptive and destabilizing deposit outflows
8. 11Insufficient liquidity or liquidity related concerns could impair our ability to fund operations, pay dividends on outstanding shares of stock, and jeopardize our financial condition, growth and prospects
9. 12On January 16, 2024, the Company announced the suspension of quarterly dividends indefinitely. The suspension of our quarterly cash dividend could have an adverse impact on the market price of our common stock

Risks Related to Our Business and Industry Generally

1. 13Our FDIC deposit insurance premiums and assessments may increase, which would reduce our profitability
2. 14Strong competition within our market areas could hurt our profits and slow growth

Risks Related to Laws and Regulations

1. 15We are required to comply with the terms of a formal written agreement and IMCRs issued by the OCC, and lack of compliance could result in monetary penalties and /or additional regulatory actions
2. 16Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations
3. 17Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions
4. 18Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and results of operations
5. 19We may be adversely affected by recent changes in U.S. tax laws and regulations
6. 20We may be subject to more stringent capital requirements which could result in lower returns on equity, require the raising of additional capital, and limit our ability to pay dividends or repurchase shares of our common stock
7. 21The Federal Reserve Board may require us to commit capital resources to support the Banks

Risks Related to Accounting Matters

1. 22Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and our financial condition or operating results
2. 23Changes in accounting standards could affect reported earnings
3. 24If we are required to impair our goodwill, intangibles, or other long-lived assets, our financial condition and results of operations would be adversely affected

Risks Related to Operational Matters

1. 25We are subject to certain risks in connection with our use of technology
2. 26Our security measures may not protect us from systems failures or interruptions
3. 27We must keep pace with technological change to remain competitive

Risks Related to Our Holding Company Structure

1. 28First Federal MHC owns a majority of our common stock and is able to exercise voting control over most matters put to a vote of stockholders, including preventing sale or merger transactions you may like or a second-step conversion by First Federal MHC