Kentucky First Federal Bancorp
For the period ended Jun 30, 2026. Filed Sep 28, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Sep 28, 2026
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EX-13 · Critical Audit Matter Description
Critical Audit Matter Description
Management’s estimate of the allowance for credit losses (ACL), includes a reserve on collectively evaluated loans. The reserve on collectively evaluated loans is based on historical loss rates adjusted for qualitative factors. Management’s adjustment for qualitative factors include actual and expected changes in regional and local economic and business conditions and developments in which the Company operates that affect the collectability of financial assets; the effect of other external factors such as the regulatory, legal and technological environments, competition, and events such as natural disasters or pandemics; and model risk including statistical risk, reversion risk, timing risk, and model limitation risk.
Significant judgment was required by management in the selection and application of key metrics used to derive the quantitative portion of the ACL. Accordingly, performing audit procedures to evaluate the Company’s estimated ACL involved a high degree of auditor judgment and required significant effort.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Company’s estimate of the ACL included, but were not limited to, the following:
| ● | We tested the process for determining reserves on collectively evaluated loans including: |
| ○ | Evaluation of the appropriateness of management’s methodology. |
| ○ | Testing the completeness and accuracy of data utilized by management. |
| ○ | Evaluation of the relevance and reliability of information used by management in the development of the estimate. |
| ○ | Evaluation of reasonableness of significant assumptions used in the qualitative analysis. |
| ○ | We evaluated the calculation and assumptions of the third party vendor for reasonableness of assumptions and recalculated amounts for accuracy. |
| ○ | Evaluation of the reasonableness of qualitative adjustment factors, including consideration of whether the adjustments applied were reasonable given portfolio composition; relevant external factors, including economic conditions; and consideration of historical or recent experience and conditions and events affecting the Company. |
/s/Clark, Schafer, Hackett & Co.
We have served as the Company’s auditor since 2024.
Cincinnati, Ohio
September 25, 2026
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