Issuer Free Writing Prospectus
Dated November 3, 2010
Filed Pursuant to Rule 433
Registration Statement No. 333-167179
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Kaiser Federal Financial Group, Inc.
KFFG
2nd Step Conversion
November 2010
Kay M. Hoveland, President & Chief Executive Officer
Dustin Luton, Chief Financial Officer
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FORWARD-LOOKING STATEMENTS
This Presentation may contain certain forward-looking statements regarding our
prospective performance and strategies within the meaning of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the Securities Exchange
Act of 1934, as amended. We intend such forward-looking statements to be
covered by the safe harbor provisions for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of said safe harbor provisions. Kaiser Federal Financial
Group, Inc. (“The Company”) has filed a registration statement
(including a prospectus) with the Securities and Exchange Commission (the
“SEC”) for the offering to which this communication relates. Before
you invest, you should read the prospectus in that registration statement and
other documents the Company has filed with the SEC for more complete
information about the Company and this offering. You may get these documents
for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively,
the Company, any underwriter or any dealer participating in the offering will
arrange to send you the prospectus if you request it by calling Keefe, Bruyette
& Woods, Inc. toll free at (877) 860-2086.
This presentation contains “forward-looking statements.” You can
identify these forward-looking statements through our use of words such as
“may,” “will,” “anticipate,” “assume,”
“should,” “indicate,” “would,”
“believe,” “contemplate,” “expect,”
“estimate,” “continue,” “plan,”
“project,” “could,” “intend,” “target”
and other similar words and expressions of the future. These forward-looking
statements include, but are not limited to:
o statements of our goals, intentions and expectations;
o statements regarding our business plans, prospects, growth and operating
strategies;
o statements regarding the asset quality of our loan and investment
portfolios; and
o estimates of our risks and future costs and benefits.
These forward-looking statements are based on current beliefs and expectations
of our management and are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond our
control. In addition, these forward-looking statements are subject to
assumptions with respect to future business strategies and decisions that are
subject to change.
Throughout this presentation, the peer companies include: PVSA, BFIN, UBNK,
BOFI, PULB, ABBC, FPTB, HOME, FSBI, and HBNK. The data presented in this
presentation relating to the peer companies is based on the calendar year, not
KFED’s fiscal year. Data for peers is sourced from SNL Financial LC.
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FORWARD-LOOKING STATEMENTS (continued)
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements:
o general economic conditions, either nationally or in our market areas,
that are worse than expected;
o fluctuations in the demand for loans, the number of unsold homes, land and
other properties and fluctuations in real estate values in our market
area;
o the credit risks of lending activities, including changes in the levels
and trends in loans delinquencies and write-offs and changes in our
allowance for loans losses and provisions for loan losses that may be
impacted by deterioration in the housing and commercial real estate
markets;
o competition among depository and other financial institutions;
o inflation and changes in the interest rate environment that reduce our
margins or reduce the fair value of financial instruments;
o adverse changes in the securities markets;
o changes in laws or government regulations or policies affecting financial
institutions, such as the Dodd-Frank Act, including changes in our primary
federal regulator, regulatory fees and capital requirements;
o results of examinations of us by the Office of Thrift Supervision or other
regulatory authorities, including the possibility that any such authority
may, among other things, require us to increase our allowance for loan
losses, write-down assets, adjust our regulatory capital position or
affect our ability to borrow funds or maintain or increase our deposits
which could adversely affect our liquidity and earnings;
o our ability to enter new markets successfully and capitalize on growth
opportunities;
o our ability to successfully integrate any assets, liabilities, customers,
systems, and management personnel we may in the future acquire into our
operations and our ability to realize related revenue synergies and cost
savings within expected time frames and any
o goodwill charges related thereto;
o changes in consumer spending, borrowing and savings habits;
o the availability of resources to address changes in laws, rules, or
regulations or to respond
o to regulatory actions;
o our ability to pay dividends;
o changes in accounting policies and practices, as may be adopted by the
bank regulatory agencies, the Financial Accounting Standards Board the
Securities and Exchange Commission and the Public Company Accounting
Oversight Board;
o changes in our organization, compensation and benefit plans;
o changes in the financial condition or future prospects of issuers of
securities that we own; and
o other economic competitive, governmental, regulatory and technological
factors affecting our operations, pricing, products and services and other
risks described elsewhere in this Presentation.
This list of important factors is not all inclusive. For a discussion of these
and other risks that may cause actual results to differ from expectations,
please refer to the Company’s Prospectus dated September 28, 2010 on file
with the SEC. Readers are cautioned not to place undue reliance on the
forward-looking statements contained herein, which speak only as of the date of
this Presentation. Except as required by applicable law or regulation, we do
not undertake, and specifically disclaim any obligation, to update any
forward-looking statements, whether written or oral, that may be made from time
to time by or on behalf of the Company or Kaiser Federal Bank.
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TRANSACTION OVERVIEW
Offering Information: Kaiser Federal Financial Group (NASDAQ: KFFG)
Transaction Structure: Second-Step Conversion
Price Per Share: $10.00
Individual Purchase Limitation: 5% of common stock sold
Shares Offered: 6,375,000 (Minimum) to 8,625,000 (Maximum)
Gross Proceeds: $63.8 Million (Minimum) to $86.3 Million (Maximum)
Pro Forma Shares Outstanding: 9,560,756 (Minimum) to 12,935,140 (Maximum)
Exchange / Symbol: Nasdaq Global Market / KFFG (1)
Book-Running Manager: Keefe, Bruyette & Woods, Inc.
Co-Manager Sterne, Agee & Leach, Inc.
Expected Pricing: TBD
K-Fed Bancorp’s common stock is currently traded on the Nasdaq Global
Market under the trading symbol “KFED.” We expect that Kaiser Federal
Financial Group, Inc.’s shares of common stock will also trade on the
Nasdaq Global Market under the trading symbol “KFFG.”
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PRO FORMA OFFERING RANGE
At or For the Year Ended June 30, 2010
Minimum Midpoint Maximum 15% Above
of Range of Range of Range Maximum of Range
Shares Sold in Offering 6,375,000 7,500,000 8,625,000 9,918,750
Exchange Ratio 0.7194 0.8463 0.9733 1.1193
Sale Price Per Share $10.00 $10.00 $10.00 $10.00
Gross Proceeds $63,750,000 $75,000,000 $86,250,000 $99,187,500
Pro Forma Stockholder’s $15.08 $13.67 $12.63 $11.75
Tangible Equity Per Share
Price/Book Ratio 64.5% 71.3% 77.3% 83.2%
Price/Tangible Book Value 66.3% 73.2% 79.2% 85.1%
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A HISTORY OF GROWTH
2003
K-Fed Bancorp is formed on July 1, 2003 as a K-Fed Bancorp is formed on July 1,
2003 as a wholly-owned subsidiary of K-Fed Mutual wholly-owned subsidiary of
K-Fed Mutual Holding Company Holding Company
1953
Kaiser Permanente Federal Credit Union (KPFCU) is founded
2007
On June 26, 2007 K-Fed On June 26, 2007 K-Fed Bancorp (MHC) is added Bancorp
(MHC) is added to the Russell 3000 Index to the Russell 3000 Index
1999
KPFCU converts to KPFCU converts to a mutual savings a mutual savings
association association
2004
On March 30, 2004, K-Fed Bancorp On March 30, 2004, K-Fed Bancorp completes a
minority stock offering in completes a minority stock offering in which it sold
5,686,750 shares, or which it sold 5,686,750 shares, or 39.09% of its
outstanding common stock 39.09% of its outstanding common stock
On September 24, 2004, K-Fed Bancorp On September 24, 2004, K-Fed Bancorp
acquires United PanAm Financial Corp. acquires United PanAm Financial Corp.
branch in Panorama City, CA branch in Panorama City, CA
2010
On September 29, 2010 K-On September 29, 2010 K-Fed Bancorp announces Fed
Bancorp announces conversion offering and plans conversion offering and plans
to offer between 6,375,000 to offer between 6,375,000 and 9,918,750 common and
9,918,750 common shares in connection with a shares in connection with a
second-stage conversion of second-stage conversion of K-Fed MHC
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A STRONG BRANCH FRANCHISE
o KFED Branches (9)
o KFED ATMs (57)
Main Office:
1359 North Grand Avenue
Covina, CA 91724
o We currently have 57 ATMs:
o Approximately 80% of our ATMs are located at Kaiser Permanente Medical
Centers
2010 2009-2010
Deposits Growth
Branch Address City ($000) Rate(%)
1 8501 Van Nuys Blvd Panorama City 136,141 14.81
2 1359 N Grand Ave Covina 87,355 17.42
3 1110 N Virgil Ave Los Angeles 85,895 1.89
4 3375 Scott Blvd #312 Santa Clara 70,639 8.06
5 252 S Lake Ave Pasadena 64,216 13.16
6 10105 Rosecrans Ave Bellflower 61,414 12.65
7 9714 Sierra Ave Ste 101 Fontana 47,606 7.04
8 11810 Pierce St Ste 150 Riverside 41,107 14.02
9 26640 Western Ave Ste N Harbor City 36,321 14.50
Data as of June 30, 2010.
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EXPERIENCED MANAGEMENT TEAM
o Kay M. Hoveland, President & Chief Executive Officer
o Has served as President and Chief Executive Officer of Kaiser
Federal Bank, including service with Kaiser Permanente Federal
Credit Union, since 1987. Ms. Hoveland has served as President and
Chief Executive Officer of K-Fed Bancorp since its formation in July
2003.
o Dustin Luton, Chief Financial Officer
o Has served as the Chief Financial Officer for Kaiser Federal Bank
from November 2006 until his appointment as the Chief Operating
Officer in July 2009. He has served as the Chief Financial Officer
of K-Fed Bancorp since November 2006. Previously, he was the Partner
in Charge of the Southern California office of the National Credit
Union Division of the accounting firm, McGladrey & Pullen, LLP.
He was employed by McGladrey & Pullen, LLP since 2000 and was
responsible for supervising the professional staff and professional
services provided to clients in the Southern California region.
o Jean M. Carandang, Chief Financial Officer of Kaiser Federal Bank
o Was appointed Chief Financial Officer of Kaiser Federal Bank in July
2009. Ms. Carandang served as VP of Finance since December 2008 and
was formerly Senior Vice President, Controller of PFF Bank &
Trust, from 2005 until 2008 and also served as Corporate Controller
and Risk Officer at Quaker City Bank from 1993 until 2005.
Kay M. Hoveland, Chief Executive Officer of Kaiser Federal Bank (on the left)
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EXPERIENCED MANAGEMENT TEAM
(from left to right, top to bottom): Nancy J. Huber, Jean M. Carandang, Kay M.
Hoveland, Dustin Luton, Jeanne R. Thompson
o Nancy J. Huber, Chief Credit Officer
o Has served as Chief Credit Officer of Kaiser Federal Bank since 1999
and Community Reinvestment Act Officer since 2002. From 1995 until
1999, she served as vice president of credit.
o Jeanne R. Thompson, Chief Administrative Officer
o Has served as Chief Operating Officer of Kaiser Federal Bank from
2001 until her appointment as Chief Administrative Officer in July
2009. She served as senior vice president for branch operations of
Indy Mac Bank from 2000 to 2001 upon the acquisition of First
Federal Savings and Loan Association of San Gabriel Valley, where
she served from 1985 to 2000.
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KFED OPERATES IN A NICHE MARKET
o We have been an attractive choice to local depositors, specifically
employees of Kaiser Permanente Medical Care Program
o Approximately 55,000 Kaiser Permanente employees are located in
Southern California
o The Kaiser Permanente Medical Care Program employs a large percentage of
our account holders
o At June 30, 2010, approximately 27% of the Bank’s deposits were
from current Kaiser Permanente employees
o Our three branch offices and six financial service centers are located in
close proximity to the Kaiser Permanente Medical Centers
o We have 48 ATMs strategically located in Kaiser Permanente medical
office buildings
o Such a strong relationship with Kaiser Permanente employees produces
a steady stream of new accounts and deposits
o Ex: Bi-weekly Kaiser Permanente employee direct deposits
o The Bank is represented at employee orientations
o Kaiser Permanente provides the Bank with access for other business
development opportunities
o We intend to expand our deposit base by building upon our niche of Kaiser
Permanente employees and our existing market locations
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BUSINESS STRATEGY AND OFFERING RATIONALE
o Our goal is to promote the financial well being of our customers and the
communities we serve by:
o Maintaining cost efficiencies and reducing our non-performing assets
o De Novo branch expansion or by acquiring branches along with
FDIC-assisted acquisitions of whole banks
o Capitalizing on current and new customer relationships
o Reasons to convert:
o Support internal growth
o Increase loan portfolio
o Improve liquidity of our shares of common stock
o Finance the acquisition of financial institutions, including
FDIC-assisted transactions and branch expansion
o Eliminate uncertainties associated with financial regulatory reforms
o With the proceeds, we intend to invest a substantial portion of the net
proceeds in short-term investments, investment-grade debt obligations and
mortgage-backed securities and/or:
o Fund a loan to the employee stock ownership plan
o Lending
o Finance the acquisition of financial institutions
o Pay cash dividends to stockholders
o Repurchase shares of our common stock(1)
o Repay $20 million of FHLB borrowings that mature on November 29, 2010
o Other general purposes
(1) Under current OTS regulations, we may not repurchase shares of our common
stock during the first year following the completion of the conversion, except
when extraordinary circumstances exist and with prior regulatory approval.
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STRONG, DIVERSIFIED LOAN GROWTH
Since June 2006, we have diversified our loan portfolio by focusing our
efforts on originating multi-family residential loans, primarily in Los Angeles
County, instead of one-to-four family real estate loans
Loan Mix as of June 30, 2006:
Multifamily CRE Home Equity Consumer 1-4 Family
14.0% 9.2% 0.3% 7.9% 68.6%
Total Loans: $636,822
Yield on Loans: 5.37%
Loan Mix as of June 30, 2010:
Multifamily CRE Home Equity Consumer 1-4 Family
36.1% 14.7% 0.1% 5.5% 43.6%
Total Loans: $770,746
Yield on Loans: 5.84%
Real Estate Loans by County*:
One-to-four family Multi-family residential Commercial Total
Non- Non- Non- Non-
County Accrual Total ($) Accrual Total ($) Accrual Total ($) Accrual Total ($)
Los Angeles $ 8,081 $ 127,625 $ - $ 208,616 $ - $ 65,614 $ 8,081 $ 401,855
Orange 2,870 55,968 - 24,027 - 28,464 2,870 108,459
San Diego 2,942 31,318 - 15,878 2,665 2,665 5,607 49,861
Riverside 3,239 14,912 231 6,850 - 9,376 3,470 31,138
San Bernardino 2,634 13,584 2,705 14,033 - 4,181 5,339 31,798
Santa Clara 1,005 25,634 - 577 - - 1,005 26,211
Alameda 985 12,699 - 65 - 465 985 13,229
Other 2,998 53,891 1,029 8,351 - 2,693 4,027 64,935
Total $ 24,754 $ 335,631 $ 3,965 $ 278,397 $ 2,665 $ 113,458 $ 31,384 $ 727,486
Non-Accruals: 4.31%
Note: Dollar values in thousands. *Data as of June 30, 2010.
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ASSET QUALITY
Servicing of Loan Portfolio by Third Parties:
o At June 30, 2010, 78.7% of our non-accrual real estate loans were
one-to-four family residential loans
o At June 30, 2010, 62.2% of our one-to-four family residential loans were
serviced by third parties
o 7.7% of these serviced loans were non-performing
o Due to a higher level of non-performing loans related to our third party
servicers, we have hired additional experienced workout staff to monitor
the collection activity of the servicers
o We are trying to reclaim these servicing rights and are pursuing
legal action against loan servicers who we believe are not
performing their servicing obligations
Composition of One-to-Four Family By Servicer:
Percent of Non-
Non- performing to
Composition Amount Percent performing Loans
Purchased and serviced
by others $208,800 62.21% $16,048 7.69%
Purchased and servicing
transferred to KFED 30,747 9.16 4,578 14.89
Originated and serviced
by KFED 96,084 28.63 4,128 4.30
Total $335,631 100.00% $24,754 7.38%
Non-Performing Assets / Total Assets:
NPAs / Assets (%)
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0 0.7 0.9 1.3 1.7 2.6 2.6 2.8 3.3 3.8
0.4 0.5 0.7 0.8 1.1 1.5 2.6 3.0 2.5
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10
KFED Peer Group Median
KFED 9/30/10 = 3.2%
Note: Dollar values in thousands.
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ASSET QUALITY
o Over the years, we have built up our reserve while our net charge-offs
have consistently remained below peer levels
o We have the capacity to endure significant charge-off activity while still
remaining well-reserved
Loan Loss Reserves / Gross Loans vs Peers:
Reserves / Loans (%)
2.0
1.5
1.0
0.5 0.9 1.0 1.2 1.1 1.4 1.4 1.5 1.7 1.7
0.0 0.4 0.4 0.5 0.6 0.6 0.7 1.4 1.5 1.6
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10
KFED Peer Group Median
KFED 9/30/10 = 1.7%
Net Charge-Offs vs Peers:
NCOs / Avg Loans (%)
1.0
0.8
0.6
0.4
0.2 0.1 0.3 0.3 0.4 0.4 0.7 0.9 0.7 0.4
0.0 0.1 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.3
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10
KFED Peer Group Median
KFED 9/30/10 = 0.7%
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KFED IS A SOLID PERFORMER
Efficiency Ratio (Cost Control) vs Peers:
Efficiency Ratio (%)
75
70
65
60
55
50
45 63.6 60.3 62.2 63.3 68.6 70.5 66.3 69.8 69.0
40 62.1 58.1 61.1 61.4 58.7 57.6 54.1 52.8 50.5
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10
KFED Peer Group Median
KFED 9/30/10 = 57.1%
Net Interest Margin vs Peers:
Net Interest Margin (%)
3.6
3.4
3.2
3.0
2.8
2.6
2.2 2.9 3.0 3.0 3.0 3.2 3.4 3.4 3.3 3.3
2.0 2.5 2.6 2.6 2.8 2.9 2.9 3.2 3.2 3.3
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-
KFED Peer Group Median
KFED 9/30/10 = 3.4%
Pre-Tax Pre-Provision / Average Assets vs Peers:
PTPP / AA (%)
2.1
1.8
1.5
1.2
0.9
0.6
0.3 1.2 1.2 1.1 1.2 1.1 1.4 1.7 1.7 1.8
0.0 1.0 0.5 1.1 1.0 0.7 0.6 0.9 0.7 0.8
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10
KFED Peer Group Median
KFED 9/30/10 = 1.6%
Noninterest Income / Average Assets vs Peers:
NII: Fee Income / AA (%)
0.70
0.65
0.60
0.55
0.50
0.45
0.40
0.35
0.30
0.25 0.53 0.57 0.56 0.52 0.54 0.53 0.55 0.50 0.54
0.20 0.52 0.53 0.50 0.48 0.51 0.52 0.54 0.46 0.54
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10
KFED Peer Group Median
KFED 9/30/10 = 0.50%
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STRONG PERFORMER THROUGH THE RECESSION
o We are a much stronger institution today, with a continued focus on
reducing cost and emphasis on multi-family originations
Net Interest Margin vs Peers:
Net Interest Margin (%)
3.4%
3.2%
3.0%
2.8%
2.6%
2.4%
2.2%
2.0%
2.67% 2.65% 2.91% 3.09% 3.32%
2.66% 2.43% 2.45% 2.71% 3.18%
2006 2007 2008 2009 2010
For the year ended June 30,
KFED Peer Group Median
Pre-Tax Pre-Provision / Average Assets vs Peers:
PTPP / ROAA (%)
1.8%
1.6%
1.4%
1.2%
1.0%
0.8%
0.6%
0.4%
1.15% 1.00% 0.97% 1.17% 1.64%
0.92% 0.78% 0.84% 0.55% 0.57%
2006 2007 2008 2009 2010
For the year ended June 30,
KFED Peer Group Median
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BUILDING STOCKHOLDER VALUE
o Our business strategy in a difficult economic and operating environment
has retained shareholder value
o We have maintained a strong history of paying quarterly dividends to our
public shareholders
o We have continued to sustain a quarterly dividend
o Being well capitalized after a second-step conversion offering
allows us to continue to pay a dividend unlike some of our peers
o Since March 31, 2004, we have repurchased 1,438,240 shares for an
aggregate amount of $18.3 million
o We currently pay an annual dividend of $0.44 per share and our current
dividend yield and dividend payout ratio are 5.75% and 52.22%,
respectfully(1)
(1) Pricing as of November 2, 2010. Note: KFED’s dividend payout ratio is
based off of core earnings for the last twelve months and is calculated using
actual dividends paid out, excluding those waived by K-Fed Bancorp’s
mutual holding company parent, K-Fed Mutual Holding Company, divided by net
income.
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DEPOSITS VS BORROWINGS
o Since June 30, 2009, total deposits increased 13.0% to $640.0 million
o Advances from the FHLB of San Francisco decreased 33.8% to $137.0
million
o Overall, we have strengthened our balance sheet by substantially reducing
our borrowings while increasing our deposit base
Total Deposits vs Total Borrowings:
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
$495,058 $509,174 $507,977 $554,250 $566,193 $598,116 $624,199 $648,738 $630,694 $639,984
$260,019 $250,015 $232,011 $232,008 $232,004 $172,000 $157,000 $147,000 $137,000 $137,000
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10
Total Deposits ($000) Total Borrow ings ($000)
Note: Dollar values in thousands. 18
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DEPOSIT MIX
o Since June 30, 2009, the growth of our deposits comprised of increases of
$47.4 million in certificates of deposit, $5.2 million in checking and
savings accounts, and $11.9 million in money market accounts
o As of June 30, 2010, we had a total of 40,617 depositors and our cost of
deposits was 1.80%
Deposit Mix as of June 30, 2010:
Transaction Accounts 8.4%
MMDAs 19.1%
Time 51.6%
Passbook Accounts 20.9%
Cost of Deposits: 1.80%
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TOTAL ASSETS
o In the midst of a difficult operating environment, we are aware of the
importance of a disciplined growth strategy
CA GR = 4.7 %
$1,000,000
$ 900,000
$ 800,000
$ 700,000
$ 600,000
$ 500,000
$ 400,000
$ 300,000
$ 200,000
$ 100,000
$ -
$739,114 $799,870 $849,291 $895,097 $866,802
2006 2007 2008 2009 2010
At the year ended June 30,
Note: Dollar values in thousands. 20
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CAPITAL RATIOS
o Following the offering, we will continue to be well capitalized. At June
30, 2010, our core capital ratio was 9.4% of total adjusted tangible
assets, which exceeded the required ratio of 5.0%
o Similarly, our Tier 1 Capital to Risk-Weighted Assets and Total Capital to
Risk-Weighted Assets were 13.5% and 14.7%, respectively, which both
exceeded the minimum required amount of 6.0% and 10.0%, respectively
20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0% 9.4% 12.2% 5.0% 13.5% 17.6% 6.0% 14.7% 18.8% 10.0%
Tier 1 Leverage Tier 1 Risk-based Total Risk-based
Kaiser Federal Bank Pro Forma (at midpoint) Requirement
At June 30, 2010
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FUTURE OPPORTUNITIES THROUGH ACQUISITION
o Our management team has proven to be effective in its ability to
assimilate an acquired branch’s operations
o In 2004, we acquired $60 million in deposits from United PanAm
Financial Corporation
o As a fully converted stock holding company, we will have greater
flexibility in structuring future mergers and acquisitions
o The new stock holding company structure will enable us to offer
stock or cash for consideration without restriction and therefore
will enhance our ability to compete with other bidders when
acquisition opportunities arise
o Through the retention of the offerings proceeds, we will consider
expanding our market presence through traditional M&A and FDIC-assisted
acquisitions, primarily in Southern California
o We will focus on the following attributes of potential acquisition
targets:
o Franchise fit, attractive market demographics
o Acquiring branches in close proximity to Kaiser Permanente
Medical Centers in Southern California and surrounding
communities
o Platform that provides opportunity for sustained growth
o Potential for operating cost synergies
o Established management team with knowledge of local market
o Balance sheet makeup: low cost of funds, diversified loan portfolio,
manageable asset quality
o Social and cultural fit
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STRATEGIC GROWTH OPPORTUNITIES
o With the proceeds from the offering, we will have flexibility in our
growth strategy
o We will consider de novo branching, branch acquisitions, traditional
M&A, FDIC-assisted transactions, and credit unions in our targeted
market area
o The following is a composite of banks and thrifts with less than $500
million in assets located in the counties of Los Angeles and Orange
Total Assets ($mm)
# of Institutions
60
50
40
30
20
10
0
16 25 24 10
< 100 100 - 200 200 - 350 350 - 500
Total Assets ($mm)
Texas Ratio (%)
# of Institutions
60
50
40
30
20
10
0
40 20 11 4
< 25 25 - 50 50 - 100 100 +
Texas Ratio (%)
KFED Branches
KFED Acquisition of United PanAm Financial Corp. branch in 2004
TCE / TA (%)
# of Institutions
60
50
40
30
20
10
0
5 7 8 55
< 6 6 - 8 8 - 10 10 +
TCE / TA (%)
PTPP / Average Assets (%)
# of Institutions
60
50
40
30
20
10
0
27 7 17 24
< 0 0 -.50 .50 - 1.00 1.00 +
PTPP / AA (%)
Note: Analysis includes all 75 public and private banks and thrifts with assets
less than $500 million in the counties of Los Angeles and Orange. Map only
highlights branches within a targeted area of California. Data as of June 30,
2010. PTPP / Average Assets is as of the most recent quarter and annualized.
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WHY INVEST IN
KAISER FEDERAL FINANCIAL GROUP
o Experienced management team
o Strong asset quality
o Historically consistent capital management strategies
o Sustained performance even in a tough economic environment
o KFFG operates in a niche market
o Strong franchise in an attractive market area
o Has solid potential for growth
o Capital raised will position KFFG to finance the acquisition of financial
institutions
o Favorable valuation
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VALUATION VERSUS APPRAISAL PEERS
Price / Tangible Book Value:
Appraisal Peer
Group(1):
88.9%
Price / Tangible Book (%)
100.0
95.0
90.0 KFFG Maximum: 79.2%
85.0
80.0 KFFG Midpoint: 73.2%
75.0
70.0 KFFG Minimum: 66.3%
65.0
60.0
88.22 97.56 79.58 72.75 76.11 82.65 82.23 79.82 81.25
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10
Peer Group Median
(1) Data for the quarter ended June 30, 2010; pricing for the appraisal peer
group is as of November 2, 2010 and at the median. Note: KFFG’s P/TBV is
from an independent appraisal report at the minimum, midpoint, and maximum
point in the offering range.
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THANK YOU VERY MUCH FOR
YOUR TIME TODAY
WE LOOK FORWARD TO VISITING
WITH YOU AND ANSWERING ANY
QUESTIONS YOU MIGHT HAVE
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 | APPENDIX 27 |
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RESILIENT STOCK PRICE PERFORMANCE IN A
DIFFICULT ECONOMIC ENVIRONMENT
Stock Price Performance (2 Years):
Price Change Volume
Nov-08 -40.0% 600,000
Dec-08 -20.0% 500,000
Jan-09 0.0% 400,000
Feb-09 20.0% 300,000
Mar-09 40.0% 200,000
Apr-09 -60.0% 100,000
May-09 -80.0% 0
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
KFED (-6.4%) KBW Bank (-23.4%) SNL Thrift (-24.3%) KFED Volume
Note: Pricing as of November 2, 2010.
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APPENDIX - APPRAISAL PEER COMPARISON(1)
General Information: Profitability: Capital and Balance Sheet: Asset Quality: Market Information: Dividends:
Tang. NCO / 11/2/2010 Price / MRQ LTM
Core Core Eff. Equity / TCE / Loans / LLR / NPAs / Avg. Market Stock Tang. Div. Div. Div.
Assets ROA (2) ROE (2) NIM Ratio Assets TA Deposits Loans Assets Loans Cap Price Book Paid Yield Payout
Institution Ticker ($mm) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) ($mm) ($) (X) ($) (%) (%)
K-Fed Bancorp KFED 867 0.93 8.68 3.32 50.52 10.51 10.51 122.29 1.73 4.13 0.31 101.7 7.65 0.68 0.11 5.75 52.22
(MHC)
Peer Group:
Parkvale PVSA 1,842 0.29 4.06 2.19 60.92 4.99 3.23 70.67 1.83 1.93 0.40 44.0 7.95 0.75 0.02 1.01 NM
Financial
Corporation
BankFinancial BFIN 1,566 (0.01) (0.07) 3.52 78.81 15.16 15.16 91.21 1.66 4.29 0.42 198.0 9.40 0.85 0.07 2.98 NM
Corporation
United UBNK 1,545 0.80 5.47 3.69 67.29 13.98 13.98 99.06 0.89 1.20 0.12 227.9 13.93 1.06 0.08 2.30 51.79
Financial
Bancorp, Inc.
Pulaski PULB 1,388 0.94 11.07 3.65 43.88 7.95 5.71 109.55 2.14 4.78 1.36 73.6 7.14 0.93 0.10 5.32316.67
Financial
Corp.
BofI Holding, BOFI 1,421 1.24 14.00 3.63 37.31 9.13 8.78 81.21 0.75 1.10 0.34 134.8 13.24 1.08 0.00 0.00 0.00
Inc.
Abington ABBC 1,268 0.62 3.68 2.87 70.79 16.76 16.76 84.19 0.96 2.77 1.18 225.1 11.06 1.06 0.05 1.81105.26
Bancorp, Inc.
First PacTrust FPTB 881 (1.07) (9.78) 3.33 47.19 10.94 8.77 106.31 2.44 7.02 1.12 47.8 11.26 0.62 0.05 1.78 NM
Bancorp, Inc.
Home Federal HOME 869 (0.90) (3.76) 2.85 98.23 23.68 23.68 83.02 3.74 3.23 3.05 202.9 12.16 0.99 0.06 1.81 56.41
Bancorp, Inc.
Fidelity FSBI 708 0.31 4.52 2.36 75.88 6.47 5.51 87.36 1.46 2.18 0.32 17.2 5.65 0.44 0.02 1.42 NM
Bancorp, Inc.
Hampden HBNK 584 0.43 2.64 3.36 77.25 16.23 16.23 99.95 1.50 1.96 0.01 71.5 10.05 0.75 0.03 1.19 NM
Bancorp, Inc.
Average: 1,207 0.27 3.18 3.15 65.76 12.53 11.78 91.25 1.74 3.05 0.83 124.3 10.18 0.85 0.05 1.96106.03
Median: 1,328 0.37 3.87 3.35 69.04 12.46 11.38 89.28 1.58 2.48 0.41 104.2 10.56 0.89 0.05 1.79 56.41
Note: Data for the quarter ended June 30, 2010. Note: Pricing data as of
November 2, 2010. KFED pricing is on a fully converted basis. (1) Peer group
companies selected by independent appraisal firm. (2) Core income excludes
extraordinary items, non-recurring items and gains/losses on sale of securities.
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