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**PRESS RELEASE**
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Contact:
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Tony D. Whitaker/Don D. Jennings
Kentucky First Federal Bancorp
(606) 436-3860
KENTUCKY FIRST FEDERAL BANCORP CONSUMMATES MINORITY STOCK
OFFERING AND ACQUISITION OF FRANKFORT FIRST BANCORP, INC.
Hazard, Kentucky, March 2, 2005 - Kentucky First Federal Bancorp
("Kentucky First") announced today it has consummated its minority stock
offering, the related mutual holding company reorganization of First Federal
Savings and Loan Association of Hazard ("First Federal of Hazard") and the
acquisition of Frankfort First Bancorp, Inc. ("Frankfort First") (NASDAQ: FKKY),
the holding company for First Federal Savings Bank of Frankfort ("First Federal
of Frankfort"). Shares of Frankfort First ceased trading as of the close of
business today. Kentucky First is expected to commence trading on March 3, 2005,
on The Nasdaq National Market under the symbol "KFFB."
Kentucky First sold 2,127,572 shares of common stock at $10.00 per
share in a subscription offering, which ended on February 14, 2005, to
depositors of First Federal of Hazard as of June 30, 2003 and First Federal of
Hazard's employee stock ownership plan in accordance with subscription rights
granted under First Federal of Hazard's plan of stock issuance.
In the merger, shareholders of Frankfort First will receive
approximately 1,740,740 shares of Kentucky First's common stock and
approximately $13.7 million in cash (including payments to holders of Frankfort
First stock options). Shareholders who elected to receive stock in the merger
will receive 1.95148 shares of Kentucky First's common stock and $3.9852 in cash
for each of their Frankfort First shares. No fractional shares of Kentucky First
common stock will be issued. Persons otherwise entitled to receive a fractional
share of Kentucky First common stock will receive cash in an amount equal to
$10.00 multiplied by such fraction. Shareholders who made a cash election for
their Frankfort First shares, indicated "No Election" or did not timely submit a
completed election form, will receive cash of $23.50 per Frankfort First share.
Upon closing of the mutual holding company reorganization, First
Federal of Hazard converted from a mutual savings and loan association to a
capital stock savings bank, with the concurrent formation of Kentucky First as
the stock, mid-tier holding company of First Federal of Hazard and the formation
of First Federal MHC (the "MHC") as a mutual holding company. The purchasers of
stock in the subscription offering and former Frankfort First shareholders who
received Kentucky First's common stock in the merger will own 45% of Kentucky
First's outstanding shares of common stock and the MHC will own 55% of Kentucky
First's outstanding shares of common stock. Under a formula contained in the
merger agreement, former Frankfort First shareholders received 45% of the shares
issued to persons other than the MHC.
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First Federal of Frankfort and First Federal of Hazard will remain
separate banks following the merger, though each will be a wholly owned
subsidiary of Kentucky First. The management teams of both subsidiary banks will
remain the same after the transaction and no staff reductions at either bank are
anticipated. Kentucky First's board of directors will include four of the former
members of First Federal of Hazard's board of directors, two former members of
Frankfort First's board of directors and Frankfort First's President, Don
Jennings. R. Clay Hulette, C.P.A., Chief Financial Officer of Frankfort First,
will serve as the Chief Financial Officer of Kentucky First and Roy Pulliam,
Secretary of First Federal of Hazard, will serve as Secretary of Kentucky First.
Tony Whitaker, Chairman and Chief Executive Officer of Kentucky First,
said, "We are pleased by the outstanding support shown by our depositors and
that the shareholders of Frankfort First have voted their support for our
partnership. We look forward, under our new structure, to bring together the
financial and human resources of the two banks for the benefit our shareholders,
our customers, our employees and our communities."
Don Jennings, President of Frankfort First and President and Chief
Operating Officer of Kentucky First, added, "While this is a new company, we
believe that we will be able to build upon the successful legacies our two
institutions have forged over many years. We look forward to continuing to serve
Frankfort First's former shareholders as well as the new shareholders from
Hazard."
Capital Resources, Inc. served as financial advisor and marketing agent
with regard to the stock offering and Capital Resources Group, Inc. served as
financial advisor with regard to the merger. Muldoon Murphy & Aguggia LLP served
as counsel to First Federal of Hazard and Kentucky First.
At December 31, 2004, First Federal of Hazard had total assets of
$139.0 million, deposits of $97.4 million and total capital of $32.0 million. At
December 31, 2004, Frankfort First had total assets of $132.3 million, deposits
of $72.0 million and total capital of $17.2 million. Based on this information,
Kentucky First on a consolidated basis will operate from four banking offices
and will represent the second largest thrift holding company in the Commonwealth
of Kentucky.
This news release contains certain forward-looking statements about the
mutual holding company reorganization, the stock issuance by Kentucky First and
the acquisition of Frankfort First by Kentucky First, including the anticipated
trading date of Kentucky First's common stock.
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Forward-looking statements can be identified by the fact that they do
not relate strictly to historical or current facts. They often include words
like "believe," "expect," "anticipate," "estimate" and "intend" or future or
conditional verbs such as "will," "would," "should," "could" or "may." Certain
factors that could cause actual results to differ materially from expected
results include delays in completing the offering and the merger, changes in the
interest rate environment, changes in general economic conditions, legislative
and regulatory changes that adversely affect the business of Kentucky First and
changes in the securities markets.