Kentucky First Federal Bancorp in Hazard indefinitely suspended its quarterly dividend.
The $357 million-asset company said in a press release that lower earnings tied to higher interest rates and “a persistent inversion of the yield curve” have limited its banks’ ability to maintain enough liquidity to fund operations and loan growth and upstream sufficient funds to fund its own operations and dividends.
Kentucky First also pointed to increased regulatory scrutiny of bank dividend payout ratios to holding companies relative to bank earnings.
First Federal Savings and Loan Association of Hazard and First Federal Savings Bank of Kentucky are both well-capitalized and asset quality remains good, Don Jennings, the company’s president and CEO, said in the release.
“The board intends to re-evaluate the payment of a quarterly dividend in the future as soon as possible,” Jennings added.