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PULASKI FINANCIAL CORP.
12300 Olive Boulevard
Saint Louis, MO 63141-6434
Office Phone: 314.878.2210 Fax: 314.878.0712
PULASKI FINANCIAL REPORTS FIRST QUARTER 2007 NET INCOME
UP 35% TO $2.5 MILLION
o $1 Billion in Total Assets Milestone Reached
o Earnings Per Share Increase 14% Over the Prior Year
o Core Deposits Jump 15% on Growth in Checking and Money Market
Balances
o Total Assets Increase 8% on $71 Million of Loan Growth
o Net Interest Income Expands 17% Over Prior Year to $6.9 Million
o Non-interest Income Increases 31% to $2.9 Million on Growth in
Mortgage, Appraisal and Investment Revenues
ST. LOUIS, JANUARY 23, 2007--Pulaski Financial Corp. (Nasdaq Global Select:
PULB) today announced net income for the quarter ended December 31, 2006 of $2.5
million, or $0.24 per diluted share, compared with earnings of $1.8 million, or
$0.21 per diluted share, during the same quarter a year ago. Earnings per share
in the current year period reflect the impact of a 1.2 million increase in the
number of shares outstanding from stock issued in a secondary public offering in
February 2006 and 211,000 shares issued to acquire CWE Bancorp on March 31,
2006.
The current year quarter's results also reflect several large items in
non-interest income and expense. These included a $144,000 gain on sale of
securities and a $172,000 gain related to changes in the market values of
derivative financial instruments, partially offset by a $220,000 expense related
to the write-off of capitalized expenses related to the termination of a
contract to convert the bank's core data processing system. Collectively these
items had no impact on earnings per share.
Earnings in the comparable period a year earlier included a $407,000 loss
related to changes in the market values of derivative financial instruments. On
an after-tax basis, this item reduced earnings by $266,000, or $0.03 per diluted
share, in the first quarter of fiscal 2006.
TOTAL ASSETS INCREASE 8%, PASS $1 BILLION MILESTONE
"We were pleased to reach an important milestone in our history," William A.
Donius, Chairman and Chief Executive Officer, commented. "We have worked
diligently over the past several years to both increase our market share and
grow our loan portfolio. The strength of our lending business, in a period of
generally weak real estate activity, speaks volumes to our emerging role as the
lender of first choice for St. Louisans. Equally important, we achieved this
without compromising our credit standards so the quality of our assets remains
excellent," he continued. The Company reported an 8% increase in total assets to
$1.03 billion at December 31, 2006. Loans receivable increased $47.8 million
during the quarter on strong growth in commercial and construction loans, while
loans held for sale increased $22.8 million on strong December 2006 residential
mortgage activity.
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"Although we experienced strong, balanced asset growth during the December
quarter, we are even more excited by the great strides we achieved in core
deposit growth," Donius said. Total deposits increased $43.8 million during the
quarter, including $23.6 million growth in checking account balances and $17.1
million growth in money market deposits.
In addition, the Company completed construction of its tenth St. Louis bank,
located in Richmond Heights, Missouri. The bank opened on January 5, 2007 and is
expected to make a significant contribution to the company's deposit growth over
the next few years. "As part of our long-term objective to become the premier
community bank in St. Louis, we expect to open two more bank locations in the
next six months. These will be located in Downtown St. Louis and Clayton,
Missouri and will further extend our branch network to both retail customers and
the St. Louis business community," Donius stated.
Net interest income rose 17% to $6.9 million for the quarter ended December 31,
2006 compared with $5.9 million for the quarter ended December 31, 2005. The net
interest margin declined 13 basis points from 3.19% for the quarter ending a
year ago compared with 3.06% for the quarter ended December 31, 2006 and, on a
linked-quarter basis, declined 1 basis point from 3.07%.
"We have seen a flat to inverted interest rate curve persist for more than a
year. This has placed continuing pressure on our margins. However, we have been
able to sustain our growth during this period by effectively managing our
balance sheet. We have structured the majority of our assets and liabilities to
reprice within one year. This gives us greater flexibility to cope with changes
in the interest rate environment," Donius noted.
OTHER REVENUES INCREASE ON STRENGTH OF THE RESIDENTIAL MORTGAGE DIVISION
"We saw an opportunity to capture a greater share of the total revenue stream
that flows from the mortgage lending process. To do so, we have integrated the
appraisal and title business lines into our expanding residential lending
division. Those efforts have been successful," Donius said. Mortgage revenue
increased 14% to $909,000 on a 6% increase in loan sales totaling $285 million
for the quarter ended December 31, 2006 compared with revenue of $795,000 on
loan sales totaling $268 million for the quarter ended December 31, 2005. In
addition, the mortgage activity continues to drive title and appraisal revenues,
which collectively increased $223,000 over the December 2005 quarter. The
appraisal division is in its second quarter of operations and generated
$208,000 in revenue for the quarter ended December 31, 2006.
Retail banking revenues increased to $782,000 from $748,000. "We continue to
focus on winning over core checking account and money market relationships. Our
retail banking strategy is made more effective as our coverage of the greater
St. Louis market expands with the new bank locations we have, or expect to open.
Improved customer access to Pulaski's products and services also shortens the
break-even cycle for new bank locations," Donius stated.
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The investment division's revenues increased $125,000 to $242,000 for the
quarter ended December 31, 2006 compared with the same period a year ago. The
outlook for the bond markets is slightly improved from a year ago, which is
resulting in improved revenues from the division.
ASSET QUALITY REMAINS STRONG
The ratio of nonperforming assets to total assets decreased from 1.02% at
September 30, 2006 to 1.01% at December 31, 2006. Non-performing assets at
December 31, 2006 totaled $10.5 million, an increase of $599,000 from September
30, 2006 due to an increase in non-performing residential loans. Real estate
acquired in settlement of loans declined $622,000 to $2.1 million and consisted
entirely of residential real estate at quarter end.
The provision for loan losses for the quarter ended December 31, 2006 was
$682,000 compared with $407,000 for the same period a year ago. The increase was
due to both strong growth in the loan portfolio during the quarter, primarily
commercial and construction loans, which carry a higher risk of default than
residential real estate loans, combined with the increase in non-performing
assets. Net charge-offs for the current year quarter totaled $159,000 compared
with $313,000 for the same period a year ago.
OUTLOOK
"Due to strong growth trends, we remain very optimistic about our outlook for
fiscal year 2007 - that we will experience double digit growth in operating
income for the fiscal year. Of course, we will not be able to replicate the
large gain from the branch sale that was included in last year's earnings. We
are more optimistic than we were at the end of fiscal 2006 due to a favorable
shift in mortgage interest rates and better-than-anticipated growth in core
deposits and commercial loans," said Donius.
CONFERENCE CALL TOMORROW
Pulaski Financial's management will discuss first quarter results and other
developments tomorrow, January 24, during a conference call beginning at 10 a.m.
Central Standard Time. The call also will be simultaneously webcast and archived
for three months at:
http://www.viavid.net/detailpage.aspx?sid=000039E5 Participants in the
conference call may dial 877-407-9039 a few minutes before start time. The call
also will be available for replay through February 7, 2007 at 877-660-6853,
account number 3055 and conference I.D. 227164.
ABOUT PULASKI FINANCIAL
Pulaski Financial Corp., operating in its 85th year through its subsidiary,
Pulaski Bank, serves customers throughout the St. Louis metropolitan area. The
bank offers a full line of quality retail-banking products through ten
full-service branch offices in St. Louis and three loan production offices in
Kansas City and the Illinois portion of the St. Louis metroplex. The company's
website can be accessed at www.pulaskibankstl.com.
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This news release may contain forward-looking statements about Pulaski Financial
Corp., which the Company intends to be covered under the safe harbor provisions
contained in the Private Securities Litigation Reform Act of 1995. Statements
that are not historical or current facts, including statements about beliefs and
expectations, are forward-looking statements. These forward-looking statements
cover, among other things, anticipated future revenue and expenses and the
future plans and prospects of the Company. These statements often include the
words "may," "could," "would," "should," "believes," "expects," "anticipates,"
"estimates," "intends," "plans," "targets," "potentially," "probably,"
"projects," "outlook" or similar expressions. You are cautioned that
forward-looking statements involve uncertainties, and important factors could
cause actual results to differ materially from those anticipated, including
changes in general business and economic conditions, changes in interest rates,
legal and regulatory developments, increased competition from both banks and
non-banks, changes in customer behavior and preferences, and effects of critical
accounting policies and judgments. For discussion of these and other risks that
may cause actual results to differ from expectations, refer to our Annual Report
on Form 10-K for the year ended September 30, 2005, and Quarterly Reports on
Form 10-Q for the quarters ending December 31, 2005, March 31, 2006 and June 30,
2006, respectively, on file with the SEC, including the sections entitled "Risk
Factors." These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements. Forward-looking statements speak only as of the date they are made,
and the Company undertakes no obligation to update them in light of new
information or future events.
For Additional Information Contact:
William A. Donius, Chairman & CEO Michael Arneth or Tad Gage
Pulaski Financial Corp. The Investor Relations Company
(314) 878-2210 Ext. 3610 (312) 245-2700
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PULASKI FINANCIAL CORP.
UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS
SELECTED BALANCE SHEET DATA AT DEC 31, AT SEPT. 30,
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) 2006 2006
----------------- ------------------
Total assets $ 1,034,770 $ 962,460
Loans receivable, net 833,038 785,199
Allowance for loan losses 8,350 7,817
Loans held for sale, net 83,169 60,371
Investment securities (includes equity securities) 19,736 17,449
FHLB stock 10,100 9,524
Mortgage-backed & related securities 3,487 3,631
Cash and cash equivalents 21,156 22,116
Deposits 699,420 655,577
FHLB advances 203,500 172,800
Subordinated debentures 19,589 19,589
Stockholders' equity 77,567 75,827
Total book value per share $7.79 $7.62
Tangible book value per share $7.33 $7.16
ASSET QUALITY RATIOS
Nonperforming loans as a percent of total loans 0.89% 0.83%
Nonperforming assets as a percent of total assets 1.01% 1.02%
Allowance for loan losses as a percent of total loans 0.90% 0.92%
Allowance for loan losses as a percent of nonperforming loans 100.98% 110.91%
THREE MONTHS
SELECTED OPERATING DATA ENDED DEC 31,
---------------------------------------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) 2006 2005
------------- --------------
Interest income $ 16,341 $ 11,790
Interest expense 9,469 5,934
--------- --------
Net interest income 6,872 5,856
Provision for loan losses 682 407
--------- --------
Net interest income after provision for loan losses 6,190 5,449
--------- --------
Retail banking fees 782 748
Mortgage revenues 909 795
Revenue from title company operations 213 198
Revenue from investment division operations 242 117
Revenue from appraisal division operations 208 -
Gain on sale of securities 144 -
Other 439 382
--------- --------
Total non-interest income 2,937 2,240
--------- --------
Compensation expense 2,674 2,048
Occupancy, equipment and data processing 1,251 1,108
(Gain) loss on derivative financial instruments (172) 407
Other 1,574 1,296
--------- --------
Total non-interest expense 5,327 4,859
--------- --------
Income before income taxes 3,800 2,830
Income taxes 1,314 983
--------- --------
Net income $ 2,486 $ 1,847
========= ========
PERFORMANCE RATIOS
Return on average assets 1.02% 0.94%
Return on average equity 12.59% 14.96%
Interest rate spread 2.72% 2.99%
Net interest margin 3.06% 3.19%
========= ========
SHARE DATA
Weighted average shares outstanding-basic 9,823,850 8,302,664
Weighted average shares outstanding-diluted 10,269,066 8,864,422
EPS-basic $0.25 $0.22
EPS-diluted $0.24 $0.21
Dividends $0.085 $0.080
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PULASKI FINANCIAL CORP.
UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS, Continued
(DOLLARS IN THOUSANDS)
LOANS RECEIVABLE DECEMBER 31, SEPTEMBER 30,
(DOLLARS IN THOUSANDS) 2006 2006
------------- --------------
Commercial & Industrial Loans $ 51,285 $ 48,785
Real estate mortgage:
One to four family residential 317,344 314,746
Multi-family residential 17,615 13,629
Commercial real estate 175,101 150,529
------------- --------------
Total real estate mortgage 510,060 478,904
------------- --------------
Real estate construction and development:
One to four family residential 32,353 30,586
Multi-family residential 13,289 6,042
Commercial real estate 26,187 20,567
------------- --------------
Total real estate construction and development 71,829 57,195
------------- --------------
Equity line of credit 205,890 207,153
Consumer and installment 6,419 6,276
------------- --------------
845,483 798,313
------------- --------------
Add (less):
Deferred loan (costs) fees 4,992 4,879
Loans in process (9,087) (10,176)
Allowance for loan losses (8,350) (7,817)
------------- --------------
(12,445) (13,114)
------------- --------------
Total $833,038 $ 785,199
============= ==============
Weighted average rate at end of period 7.49% 7.50%
============= ==============
DECEMBER 31, 2006 SEPTEMBER 30, 2006
----------------- ------------------
WEIGHTED WEIGHTED
DEPOSITS AVERAGE AVERAGE
(DOLLARS IN THOUSANDS) INTEREST INTEREST
BALANCE RATE BALANCE RATE
---------------------------------------------------------
Demand Deposit Accounts:
Noninterest-bearing checking $ 48,308 0.00% $ 38,830 0.00%
Interest-bearing checking 67,613 2.01% 53,448 1.66%
Money market 151,499 4.21% 134,383 4.12%
Passbook savings accounts: 30,525 0.37% 31,895 0.39%
------------- ------------
Total demand deposit accounts 297,945 2.63% 258,556 2.53%
------------- ------------
Certificates of Deposit: (*)
$100,000 or less 207,685 5.05% 207,900 4.91%
Greater than $100,000 193,790 4.52% 189,121 4.43%
------------- ------------
Total certificates of deposit 401,475 4.79% 397,021 4.68%
------------- ------------
Total deposits $ 699,420 3.87% $ 655,577 3.83%
============= ============
(*) Includes brokered deposits $ 126,916 $ 118,500
============= ============
NONPERFORMING ASSETS DECEMBER 31, SEPTEMBER 30,
(DOLLARS IN THOUSANDS) 2006 2006
----------------- -----------------
Non-accrual loans:
Residential real estate $ 614 $ 794
Home equity 119 119
Other 53 27
------------- ------------
Total non-accrual loans 786 940
------------- ------------
Accruing loans past due 90 days or more:
Residential real estate 5,106 3,984
Commercial 442 125
Home equity 1,612 1,456
Other 26 21
------------- ------------
Total accruing loans past due 90 days or more 7,186 5,586
------------- ------------
Restructured loans 118 220
Other nonperforming loans 179 302
------------- ------------
Total non-performing loans 8,269 7,048
Real estate acquired in settlement of loans 2,142 2,764
Other nonperforming assets 43 44
------------- ------------
Total non-performing assets $ 10,454 $ 9,856
============= ============
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PULASKI FINANCIAL CORP.
AVERAGE BALANCE SHEETS
(DOLLARS IN THOUSANDS)
THREE MONTHS ENDED
--------------------------------------------------------------------------------
DEC 31, 2006 DEC 31, 2005
-------------------------------------- ---------------------------------------
INTEREST AVERAGE INTEREST AVERAGE
AVERAGE AND YIELD/ AVERAGE AND YIELD/
BALANCE DIVIDENDS COST BALANCE DIVIDENDS COST
-------------------------------------- ---------------------------------------
Interest-earning assets:
Loans receivable $ 814,417 $ 15,187 7.46% $ 661,453 $ 10,879 6.58%
Loans available for sale 51,249 763 5.96% 45,202 646 5.72%
Other interest-earning assets 32,921 391 4.61% 27,429 265 3.72%
--------------------- ------------------------
Total interest-earning assets 898,587 16,341 7.27% 734,084 11,790 6.42%
-------- --------
Noninterest-earning assets 74,688 51,186
------------ ---------
Total assets $ 973,275 $ 785,270
============ =========
Interest-bearing liabilities:
Deposits $ 633,124 $ 6,736 4.26% $ 487,058 $ 3,674 3.02%
Borrowed money 199,126 2,733 5.47% 204,359 2,260 4.41%
------------------------ ------------------------
Total interest-bearing liabilities 832,250 9,469 4.55% 691,417 5,934 3.43%
-------- --------
Noninterest-bearing deposits 43,982 27,727
Noninterest-bearing liabilities 18,030 16,754
Stockholders' equity 79,013 49,372
------------ ---------
Total liabilities and stockholders' equity $ 973,275 $ 785,270
============ =========
Net interest income $ 6,872 $ 5,856
======== ========
Interest rate spread 2.72% 2.99%
Net interest margin 3.06% 3.19%