<Page>1
[PULASKI FINANCIAL CORP. LETTERHEAD]
FOR IMMEDIATE RELEASE
PULASKI FINANCIAL REPORTS STRONG GROWTH IN OPERATING EARNINGS FOR SECOND
QUARTER OF FISCAL 2007
O NET INTEREST INCOME GROWS 23% TO $7.0 MILLION FOR QUARTER
O LOAN DEMAND REMAINS STRONG WITH 9% YEAR-TO-DATE GROWTH
O MORTGAGE REVENUES INCREASE 12% TO $1.3 MILLION DURING QUARTER
O CORE DEPOSIT BALANCES UP YEAR-TO- DATE
O ASSET QUALITY REMAINS SOLID
ST. LOUIS, April 24, 2007--Pulaski Financial Corp. (Nasdaq GS: PULB) today
announced earnings for the fiscal second quarter ended March 31, 2007 of $2.2
million, or $0.21 per diluted share on 10.3 million average diluted shares
outstanding, compared with earnings of $2.9 million, or $0.30 per diluted share
on 9.5 million average diluted shares outstanding, during the same quarter last
year. For the six months, earnings were $4.7 million, or $0.46 per diluted share
on 10.3 million average diluted shares outstanding, compared with $4.7 million,
or $0.52 per diluted share on 9.2 million average diluted shares outstanding,
for the same period a year ago.
The company noted that results for the prior-year quarter and six months
included a $2.5 million gain on the sale of the Company's Kansas City bank
branch, partially offset by a $250,000 charitable contribution to a St. Louis
community-based organization. These items had a combined impact on diluted
earnings per share of $0.15 and $0.16 in last year's three- and six-month
periods, respectively.
Earnings per share in the current and prior periods were also impacted by 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.
LOAN GROWTH REMAINS STRONG - SUSTAINING NET INTEREST INCOME
"Our efforts over the past several years to increase our market share and grow
our loan portfolio have continued to prove successful. We continue to see growth
in our loan portfolio during a period of generally weak real estate activity and
intensified competition. Through a combination of effective marketing and
lending discipline, we continue to achieve this growth without compromising our
credit standards. As a result, the quality of our assets remains solid,"
commented William A. Donius, Chairman and Chief Executive Officer.
The Company's loan portfolio grew 3%, or $24.1 million, during the quarter to
$857.1 million at March 31, 2007. For the six months, loan balances increased
9%, or
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$71.9 million. This equates to an 18% annualized growth rate. Reducing current
period growth was an increase in principal repayments, which totaled $136.8
million for the quarter ending March 31, 2007 compared with $95.9 million for
the same period a year ago. At March 31, 2007, the Company had a pipeline of
approved but unclosed commercial loans totaling $58 million and another $301
million in loan applications.
Net interest income rose 23%, or $1.3 million, to $7.0 million for the quarter
ended March 31, 2007 compared with $5.6 million for the same period last year.
The increase was fueled by strong growth in average loan balances. Year to date,
net interest income rose $2.3 million to $13.8 million, compared with $11.5
million for the same six-month period last year.
The net interest margin dipped during the March 2007 quarter to 2.95% from 3.06%
for the quarter ended December 2006 and 3.00% for the quarter ended March 31,
2006. The decline in the net interest margin was due primarily to strong
competition for loan originations, which created pressure on loan yields,
combined with an increase in wholesale funding sources, which are typically more
costly than retail deposits. "We have maintained our high credit standards in
this competitive environment and have been unwilling to accept inferior credit
quality in exchange for higher loan yields," Donius noted.
MORTGAGE REVENUES UP, BOLSTERING NON-INTEREST INCOME
The Company completed the sale of its only depository branch in Kansas City,
Missouri during February 2006 resulting in a $2.5 million gain. Excluding this
gain, non-interest income rose $720,000 to $3.2 million for the quarter ended
March 31, 2007 compared with $2.4 million for the same quarter a year ago.
"Our March quarter benefited from a 12% increase in mortgage revenues over the
second quarter last year, due to higher loan sales. The increase was
particularly significant in the midst of a contracting lending environment. The
mortgage lending business is seasonal and we expect to see a 20% to 30% increase
in loan closings through the summer months," Donius stated. Mortgage revenues
increased to $1.3 million in the March 2007 quarter on loan sales of $307
million, compared with $1.1 million of revenue on sales of $231 million for the
same period in 2006. Loans originated for resale totaled $301 million during the
March 2007 quarter compared with $238 million in the comparable period last
year.
Title and appraisal division revenues were also up as the result of the
increased loan activity. Title policy revenues increased from $174,000 in the
March 2006 quarter to $231,000 in the March 2007 quarter. In addition, the
Company's appraisal division, which began operations in July 2006, generated
$215,000 in revenues during the March 2007 quarter. "Our efforts to capture a
greater portion of the total revenue stream related to mortgage loan
originations are meeting our expectations," Donius noted.
Continued Focus on Core Deposit Growth
"Current market conditions have placed increased value on growing core
deposits," Donius commented. "We are lending in every community and touching
every neighborhood in St. Louis. Our sales force includes a talented group
of loan officers
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with a proven track record. Consequently, we are in the process of leveraging
this sales force to better emphasize the value of core deposits. We are
optimistic that these professionals will be successful in helping us lower our
funding costs by bringing us new core deposit relationships."
Total deposits grew 17.2% to $768.6 million at March 31, 2007 from $655.6
million at September 30, 2006. Demand deposit accounts, which are considered the
bank's core deposits, increased $31.0 million, or 12%, during the six months
ended March 31, 2007 to $289.5 million, but decreased $8.4 million during the
quarter as the result of a $12 million shift in municipal and other public
deposits from checking accounts into longer-term time deposits. The year-to-date
deposit growth also included an increase in brokered deposits of $57.5 million,
which was used to fund new loans. Retail banking revenues increased 10% to
$755,000 for the March 2007 quarter compared with $685,000 for the same quarter
a year earlier.
Donius stated, "Our efforts to hire talented bankers and to generate growth, in
our quest to become the premier community bank in St. Louis, continued during
the second quarter. We opened a new bank location in Richmond Heights during
January 2007. We also announced two future locations, one in downtown St. Louis
and one in Clayton, Missouri. These are two of the most vibrant areas in the St.
Louis market. We expect them to open before the end of 2007, allowing us to make
banking even more convenient for our current customers and to attract new
customers."
ASSET QUALITY REMAINS SOLID
The ratio of nonperforming assets to total assets was 0.98% at March 31, 2007
compared with 1.01% at December 31, 2006 and 1.02% at September 30, 2006.
Non-performing assets at March 31, 2007 totaled $10.5 million compared with
$10.5 million at December 31, 2006 and $9.9 million at September 30, 2006.
The provision for loan losses for the quarter ended March 31, 2007 was $573,000
compared with $682,000 during the quarter ended December 31, 2006 and $453,000
during the quarter ended March 31, 2006. Net charge-offs for the quarter ended
March 31, 2007 were $414,000, or 0.05% of average loans, compared with $149,000,
or 0.02% of average loans, and $239,000, or 0.03% of average loans for the
quarters ended December 31, 2006 and March 31, 2006, respectively. Net
charge-offs for the current-year quarter primarily include $193,000 in
charge-offs on single-family residential mortgage loans and $120,000 in
charge-offs on multifamily real estate loans.
Real estate foreclosure expense and losses, net were $174,000 for the quarter
ended March 31, 2007 compared to $29,000 for the same 2006 quarter. The increase
was primarily the result of losses and expenses incurred in connection with
several residential properties acquired, through foreclosure, from a single
borrower. The properties are located in an economically depressed area of St.
Louis and experienced significant deterioration in physical condition.
NON-INTEREST EXPENSE
Non-interest expense rose to $6.3 million in the second quarter, an increase of
$680,000, or 12% over the same quarter last year. The Company made a $250,000
charitable contribution in the second quarter of fiscal 2006. Excluding this
contribution,
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non-interest expense increased $930,000, or 17%.
Total compensation and employee benefits expense, which represented
approximately 52% of total non-interest expense for the quarter, increased to
$3.3 million compared with $2.7 million in the same period a year ago. The
increase resulted from the addition of the former Central West End Bank
employees following its purchase, employees at the new Richmond Heights bank
location, and staff expansion necessary to support increased loan activity.
Occupancy and equipment expense increased to $1.4 million for the current-year
quarter compared with $1.2 million for same quarter last year primarily as the
result of the two banking locations acquired in the Central West End Bank
purchase, the new Richmond Heights bank location, and additional mortgage
origination offices. The ratio of non-interest expense to average assets
declined to 2.53% for the quarter ended March 31, 2007 compared with 2.75% for
the same quarter in 2006.
OUTLOOK
"Despite a challenging environment caused by the inverted yield curve, we expect
to see stronger results in the second half of the fiscal year resulting in low
double-digit growth in diluted earnings per share from operations for fiscal
2007, when compared to last year's results excluding the one time gain on sale
of the bank location", Donius noted.
"Re-pricing assets will continue to put pressure on our net interest margin.
However, we are encouraged by a mortgage environment that we think will result
in strong seasonal growth of 20% to 30% in mortgage revenues through the rest of
the fiscal year. In addition, we believe growth in core deposits combined with
strong double-digit loan growth will mitigate any negative effects on net
interest income caused by margin pressures," Donius added.
CONFERENCE CALL TOMORROW
Pulaski Financial management will discuss second quarter results and other
developments tomorrow, April 25, 2007, during a conference call beginning at 10
a.m. Central Daylight Time. The call also will be simultaneously web cast and
archived for three months at:
http://www.viavid.net/detailpage.aspx?sid=00003DEF. 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 May 9, 2007 at 877-660-6853, account
number 3055 and conference I.D. 238775.
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.
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,
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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, 2006, and our Quarterly Report on Form 10-Q for the
quarter ending December 31, 2006 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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<Table>
<Caption>
PULASKI FINANCIAL CORP.
UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS
SELECTED BALANCE SHEET DATA March 31, December 31, September 30,
(Dollars in thousands except per share data) 2007 2006 2006
----------- ------------ -------------
Total assets $ 1,063,673 $ 1,034,770 $ 962,460
Loans receivable, net 857,095 833,038 785,199
Allowance for loan losses 8,510 8,350 7,817
Loans held for sale, net 76,703 83,169 60,371
Investment securities (includes equity securities) 22,743 19,736 17,449
FHLB stock 8,189 10,100 9,524
Mortgage-backed & related securities 3,331 3,487 3,631
Cash and cash equivalents 29,139 21,156 22,116
Deposits 768,581 699,420 655,577
FHLB advances 160,500 203,500 172,800
Subordinated debentures 19,589 19,589 19,589
Stockholders' equity 79,296 77,567 75,827
Book value per share $ 7.95 $ 7.79 $ 7.62
Asset Quality Ratios
Nonperforming loans as a percent of total loans 0.87% 0.89% 0.83%
Nonperforming assets as a percent of total assets 0.98% 1.01% 1.02%
Allowance for loan losses as a percent of total loans 0.90% 0.90% 0.92%
Allowance for loan losses as a percent of nonperforming loans 104.32% 100.98% 110.91%
</Table>
<Table>
<Caption>
Three months Six months
SELECTED OPERATING DATA ended March 31, ended March 31,
------------------------------ ----------------------------
(Dollars in thousands) 2007 2006 2007 2006
---------- ---------- ---------- ----------
Interest income $ 16,934 $ 12,141 $ 33,275 $ 23,931
Interest expense 9,981 6,500 19,450 12,434
---------- ---------- ---------- ----------
Net interest income 6,953 5,641 13,825 11,497
Provision for loan losses 573 453 1,255 859
---------- ---------- ---------- ----------
Net interest income after provision
for loans losses 6,380 5,188 12,570 10,638
---------- ---------- ---------- ----------
Retail banking fees 755 685 1,537 1,432
Mortgage revenues 1,259 1,122 2,168 2,128
Revenue from title company operations 231 174 444 372
Revenue from investment division operations 133 150 376 267
Revenue from appraisal division operations 215 - 424 -
Gain on sale of securities - 56 144 56
Gain on sale of branch - 2,474 - 2,474
Other 570 256 1,008 639
---------- ---------- ---------- ----------
Total non-interest income 3,163 4,917 6,101 7,368
---------- ---------- ---------- ----------
Compensation expense 3,275 2,746 5,949 5,004
Occupancy, equipment and data processing 1,431 1,227 2,682 2,335
Advertising 372 276 619 465
Professional services 399 325 661 664
Real estate foreclosure expense and losses, net 174 29 236 55
(Gain) loss on derivative financial instruments (141) 73 (314) 480
Charitable donations 17 289 66 309
Other 792 673 1,747 1,396
---------- ---------- ---------- ----------
Total non-interest expense 6,319 5,638 11,646 10,708
---------- ---------- ---------- ----------
Income before income taxes 3,224 4,467 7,025 7,298
Income taxes 1,020 1,572 2,334 2,555
---------- ---------- ---------- ----------
Net income $ 2,204 $ 2,895 $ 4,691 $ 4,743
========== ========== ========== ==========
Performance Ratios
Return on average assets 0.86% 1.43% 0.94% 1.19%
Return on average equity 10.98% 18.99% 11.78% 17.21%
Interest rate spread 2.62% 2.78% 2.68% 2.88%
Net interest margin 2.95% 3.00% 3.00% 3.09%
SHARE DATA
Weighted average shares outstanding-basic 9,829,899 8,977,678 9,835,729 8,636,462
Weighted average shares outstanding-diluted 10,265,321 9,507,731 10,276,102 9,182,542
EPS-basic $0.22 $0.32 $0.48 $0.55
EPS-diluted $0.21 $0.30 $0.46 $0.52
Dividends $0.085 $0.080 $0.170 $0.160
</Table>
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<Table>
<Caption>
PULASKI FINANCIAL CORP.
UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS, Continued
(Dollars in Thousands)
LOANS RECEIVABLE March 31, December 31, September 30,
(Dollars in thousands) 2007 2006 2006
------------- --------------- -------------
Real estate mortgage:
One to four family residential $ 321,033 $ 317,344 $ 314,746
Multi-family residential 16,981 17,615 13,629
Commercial real estate 175,546 175,101 150,529
------------- --------------- -------------
Total real estate mortgage 513,560 510,060 478,904
------------- --------------- -------------
Real estate construction and development:
One to four family residential 32,883 32,353 30,586
Multi-family residential 13,910 13,289 6,042
Commercial real estate 31,565 26,187 20,567
------------- --------------- -------------
Total real estate construction and development 78,358 71,829 57,195
------------- --------------- -------------
Commercial & Industrial Loans 67,080 51,285 48,785
Equity line of credit 204,226 205,890 207,153
Consumer and installment 6,311 6,419 6,276
------------- --------------- -------------
869,535 845,483 798,313
------------- --------------- -------------
Add (less):
Deferred loan (costs) fees 5,194 4,992 4,879
Loans in process (9,124) (9,087) (10,176)
Allowance for loan losses (8,510) (8,350) (7,817)
------------- --------------- -------------
(12,440) (12,445) (13,114)
------------- --------------- -------------
Total $ 857,095 $ 833,038 $ 785,199
============= =============== =============
Weighted average rate at end of period 7.55% 7.49% 7.50%
============= =============== =============
</Table>
<Table>
<Caption>
March 31, 2007 December 31, 2006 September 30, 2006
---------------------- ----------------------- -----------------------
Weighted Weighted Weighted
DEPOSITS Average Average Average
(Dollars in thousands) Interest Interest Interest
Balance Rate Balance Rate Balance Rate
---------- --------- ---------- --------- ---------- ----------
Demand Deposit Accounts:
Noninterest-bearing checking $ 46,647 0.00% $ 48,308 0.00% $ 38,830 0.00%
Interest-bearing checking 63,792 1.76% 67,613 2.01% 53,448 1.66%
Money market 148,588 4.25% 151,499 4.21% 134,383 4.12%
Passbook savings accounts 30,519 0.37% 30,525 0.37% 31,895 0.39%
---------- ---------- ----------
Total demand deposit accounts 289,546 2.61% 297,945 2.63% 258,556 2.53%
---------- ---------- ----------
Certificates of Deposit: (1)
$100,000 or less 236,026 5.18% 207,685 5.05% 207,900 4.91%
Greater than $100,000 243,009 4.65% 193,790 4.52% 189,121 4.43%
---------- ---------- ----------
Total certificates of deposit 479,035 4.91% 401,475 4.79% 397,021 4.68%
---------- ---------- ----------
Total deposits $ 768,581 4.04% $ 699,420 3.87% $ 655,577 3.83%
========== ========== ==========
(1) Includes brokered deposits $ 176,005 $ 126,916 $ 118,500
========== ========== ==========
</Table>
<Table>
<Caption>
NONPERFORMING ASSETS March 31, December 31, September 30,
(Dollars in thousands) 2007 2006 2006
----------- ------------ -------------
Non-accrual loans:
Residential real estate $ 466 $ 614 $ 794
Home equity 126 119 119
Other 53 53 27
----------- ------------ -------------
Total non-accrual loans 645 786 940
----------- ------------ -------------
Accruing loans past due 90 days or more:
Residential real estate 3,649 5,106 3,984
Commercial 821 442 125
Real estate-construction and development 549 - -
Home equity 1,745 1,612 1,456
Other 54 26 21
----------- ------------ -------------
Total accruing loans past due 90 days or more 6,818 7,186 5,586
----------- ------------ -------------
Restructured loans 117 118 220
Other nonperforming loans 577 179 302
----------- ------------ -------------
Total non-performing loans 8,157 8,269 7,048
Real estate acquired in settlement of loans 2,263 2,142 2,764
Other nonperforming assets 43 43 44
----------- ------------ -------------
Total non-performing assets $ 10,463 $ 10,454 $ 9,856
=========== ============ =============
</Table>
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<Table>
<Caption>
PULASKI FINANCIAL CORP.
AVERAGE BALANCE SHEETS
(Dollars in Thousands)
Three Months Ended
-----------------------------------------------------------------------------
March 31, 2007 March 31, 2006
----------------------------------- -----------------------------------
Interest Average Interest Average
Average and Yield/ Average and Yield/
Balance Dividends Cost Balance Dividends Cost
---------- ---------- -------- --------- --------- --------
Interest-earning assets:
Loans receivable $ 854,965 $ 15,713 7.35% $687,438 $11,362 6.61%
Loans available for sale 55,720 826 5.93% 33,035 452 5.47%
Other interest-earning assets 33,431 395 4.72% 32,347 327 4.03%
---------- ---------- ---------- ----------
Total interest-earning assets 944,116 16,934 7.17% 752,820 12,141 6.45%
---------- ----------
Noninterest-earning assets 77,861 57,490
Total assets $1,021,977 $810,310
========== ==========
Interest-bearing liabilities:
Deposits $ 701,113 $ 7,583 4.33% $544,626 $ 4,604 3.38%
Borrowed money 176,435 2,398 5.43% 162,908 1,896 4.66%
---------- ---------- ---------- ----------
Total interest-bearing liabilities 877,548 9,981 4.55% 707,534 6,500 3.67%
---------- ---------- ----------
Noninterest-bearing deposits 46,125 27,501
Noninterest-bearing liabilities 17,984 14,275
Stockholders' equity 80,320 61,000
---------- ----------
Total liabilities and stockholders' equity $1,021,977 $810,310
========== ==========
Net interest income $ 6,953 $ 5,641
========== ==========
Interest rate spread 2.62% 2.78%
Net interest margin 2.95% 3.00%
</Table>
<Table>
<Caption>
Six Months Ended
-----------------------------------------------------------------------------
March 31, 2007 March 31, 2006
----------------------------------- -----------------------------------
Interest Average Interest Average
Average and Yield/ Average and Yield/
Balance Dividends Cost Balance Dividends Cost
---------- ---------- -------- --------- --------- --------
Interest-earning assets:
Loans receivable $ 834,468 $ 30,900 7.41% $ 674,303 $ 22,241 6.60%
Loans available for sale 53,460 1,589 5.95% 39,185 1,098 5.60%
Other interest-earning assets 33,173 786 4.73% 29,861 592 3.96%
----------- ---------- --------- ---------
Total interest-earning assets 921,101 33,275 7.23% 743,349 23,931 6.44%
---------- ---------
Noninterest-earning assets 76,259 54,304
----------- ---------
Total assets $ 997,360 $ 797,653
=========== =========
Interest-bearing liabilities:
Deposits $ 666,745 $ 14,319 4.30% $ 515,526 $ 8,278 3.21%
Borrowed money 187,905 5,131 5.45% 183,861 4,156 4.53%
----------- ----------- --------- --------
Total interest-bearing liabilities 854,650 19,450 4.55% 699,387 12,434 3.56%
----------- --------
Noninterest-bearing deposits 45,042 27,615
Noninterest-bearing liabilities 18,009 15,529
Stockholders' equity 79,659 55,122
----------- ---------
Total liabilities and stockholders' equity $ 997,360 $ 797,653
=========== =========
Net interest income $ 13,825 $ 11,497
======== ========
Interest rate spread 2.68% 2.88%
Net interest margin 3.00% 3.09%
</Table>