ST. LOUIS, MO--(Marketwire - January 22, 2008) -
-- Focus on Community Banking Drives Improved Results
-- Net Interest Income Expands 19% Over Prior Year to $8.2 Million
-- Strong Commercial Loan Demand Fuels $76 Million in Loan Growth; Loans
Receivable Exceed $1 Billion
-- Core Deposits Increase 17%, Aided by Growth From New Bank Locations
-- Non-Interest Income Increases 18% to $3.1 Million on Growth in
Mortgage Revenues and Retail Banking Fees
-- While Non-Performing Assets Increase Slightly, Having Never Engaged in
Subprime Lending Activities Aids Efforts to Ensure Overall Asset Quality
Pulaski Financial Corp. (
NASDAQ:
PULB) today announced net income for the
first fiscal quarter ended December 31, 2007 of $2.7 million, or $0.27 per
diluted share, compared with earnings of $2.5 million, or $0.24 per diluted
share, during the same quarter a year ago. The increased earnings were
fueled by strong growth in net interest income, mortgage revenues and
retail banking fees.
Chief Executive Officer William Donius commented, "We are pleased with the
strong start to fiscal 2008 in each of our principal lines of business:
retail, mortgage and commercial. Each of these areas made a significant
contribution to our first quarter success."
NET INTEREST INCOME INCREASES ON STRONG LOAN AND CORE DEPOSIT GROWTH
Net interest income rose 19% to $8.2 million for the first fiscal quarter
of 2008 compared with $6.9 million for the same 2007 period as the result
of strong growth in loans and core deposits.
Loans receivable grew 8%, or $75.8 million, during the quarter to
$1.03 billion at December 31, 2007. Commercial real estate and commercial
and industrial loans accounted for more than 80% of this growth. The
Company also saw strong growth in loans held for sale, which increased 50%,
or $29.0 million, during the quarter.
"We experienced strong growth in our commercial loan portfolio, which
continues to perform at a very high level. Our commercial lending group
continues to demonstrate their ability to generate quality assets in the
midst of a tough loan market. Ensuring continued credit quality remains
our foremost concern, as we approved only about 60% of the commercial loan
applications we reviewed during the quarter," Donius said.
Also contributing to the increase in net interest income was growth in
total deposits, including core deposits, which are generally the Company's
lowest-cost funding source. Core deposit growth continues to be one of the
Company's primary strategic objectives. This strategy has yielded
immediate success as core deposits, which include checking, money market
and passbook accounts, rose 17%, or $54.4 million, during the quarter to
$372.1 million at December 31, 2007. Total deposits increased $33.5
million to $869.0 million at December 31, 2007.
"Growth in core deposits from commercial banking relationships is essential
for the Company's continued growth in the St. Louis market. Since 2005,
the Company has opened or acquired six new full-service locations in the
central corridor of St. Louis. With the city's business districts
predominately in this area, these new locations are perfectly located to
enhance the Company's ability to provide convenient service to commercial
customers," said Donius. "We are pleased to report that our three newest
bank locations, which were opened in calendar year 2007, are exceeding our
expectations."
The Company's Clayton, downtown St. Louis and Richmond Heights locations,
which have been open 12 months or less, have combined deposits totaling
nearly $40 million, including $20 million of growth during the December
2007 quarter.
"Several years ago, we committed to becoming St. Louis' leading community
bank. We believe these results are proof of our progress," Donius said.
"By every measure, our growth can be traced to a philosophy of serving
retail and commercial customers whose banking needs are not being met by
either national affiliates or de novo start-ups."
The Company's net interest margin remained relatively unchanged at 3.02%
for the December 2007 quarter compared with 3.03% and 3.06% for the
quarters ended September 30, 2007 and December 31, 2006, respectively.
Although the Company's
interest-bearing liabilities are slightly more sensitive to a declining
interest-rate environment than its interest-bearing assets, the Company
remains well-positioned to absorb changes in market interest rates, with
approximately two-thirds of its assets and liabilities scheduled to mature
or reprice within one year.
NON-INTEREST INCOME INCREASES ON STRONG MORTGAGE AND RETAIL BANKING RESULTS
Mortgage revenues rose 24% to $1.3 million for the three months ending
December 31, 2007 compared with the same period last year. Loan sales
totaled approximately $285 million in each of the two quarters ended
December 31, 2007 and 2006. However, the Company realized higher gross
revenue margins during the December 2007 quarter due to reduced market
competition, which resulted in increased revenues. Also contributing to
the increase in mortgage revenues were lower overhead costs within the
mortgage division, primarily lower compensation costs resulting from
reduced staffing levels.
Donius commented, "Even though much of the national mortgage sector is
distressed, our mortgage division experienced a strong quarter due to both
higher gross margins and greater efficiency. Reduced staffing levels
within our mortgage division allowed us to optimize staffing size and
reduce overhead."
Retail banking fees rose 32%, or $246,000, to $1.0 million for the quarter
ended December 31, 2007 compared with $782,000 for last year's quarter,
primarily due to a change in the Company's policy on account overdraft
fees.
ASSET QUALITY
The balance of non-performing assets was $16.1 million, or 1.29% of total
assets, at December 31, 2007 compared with $13.6 million, or 1.20% of total
assets, at September 30, 2007. The Company's largest non-performing asset
at December 31, 2007 was a $2.6 million loan secured by commercial real
estate. The property securing the loan was acquired through foreclosure in
January 2008. Management is optimistic it will work out of this
non-performing asset in the near future and believes the loan was
adequately collateralized at December 31, 2007.
Net charge-offs for the quarter ended December 31, 2007 were $302,000, or
0.12% of average loans on an annualized basis, compared with $149,000, or
0.07% of average loans on an annualized basis, for the December 2006
quarter and $267,000, or 0.11% of average loans on an annualized basis, for
the quarter ended September 30, 2007. Net charge-offs for the current
quarter primarily included $257,000 in charge-offs on single-family
residential mortgage loans and $46,000 in charge-offs on consumer loans.
Donius observed, "Property values in some Midwest residential real estate
markets began to decline during 2007, but because property values in the
Midwest have generally moved up slowly over the years, we are not expecting
a substantial decline in values overall. We recognized this trend in
mid-2007 and we were proactive in adapting to this environment by
tightening our underwriting practices. Also, we modified policies,
scrutinized collateral values on problem loans and made changes to
eliminate or enhance certain loan products in light of weakening market
conditions."
Donius added, "We are committed to maintaining our high standard of credit
quality. We have never engaged in sub-prime lending activities."
The provision for loan losses increased $351,000 to $1.0 million for the
quarter ended December 31, 2007 compared with $682,000 for the same quarter
the year before. The provision for loan losses in the current-year quarter
related primarily to growth in the Company's performing loan portfolio,
including substantial growth in commercial loans, which carry a higher
level of inherent risk than residential loans, and also to charge-offs and
the increase in the level of non-performing assets. The ratios of the
allowance for loan losses to total loans and to non-performing loans were
0.99% and 89.66%, respectively, at December 31, 2007 compared with 1.02%
and 99.44%, respectively, at September 30, 2007.
NON-INTEREST EXPENSE
Total non-interest expense increased 27% to $6.4 million for the quarter
ended December 31, 2007 compared with $5.1 million for the comparable 2006
quarter primarily as the result of increases in salaries and employee
benefits expense and occupancy expense. Salaries and employee benefits
expense and occupancy expense related to the three new bank locations
totaled $166,000 and $147,000, respectively for the December 2007 quarter
compared with $8,000 and $0, respectively for the December 2006 quarter.
The Company also saw a $213,000 increase in FDIC insurance premium expense
during the December 2007 quarter following the utilization of the one-time
assessment credit provided to eligible insured depository institutions
under the Federal Deposit Insurance Reform Act of 2005. Management expects
future quarterly FDIC insurance premium expense to be approximately
$150,000.
The provision for income taxes decreased from $1.3 million for the quarter
ended December 31, 2006 to $1.1 million for the December 2007 quarter. The
effective tax rate was 29.4% for the quarter ended December 31, 2007
compared with 34.6% in the prior-year quarter. The lower effective tax
rate was primarily the result of a $150,000 benefit in the December 2007
quarter related to a change in the estimated amount of the Company's tax
liability.
OUTLOOK
"We expect to see continued growth in loans receivable and core deposits
which will generate additional net interest income and strengthen 2008
earnings. We are optimistic that the changes we made in our underwriting
policies and practices in 2007 will have lasting benefits resulting in
sound asset quality. Our new bank locations have already attracted
valuable core deposits. We are confident that, while modestly dilutive to
earnings in 2008, this investment in our future will produce strong returns
as early as fiscal 2009 and will add significant value to our franchise,"
Donius stated.
"Given these trends, we remain very optimistic about our outlook for fiscal
year 2008: high single-digit to low double-digit percentage growth in our
2008 diluted earnings per share compared with fiscal 2007. However, the
entire banking industry continues to operate in a challenging environment
caused by uncertainties in the national housing and mortgage sectors,
volatile interest rates and ongoing national credit concerns. We cannot
fully predict the impact these external market factors will have on our
2008 results," Donius continued.
CONFERENCE CALL TOMORROW
Pulaski Financial management will discuss first quarter results and other
developments tomorrow, January 23, 2008, during a conference call beginning
at 11 a.m. EST (10 a.m. CST). The call also will be simultaneously webcast
and archived for three months at:
http://www.viavid.net/detailpage.aspx?sid=00004A6C. Participants in the
conference call may dial 877-407-9039 a few minutes before start time. The
call also will be available for replay for three months at 877-660-6853,
account number 3055 and conference I.D. 270781.
ABOUT PULASKI FINANCIAL
Pulaski Financial Corp., operating in its 86th year through its subsidiary,
Pulaski Bank, serves customers throughout the St. Louis metropolitan area.
The bank offers a full line of quality retail and commercial banking
products through 12 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, 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,
2007 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.
PULASKI FINANCIAL CORP.
UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS
SELECTED BALANCE SHEET DATA December 31, September 30,
(Dollars in thousands except per share data) 2007 2007
============ ============
Total assets $ 1,250,907 $ 1,131,465
Loans receivable, net 1,025,623 949,826
Allowance for loan losses 11,151 10,421
Loans held for sale, net 87,582 58,536
Investment securities (includes equity
securities) 27,679 16,988
FHLB stock 12,489 8,306
Mortgage-backed & related securities 2,937 3,027
Cash and cash equivalents 23,334 23,675
Deposits 868,966 835,489
FHLB advances 252,300 158,400
Subordinated debentures 19,589 19,589
Stockholders' equity 83,572 80,804
Book value per share $ 8.36 $ 8.13
Asset Quality Ratios
Non-performing loans as a percent of total
loans 1.11% 1.03%
Non-performing assets as a percent of total
assets 1.29% 1.20%
Allowance for loan losses as a percent of total
loans 0.99% 1.02%
Allowance for loan losses as a percent of
nonperforming loans 89.66% 99.44%
Three Months
Ended December 31,
SELECTED OPERATING DATA ==========================
(Dollars in thousands) 2007 2006
============ ============
Interest income $ 19,370 $ 16,375
Interest expense 11,169 9,469
------------ ------------
Net interest income 8,201 6,906
Provision for loan losses 1,032 681
------------ ------------
Net interest income after provision for
loan losses 7,169 6,225
------------ ------------
Retail banking fees 1,028 782
Mortgage revenues 1,318 1,061
Revenue from investment division operations 215 242
Gain on sale of securities 54 144
Other 526 431
------------ ------------
Total non-interest income 3,141 2,660
------------ ------------
Compensation expense 3,021 2,432
Occupancy, equipment and data processing 1,597 1,251
Advertising 340 247
Professional services 283 262
Real estate foreclosure expense and losses, net 229 147
Gain on derivative financial instruments (122) (172)
Charitable donations 39 49
Other 1,056 869
------------ ------------
Total non-interest expense 6,443 5,085
------------ ------------
Income before income taxes 3,867 3,800
Income taxes 1,135 1,314
------------ ------------
Net income $ 2,732 $ 2,486
============ ============
Performance Ratios
Return on average assets 0.94% 1.02%
Return on average equity 12.88% 12.59%
Interest rate spread 2.65% 2.71%
Net interest margin 3.02% 3.06%
SHARE DATA
Weighted average shares outstanding-basic 9,780,132 9,823,850
Weighted average shares outstanding-diluted 10,186,789 10,269,066
EPS-basic $ 0.28 $ 0.25
EPS-diluted $ 0.27 $ 0.24
Dividends $ 0.090 $ 0.085
PULASKI FINANCIAL CORP.
UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS, Continued
LOANS RECEIVABLE December 31, September 30,
(Dollars in thousands) 2007 2007
=========== ===========
Real estate mortgage:
One to four family residential $ 333,047 $ 332,206
Multi-family residential 33,713 30,219
Commercial real estate 230,655 200,206
----------- -----------
Total real estate mortgage 597,415 562,631
----------- -----------
Real estate construction and
development:
One to four family residential 47,079 45,428
Multi-family residential 13,014 13,899
Commercial real estate 45,985 39,594
----------- -----------
Total real estate construction
and development 106,078 98,921
----------- -----------
Commercial & industrial loans 110,033 77,642
Equity line of credit 223,270 219,539
Consumer and installment 7,000 6,918
----------- -----------
1,043,796 965,651
----------- -----------
Add (less):
Deferred loan costs 5,327 5,163
Loans in process (12,349) (10,567)
Allowance for loan losses (11,151) (10,421)
----------- -----------
(18,173) (15,825)
----------- -----------
Total $ 1,025,623 $ 949,826
=========== ===========
Weighted average rate at end of
period 7.29% 7.44%
=========== ===========
December 31, 2007 September 30, 2007
=====================================
Weighted Weighted
DEPOSITS Average Average
(Dollars in thousands) Interest Interest
Balance Rate Balance Rate
=========== ===========
Demand Deposit Accounts:
Noninterest-bearing checking $ 63,341 0.00% $ 57,005 0.00%
Interest-bearing checking 82,952 1.96% 57,815 1.79%
Money market 196,357 3.76% 173,950 4.05%
Passbook savings accounts 29,450 0.29% 28,909 0.29%
----------- -----------
Total demand deposit accounts 372,100 2.44% 317,679 2.57%
----------- -----------
Certificates of Deposit: (1)
$100,000 or less 231,077 4.99% 239,401 5.45%
Greater than $100,000 265,789 4.73% 278,409 4.73%
----------- -----------
Total certificates of deposit 496,866 4.85% 517,810 5.06%
----------- -----------
Total deposits $ 868,966 3.82% $ 835,489 4.11%
=========== ===========
(1) Includes brokered deposits $ 173,343 $ 190,445
=========== ===========
PULASKI FINANCIAL CORP.
NONPERFORMING ASSETS AND ALLOWANCE FOR LOAN LOSSES
(Unaudited)
NONPERFORMING ASSETS December 31, September 30,
(In thousands) 2007 2007
============= =============
Non-accrual loans:
Residential real estate $ 1,846 $ 2,082
Commercial 3,786 3,708
Real estate construction and development 221 -
Home equity 669 554
Other 289 105
------------- -------------
Total non-accrual loans 6,811 6,449
------------- -------------
Accruing loans past due 90 days or more:
Residential real estate 3,116 2,564
Commercial 383 44
Real estate construction and development 227 -
Home equity 1,106 1,063
Other 207 150
------------- -------------
Total accruing loans past due 90
days or more 5,039 3,821
------------- -------------
Restructured loans 587 210
------------- -------------
Total non-performing loans 12,437 10,480
Real estate acquired in settlement of loans 3,645 3,090
Other nonperforming assets 44 43
------------- -------------
Total non-performing assets $ 16,126 $ 13,613
============= =============
Three Months Ended December 31,
ALLOWANCE FOR LOAN LOSSES ==============================
(In thousands) 2007 2006
============= =============
Allowance for loan losses, beginning of
period $ 10,421 $ 7,817
Provision charged to expense 1,032 682
Loans charged-off (410) (159)
Recoveries of loans previously charged-off 108 10
------------- -------------
Allowance for loan losses, end of period $ 11,151 $ 8,350
============= =============
PULASKI FINANCIAL CORP.
AVERAGE BALANCE SHEETS
(Unaudited)
Three Months Ended
====================================================
December 31, 2007 December 31, 2006
========================== ========================
(Dollars in thousands) Interest Average Interest Average
Average and Yield/ Average and Yield/
Balance Dividends Cost Balance Dividends Cost
----------- -------- ----- --------- -------- -----
Interest-earning
assets:
Loans receivable $ 994,423 $ 18,215 7.33% $ 814,417 $ 15,187 7.46%
Loans available for
sale 51,511 727 5.64% 51,249 763 5.96%
Other interest-earning
assets 39,313 428 4.35% 36,850 425 4.61%
----------- -------- --------- --------
Total
interest-earning
assets 1,085,247 19,370 7.14% 902,516 16,375 7.26%
-------- --------
Noninterest-earning
assets 76,327 70,763
----------- ---------
Total assets $ 1,161,574 $ 973,279
=========== =========
Interest-bearing
liabilities:
Deposits $ 762,448 $ 8,202 4.30% $ 633,124 $ 6,736 4.26%
Borrowed money 233,572 2,967 5.08% 199,126 2,733 5.49%
----------- -------- --------- --------
Total
interest-bearing
liabilities 996,020 11,169 4.49% 832,250 9,469 4.55%
-------- --------
Noninterest-bearing
deposits 59,688 43,982
Noninterest-bearing
liabilities 21,018 18,034
Stockholders' equity 84,848 79,013
----------- ---------
Total liabilities
and stockholders'
equity $ 1,161,574 $ 973,279
=========== =========
Net interest income $ 8,201 $ 6,906
======== ========
Interest rate spread 2.65% 2.71%
Net interest margin 3.02% 3.06%
Contact Information: For Additional Information Contact:
William A. Donius
CEO
Pulaski Financial Corp.
(314) 878-2210 Ext. 3610
John Hastings
Dan Callahan
Fleishman-Hillard, Inc.
(314) 982-1700