• The Company showed strong growth in linked-quarter operating performance
- Diluted EPS increased 52% from $0.15 to $0.23, representing the third consecutive quarter of meaningful earnings growth
- Annualized return on average assets and return on average common equity were
0.93% and 11.08%, respectively
- Achieved top-line revenue growth in a challenging environment, with 3% growth in interest income
- Net interest income grew 7%
- Net interest margin grew 30 basis points and reached a record level of 3.97%
- Focus on cost control resulted in a 9% reduction in non-interest expense
• Asset quality continued to improve
- Non-performing assets declined 3%, representing the fourth consecutive quarterly decline
- Internal adversely classified assets declined approximately 9%
- Early stage loan delinquencies (31 to 89 days past due) declined approximately 34%
• The Bank remained "well capitalized" with estimated Tier 1 leverage and total risk-based capital ratios of 10.11% and 13.59%, respectively and the quarterly common dividend was maintained
ST. LOUIS, January 17, 2012 - Pulaski Financial Corp. (Nasdaq
Global Select: PULB) today reported net income for the
quarter ended December 31, 2011 of $3.0 million, or $0.23 per
diluted common share, compared with net income of $2.2
million, or $0.15 per diluted common share, for the quarter
ended September 30, 2011 and net income of $3.1 million, or
$0.24 per diluted common share, for the December 2010
quarter. Reducing income available to common shares were
dividends and the related discount accretion on the Company's
preferred stock totaling $0.05 per diluted common share in
each of the three quarters.
Gary Douglass, President and Chief Executive Officer
commented, "We are very pleased with the continued
improvements realized in the December 2011 quarter in terms
of both operating results and asset quality. The 52% increase
in our linked-quarter earnings per share marked the third
consecutive quarter of meaningful earnings growth. In an
environment where top-line revenue growth was challenging, we
were able to deliver meaningful growth in interest income,
net interest income and the net interest margin while, at the
same time, significantly reducing our overall level of
non-interest expense. Equally important, we continued to make
good progress on our number one priority, which is asset
quality improvement. Not only did we reduce the level of
non-performing assets for the fourth consecutive quarter, we
also saw improvement in several potential future predictors
of asset quality. The levels of internal
adversely classified assets and early stage loan
delinquencies, which we define as loans that are 31 to 89
days past due, both showed meaningful declines from September
30, 2011."
Net interest income increased to $12.1 million for the first
quarter of fiscal 2012 compared with
$11.3 million for the quarter ended September 30, 2011, but
decreased from $13.4 million for the same period a year ago.
The increase from the linked quarter was primarily the result
of growth in the average balance of mortgage loans held for
sale to $138.7 million compared with
$61.9 million for the quarter ended September 30, 2011 and,
to a lesser extent, a lower cost of deposits. The decrease
from the same period a year ago was primarily due to a
decline in the average balance of mortgage loans held for
sale from a near record high of $305.9 million for the
quarter ended December 31, 2010, partially offset by a lower
cost of deposits.
The net interest margin reached a record high of 3.97% for
the three months ended
December 31, 2011 compared with 3.67% for the quarter ended
September 30, 2011 and
3.78% for the quarter ended December 31, 2010. The
linked-quarter increase was the result of growth in mortgage
loans held for sale that was funded by the reduction of
lower-yielding assets held in Fed funds, combined with a
decrease in the cost of deposits. The increase in the net
interest margin from the December 2010 quarter was primarily
the result of a decrease in the cost of deposits.
Non-interest income decreased to $3.4 million for the quarter
ended December 31, 2011 compared with $3.6 million for each
of the quarters ended September 30, 2011 and
December 31, 2010. The linked-quarter decrease was primarily
due to lower retail banking fees related to fees charged on
insufficient checks while the decrease from the prior-year
quarter
was due to lower mortgage revenues. Mortgage revenues were
$1.7 million on loan sales of
$329 million for the quarter ended December 31, 2011 compared
with $1.7 million on loan sales of $283 million for the
quarter ended September 30, 2011 and $1.8 million on loan
sales of
$612 million in the December 2010 quarter.
Mortgage loans originated for sale totaled $371 million for
the quarter ended December 31,
2011 compared with $354 million for the quarter ended
September 30, 2011 and $598 million for the December 2010
quarter. As a result of the low level of market interest
rates during the quarter, the Company saw an increase in
demand for mortgage refinancings compared with the linked
quarter, but this level of demand was down significantly from
the near historically high levels experienced in the December
2010 quarter. Mortgage refinancings totaled $242 million, or
65% of total loans originated for sale, for the quarter ended
December 31, 2011 compared with $177 million, or 50% of total
loans originated for sale for the quarter ended September
30,
2011, and $434 million, or 73% of total loans originated for
sale, for the December 2010 quarter.
The net profit margin on loans sold was 0.51% for the quarter
ended December 31, 2011 compared with 0.59% for the quarter
ended September 30, 2011 and 0.30% for the December
2
2010 quarter. The linked-quarter decrease was primarily the
result of a market-driven decrease in selling prices realized
from the Company's mortgage loan investors. The net profit
margin for the same quarter last year was abnormally low and
was due to the backlog of loans held in the Company's
mortgage warehouse that was created by the near record high
level of loan origination volumes resulting in lower realized
selling prices. Mortgage loans held for sale increased $54.2
million, or 54%, to $154.9 million at December 31, 2011
compared with
$100.7 million at September 30, 2011.
Douglass noted, "Once again, we were able to capitalize on
the increased market demand for mortgage loan refinancings
during the quarter that was driven by the historically low
level of interest rates. As a result, we realized a
linked-quarter increase in mortgage loan originations and
sales. However, we experienced a linked-quarter decrease in
our net profit margins due to market-driven decreases in the
selling prices realized from our investors. Fortunately, a
portion of the impact of these decreased selling prices was
offset by the significant reduction to our operating cost
structure that we implemented in the prior quarter. The
strong demand also resulted in growth in our mortgage loans
held for sale to $155 million at December 31, 2011, which
will give us significant momentum going into our second
fiscal quarter of 2012 by generating net interest income
while they are held in the warehouse and mortgage revenues
when they are delivered to our investors."
Total non-interest expense was $8.1 million for the quarter
ended December 31, 2011
compared with $8.9 million for the linked quarter and $8.3
million for the prior-year quarter. The linked-quarter
decrease was primarily due to lower occupancy and advertising
costs as management continued ongoing efforts to control such
costs. The decrease from the same quarter last year was
primarily due to lower expense associated with foreclosed
properties.
Real estate foreclosure expense and losses totaled $745,000
for the quarter ended
December 31, 2011 compared with $796,000 for the linked
quarter and $1.1 million for the prior- year quarter. Such
expenses were primarily due to write-downs of properties and
losses on sales that resulted from declines in their fair
values subsequent to foreclosure.
Compensation expense totaled $3.7 million in the December
2011 quarter compared with
$3.8 million for the linked quarter and $3.4 million for the
prior-year quarter. The increase from the December 2010
quarter was related primarily to the decrease in loan
origination activity compared with the prior-year quarter,
which resulted in a lower level of absorption of direct,
fixed compensation costs and higher compensation expense in
the December 2011 quarter.
Non-performing assets decreased to $69.9 million at December
31, 2011 from $72.1 million at September 30, 2011. The
decrease was primarily attributable to a $2.9 million
decrease in real estate acquired in settlement of loans
resulting from the sale or write down of several properties
during the quarter. In addition, two other important
potential future predictors of asset quality
experienced improvement during the quarter. The level of
internal adversely classified assets
3
decreased approximately 9% from September 30, 2011 to
December 31, 2011 and total loans that were 31 to 89 days
past due decreased approximately 34% during the same
period.
The provision for loan losses for the three months ended
December 31, 2011 was $3.0 million compared with $3.0 million
for the quarter ended September 30, 2011 and $4.3 million for
the December 2010 quarter. Net charge-offs for the quarter
ended December 31, 2011 totaled
$2.9 million, or 1.12% of average loans on an annualized
basis, compared with $3.0 million, or
1.15% of average loans on an annualized basis, for the
quarter ended September 30, 2011 and
$4.0 million, or 1.51% of average loans on an annualized
basis, for the December 2010 quarter.
Douglass stated, "While we expect to achieve solid earnings
performance again in our second fiscal quarter, the level of
earnings is not likely to reach the level we saw in the
December 2011 quarter. This expectation is principally based
on the anticipated impact that the usual seasonal decline in
market demand for mortgage loan originations, which we
generally see in our second fiscal quarter, will have on
mortgage revenues and interest income on mortgage loans held
for sale. For the full fiscal year of 2012, we continue to
expect meaningful year-over-year earnings improvement
compared with fiscal 2011."
Douglass continued, "Our priorities and focus for the balance
of fiscal 2012 are continued asset quality improvement and
revenue expansion from growth in commercial and industrial
and owner-occupied commercial real estate lending and
additional residential mortgage loan production gained by
capturing additional market share. Finally, we will remain
ever vigilant with respect to controlling both funding costs
and operating expenses."
Pulaski Financial's management will discuss first quarter
results and other developments tomorrow, January 18, 2012,
during a conference call beginning at 11 a.m. EDT (10 a.m.
CDT). The call also will be simultaneously webcast and
archived for three months at: http://pulaskibankstl.com/corporate-profile.aspx.
Participants in the conference call may dial
877-473-3757 a few minutes before start time. The call also
will be available for replay through
January 31, 2012 at 800-585-8367 or 404-537-3406, conference
ID 43044511.
Pulaski Financial Corp., operating in its 90th year through its subsidiary, Pulaski Bank, serves customers throughout the St. Louis and Kansas City metropolitan areas and Wichita, Kansas. The bank offers a full line of quality retail and commercial banking products through 13 full- service branch offices in the St. Louis metropolitan area and offers mortgage loan products through six loan production offices in the St. Louis and Kansas City metropolitan areas and Wichita, Kansas. 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,"
4
"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, 2011 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:
Paul Milano
Chief Financial Officer Pulaski Financial Corp. (314)
317-5046
Tables follow...
5
PULASKI FINANCIAL CORP. CONDENSED STATEMENTS OF INCOME(Unaudited)
(Dollars in thousands except per share data)
Three Months EndedDecember 31, 2011 | September 30, 2011 | December 31, 2010 | |||
Interest income | $ 14,624 | $ 14,136 | $ 17,124 | ||
Interest expense | 2,509 | 2,816 | 3,708 | ||
Net interest income | 12,115 | 11,320 | 13,416 | ||
Provision for loan losses | 3,000 | 3,000 | 4,300 | ||
Net interest income after provision for loan losses | 9,115 | 8,320 | 9,116 | ||
Retail banking fees | 1,001 | 1,102 | 1,026 | ||
Mortgage revenues | 1,687 | 1,681 | 1,847 | ||
Investment brokerage revenues | 374 | 395 | 446 | ||
Other | 353 | 407 | 329 | ||
Total non-interest income | 3,415 | 3,585 | 3,648 | ||
Compensation expense | 3,743 | 3,820 | 3,402 | ||
Occupancy, equipment and data processing expense | 2,181 | 2,402 | 2,072 | ||
Advertising | 108 | 216 | 100 | ||
Professional services | 426 | 401 | 445 | ||
Real estate foreclosure losses and expenses, net | 745 | 796 | 1,085 | ||
FDIC deposit insurance premiums | 441 | 479 | 623 | ||
Other | 487 | 776 | 574 | ||
Total non-interest expense | 8,131 | 8,890 | 8,301 | ||
Income before income taxes | 4,399 | 3,015 | 4,463 | ||
Income tax expense 1,357 835 1,346 | |||||
Net income after tax | 3,042 | 2,180 | 3,117 | ||
Preferred stock dividends | 517 | 517 | 516 | ||
Earnings available for common shares | $ 2,525 | $ 1,663 | $ 2,601 | ||
Annualized Performance Ratios Return on average assets | 0.93% | 0.66% | 0.83% | ||
Return on average common equity | 11.08% | 7.47% | 11.71% | ||
Interest rate spread | 3.80% | 3.52% | 3.61% | ||
Net interest margin | 3.97% | 3.67% | 3.78% | ||
SHARE DATA Weighted average shares outstanding - basic | 10,605,620 | 10,574,405 | 10,507,158 | ||
Weighted average shares outstanding - diluted | 11,004,706 | 10,962,188 | 10,925,023 | ||
Basic earnings per common share | $0.24 | $0.16 | $0.25 | ||
Diluted earnings per common share | $0.23 | $0.15 | $0.24 | ||
Dividends per common share | $0.095 | $0.095 | $0.095 |
6
PULASKI FINANCIAL CORP. BALANCE SHEET DATA (Unaudited)(Dollars in thousands)
December 31, 2011 | September 30, 2011 | ||
Total assets | $ 1,332,081 | $ 1,309,209 | |
Loans receivable, net | 1,014,000 | 1,021,273 | |
Allowance for loan losses | 25,790 | 25,714 | |
Mortgage loans held for sale, net | 154,876 | 100,719 | |
Investment securities | 10,950 | 14,457 | |
FHLB stock | 4,519 | 3,100 | |
Mortgage-backed & related securities | 8,364 | 9,986 | |
Cash and cash equivalents | 41,652 | 57,071 | |
Deposits | 1,126,631 | 1,122,525 | |
FHLB advances | 49,000 | 29,000 | |
Subordinated debentures | 19,589 | 19,589 | |
Stockholders' equity - preferred | 31,638 | 31,527 | |
Stockholders' equity - common | 90,585 | 88,643 | |
Book value per common share | $8.03 | $8.07 | |
Tangible book value per share | $7.68 | $7.70 |
Single-family residential:
December 31, September 30, 2011 2011Residential first mortgage
$ 235,967
$ 242,091
Residential second mortgage 49,467 51,535
Home equity lines of credit 167,447 176,324
Commercial:
Commercial and multi-family real estate | 316,783 | 316,210 | |
Land acquisition and development | 52,531 | 51,497 | |
Real estate construction and development | 23,520 | 22,331 | |
Commercial and industrial | 188,776 | 180,821 | |
Consumer and installment | 2,714 | 3,118 | |
1,037,205 | 1,043,927 | ||
Add (less): Deferred loan costs | 3,496 | 3,626 | |
Loans in process | (911) | (566) | |
Allowance for loan losses | (25,790) | (25,714) | |
(23,205) | (22,654) |
Total
$ 1,014,000
$ 1,021,273
Weighted average rate at end of period 5.17% 5.30%
December 31, 2011 September 30, 2011 Weighted Weighted Average Average Interest Interest DEPOSITS Balance Rate Balance RateDemand Deposit Accounts: (Dollars In thousands)
Non-interest-bearing checking | $ 150,028 | 0.00% | $ 150,431 | 0.00% | |
Interest-bearing checking | 341,608 | 0.25% | 328,275 | 0.28% | |
Passbook savings accounts | 36,307 | 0.14% | 35,714 | 0.14% | |
Money market | 185,220 | 0.33% | 183,873 | 0.33% | |
Total demand deposit accounts | 713,163 | 0.21% | 698,293 | 0.22% |
Certificates of Deposit:
Retail | 340,238 | 1.39% | 344,770 | 1.61% | |
CDARS | 73,230 | 0.36% | 71,026 | 0.42% | |
Brokered | - | - | 8,436 | 5.23% | |
Total certificates of deposit | 413,468 | 1.21% | 424,232 | 1.48% | |
Total deposits | $ 1,126,631 | 0.58% | $ 1,122,525 | 0.70% |
7
PULASKI FINANCIAL CORP. NONPERFORMING ASSETS (Unaudited)(In thousands)
Current under the restructured terms:
(1) Troubled debt restructured includes non-accrual loans totaling $35.4 million and $38.3 million at December 31, 2011 and September 30, 2011 , respectively
These totals are not included in non-accrual loans above.
8
PULASKI FINANCIAL CORP. ALLOWANCE FOR LOAN LOSSES AND ASSET QUALITY RATIOS(Unaudited)
(Dollars in thousands)
Three Months Ended December 31,ALLOWANCE FOR LOAN LOSSES | 2011 | 2010 | |
Allowance for loan losses, beginning of period | $ 25,714 | $ 26,976 | |
Provision charged to expense (Charge-offs) recoveries, net: Residential real estate first mortgages | 3,000 (697) | 4,300 (166) | |
Residential real estate second mortgages | (124) | (302) | |
Home equity | (1,300) | (521) | |
Commercial and multi-family | (789) | (721) | |
Land acquisition & development | 6 | (2,117) | |
Commercial and industrial | 6 | (141) | |
Consumer and other | (26) | (33) | |
Total loans charged off, net | (2,924) | (4,001) | |
Allowance for loan losses, end of period | $ 25,790 | $ 27,275 | |
ASSET QUALITY RATIOS | December 31, 2011 | September 30, 2011 | |
Nonperforming loans as a percent of total loans | 5.21% | 5.11% | |
Nonperforming loans excluding current troubled debt restructurings as a percent of total loans | 3.40% | 2.77% | |
Nonperforming assets as a percent of total assets | 5.24% | 5.51% | |
Nonperforming assets excluding current troubled debt restructurings as a percent of total assets | 3.84% | 3.64% | |
Allowance for loan losses as a percent of total loans | 2.49% | 2.46% | |
Allowance for loan losses as a percent of nonperforming loans | 47.76% | 48.17% |
Allowance for loan losses as a percent of
nonperforming loans excluding current troubled debt
restructurings and related allowance for loan losses 72.02% 84.50%
9
PULASKI FINANCIAL CORP. AVERAGE BALANCE SHEETS (Unaudited)(Dollars in thousands)
Three Months Ended December 31, 2011 December 31, 2010 Interest Average Interest Average Average and Yield/ Average and Yield/Interest-earning assets: Balance Dividends Cost Balance Dividends Cost
Loans receivable
$ 1,040,762
$ 13,201
5.07%
$ 1,064,170
$ 13,585
5.11%
Mortgage loans held for sale 138,698 1,310 3.78% 305,905 3,229 4.22% Other interest-earning assets 42,660 113 1.06% 49,650 310 2.50% Total interest-earning assets 1,222,120 14,624 4.79% 1,419,725 17,124 4.82%
Noninterest-earning assets 87,287 85,062
Total assets
$ 1,309,407
$ 1,504,787
Interest-bearing liabilities: Deposits
$ 961,548
$ 2,145
0.89%
$ 982,640
$ 3,198
1.30%
Borrowed money 52,410 364 2.78% 242,287 511 0.84% Total interest-bearing liabilities 1,013,958 2,509 0.99% 1,224,927 3,709 1.21%
Noninterest-bearing deposits 157,286 141,331
Noninterest-bearing liabilities 15,471 18,533
Stockholders' equity 122,692 119,996
Total liabilities and stockholders' equity
Net interest income
$ 1,309,407
$ 12,115
$ 1,504,787
$ 13,415
Interest rate spread 3.80% 3.61% Net interest margin 3.97% 3.78%
# # #
10
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