Pulaski Financial Reports Record Earnings for Fiscal Year 2015

Full Year Highlights

  • Diluted EPS of $1.17 in fiscal 2015 versus $0.88 last year
  • Return on average assets was 1.01% in 2015 compared with 0.87% in 2014
  • Return on average common equity for 2015 at 12.09% versus 9.80% in 2014
  • Book value per common share grew to $10.19 at year-end 2015 from $9.31 last year end
  • Mortgage revenues up 152% from prior year on increases in loans originated for home purchase and refinancing activity combined with an improvement in the net profit margin
  • Net interest income increased 5% over prior year as the result of substantial growth in average loan balances partially offset by a decline in the net interest margin
  • Non-interest expense up 15% due in large part to increases in compensation expense and occupancy and data processing expense related to the Company’s mortgage banking activities
  • Loan portfolio balance at September 30, 2015 up 7% from same time last year on increases in commercial and residential loans
  • Deposits increased 11% from September 30, 2014 on substantial growth in retail, commercial and municipal and public entity deposits
  • Decrease of 31% in the balance of non-performing assets dropped the ratio of non-performing assets to total assets to 1.49% at September 30, 2015
  • For the full year, the Company received $2.0 million from an insurance settlement related to a fraud perpetrated against the Company by one of its commercial loan customers in a prior year

Linked-Quarter Highlights

  • Diluted EPS of $0.29 in September 2015 quarter versus $0.36 in June 2015 quarter
  • Annualized return on average assets was 0.98% in September 2015 quarter compared with 1.22% in June 2015 quarter
  • Annualized return on average common equity for September 2015 quarter at 11.79% versus 14.46% in June 2015 quarter
  • Higher returns in the June 2015 quarter primarily related to the receipt of $1.3 million representing the final insurance settlement for the customer loan fraud
  • Loan portfolio increased $13.8 million, or 1%
  • Deposits decreased $20.0 million, or 2% from June 30, 2015 as growth in commercial and retail deposits was more than offset by decreases in brokered deposits and municipal and public entity deposits
  • Level of non-performing assets decreased 8%

ST. LOUIS--()--Pulaski Financial Corp. (Nasdaq Global Select: PULB, the “Company”) reported net income available to common shareholders for the fiscal year ended September 30, 2015 of $14.1 million, or $1.17 per diluted common share compared with $10.2 million, or $0.88 per diluted common share, reported for fiscal 2014. For the quarter ended September 30, 2015, the Company reported net income available to common shareholders of $3.6 million, or $0.29 per diluted common share, compared with $4.4 million, or $0.36 per diluted common share, for the linked quarter ended June 30, 2015 and net income of $3.3 million, or $0.27 per diluted common share, for the quarter ended September 30, 2014.

Earnings for the year represent a historical high for the Company and were fueled by strong operating revenues combined with low credit costs. The Company saw a 152% increase in mortgage revenues over last year, as the demand for loans to finance home purchases remained strong. The Company saw a 42% increase in loans to finance home purchases compared with last year, representing the highest purchase money mortgage volume in over five years. In addition, low market interest rates continued to fuel strong customer demand for loans to refinance existing mortgages.

Net interest income for the year was up 5% from fiscal 2014 as the Company benefited from substantial growth in portfolio loans and residential mortgage loans held for sale. This growth more than offset a decline in the net interest margin that resulted primarily from market driven declines in loan rates. The total balance of portfolio loans increased 7% from September 30, 2014 as the result of an increase in commercial loans and residential real estate loans.

The Company continued to be successful in raising deposits while carefully managing the total cost of deposits. Total deposits increased 11% during the year, while the weighted average period-end cost of total deposits increased to 0.39% at September 30, 2015 from 0.29% at September 30, 2014.

Also increasing non-interest income during the year ended September 30, 2015 were payments received by the Company under its fidelity bond, which were related to an elaborate fraud perpetrated against the Company by one of its commercial loan customers in a prior year. The Company received $688,000 and $1.3 million from its insurance carrier during the quarters ended December 31, 2014 and June 30, 2015, respectively. The payments were equivalent to $0.11 per average diluted share after tax and represented the Company’s final settlement with its insurance carrier.

Gary Douglass, President and Chief Executive Officer, commented, “We are very pleased with both our fourth fiscal quarter and our record year of net income and earnings per share. While we do not expect to replicate the outstanding earnings growth performance of fiscal 2015 (21% excluding the insurance recovery), our goal is to deliver a modest level of earnings growth in fiscal 2016.”

Conference Call Tomorrow

Pulaski Financial’s management will discuss fiscal 2015 results and other developments tomorrow, October 28, 2015, during a conference call beginning at 11 a.m. EST (10 a.m. CST). The call will also be simultaneously webcast and archived for three months at: http://www.pulaskibank.com/our-story/shareholder-relations/. Participants in the conference call may dial 877-473-3757, conference ID 67756700, a few minutes before the start time. The call will also be available for replay for three months at 855-859-2056 or 404-537-3406, conference ID 67756700.

About Pulaski Financial

Pulaski Financial Corp., operating in its 93rd year through its subsidiary, Pulaski Bank, N.A., offers a full line of quality retail and commercial banking products through 13 full-service branch offices in the St. Louis metropolitan area. The Bank also offers mortgage loan products through loan production offices in the St. Louis, Kansas City, Chicago, and Omaha-Council Bluffs metropolitan areas, mid-Missouri, southwestern Missouri, eastern Kansas, and Lincoln, Nebraska. The Company’s website can be accessed at www.pulaskibank.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, 2014 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.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
 
      (Dollars in thousands except per share data)
       
Three Months Ended
September 30, June 30, September 30,
2015 2015 2014
Interest income $ 12,933 $ 12,837 $ 12,397
Interest expense   1,476     1,428     1,314  
 
Net interest income 11,457 11,409 11,083
Provision for loan losses   500     1,000     310  
 
Net interest income after provision for loan losses   10,957     10,409     10,773  
 
Mortgage revenues 3,103 3,106 1,134
Retail banking fees 1,094 1,078 1,119
SBA loan sale revenues 14 97 72
Proceeds from insurance settlement - 1,325 -
Other   305     444     295  
Total non-interest income   4,516     6,050     2,620  
 
Salaries and employee benefits 5,682 5,233 4,297
Occupancy, equipment and data processing expense 3,221 3,008 2,694
Advertising 182 162 164
Professional services 441 486 436
FDIC deposit insurance premium expense 229 265 289
Real estate foreclosure (recoveries) losses and expenses, net 29 85 (28 )
Other   556     613     586  
Total non-interest expense   10,340     9,852     8,438  
 
Income before income taxes 5,133 6,607 4,955
Income tax expense   1,581     2,254     1,532  
Net income after tax 3,552 4,353 3,423
Preferred stock dividends and premium paid on repurchases   -     -     (127 )
Earnings available to common shares $ 3,552   $ 4,353   $ 3,296  
 
Annualized Performance Ratios
Return on average assets 0.98 % 1.22 % 1.03 %
Return on average common equity 11.79 % 14.46 % 11.68 %
Interest rate spread 3.27 % 3.34 % 3.46 %
Net interest margin 3.38 % 3.43 % 3.56 %
 
SHARE DATA
Weighted average common shares outstanding - basic 11,883,373 11,896,781 11,671,891
Weighted average common shares outstanding - diluted 12,065,763 12,081,029 12,095,294
Basic earnings per common share $ 0.30 $ 0.37 $ 0.28
Diluted earnings per common share $ 0.29 $ 0.36 $ 0.27
Dividends per common share $ 0.095 $ 0.095 $ 0.095
 
 
 
 
 
 
PULASKI FINANCIAL CORP.
CONDENSED STATEMENTS OF INCOME, Continued
(Unaudited)
         
(Dollars in thousands except per share data)
 
Twelve Months Ended September 30,
2015 2014
Interest income $ 50,031 $ 47,427
Interest expense   5,653     5,230  
 
Net interest income 44,378 42,197
Provision for loan losses   2,000     1,210  
 
Net interest income after provision for loan losses   42,378     40,987  
 
Mortgage revenues 9,873 3,918
Retail banking fees 4,256 4,252
SBA loan sale revenues 404 72
Proceeds from insurance settlement 2,013 -
Other   1,397     1,300  
Total non-interest income   17,943     9,542  
 
Salaries and employee benefits 21,386 17,714
Occupancy, equipment and data processing expense 12,020 10,816
Advertising 709 637
Professional services 1,846 2,269
FDIC deposit insurance premiums 1,004 1,091
Real estate foreclosure (recoveries) losses and expenses, net 32 (324 )
Other   2,249     2,060  
Total non-interest expense   39,246     34,263  
 
Income before income taxes 21,075 16,266
Income tax expense   6,948     5,233  
Net income after tax 14,127 11,033
Preferred stock dividends and premium paid on repurchases   -     (810 )
Earnings available to common shares $ 14,127   $ 10,223  
 
Annualized Performance Ratios
Return on average assets 1.01 % 0.87 %
Return on average common equity 12.09 % 9.80 %
Interest rate spread 3.30 % 3.44 %
Net interest margin 3.40 % 3.54 %
 
SHARE DATA
Weighted average shares outstanding - basic 11,825,104 11,154,695
Weighted average shares outstanding - diluted 12,064,356 11,570,033
Basic earnings per common share $ 1.19 $ 0.92
Diluted earnings per common share $ 1.17 $ 0.88
Dividends per common share $ 0.38 $ 0.38
 
 
 
 
 
 
PULASKI FINANCIAL CORP.
SELECTED BALANCE SHEET DATA
(Unaudited)
 
(Dollars in thousands)
             
September 30, June 30, September 30,
2015 2015 2014
Total assets $ 1,521,694 $ 1,560,886 $ 1,380,096
Loans receivable, net 1,188,369 1,174,557 1,110,861
Allowance for loan losses 15,799 16,144 15,978
Mortgage loans held for sale, net 112,651 152,546 58,139
Investment securities 47,528 42,817 41,431
Capital stock of Federal Home Loan Bank/Federal Reserve Bank 11,156 9,831 8,268
Cash and cash equivalents 79,784 96,592 81,549
Deposits 1,137,805 1,157,731 1,021,653
Borrowed money 219,854 242,623 210,940
Subordinated debentures 19,589 19,589 19,589
Stockholders' equity - common 121,498 119,031 112,116
Total book value per common share $ 10.19 $ 9.94 $ 9.31
Tangible book value per common share (1) $ 9.86 $ 9.61 $ 8.99
Tangible common equity to total assets 7.75 % 7.39 % 7.86 %
Regulatory capital ratios - Pulaski Bank only: (2)
Tier 1 leverage capital (to average assets) 9.83 % 9.83 % 9.70 %
Total risk-based capital (to risk-weighted assets) 12.41 % 12.20 % 13.46 %
 
(1) Tangible book value per common share represents total common stockholders' equity less goodwill divided by common shares outstanding.
(2) September 30, 2015 regulatory capital ratios are estimated.
 
 
September 30, June 30, September 30,
2015 2015 2014
LOANS RECEIVABLE
Single-family residential:
First mortgage $ 318,268 $ 303,511 $ 273,370
Second mortgage 41,822 43,701 39,555
Home equity lines of credit   70,530     76,081     90,179  
Total single-family residential real estate   430,620     423,293     403,104  
Commercial:
Commercial and multi-family real estate:
Owner occupied 147,655 139,903 134,609
Non-owner occupied 253,216 261,940 261,948
Land acquisition and development 32,584 33,234 37,052
Real estate construction and development 79,390 72,234 46,777
Commercial and industrial   258,229     255,239     235,297  
Total commercial   771,074     762,550     715,683  
Consumer and installment   1,651     1,736     4,024  
1,203,345 1,187,579 1,122,811
Add (less):
Deferred loan costs 5,243 4,928 4,669
Loans in process (4,420 ) (1,806 ) (641 )
Allowance for loan losses   (15,799 )   (16,144 )   (15,978 )
Total $ 1,188,369   $ 1,174,557   $ 1,110,861  
 
Weighted average rate at end of period   3.97 %   4.00 %   4.11 %
 
 
      September 30, 2015     June 30, 2015    

September 30, 2014

    Weighted     Weighted     Weighted
Average Average Average
Interest Interest Interest
DEPOSITS Balance     Rate     Balance     Rate     Balance     Rate
Demand deposits: (Dollars in thousands)
Non-interest-bearing checking $ 203,551 0.00 % $ 198,868 0.00 % $ 189,642 0.00 %
Interest-bearing checking 225,967 0.11 % 224,527 0.12 % 222,156 0.10 %
Savings accounts 43,938 0.12 % 43,015 0.12 % 43,640 0.13 %
Money market   228,679 0.31 %   244,716 0.30 %   203,974 0.29 %
Total demand deposits   702,135 0.14 %   711,126 0.15 %   659,412 0.13 %
 
Certificates of Deposit:
Traditional 323,593 0.88 % 315,471 0.82 % 273,349 0.66 %
CDARS 82,106 0.50 % 91,149 0.44 % 44,794 0.31 %
Brokered   29,971 0.59 %   39,985 0.41 %   44,098 0.39 %
Total certificates of deposit   435,670 0.79 %   446,605 0.70 %   362,241 0.59 %
Total deposits $ 1,137,805 0.39 % $ 1,157,731 0.36 % $ 1,021,653 0.29 %
 
 
 
 
 
 
PULASKI FINANCIAL CORP.
RESIDENTIAL MORTGAGE LOAN ACTIVITY
(Unaudited)
                             
RESIDENTIAL MORTGAGE LOANS ORIGINATED FOR SALE
 
Twelve Months Ended Twelve Months Ended
September 30, 2015 September 30, 2014
Mortgage Home Mortgage Home
Refinancings Purchases Total Refinancings Purchases Total
(In thousands)
First quarter $ 94,694 $ 167,472 $ 262,166 $ 29,996 $ 136,423 $ 166,419
Second quarter $ 209,458 $ 153,486 $ 362,944 $ 24,376 $ 98,065 $ 122,441
Third quarter $ 161,475 $ 277,467 $ 438,942 $ 28,212 $ 186,716 $ 214,928
Fourth quarter $ 124,604 $ 277,831 $ 402,435   $ 37,657 $ 197,096 $ 234,753  
$ 590,231 $ 876,256 $ 1,466,487   $ 120,241 $ 618,300 $ 738,541  
 
RESIDENTIAL MORTGAGE LOANS SOLD TO INVESTORS
 
Twelve Months Ended Twelve Months Ended
September 30, 2015 September 30, 2014
Net Net
Loans Mortgage Profit Loans Mortgage Profit
Sold Revenues Margin Sold Revenues Margin
(Dollars in thousands)
First quarter $ 229,565 $ 1,474 0.64 % $ 179,919 $ 1,033 0.57 %
Second quarter $ 337,890 $ 2,189 0.65 % $ 136,231 $ 507 0.37 %
Third quarter $ 387,113 $ 3,107 0.80 % $ 188,431 $ 1,245 0.66 %
Fourth quarter $ 433,467 $ 3,103   0.72 % $ 237,043 $ 1,133   0.48 %
$ 1,388,035 $ 9,873   0.71 % $ 741,624 $ 3,918   0.53 %
 
 
 
 
 
 
PULASKI FINANCIAL CORP.
NONPERFORMING ASSETS
(Unaudited)
           
(In thousands)
 
September 30, June 30, September 30,
NON-PERFORMING ASSETS 2015 2015 2014
Non-accrual loans:
Single-family residential real estate:
First mortgage $ 2,821 $ 2,234 $ 4,026
Second mortgage 651 623 354
Home equity lines of credit   1,533   1,373   1,479
  5,005   4,230   5,859
Commercial:
Commercial and multi-family real estate 230 374 457
Land acquisition and development - - 3,734
Commercial and industrial   304   309   348
Total commercial   534   683   4,539
Total non-accrual loans   5,539   4,913   10,398
 
Non-Accrual Troubled debt restructurings: (1)
Current under the restructured terms:
Single-family residential real estate:
First mortgage 4,697 6,288 4,668
Second mortgage 777 806 1,126
Home equity lines of credit   763   986   741
Total single-family residential real estate   6,237   8,080   6,535
Commercial:
Commercial and multi-family real estate 3,211 3,287 3,335
Real estate construction and development - 13 -
Commercial and industrial   321   339   1,102
Total commercial   3,532   3,639   4,437
Consumer and installment   -   2   13
Total current troubled debt restructurings   9,769   11,721   10,985
Past due under restructured terms:
Single-family residential real estate:
First mortgage 1,879 1,286 3,477
Second mortgage 167 163 483
Home equity lines of credit   208   102   395
Total single-family residential real estate   2,254   1,551   4,355
Commercial:
Commercial and multi-family real estate - 358 669
Land acquisition and development - - 38
Real estate construction and development 12 - 39
Commercial and industrial   -   -   488
Total commercial   12   358   1,234
Total past due troubled debt restructurings   2,266   1,909   5,589
Total non-accrual troubled debt restructurings   12,035   13,630   16,574
Total non-performing loans   17,574   18,543   26,972
Real estate acquired in settlement of loans:
Residential real estate 744 1,162 2,631
Commercial real estate   4,407   5,063   3,171
Total real estate acquired in settlement of loans   5,151   6,225   5,802
Total non-performing assets $ 22,725 $ 24,768 $ 32,774
 

(1) Troubled debt restructured includes non-accrual loans totaling $12.0 million, $13.6 million and $16.6 million at September 30, 2015, June 30, 2015 September 30, 2014, respectively. These totals are not included in non-accrual loans above.

 
 
 
 
 
 
PULASKI FINANCIAL CORP.
ALLOWANCE FOR LOAN LOSSES AND ASSET QUALITY RATIOS
(Unaudited)
                   
(Dollars in thousands)
 
Three Months Twelve Months
Ended September 30, Ended September 30,
ALLOWANCE FOR LOAN LOSSES 2015 2014 2015 2014
Allowance for loan losses, beginning of period $ 16,144 $ 16,830 $ 15,978 $ 18,306
Provision charged to expense 500 310 2,000 1,210
Charge-offs:
Single-family residential real estate:
First mortgage 249 271 806 1,772
Second mortgage 118 119 398 618
Home equity   244     328     1,096     1,577
Total single-family residential real estate   611     718     2,300     3,967
Commercial:
Commercial and multi-family real estate 359 31 359 15
Land acquisition and development - 859 - 1,883
Commercial and industrial   3     -     61     1
Total commercial   362     890     420     1,899
Consumer and installment   78     47     227     128
Total charge-offs   1,051     1,655     2,947     5,994
Recoveries:
Single-family residential real estate:
First mortgage 63 5 158 396
Second mortgage 50 15 189 92
Home equity   78     86     247     323
Total single-family residential real estate   191     106     594     811
Commercial:
Commercial and multi-family real estate 2 2 92 765
Land acquisition and development - - 8 1
Real estate construction and development - - 4 -
Commercial and industrial   7     377     43     848
Total commercial   9     379     147     1,614
Consumer and installment   6     8     27     31
Total recoveries   206     493     768     2,456
Net charge-offs   845     1,162     2,179     3,538
Balance, end of period $ 15,799   $ 15,978   $ 15,799   $ 15,978
 
 
 
September 30, June 30, September 30,
ASSET QUALITY RATIOS 2015 2015 2014
Non-performing loans as a percent of total loans 1.46 % 1.56 % 2.40 %

Non-performing loans excluding current troubled debt restructurings as a percent of total loans

0.65 % 0.57 % 1.42 %
Non-performing assets as a percent of total assets 1.49 % 1.59 % 2.37 %

Non-performing assets excluding current troubled debt restructurings as a percent of total assets

0.85 % 0.84 % 1.58 %
Allowance for loan losses as a percent of total loans 1.31 % 1.36 % 1.42 %

Allowance for loan losses as a percent of non-performing loans

89.90 % 87.06 % 59.24 %

Allowance for loan losses as a percent of non-performing loans excluding current troubled debt restructurings and related allowance for loan losses

197.40 % 228.81 % 97.06 %
 
 
 
 
 
PULASKI FINANCIAL CORP.
AVERAGE BALANCE SHEETS
(Unaudited)
                             
(Dollars in thousands)
 
Three Months Ended
September 30, 2015 September 30, 2014
Interest Average Interest Average
Average and Yield/ Average and Yield/
Interest-earning assets: Balance     Dividends     Cost Balance     Dividends     Cost
Loans receivable $ 1,176,764 $ 11,623 3.95 % $ 1,117,601 $ 11,509 4.12 %
Mortgage loans held for sale 115,358 1,169 4.05 % 72,628 776 4.27 %
Other interest-earning assets   65,594       141 0.86 %   56,251       112 0.80 %
Total interest-earning assets 1,357,716   12,933 3.81 % 1,246,480   12,397 3.98 %
Non-interest-earning assets   88,061   86,304
Total assets $ 1,445,777 $ 1,332,784
 
Interest-bearing liabilities:
Deposits $ 957,552 $ 1,166 0.49 % $ 822,486 $ 820 0.40 %
Borrowed money   142,488       310 0.87 %   193,443       494 1.02 %
Total interest-bearing liabilities 1,100,040   1,476 0.54 % 1,015,929   1,314 0.52 %
Non-interest-bearing deposits 204,817 188,000
Non-interest-bearing liabilities

20,395

13,828
Stockholders' equity  

120,525

  115,027
Total liabilities and stockholders' equity $ 1,445,777 $ 1,332,784
Net interest income $ 11,457 $ 11,083
Interest rate spread 3.27 % 3.46 %
Net interest margin 3.38 % 3.56 %
 
 
 
(Dollars in thousands)
 
Twelve Months Ended
September 30, 2015 September 30, 2014
Interest Average Interest Average
Average and Yield/ Average and Yield/
Interest-earning assets: Balance     Dividends     Cost Balance     Dividends     Cost
Loans receivable $ 1,144,864 $ 45,799 4.00 % $ 1,053,709 $ 44,822 4.25 %
Mortgage loans held for sale 95,638 3,777 3.95 % 51,838 2,195 4.23 %
Other interest-earning assets   65,532       455 0.69 %   85,832       410 0.48 %
Total interest-earning assets 1,306,034   50,031 3.83 % 1,191,379   47,427 3.98 %
Non-interest-earning assets   88,452   83,341
Total assets $ 1,394,486 $ 1,274,720
 
Interest-bearing liabilities:
Deposits $ 920,649 $ 4,168 0.45 % $ 840,398 $ 3,514 0.42 %
Borrowed money   143,546       1,485 1.03 %   127,529       1,716 1.35 %
Total interest-bearing liabilities 1,064,195   5,653 0.53 % 967,927   5,230 0.54 %
Non-interest-bearing deposits 195,959 180,896
Non-interest-bearing liabilities

17,470

12,410
Stockholders' equity  

116,862

  113,487
Total liabilities and stockholders' equity $ 1,394,486 $ 1,274,720
Net interest income $ 44,378 $ 42,197
Interest rate spread 3.30 % 3.44 %
Net interest margin 3.40 % 3.54 %
 
 
 
 

Contacts

Pulaski Financial Corp.
Paul Milano, 314-878-2210
Chief Financial Officer

Contacts

Pulaski Financial Corp.
Paul Milano, 314-878-2210
Chief Financial Officer