Pulaski Financial Reports 45% Increase in Third Fiscal Quarter EPS

Before you go, we thought you'd like these...
Before you go close icon

Pulaski Financial Reports 45% Increase in Third Fiscal Quarter EPS

Current Versus Prior Year Quarter Highlights

  • Earnings growth
    • Diluted EPS $0.29 in 2013 versus $0.20 in 2012
    • Annualized return on average assets 1.11% in 2013 versus 0.84% in 2012
    • Annualized return on average common equity 12.97% in 2013 versus 9.46% in 2012
  • 43% increase in mortgage revenues
  • 48% decline in combined provision for loan losses and foreclosure costs

Linked Quarter Highlights

  • 9% increase in mortgage revenues
  • $5 million, or 1%, increase in commercial loans
  • Net interest income declines modestly; commercial loan growth only partially offsets impact of market-driven yield declines and expected legacy residential mortgage portfolio runoff
  • Continued improvement in asset quality
    • Non-performing assets down $1.9 million, or 4%, to 3.2% of total assets
    • Internal adversely classified assets decreased 3% to approximately 40% of regulatory capital plus the allowance for loan losses
    • Percentage of loans that were 31 to 89 days past due on payments remained low and almost constant at approximately 1% of gross loans

ST. LOUIS--(BUSINESS WIRE)-- Pulaski Financial Corp. (Nasdaq Global Select: PULB) reported net income available to common shares for the quarter ended June 30, 2013 of $3.2 million, or $0.29 per diluted common share, compared with $2.2 million, or $0.20 per diluted common share, for the quarter ended June 30, 2012. For the nine-month periods, the Company reported net income available to common shares of $9.2 million, or $0.83 per diluted common share, in 2013 compared with net income of $5.6 million, or $0.51 per diluted common share, in 2012.

Gary Douglass, President and Chief Executive Officer, commented, "We are very pleased with our third fiscal quarter results. We saw a significant increase in mortgage revenues driven by the recovering housing market. Our asset quality continued to improve, showing meaningful declines in non-performing and internally classified assets. And finally, despite a challenging and generally low growth environment, we saw our third consecutive quarter of commercial loan growth."

Net Interest Income Declines Modestly

Net interest income was $11.2 million for the quarter ended June 30, 2013 compared with $11.5 million for the quarter ended March 31, 2013 and $11.6 million for the quarter ended June 30, 2012. The decreases were primarily the result of declines in the net interest margin combined with a change in the mix of interest-earning assets. The net interest margin was 3.65% for the quarter ended June 30, 2013 compared with 3.67% for the March 2013 quarter and 3.84% for the June 2012 quarter.

Douglass commented, "We were encouraged to see another quarter of commercial loan growth. Unfortunately, this growth was not sufficient to offset the expected shrinkage in our legacy residential loan portfolio caused mainly by the decreasing balances in our home equity line of credit portfolio, resulting in slight shrinkage in our total portfolio level. We were also encouraged to see our net interest margin remain almost unchanged on a linked-quarter basis despite the significant industry-wide headwinds we faced during the quarter as we continued to feel the effect of the market-driven yield declines on new and renewing loans."

Mortgage Revenues Showed a Substantial Increase on Improved Profit Margins and Higher Loan Sales Volumes

Primarily as the result of increased mortgage revenues, non-interest income increased to $4.9 million for the quarter ended June 30, 2013 compared with $4.1 million for the quarter ended June 30, 2012. Mortgage revenues were $3.4 million on loan sales of $355 million for the quarter ended June 30, 2013 compared with $2.4 million on loan sales of $342 million for the quarter ended June 30, 2012. The Company also saw a 9% increase in linked-quarter mortgage revenues.

Mortgage loans originated for sale totaled $358 million for the quarter ended June 30, 2013 compared with $350 million for the quarter ended June 30, 2012. The Company continued to experience strong demand for loans to finance the purchase of homes. Mortgage loans originated to finance the purchase of homes totaled $225 million, or 63% of total loans originated for sale, during the quarter ended June 30, 2013 compared with $200 million, or 57% of total loans originated for sale, for the quarter ended June 30, 2012.

The net profit margin on loans sold improved to 0.97% for the quarter ended June 30, 2013 compared with 0.70% for the June 30, 2012 quarter and 0.90% for the March 2013 quarter. The increases were primarily the result of strong selling prices realized from the Company's mortgage loan investors and the continued control of costs to originate such loans. Mortgage loans held for sale increased to $144.6 million at June 30, 2013 compared with $144.0 million at March 31, 2013.

Douglass noted, "We experienced another quarter of strong loan demand that helped us achieve our ninth consecutive quarterly increase in mortgage revenues. The recovering housing market had a dramatic impact on the mix of our origination activity during the quarter. The total dollar volume of loans originated to finance home purchases reached its highest level in 14 quarters."

Asset Quality Continued to Improve

Non-performing assets decreased to $42.9 million, or 3.2% of total assets, at June 30, 2013 from $44.9 million, or 3.3% of total assets, at March 31, 2013. In addition, the balance of internal adversely classified assets decreased approximately 3% from March 31, 2013 to June 30, 2013, resulting in the seventh consecutive quarterly decline in this category.

The provision for loan losses for the three months ended June 30, 2013 was $1.8 million compared with $1.4 million for the three months ended March 31, 2013. The increased provision was primarily the result of a higher level of net charge-offs. Net charge-offs for the quarter ended June 30, 2013 totaled $1.8 million compared with $724,000 for the March 2013 quarter.

Other News - Results of At-The-Market Common Stock Offering

The Company previously announced on May 7, 2013, that it had filed a prospectus supplement under which it planned from time to time sell up to $10,000,000 of its common stock pursuant to an "at-the-market" equity offering program. During the quarter ended June 30, 2013, the Company sold 13,653 shares of its common stock under the program through Sandler O'Neill & Partners, L.P. as sales agent. Sales were made in "at-the-market" offerings directly on The Nasdaq Global Select Market at an average price of $10.60 resulting in net proceeds to the Company totaling $140,000.

Conclusion / Outlook

Douglass stated, "For our fourth fiscal quarter of 2013, we expect to see additional asset quality improvement resulting in the continuing normalization of credit costs. We will remain focused on increasing our residential mortgage market share to capitalize on increasing home purchase activity and help minimize the revenue impact of potentially lower demand for mortgage refinancings caused by a higher interest rate environment. We will also concentrate on a continuation of commercial loan growth. And finally, we expect to continue to implement our capital management strategy by repurchasing additional preferred shares with available cash and excess capital."

Conference Call Tomorrow

Pulaski Financial's management will discuss third fiscal quarter results and other developments tomorrow, July 31, 2013, during a conference call beginning at 11 a.m. EDT (10 a.m. CDT). The call will also be simultaneously webcast and archived for three months at: http://pulaskibank.com/corporate-profile.aspx. Participants in the conference call may dial 877-473-3757, conference ID 42945640, a few minutes before the start time. The call will also be available for replay through August 31, 2013 at 855-859-2056 or 404-537-3406, conference ID 42945640.

About Pulaski Financial

Pulaski Financial Corp., operating in its 91st year through its subsidiary, Pulaski Bank, 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 and Kansas City metropolitan areas, mid-Missouri, southwestern Missouri, eastern Kansas, Omaha, Nebraska, and Council Bluffs, Iowa. 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, 2012 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
June 30,March 31,June 30,
201320132012
Interest income$12,707$13,176$13,663
Interest expense 1,545  1,687  2,016 
 
Net interest income11,16211,48911,647
Provision for loan losses 1,800  1,375  3,000 
 
Net interest income after provision for loan losses 9,362  10,114  8,647 
 
Retail banking fees9989941,002
Mortgage revenues3,4443,1482,410
Investment brokerage revenues185264350
Other 287  230  340 
Total non-interest income 4,914  4,636  4,102 
 
Salaries and employee benefits4,4144,4133,773
Occupancy, equipment and data processing expense2,6642,5452,330
Advertising157111168
Professional services569801844
Real estate foreclosure losses and expense, net112240436
FDIC deposit insurance premium expense265276650
Other 617  720  589 
Total non-interest expense 8,798  9,106  8,790 
 
Income before income taxes5,4785,6443,959
Income tax expense 1,870  1,992  1,213 
Net income after tax3,6083,6522,746
Preferred stock dividends (373) (406) (518)
Earnings available to common shares$3,235 $3,246 $2,228 
 
Annualized Performance Ratios
Return on average assets1.11%1.09%0.84%
Return on average common equity12.97%13.36%9.46%
Interest rate spread3.54%3.55%3.70%
Net interest margin3.65%3.67%3.84%
 
SHARE DATA
Weighted average shares outstanding - basic10,914,91310,916,52210,709,072
Weighted average shares outstanding - diluted11,147,04911,136,80111,121,025
Basic earnings per common share$0.30$0.30$0.21
Diluted earnings per common share$0.29$0.29$0.20
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)
 
Nine Months Ended June 30,
20132012
Interest income$39,496$42,297
Interest expense 5,038  6,714 
 
Net interest income34,45835,583
Provision for loan losses 5,240  11,500 
 
Net interest income after provision for loan losses 29,218  24,083 
 
Retail banking fees3,1452,982
Mortgage revenues9,5805,994
Investment brokerage revenues7421,120
Other 798  976 
Total non-interest income 14,265  11,072 
 
Salaries and employee benefits13,39311,297
Occupancy, equipment and data processing expense7,5696,840
Advertising388381
Professional services1,9241,674
Real estate foreclosure losses and expenses, net1,5661,783
FDIC deposit insurance premiums9751,318
Other 1,946  1,571 
Total non-interest expense 27,761  24,864 
 
Income before income taxes15,72210,291
Income tax expense 5,334  3,134 
Net income after tax10,3887,157
Preferred stock dividends (1,185) (1,553)
Earnings available to common shares$9,203 $5,604 
 
Annualized Performance Ratios
Return on average assets1.05%0.73%
Return on average common equity12.58%8.05%
Interest rate spread3.60%3.74%
Net interest margin3.73%3.89%
 
SHARE DATA
Weighted average shares outstanding - basic10,881,98610,657,747
Weighted average shares outstanding - diluted11,116,47911,087,851
Basic earnings per common share$0.85$0.53
Diluted earnings per common share$0.83$0.51
Dividends per common share$0.285$0.285
 
     
PULASKI FINANCIAL CORP.
BALANCE SHEET DATA
(Unaudited)
 
(Dollars in thousands)
 
June 30,March 31,September 30,
201320132012 Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Gift Finder Promo
More to Explore
Sat, Dec 10
Set Your Location
City, State, or Zip