Pulaski Financial Reports 44% Increase in Third Fiscal Quarter EPS

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July 28, 2015 6:00 PM EDT
  • Diluted EPS were $0.36 in June 2015 quarter versus $0.25 in same quarter last year and $0.88 for nine months ended June 30, 2015 versus $0.61 last year
  • Annualized return on average assets improved to 1.22% in June 2015 quarter compared with 0.95% in last year’s quarter
  • Annualized return on average common equity for June 2015 quarter increased to 14.46% versus 10.89% in June 2014 quarter
  • Mortgage revenues up sharply from prior year quarter 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 quarter as the result of substantial growth in average loan balances partially offset by a decline in the net interest margin
  • Loan portfolio balance at June 30, 2015 up 7% from same time last year, and up 6% from March 31, 2015 on increases in commercial and residential loans
  • Deposits increased 3% from March 31, 2015 on substantial growth in retail and municipal and public entity deposits
  • Additional 9% decrease in the balance of non-performing assets from March 31, 2015 dropped the ratio of non-performing assets to total assets to 1.59%
  • Book value per common share grew to $9.94 at June 30, 2015 from $9.67 at March 31, 2015
  • The Company received an additional $1.3 million final insurance settlement related to a fraud perpetrated against the Company by one of its commercial loan customers in a prior year

ST. LOUIS--(BUSINESS WIRE)-- Pulaski Financial Corp. (Nasdaq Global Select: PULB, the “Company”) reported net income available to common shareholders for the quarter ended June 30, 2015 of $4.4 million, or $0.36 per diluted common share, compared with $2.8 million, or $0.25 per diluted common share, for the same quarter last year. For the nine months ended June 30, 2015, net income available to common shareholders was $10.6 million, or $0.88 per diluted common share, compared with $6.9 million, or $0.61 per diluted common share, for the same period last year.

The Company reported another quarter of significantly higher returns compared with the same prior-year quarter. The annualized return on average assets increased to 1.22%, up 27 basis points from 0.95% reported in last year’s quarter. The annualized average return on common equity increased to 14.46%, up 357 basis points from 10.89% reported for the quarter ended June 30, 2014.

Earnings for the quarter were marked by a 150% increase in mortgage revenues over the same quarter last year, as the demand for loans to finance home purchases remained strong. The Company saw a 49% increase in loans to finance home purchases compared with last year’s quarter, 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.

Also increasing non-interest income during the June 2015 quarter was a $1.3 million payment received by the Company under its fidelity bond, which was related to an elaborate fraud perpetrated against the Company by one of its commercial loan customers in a prior year. This was equivalent to $0.07 per average diluted share after tax and represented the Company’s final settlement with its insurance carrier. The Company previously recorded a $688,000 insurance recovery in the quarter ending December 31, 2014 bringing the total amount of insurance settlement for this matter to $2.0 million, or $0.11 per average diluted share.

Net interest income for the quarter was up 5% from the June 2014 quarter 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 6% from March 31, 2015 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 3% during the quarter, while the weighted average period-end cost of total deposits increased to 0.36% at June 30, 2015 from 0.34% at March 31, 2015.

Gary Douglass, President and Chief Executive Officer, commented, “We are very pleased with our quarterly results driven by strong loan portfolio growth, significant growth in mortgage-related revenues and a continuation of low net credit costs.”

Douglass concluded, “We expect to end our fiscal year with another strong earnings performance which should approximate the earnings reported in the current quarter, exclusive of the insurance recovery.”

Conference Call Tomorrow

Pulaski Financial’s management will discuss third quarter results and other developments tomorrow, July 29, 2015, 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://www.pulaskibank.com/our-story/shareholder-relations/. Participants in the conference call may dial 877-473-3757, conference ID 67756699, a few minutes before the start time. The call will also be available for replay through August 29, 2015 at 855-859-2056 or 404-537-3406, conference ID 67756699.

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, and Chicago 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, 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
June 30, March 31, June 30,
2015 2015 2014
Interest income $ 12,837 $ 12,037 $ 12,157
Interest expense   1,428     1,375     1,280  
Net interest income 11,409 10,662 10,877
Provision for loan losses   1,000     -     200  
Net interest income after provision for loan losses   10,409     10,662     10,677  
Mortgage revenues 3,106 2,189 1,245
Retail banking fees 1,078 1,030 1,099
SBA loan sale revenues 97 113 -
Proceeds from insurance settlement 1,325 - -
Other   444     329     252  
Total non-interest income   6,050     3,661     2,596  
Salaries and employee benefits 5,233 5,501 4,651
Occupancy, equipment and data processing expense 3,008 2,997 2,762
Advertising 162 194 167
Professional services 486 422 508
FDIC deposit insurance premium expense 265 251 278
Real estate foreclosure (recoveries) losses and expenses, net 85 (159 ) (11 )
Other   613     523     531  
Total non-interest expense   9,852     9,729     8,886  
Income before income taxes 6,607 4,594 4,387
Income tax expense   2,254     1,506     1,382  
Net income after tax 4,353 3,088 3,005
Preferred stock dividends and premium paid on repurchases   -     -     (201 )
Earnings available to common shares $ 4,353   $ 3,088   $ 2,804  
 
Annualized Performance Ratios
Return on average assets 1.22 % 0.91 % 0.95 %
Return on average common equity 14.46 % 10.48 % 10.89 %
Interest rate spread 3.34 % 3.27 % 3.58 %
Net interest margin 3.43 % 3.36 % 3.68 %
 
SHARE DATA
Weighted average common shares outstanding - basic 11,896,781 11,805,494 11,023,167
Weighted average common shares outstanding - diluted 12,081,029 12,115,757 11,418,794
Basic earnings per common share $0.37 $0.26 $0.25
Diluted earnings per common share $0.36 $0.25 $0.25
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,
2015 2014
Interest income $ 37,098 $ 35,030
Interest expense   4,177     3,916  
Net interest income 32,921 31,114
Provision for loan losses   1,500     900  
Net interest income after provision for loan losses   31,421     30,214  
Mortgage revenues 6,770 2,784
Retail banking fees 3,163 3,133
SBA loan sale revenues 390 -
Proceeds from insurance settlement 2,013 -
Other   1,091     1,005  
Total non-interest income   13,427     6,922  
Salaries and employee benefits 15,704 13,416
Occupancy, equipment and data processing expense 8,799 8,122
Advertising 527 473
Professional services 1,405 1,833
FDIC deposit insurance premiums 776 802
Real estate foreclosure (recoveries) losses and expenses, net 3 (296 )
Other   1,692     1,474  
Total non-interest expense   28,906     25,824  
Income before income taxes 15,942 11,312
Income tax expense   5,366     3,701  
Net income after tax 10,576 7,611
Preferred stock dividends and premium paid on repurchases   -     (684 )
Earnings available to common shares $ 10,576   $ 6,927  
 
Annualized Performance Ratios
Return on average assets 1.02 % 0.81 %
Return on average common equity 11.98 % 9.11 %
Interest rate spread 3.31 % 3.43 %
Net interest margin 3.41 % 3.54 %
 
SHARE DATA
Weighted average shares outstanding - basic 11,805,467 10,980,401
Weighted average shares outstanding - diluted 12,072,117 11,373,371
Basic earnings per common share $0.90 $0.63
Diluted earnings per common share $0.88 $0.61
Dividends per common share $0.285 $0.285
 
               
PULASKI FINANCIAL CORP.
SELECTED BALANCE SHEET DATA
(Unaudited)
 
(Dollars in thousands)
 
June 30, March 31, September 30,
2015 2015 2014
Total assets $ 1,560,886 $ 1,383,450 $ 1,380,096
Loans receivable, net 1,174,557 1,113,271 1,110,861
Allowance for loan losses 16,144 15,704 15,978
Mortgage loans held for sale, net 152,546 101,993 58,139
Investment securities 42,817 45,757 41,431
Capital stock of Federal Home Loan Bank 9,831 4,271 8,268
Cash and cash equivalents 96,592 34,407 81,549
Deposits 1,157,731 1,126,396 1,021,653
Borrowed money 242,623 102,345 210,940
Subordinated debentures 19,589 19,589 19,589
Stockholders' equity - common 119,031 116,449 112,116
Total book value per common share $9.94 $9.67 $9.31
Tangible book value per common share (1) $9.61 $9.34 $8.99
Tangible common equity to total assets 7.39 % 8.16 % 7.86 %
Regulatory capital ratios - Pulaski Bank only: (2)
Tier 1 leverage capital (to average assets) 9.83 % 10.11 % 9.70 %
Total risk-based capital (to risk-weighted assets) 12.20 % 12.71 % 13.46 %
 
(1) Tangible book value per common share represents total common stockholders' equity less goodwill divided by common shares outstanding.
(2) June 30, 2015 regulatory capital ratios are estimated.
 
June 30, March 31, September 30,
2015 2015 2014
LOANS RECEIVABLE
Single-family residential:
First mortgage $ 303,511 $ 276,731 $ 273,370
Second mortgage 43,701 40,029 39,555
Home equity lines of credit   76,081     80,961     90,179  
Total single-family residential real estate   423,293     397,721     403,104  
Commercial:
Commercial and multi-family real estate:
Owner occupied 139,903 129,929 134,609
Non-owner occupied 261,940 261,520 261,948
Land acquisition and development 33,234 32,133 37,052
Real estate construction and development 72,234 62,398 46,777
Commercial and industrial   255,239     238,769     235,297  
Total commercial   762,550     724,749     715,683  
Consumer and installment   1,736     2,969     4,024  
1,187,579 1,125,439 1,122,811
Add (less):
Deferred loan costs 4,928 4,752 4,669
Loans in process (1,806 ) (1,216 ) (641 )
Allowance for loan losses   (16,144 )   (15,704 )   (15,978 )
Total $ 1,174,557   $ 1,113,271   $ 1,110,861  
 
Weighted average rate at end of period   4.00 %   4.04 %   4.11 %
 
 

June 30, 2015

 

March 31, 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 $ 198,868 0.00 % $ 189,107 0.00 % $ 189,642 0.00 %
Interest-bearing checking 224,527 0.12 % 231,111 0.12 % 222,156 0.10 %
Savings accounts 43,015 0.12 % 43,041 0.13 % 43,640 0.13 %
Money market   244,716   0.30 %   237,422   0.29 %   203,974   0.29 %
Total demand deposits   711,126   0.15 %   700,681   0.15 %   659,412   0.13 %
 
Certificates of Deposit:
Traditional 315,471 0.82 % 311,864 0.77 % 273,349 0.66 %
CDARS 91,149 0.44 % 73,876 0.40 % 44,794 0.31 %
Brokered   39,985   0.41 %   39,975   0.42 %   44,098   0.39 %
Total certificates of deposit   446,605   0.70 %   425,715   0.67 %   362,241   0.59 %
Total deposits $ 1,157,731   0.36 % $ 1,126,396   0.34 % $ 1,021,653   0.29 %
 
 
PULASKI FINANCIAL CORP.
RESIDENTIAL MORTGAGE LOAN ACTIVITY
(Unaudited)
                       
RESIDENTIAL MORTGAGE LOANS ORIGINATED FOR SALE
 
Nine Months Ended Nine Months Ended
June 30, 2015 June 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 $ 277,466 $ 438,941 $ 28,212 $ 186,716 $ 214,928
 
 
 
RESIDENTIAL MORTGAGE LOANS SOLD TO INVESTORS
 
Nine Months Ended Nine Months Ended
June 30, 2015 June 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 $ 3,106 0.80 % $ 188,431 $ 1,245 0.66 %
 
 
PULASKI FINANCIAL CORP.
NONPERFORMING ASSETS
(Unaudited)
           
(In thousands)
 
June 30, March 31, September 30,
NON-PERFORMING ASSETS 2015 2015 2014
Non-accrual loans:
Single-family residential real estate:
First mortgage $ 2,234 $ 3,231 $ 4,026
Second mortgage 623 567 354
Home equity lines of credit   1,373   1,861   1,479
  4,230   5,659   5,859
Commercial:
Commercial and multi-family real estate 374 279 457
Land acquisition and development - - 3,734
Commercial and industrial   309   302   348
Total commercial   683   581   4,539
Consumer and installment   -   49   -
Total non-accrual loans   4,913   6,289   10,398
 

Non-Accrual Troubled debt restructurings: (1)

Current under the restructured terms:
Single-family residential real estate:
First mortgage 6,288 4,825 4,668
Second mortgage 806 1,026 1,126
Home equity lines of credit   986   997   741
Total single-family residential real estate   8,080   6,848   6,535
Commercial:
Commercial and multi-family real estate 3,287 3,385 3,335
Real estate construction and development 13 13 -
Commercial and industrial   339   904   1,102
Total commercial   3,639   4,302   4,437
Consumer and installment   2   6   13
Total current troubled debt restructurings   11,721   11,156   10,985
Past due under restructured terms:
Single-family residential real estate:
First mortgage 1,286 2,087 3,477
Second mortgage 163 492 483
Home equity lines of credit   102   224   395
Total single-family residential real estate   1,551   2,803   4,355
Commercial:
Commercial and multi-family real estate 358 388 669
Land acquisition and development - 38 38
Real estate construction and development - - 39
Commercial and industrial   -   -   488
Total commercial   358   426   1,234
Total past due troubled debt restructurings   1,909   3,229   5,589
Total non-accrual troubled debt restructurings   13,630   14,385   16,574
Total non-performing loans   18,543   20,674   26,972
Real estate acquired in settlement of loans:
Residential real estate 1,162 993 2,631
Commercial real estate   5,063   5,699   3,171
Total real estate acquired in settlement of loans   6,225   6,692   5,802
Total non-performing assets $ 24,768 $ 27,366 $ 32,774
 

(1)

Troubled debt restructured includes non-accrual loans totaling $13.6 million, $14.4 million and $16.6 million at June 30, 2015, March 31, 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 Nine Months
Ended June 30, Ended June 30,
ALLOWANCE FOR LOAN LOSSES 2015 2014 2015 2014
Allowance for loan losses, beginning of period $ 15,704 $ 16,829 $ 15,978 $ 18,306
Provision charged to expense 1,000 200 1,500 900
Charge-offs:
Single-family residential real estate:
First mortgage 227 526 557 1,500
Second mortgage 33 131 280 500
Home equity   424     237     852     1,249
Total single-family residential real estate   684     894     1,689     3,249
Commercial:
Land acquisition and development - - - 1,027
Commercial and industrial   20     -     57     1
Total commercial   20     -     57     1,028
Consumer and installment   45     26     150     81
Total charge-offs   749     920     1,896     4,358
Recoveries:
Single-family residential real estate:
First mortgage 32 199 95 391
Second mortgage 34 19 140 77
Home equity   38     7     168     237
Total single-family residential real estate   104     225     403     705
Commercial:
Commercial and multi-family real estate 67 485 91 778
Land acquisition and development - 4 8 4
Real estate construction and development - - 3 -
Commercial and industrial   12     1     36     472
Total commercial   79     490     138     1,254
Consumer and installment   6     6     21     23
Total recoveries   189     721     562     1,982
Net charge-offs   560     199     1,334     2,376
Balance, end of period $ 16,144   $ 16,830   $ 16,144   $ 16,830
 
 
June 30, March 31, September 30,
ASSET QUALITY RATIOS 2015 2015 2014
Non-performing loans as a percent of total loans 1.56 % 1.84 % 2.40 %

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

0.57 % 0.85 % 1.42 %
Non-performing assets as a percent of total assets 1.59 % 1.98 % 2.37 %

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

0.84 % 1.17 % 1.58 %
Allowance for loan losses as a percent of total loans 1.36 % 1.40 % 1.42 %

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

87.06 % 75.96 % 59.24 %

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

228.81 % 159.70 % 97.06 %
 
 
PULASKI FINANCIAL CORP.
AVERAGE BALANCE SHEETS
(Unaudited)
               
(Dollars in thousands)
Three Months Ended
June 30, 2015 June 30, 2014
Interest Average Interest Average
Average and Yield/ Average and Yield/
Interest-earning assets: Balance   Dividends   Cost Balance   Dividends   Cost
Loans receivable $ 1,148,455 $ 11,587 4.04 % $ 1,067,823 $ 11,578 4.34 %
Mortgage loans held for sale 119,282 1,148 3.85 % 44,718 488 4.36 %
Other interest-earning assets   63,126     102 0.65 %   71,262     91 0.51 %
Total interest-earning assets 1,330,863   12,837 3.86 % 1,183,803   12,157 4.11 %
Non-interest-earning assets   93,492   87,326
Total assets $ 1,424,355 $ 1,271,129
 
Interest-bearing liabilities:
Deposits $ 959,058 $ 1,122 0.47 % $ 831,497 $ 829 0.40 %
Borrowed money   136,051     306 0.90 %   133,341     451 1.35 %
Total interest-bearing liabilities 1,095,109   1,428 0.52 % 964,838   1,280 0.53 %
Non-interest-bearing deposits 191,516 184,362
Non-interest-bearing liabilities 17,305 11,576
Stockholders' equity   120,425   110,353
Total liabilities and stockholders' equity $ 1,424,355 $ 1,271,129
Net interest income $ 11,409 $ 10,877
Interest rate spread 3.34 % 3.58 %
Net interest margin 3.43 % 3.68 %
 
 
 
(Dollars in thousands)
Nine Months Ended
June 30, 2015 June 30, 2014
Interest Average Interest Average
Average and Yield/ Average and Yield/
Interest-earning assets: Balance   Dividends   Cost Balance   Dividends   Cost
Loans receivable $ 1,134,114 $ 34,175 4.02 % $ 1,032,178 $ 33,313 4.30 %
Mortgage loans held for sale 88,992 2,608 3.91 % 44,832 1,419 4.22 %
Other interest-earning assets   65,511     315 0.64 %   95,800     298 0.41 %
Total interest-earning assets 1,288,617   37,098 3.84 % 1,172,810   35,030 3.98 %
Non-interest-earning assets   88,584   82,343
Total assets $ 1,377,201 $ 1,255,153
 
Interest-bearing liabilities:
Deposits $ 908,212 $ 3,002 0.44 % $ 846,434 $ 2,694 0.42 %
Borrowed money   143,904     1,175 1.09 %   105,317     1,222 1.55 %
Total interest-bearing liabilities 1,052,116   4,177 0.53 % 951,751   3,916 0.55 %
Non-interest-bearing deposits 192,974 178,502
Non-interest-bearing liabilities 14,382 11,932
Stockholders' equity   117,729   112,968
Total liabilities and stockholders' equity $ 1,377,201 $ 1,255,153
Net interest income $ 32,921 $ 31,114
Interest rate spread 3.31 % 3.43 %
Net interest margin 3.41 % 3.54 %

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

Source: Pulaski Financial Corp.


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