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8-K - 8-K - PULASKI FINANCIAL CORPa14-4702_18k.htm

Exhibit 99.1

 

 

PULASKI FINANCIAL REPORTS FIRST FISCAL QUARTER RESULTS

 

Highlights for the Quarter

 

·                  Diluted EPS $0.20 in 2014 versus $0.25 in 2013

 

·                  Credit costs decreased 90% to $327,000 in 2014 versus $3.3 million in 2013

 

·                  Mortgage revenues down 65% on sharp drop in loan refinancing activity

 

·                  Commercial loan portfolio increased $15.3 million, or 2%

 

·                  Net interest income declined 14%; commercial loan growth only partially offsets impact of market-driven yield declines and expected legacy residential mortgage portfolio runoff

 

·                  Internal adversely classified assets represented only 35% of regulatory capital plus the allowance for loan losses

 

ST. LOUIS, January 28, 2014 — Pulaski Financial Corp. (Nasdaq Global Select: PULB, the “Company”) reported net income available to common shareholders for the quarter ended December 31, 2013 of $2.2 million, or $0.20 per diluted common share compared with $2.7 million, or $0.25 per diluted common share, for the same quarter last year.

 

Earnings for the quarter benefited from a sharp decline in credit costs as asset quality remained stable.  Total credit costs, consisting of the provision for loan losses and foreclosed property losses and expense, fell to $327,000 for the December 2013 quarter compared with $3.3 million in the same quarter last year.  Net charge-offs decreased to $836,000 compared with $1.2 million in last year’s quarter. The quarter-end level of non-performing assets increased $2.9 million from September 30, 2013 primarily as the result of the classification as non-accrual of a $3.9 million loan secured by commercial real estate in the St. Louis metropolitan area that had been on the Company’s list of adversely classified loans for several quarters.  However, the combined level of adversely classified and watch list loans declined 4% during the quarter.

 

Noninterest income for the quarter decreased $2.2 million compared with the same quarter last year primarily as the result of a 65% decrease in mortgage revenues.  The Company saw a 56% decrease in the amount of mortgage loans originated for sale during the quarter compared with last year’s quarter.  Dampened by the higher level of market interest rates, and directionally consistent with industry-wide trends, the level of mortgage loan refinancings decreased 87%.  However, the volume of loans to finance home purchases decreased only 9%.

 

Net interest income for the quarter was down $1.6 million compared with the same quarter last year primarily as the result of lower levels of interest income on loans.  Interest income on mortgage loans held for sale decreased $1.0 million primarily due to the lower average balance resulting from the decreased mortgage origination activity. Interest income on portfolio loans decreased $1.1 million primarily as the result of a decrease in the average yield.

 

Gary Douglass, President and Chief Executive Officer, commented, “Although down from the comparable quarter last year, our first fiscal quarter earnings in 2014 remained at a respectable level in light of the difficult operating environment we faced.  The dramatic industry-wide decrease in consumer demand for mortgage refinancings had a significant negative impact on mortgage revenues and the amount of interest earned on loans held for sale.  In addition, the continued strong competition for commercial loans held down the interest rates we were able to charge on new and renewing loans. Fortunately, a significant portion of our revenue decline was

 



 

offset by significantly lower overall credit costs as we continue to reap the benefits of our hard work in problem asset management over the past several years.”

 

Douglass continued, “Looking forward to the balance of fiscal 2014, we continue to remain optimistic about our prospects for meaningful earnings growth. We expect our second fiscal quarter to produce reasonably similar results to the just completed first quarter as the seasonal nature of purchase mortgage demand and minimal refinance activity continue to depress mortgage-related revenues.  However, we expect a much stronger second half of our fiscal year driven by increased home purchase activity and an expanded staff of mortgage loan originators. We also expect continued commercial portfolio growth, bolstered by our renewed focus on new business and expanded production capacity.  Earnings for the balance of the fiscal year should also benefit from the repurchase of additional preferred stock funded by lower-cost, tax-deductible bank borrowings.  Finally, we will opportunistically review and evaluate shareholder-beneficial, in-market acquisition opportunities and possible niche loan production activities as drivers of potential future revenue growth.”

 

Other News — Company Completes Repurchase of $10 Million of Preferred Stock

 

The Company also today announced that it recently completed another repurchase of its preferred stock from a private investor.  During January 2014, the Company repurchased $10 million in par value, or approximately 58% of the outstanding shares, of its Fixed Rate Cumulative Perpetual Preferred Stock, Series A, using proceeds from a loan obtained from a commercial bank.  Following the repurchase, $7.3 million in par value, or 23% of the original amount issued, remains outstanding.

 

Conference Call Tomorrow

 

Pulaski Financial’s management will discuss first fiscal quarter results and other developments tomorrow, January 29, 2014, 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 44426431, a few minutes before the start time. The call will also be available for replay through March 1, 2014 at 855-859-2056 or 404-537-3406, conference ID 44426431.

 

About Pulaski Financial

 

Pulaski Financial Corp., operating in its 92nd 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.

 

2



 

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, 2013 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) 878-2210

 

Tables follow...

 

3



 

PULASKI FINANCIAL CORP.

CONDENSED STATEMENTS OF INCOME

(Unaudited)

 

 

 

(Dollars in thousands except per share data)

 

 

 

Three Months Ended

 

 

 

December 31,

 

September 30,

 

December 31,

 

 

 

2013

 

2013

 

2012

 

Interest income

 

$

11,498

 

$

12,117

 

$

13,613

 

Interest expense

 

1,323

 

1,406

 

1,806

 

 

 

 

 

 

 

 

 

Net interest income

 

10,175

 

10,711

 

11,807

 

Provision for loan losses

 

200

 

6,850

 

2,065

 

 

 

 

 

 

 

 

 

Net interest income after provision for loan losses

 

9,975

 

3,861

 

9,742

 

 

 

 

 

 

 

 

 

Mortgage revenues

 

1,033

 

2,752

 

2,988

 

Retail banking fees

 

1,046

 

1,050

 

1,153

 

Investment brokerage revenues

 

99

 

231

 

293

 

Other

 

294

 

471

 

282

 

Total non-interest income

 

2,472

 

4,504

 

4,716

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

4,191

 

4,354

 

4,566

 

Occupancy, equipment and data processing expense

 

2,627

 

2,543

 

2,360

 

Advertising

 

179

 

157

 

119

 

Professional services

 

822

 

600

 

554

 

FDIC deposit insurance premium expense

 

261

 

276

 

434

 

Real estate foreclosure losses and expense, net

 

127

 

644

 

1,214

 

Other

 

493

 

908

 

611

 

Total non-interest expense

 

8,700

 

9,482

 

9,858

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

3,747

 

(1,117

)

4,600

 

Income tax expense (benefit)

 

1,244

 

(537

)

1,472

 

Net income (loss) after tax

 

2,503

 

(580

)

3,128

 

Benefit from repurchase of preferred stock, net

 

 

(20

)

 

Preferred stock dividends

 

(295

)

(342

)

(406

)

Earnings (loss) available to common shares

 

$

2,208

 

$

(942

)

$

2,722

 

 

 

 

 

 

 

 

 

Annualized Performance Ratios

 

 

 

 

 

 

 

Return on average assets

 

0.81

%

(0.18

)%

0.96

%

Return on average common equity

 

8.83

%

(3.71

)%

11.40

%

Interest rate spread

 

3.42

%

3.54

%

3.73

%

Net interest margin

 

3.53

%

3.65

%

3.87

%

 

 

 

 

 

 

 

 

SHARE DATA

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic

 

10,948,781

 

10,922,253

 

10,815,633

 

Weighted average common shares outstanding - diluted

 

11,220,002

 

11,181,889

 

11,066,355

 

Basic earnings (loss) per common share

 

$

0.20

 

$

(0.09

)

$

0.25

 

Diluted earnings (loss) per common share

 

$

0.20

 

$

(0.08

)

$

0.25

 

Dividends per common share

 

$

0.095

 

$

0.095

 

$

0.095

 

 



 

PULASKI FINANCIAL CORP.

BALANCE SHEET DATA

(Unaudited)

 

 

 

(Dollars in thousands)

 

 

 

December 31,

 

September 30,

 

 

 

2013

 

2013

 

Total assets

 

$

1,293,704

 

$

1,275,944

 

Loans receivable, net

 

1,003,726

 

988,668

 

Allowance for loan losses

 

17,670

 

18,306

 

Mortgage loans held for sale, net

 

56,031

 

70,473

 

Investment securities

 

42,380

 

43,211

 

Capital stock of Federal Home Loan Bank

 

4,617

 

4,777

 

Cash and cash equivalents

 

105,057

 

86,309

 

Deposits

 

1,030,128

 

1,010,812

 

Borrowed money

 

114,543

 

113,483

 

Subordinated debentures

 

19,589

 

19,589

 

Stockholders’ equity - preferred

 

17,388

 

17,310

 

Stockholders’ equity - common

 

99,551

 

98,748

 

Total book value per common share

 

$

8.76

 

$

8.65

 

Tangible book value per common share

 

$

8.41

 

$

8.30

 

Regulatory capital ratios - Pulaski Bank only: (1)

 

 

 

 

 

Tier 1 leverage capital (to average assets)

 

10.00

%

10.05

%

Total risk-based capital (to risk-weighted assets)

 

14.03

%

14.03

%

 


(1) September 30, 2013 regulatory capital ratios are estimated.

 

 

 

December 31,

 

September 30,

 

 

 

2013

 

2013

 

LOANS RECEIVABLE

 

 

 

 

 

Single-family residential:

 

 

 

 

 

First mortgage

 

$

214,918

 

$

212,357

 

Second mortgage

 

43,420

 

43,208

 

Home equity lines of credit

 

107,228

 

110,906

 

Total single-family residential real estate

 

365,566

 

366,471

 

Commercial:

 

 

 

 

 

Commercial and multi-family real estate

 

366,954

 

348,003

 

Land acquisition and development

 

37,941

 

40,430

 

Real estate construction and development

 

35,964

 

20,548

 

Commercial and industrial

 

210,298

 

226,829

 

Total commercial

 

651,157

 

635,810

 

Consumer and installment

 

2,742

 

2,761

 

 

 

1,019,465

 

1,005,042

 

Add (less):

 

 

 

 

 

Deferred loan costs

 

2,902

 

3,188

 

Loans in process

 

(971

)

(1,256

)

Allowance for loan losses

 

(17,670

)

(18,306

)

Total

 

$

1,003,726

 

$

988,668

 

 

 

 

 

 

 

Weighted average rate at end of period

 

4.38

%

4.45

%

 

 

 

December 31, 2013

 

September 30, 2013

 

 

 

 

 

Weighted

 

 

 

Weighted

 

 

 

 

 

Average

 

 

 

Average

 

 

 

 

 

Interest

 

 

 

Interest

 

 

 

Balance

 

Rate

 

Balance

 

Rate

 

 

 

(Dollars in thousands)

 

DEPOSITS

 

 

 

 

 

 

 

 

 

Demand deposits:

 

 

 

 

 

 

 

 

 

Non-interest-bearing checking

 

$

177,825

 

0.00%

 

$

168,033

 

0.00%

 

Interest-bearing checking

 

254,882

 

0.10%

 

237,362

 

0.10%

 

Savings accounts

 

39,693

 

0.13%

 

39,845

 

0.13%

 

Money market

 

208,559

 

0.27%

 

206,927

 

0.26%

 

Total demand deposits

 

680,959

 

0.13%

 

652,167

 

0.13%

 

 

 

 

 

 

 

 

 

 

 

Certificates of Deposit:

 

 

 

 

 

 

 

 

 

Traditional

 

299,573

 

0.77%

 

313,217

 

0.84%

 

CDARS

 

49,596

 

0.26%

 

45,428

 

0.28%

 

Total certificates of deposit

 

349,169

 

0.70%

 

358,645

 

0.77%

 

Total deposits

 

$

1,030,128

 

0.32%

 

$

1,010,812

 

0.35%

 

 



 

PULASKI FINANCIAL CORP.

RESIDENTIAL MORTGAGE LOAN ACTIVITY

(Unaudited)

 

RESIDENTIAL MORTGAGE LOANS ORIGINATED FOR SALE

 

 

 

2014

 

2013

 

 

 

Mortgage

 

Home

 

 

 

Mortgage

 

Home

 

 

 

 

 

Refinancings

 

Purchases

 

Total

 

Refinancings

 

Purchases

 

Total

 

 

 

(In thousands)

 

First quarter

 

$

29,996

 

$

136,423

 

$

166,419

 

$

230,399

 

$

149,241

 

$

379,640

 

 

RESIDENTIAL MORTGAGE LOANS SOLD TO INVESTORS

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Net

 

 

 

 

 

Net

 

 

 

Loans

 

Mortgage

 

Profit

 

Loans

 

Mortgage

 

Profit

 

 

 

Sold

 

Revenues

 

Margin

 

Sold

 

Revenues

 

Margin

 

 

 

(Dollars in thousands)

 

First quarter

 

$

179,919

 

$

1,033

 

0.57%

 

$

367,388

 

$

2,988

 

0.81

%

 



 

PULASKI FINANCIAL CORP.

NONPERFORMING ASSETS

(Unaudited)

 

 

 

(In thousands)

 

 

 

December 31,

 

September 30,

 

 

 

2013

 

2013

 

NON-PERFORMING ASSETS

 

 

 

 

 

Non-accrual loans:

 

 

 

 

 

Single-family residential real estate:

 

 

 

 

 

First mortgage

 

$

5,145

 

$

5,335

 

Second mortgage

 

585

 

442

 

Home equity lines of credit

 

1,866

 

2,124

 

Total single-family residential real estate

 

7,596

 

7,901

 

Commercial:

 

 

 

 

 

Commercial and multi-family real estate

 

1,492

 

1,774

 

Land acquisition and development

 

3,429

 

 

Commercial and industrial

 

357

 

 

Total commercial

 

5,278

 

1,774

 

Consumer & installment

 

62

 

78

 

Total non-accrual loans

 

12,936

 

9,753

 

 

 

 

 

 

 

Non-Accrual Troubled debt restructurings: (1)

 

 

 

 

 

Current under the restructured terms:

 

 

 

 

 

Single-family residential real estate:

 

 

 

 

 

First mortgage

 

6,938

 

5,169

 

Second mortgage

 

1,289

 

904

 

Home equity lines of credit

 

427

 

498

 

Total single-family residential real estate

 

8,654

 

6,571

 

Commercial:

 

 

 

 

 

Commercial and multi-family real estate

 

1,647

 

2,585

 

Land acquisition and development

 

 

43

 

Real estate construction and development

 

 

23

 

Commercial and industrial

 

1,970

 

2,055

 

Total commercial

 

3,617

 

4,706

 

Consumer and installment

 

23

 

28

 

Total current troubled debt restructurings

 

12,294

 

11,305

 

Past due under restructured terms:

 

 

 

 

 

Single-family residential real estate:

 

 

 

 

 

First mortgage

 

2,141

 

3,974

 

Second mortgage

 

234

 

155

 

Home equity lines of credit

 

234

 

178

 

Total single-family residential real estate

 

2,609

 

4,307

 

Commercial:

 

 

 

 

 

Commercial and multi-family real estate

 

2,780

 

1,652

 

Land acquisition and development

 

42

 

19

 

Real estate construction and development

 

42

 

 

Commercial and industrial

 

451

 

572

 

Total commercial

 

3,315

 

2,243

 

Total past due troubled debt restructurings

 

5,924

 

6,550

 

Total non-accrual troubled debt restructurings

 

18,218

 

17,855

 

Total non-performing loans

 

31,154

 

27,608

 

Real estate acquired in settlement of loans:

 

 

 

 

 

Residential real estate

 

2,403

 

3,019

 

Commercial real estate

 

3,347

 

3,376

 

Total real estate acquired in settlement of loans

 

5,750

 

6,395

 

Total non-performing assets

 

$

36,904

 

$

34,003

 

 


(1) Troubled debt restructured includes non-accrual loans totaling $18.2 million and $17.9 million at December 31, 2013 and September 30, 2013,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

 

 

 

Ended December 31,

 

 

 

2013

 

2012

 

ALLOWANCE FOR LOAN LOSSES

 

 

 

 

 

Allowance for loan losses, beginning of period

 

$

18,306

 

$

17,117

 

Provision charged to expense

 

200

 

2,065

 

Charge-offs:

 

 

 

 

 

Single-family residential real estate:

 

 

 

 

 

First mortgage

 

717

 

1,236

 

Second mortgage

 

196

 

351

 

Home equity

 

354

 

713

 

Total single-family residential real estate

 

1,267

 

2,300

 

Commercial:

 

 

 

 

 

Commercial and multi-family real estate

 

 

523

 

Land acquisition and development

 

465

 

23

 

Real estate construction and development

 

 

260

 

Commercial and industrial

 

 

484

 

Total commercial

 

465

 

1,290

 

Consumer and installment

 

21

 

34

 

Total charge-offs

 

1,753

 

3,624

 

Recoveries:

 

 

 

 

 

Single-family residential real estate:

 

 

 

 

 

First mortgage

 

59

 

25

 

Second mortgage

 

47

 

34

 

Home equity

 

159

 

86

 

Total single-family residential real estate

 

265

 

145

 

Commercial:

 

 

 

 

 

Commercial and multi-family real estate

 

186

 

1,042

 

Land acquisition and development

 

 

17

 

Real estate construction and development

 

 

1,169

 

Commercial and industrial

 

458

 

15

 

Total commercial

 

644

 

2,243

 

Consumer and installment

 

8

 

11

 

Total recoveries

 

917

 

2,399

 

Net charge-offs

 

836

 

1,225

 

Balance, end of period

 

$

17,670

 

$

17,957

 

 

 

 

December 31,

 

September 30,

 

 

 

2013

 

2013

 

ASSET QUALITY RATIOS

 

 

 

 

 

Non-performing loans as a percent of total loans

 

3.06

%

2.75

%

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

 

1.85

%

1.62

%

Non-performing assets as a percent of total assets

 

2.85

%

2.66

%

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

 

1.90

%

1.78

%

Allowance for loan losses as a percent of total loans

 

1.73

%

1.82

%

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

 

56.72

%

66.31

%

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

 

90.27

%

106.56

%

 



 

PULASKI FINANCIAL CORP.

AVERAGE BALANCE SHEETS

(Unaudited)

 

 

 

(Dollars in thousands)

 

 

 

Three Months Ended

 

 

 

December 31, 2013

 

December 31, 2012

 

 

 

 

 

Interest

 

Average

 

 

 

Interest

 

Average

 

 

 

Average

 

and

 

Yield/

 

Average

 

and

 

Yield/

 

 

 

Balance

 

Dividends

 

Cost

 

Balance

 

Dividends

 

Cost

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable

 

$

1,008,591

 

$

10,836

 

4.30%

 

$

987,147

 

$

11,939

 

4.84%

 

Mortgage loans held for sale

 

54,239

 

567

 

4.18%

 

183,801

 

1,569

 

3.41%

 

Other interest-earning assets

 

90,618

 

95

 

0.42%

 

50,761

 

105

 

0.83%

 

Total interest-earning assets

 

1,153,448

 

11,498

 

3.99%

 

1,221,709

 

13,613

 

4.46%

 

Non-interest-earning assets

 

79,097

 

 

 

 

 

86,550

 

 

 

 

 

Total assets

 

$

1,232,545

 

 

 

 

 

$

1,308,259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

838,101

 

$

958

 

0.46%

 

$

911,539

 

$

1,435

 

0.63%

 

Borrowed money

 

88,562

 

365

 

1.64%

 

76,874

 

371

 

1.92%

 

Total interest-bearing liabilities

 

926,663

 

1,323

 

0.57%

 

988,413

 

1,806

 

0.73%

 

Non-interest-bearing deposits

 

175,062

 

 

 

 

 

182,531

 

 

 

 

 

Non-interest-bearing liabilities

 

13,462

 

 

 

 

 

16,773

 

 

 

 

 

Stockholders’ equity

 

117,358

 

 

 

 

 

120,542

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

1,232,545

 

 

 

 

 

$

1,308,259

 

 

 

 

 

Net interest income

 

 

 

$

10,175

 

 

 

 

 

$

11,807

 

 

 

Interest rate spread

 

 

 

 

 

3.42%

 

 

 

 

 

3.73%

 

Net interest margin

 

 

 

 

 

3.53%

 

 

 

 

 

3.87%

 

 

# # #