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Pulaski Financial Corporation

PULB

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Earnings estimates for Pulaski Financial Corporation (PULB - Snapshot Report) have advanced after this financial holding company delivered strong fiscal fourth quarter 2012 results, including a year-over-year earnings increase of 53.3%. Moreover, an attractive valuation, including a P/B multiple of just 1.1, makes this Zacks #1 Rank (Strong Buy) a natural pick for value investors.

Impressive 3Q Results

On October 29, Pulaski Financial reported fiscal fourth quarter earnings of 23 cents per share, outpacing the Zacks Consensus Estimate by 4.6% and year-ago earnings by 53.3%. The better-than-expected results were driven by growth in the top line, partially offset by higher operating expenses. For fiscal 2012, the company reported earnings of 74 cents per share, reflecting a year-over-year increase of 34.5%.

Net interest income rose 1.1% from the year-ago quarter to $11.4 million. Similarly, net interest margin was up 8 basis points (bps) to 3.75%. Moreover, non-interest income jumped 29.2% to $4.6 million. Yet, non-interest expenses rose 4.9% to $9.3 million as a result of higher levels of real estate foreclosure expense as well as increased compensation and occupancy expenses.

Pulaski Financial witnessed a decent improvement in its asset quality during the quarter. As of September 30, 2012, allowance for loan losses as a percentage of total loans was 1.73%, down 73 bps year over year. Non-performing assets declined 14.8% year over year, with the September quarter representing the seventh consecutive quarter with a decline in non-performing assets. Nonperforming assets as a percentage of total assets were 4.56%, falling 95 bps from the prior-year quarter.

Accelerates Dividend Payout Timing

As a result of the uncertainty regarding the taxation of dividends in 2013, Pulaski Financial accelerated the timing of its quarterly dividend payment. The 9.5 cents per share dividend will now be paid on December 31, 2012 instead of January 2013, to shareholders of record as of the close of business on December 22, 2012.

Surge in Earnings Estimates

Over the last 60 days, the Zacks Consensus Estimate for fiscal 2013 advanced 11.0% to 91 cents per share. This reflects year-over-year growth of about 23.0%. For fiscal 2014, the Zacks Consensus Estimate has, however, remained flat at 87 cents per share.

Valuation Looks Attractive

Along with an attractive P/B multiple, Pulaski Financial has a forward P/E ratio of just 9.6 (a P/E ratio under 15.0 and P/B ratio below 3.0 generally indicate value). Moreover, the company has a trailing 12-month ROE of 10.6%, compared with the peer group average of 5.7%. This implies that the company reinvests its earnings more efficiently than its industry peers.

Additionally, Pulaski Financial Corp. currently enjoys a decent dividend yield of 4.3%. Therefore, in addition to being a value stock, the company offers a steady income opportunity.

Headquartered in St. Louis, Missouri, Pulaski Financial Corp. operates as the holding company for Pulaski Bank. The company provides a range of retail and commercial banking products as well as mortgage loan products. It has 13 full-service branch offices in the St. Louis metropolitan area and loan production offices in the St. Louis and Kansas City metropolitan areas, Wichita, Kansas, mid-Missouri and southwestern Missouri. The company has a market capitalization of about $91 million. Other Zacks #1 Rank (Strong Buy) banks include Cardinal Financial Corp. (CFNL) and IberiaBank Corp. (IBKC).

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