##### Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



|                                                 |  |                                                                                          |  | 
|------------------------------------------------ |  | ---------------------------------------------------------------------------------------- |  | 
|x                                                |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |  | 
|                                                 | 
|For the quarterly period ended
March 31,2009  OR |  |                                                                                         
|                                                 |  |                                                                                         
| ̈                                                |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |  | 
|                                                 | 
|For the transition period from
 to               |  |                                                                                         

0-24571



Commission File Number

Pulaski Financial Corp.



(Exact name of registrant as specified in its charter)



|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Missouri                                                       |  | 43-1816913                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)
|                                                               | 
|12300 Olive Boulevard St. Louis,
Missouri                      |  | 63141-6434                             
|(Address of principal executive offices)                       |  | (Zip Code)                             

Registrants telephone number, including area code:  (314) 878-2210

Not Applicable

(Former name, address
and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past
90 days.

Yes        x                        No         ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



| |  |                                                |  |                              |  | 
| |  | ---------------------------------------------- |  | ---------------------------- |  | 
| |  | Large accelerated filer   ̈                     |  | Accelerated filer   x        |  | 
| |  | Non-accelerated filer   ̈                       |  | Smaller reporting company   ̈ |  | 
| |  | (Do not check if a smaller reporting company.) |  |                             

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
    Yes   ̈    No  x

Indicate the number of shares outstanding of the registrants classes of common stock, as of the latest practicable date.



|                                       |  |                           
|-------------------------------------- |  | --------------------------
|Class                                  |  | Outstanding at May 7, 2009
|Common Stock, par value $.01 per share |  | 10,312,201 shares         



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##### Table of Contents

PULASKI FINANCIAL CORP. AND SUBSIDIARIES

FORM 10-Q

MARCH 31, 2009

TABLE OF CONTENTS



|                                |  |                                                                                                                                   |  |     
|------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                |  |                                                                                                                                   |  | Page
|PART I    FINANCIAL INFORMATION |  |                                                                                                                                  
|                                |  |                                                                                                                                  
|Item 1.                         |  | Financial Statements                                                                                                              |  |     
|                                |  |                                                                                                                                  
|                                |  | Consolidated Balance Sheets at March 31, 2009 and September 30, 2008 (Unaudited)                                                  |  | 1   
|                                |  |                                                                                                                                  
|                                |  | Consolidated Statements of Income and Comprehensive Income for the Three and Six Months Ended March 31, 2009 and 2008 (Unaudited) |  | 2   
|                                |  |                                                                                                                                  
|                                |  | Consolidated Statement of Stockholders Equity for the Six Months Ended March 31, 2009 (Unaudited)                                |  | 3   
|                                |  |                                                                                                                                  
|                                |  | Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2009 and 2008 (Unaudited)                                |  | 4   
|                                |  |                                                                                                                                  
|                                |  | Notes to Unaudited Consolidated Financial Statements                                                                              |  | 6   
|                                |  |                                                                                                                                  
|Item 2.                         |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                             |  | 16  
|                                |  |                                                                                                                                  
|Item 3.                         |  | Quantitative and Qualitative Disclosures About Market Risk                                                                        |  | 33  
|                                |  |                                                                                                                                  
|Item 4.                         |  | Controls and Procedures                                                                                                           |  | 33  
|                                | 
|PART II    OTHER INFORMATION    |  |                                                                                                                                  
|                                |  |                                                                                                                                  
|Item 1.                         |  | Legal Proceedings                                                                                                                 |  | 36  
|                                |  |                                                                                                                                  
|Item 1A.                        |  | Risk Factors                                                                                                                      |  | 36  
|                                |  |                                                                                                                                  
|Item 2.                         |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                       |  | 36  
|                                |  |                                                                                                                                  
|Item 3.                         |  | Defaults Upon Senior Securities                                                                                                   |  | 37  
|                                |  |                                                                                                                                  
|Item 4.                         |  | Submission of Matters to a Vote of Security Holders                                                                               |  | 37  
|                                |  |                                                                                                                                  
|Item 5.                         |  | Other Information                                                                                                                 |  | 37  
|                                |  |                                                                                                                                  
|Item 6.                         |  | Exhibits                                                                                                                          |  | 37  
|                                |  |                                                                                                                                  
|                                |  | Signatures                                                                                                                        |  |     



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##### Table of Contents

PART IFINANCIAL INFORMATION

PULASKI FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2009 AND SEPTEMBER 30, 2008 (UNAUDITED)



|                                                                                                                                                                            |  |               |               |   |                   |   |               |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------------- | - | ----------------- | - | ------------- | -
|                                                                                                                                                                            |  | March 31,2009 |               |   | September 30,2008 |  
|ASSETS                                                                                                                                                                      |  |               |               |   |                   |   |               |  
|Cash and amounts due from depository institutions                                                                                                                           |  | $             | 26,669,796    |   |                   | $ | 28,430,409    |  
|Federal funds sold and overnight deposits                                                                                                                                   |  |               | 26,803,371    |   |                   |   | 647,453       |  
|                                                                                                                                                                            |  |               |               |   |                   |   |               |  
|Total cash and cash equivalents                                                                                                                                             |  |               | 53,473,167    |   |                   |   | 29,077,862    |  
|Equity securities available for sale, at fair value                                                                                                                         |  |               | 589,000       |   |                   |   | 733,000       |  
|Debt securities available for sale, at fair value                                                                                                                           |  |               | 5,012,859     |   |                   |   |              |  
|Mortgage-backed and related securities held to maturity, at amortized cost (fair value, $14,649,157 and $15,607,652 at March 31, 2009 and
September 30, 2008, respectively) |  |               | 14,414,583    |   |                   |   | 15,744,497    |  
|Mortgage-backed securities available for sale, at fair value                                                                                                                |  |               | 16,857,130    |   |                   |   | 10,180,666    |  
|Capital stock of Federal Home Loan Bank, at cost                                                                                                                            |  |               | 11,649,800    |   |                   |   | 10,896,100    |  
|Loans held for sale, at lower of cost or market                                                                                                                             |  |               | 110,201,448   |   |                   |   | 71,966,443    |  
|Loans receivable, net of allowance for loan losses of $18,467,535 and $12,761,532 at March 31, 2009 and September 30, 2008,
respectively                                    |  |               | 1,172,785,888 |   |                   |   | 1,088,736,516 |  
|Real estate acquired in settlement of loans, net of allowance for losses of $267,356 and $417,773 at March 31, 2009 and
September 30, 2008, respectively                    |  |               | 3,999,678     |   |                   |   | 3,518,806     |  
|Premises and equipment, net                                                                                                                                                 |  |               | 19,548,993    |   |                   |   | 19,853,426    |  
|Bank-owned life insurance                                                                                                                                                   |  |               | 28,149,049    |   |                   |   | 27,591,986    |  
|Accrued interest receivable                                                                                                                                                 |  |               | 4,889,691     |   |                   |   | 5,614,887     |  
|Goodwill                                                                                                                                                                    |  |               | 3,938,524     |   |                   |   | 3,938,524     |  
|Core deposit intangible                                                                                                                                                     |  |               | 299,602       |   |                   |   | 361,591       |  
|Deferred tax asset                                                                                                                                                          |  |               | 6,013,886     |   |                   |   | 8,062,641     |  
|Prepaid expenses, accounts receivable and other assets                                                                                                                      |  |               | 9,569,957     |   |                   |   | 7,873,515     |  
|                                                                                                                                                                            |  |               |               |   |                   |   |               |  
|Total assets                                                                                                                                                                |  | $             | 1,461,393,255 |   |                   | $ | 1,304,150,460 |  
|                                                                                                                                                                            |  |               |               |   |                   |   |               |  
|                                                                                                                                                                            |  |              
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                        |  |               |               |   |                   |   |               |  
|Liabilities:                                                                                                                                                                |  |               |               |   |                   |   |               |  
|Deposits                                                                                                                                                                    |  | $             | 1,094,872,922 |   |                   | $ | 915,311,365   |  
|Advances from Federal Home Loan Bank of Des Moines                                                                                                                          |  |               | 86,100,000    |   |                   |   | 210,600,000   |  
|Borrowings from the Federal Reserve Bank of St. Louis                                                                                                                       |  |               | 130,000,000   |   |                   |   | 40,000,000    |  
|Note payable                                                                                                                                                                |  |               |              |   |                   |   | 7,640,000     |  
|Subordinated debentures                                                                                                                                                     |  |               | 19,589,000    |   |                   |   | 19,589,000    |  
|Advance payments by borrowers for taxes and insurance                                                                                                                       |  |               | 2,762,391     |   |                   |   | 3,667,014     |  
|Accrued interest payable                                                                                                                                                    |  |               | 1,195,669     |   |                   |   | 1,505,949     |  
|Due to other banks                                                                                                                                                          |  |               |              |   |                   |   | 14,377,831    |  
|Other liabilities                                                                                                                                                           |  |               | 10,797,995    |   |                   |   | 9,098,795     |  
|                                                                                                                                                                            |  |               |               |   |                   |   |               |  
|Total liabilities                                                                                                                                                           |  |               | 1,345,317,977 |   |                   |   | 1,221,789,954 |  
|                                                                                                                                                                            |  |               |               |   |                   |   |               |  
|                                                                                                                                                                            |  |              
|Stockholders Equity:                                                                                                                                                       |  |               |               |   |                   |   |               |  
|Preferred stock$.01 par value per share, authorized 1,000,000 shares; 32,538 shares issued at March 31, 2009, $1,000 per share
liquidation value, net of discount          |  |               | 30,440,827    |   |                   |   |              |  
|Common stock$.01 par value per share, authorized 18,000,000 shares; 13,068,618 shares issued at March 31, 2009 and
September 30, 2008                                      |  |               | 130,687       |   |                   |   | 130,687       |  
|Additional paid-in capital from common stock                                                                                                                                |  |               | 54,528,272    |   |                   |   | 51,987,198    |  
|Treasury stock, at cost; 2,764,878 and 2,853,078 shares at March 31, 2009 and September 30, 2008, respectively                                                              |  |               | (15,932,784   | ) |                   |   | (16,278,615   | )
|Treasury stock, equity trust, at cost; 239,138 and 226,992 shares at March 31, 2009 and September 30, 2008,
respectively                                                    |  |               | (2,705,791    | ) |                   |   | (2,771,883    | )
|Accumulated other comprehensive income (loss)                                                                                                                               |  |               | 73,746        |   |                   |   | (97,394       | )
|Retained earnings                                                                                                                                                           |  |               | 49,540,321    |   |                   |   | 49,390,513    |  
|                                                                                                                                                                            |  |               |               |   |                   |   |               |  
|Total stockholders equity                                                                                                                                                  |  |               | 116,075,278   |   |                   |   | 82,360,506    |  
|                                                                                                                                                                            |  |               |               |   |                   |   |               |  
|Total liabilities and stockholders equity                                                                                                                                  |  | $             | 1,461,393,255 |   |                   | $ | 1,304,150,460 |  
|                                                                                                                                                                            |  |               |               |   |                   |   |               |  
|                                                                                                                                                                            |  |               |               |   |                   |   |               |  

See accompanying notes to the unaudited consolidated financial statements.



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##### Table of Contents

PULASKI FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

THREE
AND SIX MONTHS ENDED MARCH 31, 2009 AND 2008 (UNAUDITED)





|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|----------------------------------------------------- |  | --------------------------- | ---------- | ---- | ------------------------- | ---------- | ---- |  | ---- | ---------- |  | - | ---------- | -
|                                                      |  | Three Months EndedMarch 31, |            |      | Six Months EndedMarch 31, |           
|                                                      |  | 2009                        |            | 2008 |                           |            | 2009 |  | 2008 |           
|Interest and Dividend Income:                         |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Loans receivable                                      |  | $                           | 16,310,470 |      | $                         | 18,401,922 |      |  | $    | 32,661,392 |  | $ | 37,343,577 |  
|Securities and other                                  |  |                             | 346,558    |      |                           | 586,921    |      |  |      | 830,348    |  |   | 1,015,413  |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Total interest and dividend income                    |  |                             | 16,657,028 |      |                           | 18,988,843 |      |  |      | 33,491,740 |  |   | 38,358,990 |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Interest Expense:                                     |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Deposits                                              |  |                             | 5,312,328  |      |                           | 7,666,839  |      |  |      | 11,435,622 |  |   | 15,868,576 |  
|Advances from Federal Home Loan Bank of Des Moines    |  |                             | 915,395    |      |                           | 2,062,933  |      |  |      | 2,086,047  |  |   | 4,588,300  |  
|Borrowings from the Federal Reserve Bank of St. Louis |  |                             | 135,165    |      |                           | 16,493     |      |  |      | 214,932    |  |   | 16,630     |  
|Subordinated debentures                               |  |                             | 200,190    |      |                           | 341,042    |      |  |      | 446,613    |  |   | 734,602    |  
|Notes payable                                         |  |                             | 12,233     |      |                           | 37,714     |      |  |      | 113,354    |  |   | 85,567     |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Total interest expense                                |  |                             | 6,575,311  |      |                           | 10,125,021 |      |  |      | 14,296,568 |  |   | 21,293,675 |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Net interest income                                   |  |                             | 10,081,717 |      |                           | 8,863,822  |      |  |      | 19,195,172 |  |   | 17,065,315 |  
|Provision for loan losses                             |  |                             | 5,664,407  |      |                           | 1,728,140  |      |  |      | 10,355,985 |  |   | 2,760,691  |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Net interest income after provision for loan losses   |  |                             | 4,417,310  |      |                           | 7,135,682  |      |  |      | 8,839,187  |  |   | 14,304,624 |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Non-Interest Income:                                  |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Mortgage revenues                                     |  |                             | 4,313,013  |      |                           | 1,846,936  |      |  |      | 5,862,643  |  |   | 2,954,471  |  
|Retail banking fees                                   |  |                             | 935,598    |      |                           | 932,155    |      |  |      | 1,902,632  |  |   | 1,960,653  |  
|Investment brokerage revenues                         |  |                             | 379,227    |      |                           | 355,659    |      |  |      | 640,691    |  |   | 570,669    |  
|Gain on the sales of securities                       |  |                             |           |      |                           | 262,768    |      |  |      | 243,386    |  |   | 316,693    |  
|Other                                                 |  |                             | 143,790    |      |                           | 445,052    |      |  |      | 435,812    |  |   | 1,018,610  |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Total non-interest income                             |  |                             | 5,771,628  |      |                           | 3,842,570  |      |  |      | 9,085,164  |  |   | 6,821,096  |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Non-Interest Expense:                                 |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Salaries and employee benefits                        |  |                             | 3,593,274  |      |                           | 3,199,356  |      |  |      | 6,935,276  |  |   | 6,219,913  |  
|Occupancy, equipment and data processing expense      |  |                             | 2,053,152  |      |                           | 1,958,654  |      |  |      | 3,933,441  |  |   | 3,658,120  |  
|Advertising                                           |  |                             | 209,286    |      |                           | 294,262    |      |  |      | 495,285    |  |   | 634,429    |  
|Professional services                                 |  |                             | 370,947    |      |                           | 424,586    |      |  |      | 632,418    |  |   | 707,802    |  
|FDIC deposit insurance premium expense                |  |                             | 410,593    |      |                           | 157,540    |      |  |      | 609,812    |  |   | 390,291    |  
|Loss (gain) on derivative instruments                 |  |                             |           |      |                           | 57,925     |      |  |      |           |  |   | (64,322    | )
|Real estate foreclosure losses and expense, net       |  |                             | 409,437    |      |                           | 154,881    |      |  |      | 751,001    |  |   | 383,441    |  
|Other                                                 |  |                             | 607,336    |      |                           | 669,025    |      |  |      | 1,169,492  |  |   | 1,266,571  |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Total non-interest expense                            |  |                             | 7,654,025  |      |                           | 6,916,229  |      |  |      | 14,526,725 |  |   | 13,196,245 |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Income before income taxes                            |  |                             | 2,534,913  |      |                           | 4,062,023  |      |  |      | 3,397,626  |  |   | 7,929,475  |  
|Income tax expense                                    |  |                             | 761,910    |      |                           | 1,513,742  |      |  |      | 1,058,766  |  |   | 2,649,042  |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Net income                                            |  | $                           | 1,773,003  |      | $                         | 2,548,281  |      |  | $    | 2,338,860  |  | $ | 5,280,433  |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Other comprehensive income (loss)                     |  |                             | 58,944     |      |                           | (294,099   | )    |  |      | 171,140    |  |   | (227,816   | )
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Comprehensive income                                  |  | $                           | 1,831,947  |      | $                         | 2,254,182  |      |  | $    | 2,510,000  |  | $ | 5,052,617  |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Income available to common shares                     |  | $                           | 1,535,393  |      | $                         | 2,548,281  |      |  | $    | 2,101,250  |  | $ | 5,280,433  |  
|                                                      |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Per Share Amounts:                                    |  |                             |            |      |                           |            |      |  |      |            |  |   |            |  
|Basic earnings per common share                       |  | $                           | 0.15       |      | $                         | 0.26       |      |  | $    | 0.21       |  | $ | 0.54       |  
|Weighted average common shares outstandingbasic      |  |                             | 10,153,221 |      |                           | 9,854,302  |      |  |      | 10,133,651 |  |   | 9,817,014  |  
|Diluted earnings per common share                     |  | $                           | 0.15       |      | $                         | 0.25       |      |  | $    | 0.20       |  | $ | 0.52       |  
|Weighted average common shares outstandingdiluted    |  |                             | 10,283,324 |      |                           | 10,209,176 |      |  |      | 10,324,389 |  |   | 10,197,921 |  

See accompanying notes to the unaudited consolidated financial statements.



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##### Table of Contents

PULASKI FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY

SIX MONTHS
ENDED MARCH 31, 2009 (UNAUDITED)





|                                                                                            |  |                               |            |             |   |                                |  |   |               |   |  |                                            |             |   |                  |   |          |       |  |   |            |   |  |   |             |  
|------------------------------------------------------------------------------------------- |  | ----------------------------- | ---------- | ----------- | - | ------------------------------ |  | - | ------------- | - |  | ------------------------------------------ | ----------- | - | ---------------- | - | -------- | ----- |  | - | ---------- | - |  | - | ----------- | -
|                                                                                            |  | PreferredStock,Net ofDiscount |            | CommonStock |   | AdditionalPaid-InCapitalCommon |  |   | TreasuryStock |   |  | AccumulatedOtherComprehensiveIncome (Loss) |             |   | RetainedEarnings |   |          | Total | 
|Balance, September 30, 2008                                                                 |  | $                             |           |             | $ | 130,687                        |  | $ | 51,987,198    |   |  | $                                          | (19,050,498 | ) |                  | $ | (97,394  | )     |  | $ | 49,390,513 |   |  | $ | 82,360,506  |  
|                                                                                            |  |                               |            |             |   |                                |  |   |               |   |  |                                            |             |   |                  |   |          |       |  |   |            |   |  |   |             |  
|Comprehensive income:                                                                       |  |                               |            |             |   |                                |  |   |               |   |  |                                            |             |   |                  |   |          |       |  |   |            |   |  |   |             |  
|Net income                                                                                  |  |                               |           |             |   |                               |  |   |              |   |  |                                            |            |   |                  |   |         |       |  |   | 2,338,860  |   |  |   | 2,338,860   |  
|Change in unrealized gain (loss) on investment securities, net of tax                       |  |                               |           |             |   |                               |  |   |              |   |  |                                            |            |   |                  |   | 322,040  |       |  |   |           |   |  |   | 322,040     |  
|Realized gain on sales of investment securities included in net income, net of tax          |  |                               |           |             |   |                               |  |   |              |   |  |                                            |            |   |                  |   | (150,900 | )     |  |   |           |   |  |   | (150,900    | )
|                                                                                            |  |                               |            |             |   |                                |  |   |               |   |  |                                            |             |   |                  |   |          |       |  |   |            |   |  |   |             |  
|Comprehensive income                                                                        |  |                               |           |             |   |                               |  |   |              |   |  |                                            |            |   |                  |   | 171,140  |       |  |   | 2,338,860  |   |  |   | 2,510,000   |  
|                                                                                            |  |                               |            |             |   |                                |  |   |               |   |  |                                            |             |   |                  |   |          |       |  |   |            |   |  |   |             |  
|Preferred stock and common stock warrant issued                                             |  |                               | 30,334,273 |             |   |                               |  |   | 2,167,495     |   |  |                                            |            |   |                  |   |         |       |  |   |           |   |  |   | 32,501,768  |  
|Common stock dividends ($0.095 per share)                                                   |  |                               |           |             |   |                               |  |   |              |   |  |                                            |            |   |                  |   |         |       |  |   | (1,951,442 | ) |  |   | (1,951,442  | )
|Preferred stock dividend                                                                    |  |                               |           |             |   |                               |  |   |              |   |  |                                            |            |   |                  |   |         |       |  |   | (131,056   | ) |  |   | (131,056    | )
|Amortization of discount on preferred stock                                                 |  |                               | 106,554    |             |   |                               |  |   |              |   |  |                                            |            |   |                  |   |         |       |  |   | (106,554   | ) |  |   |            |  
|Stock option and award expense                                                              |  |                               |           |             |   |                               |  |   | 232,185       |   |  |                                            |            |   |                  |   |         |       |  |   |           |   |  |   | 232,185     |  
|Common stock issued under dividend reinvestment plan (67,320 shares)                        |  |                               |           |             |   |                               |  |   | 66,671        |   |  |                                            | 274,734     |   |                  |   |         |       |  |   |           |   |  |   | 341,405     |  
|Restricted common stock issued (24,327 shares)                                              |  |                               |           |             |   |                               |  |   | (99,278       | ) |  |                                            | 99,278      |   |                  |   |         |       |  |   |           |   |  |   |            |  
|Common stock surrendered to satisfy tax withholding obligations of stock-based compensation |  |                               |           |             |   |                               |  |   |              |   |  |                                            | (28,181     | ) |                  |   |         |       |  |   |           |   |  |   | (28,181     | )
|Purchase of equity trust shares (11,160 shares)                                             |  |                               |           |             |   |                               |  |   |              |   |  |                                            | (68,200     | ) |                  |   |         |       |  |   |           |   |  |   | (68,200     | )
|Distribution of equity trust shares (9,504 shares)                                          |  |                               |           |             |   |                               |  |   | (134,292      | ) |  |                                            | 134,292     |   |                  |   |         |       |  |   |           |   |  |   |            |  
|Amortization of equity trust expense                                                        |  |                               |           |             |   |                               |  |   | 296,913       |   |  |                                            |            |   |                  |   |         |       |  |   |           |   |  |   | 296,913     |  
|Excess tax benefit from stock-based compensation                                            |  |                               |           |             |   |                               |  |   | 11,380        |   |  |                                            |            |   |                  |   |         |       |  |   |           |   |  |   | 11,380      |  
|                                                                                            |  |                               |            |             |   |                                |  |   |               |   |  |                                            |             |   |                  |   |          |       |  |   |            |   |  |   |             |  
|Balance, March 31, 2009                                                                     |  | $                             | 30,440,827 |             | $ | 130,687                        |  | $ | 54,528,272    |   |  | $                                          | (18,638,575 | ) |                  | $ | 73,746   |       |  | $ | 49,540,321 |   |  | $ | 116,075,278 |  
|                                                                                            |  |                               |            |             |   |                                |  |   |               |   |  |                                            |             |   |                  |   |          |       |  |   |            |   |  |   |             |  

See accompanying notes to the unaudited consolidated financial statements.



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##### Table of Contents

PULASKI FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR SIX MONTHS

ENDED MARCH
31, 2009 AND MARCH 31, 2008 (UNAUDITED)





|                                                                                                  |  |                           |              |   |      |   |              |  
|------------------------------------------------------------------------------------------------- |  | ------------------------- | ------------ | - | ---- | - | ------------ | -
|                                                                                                  |  | Six Months EndedMarch 31, |             
|                                                                                                  |  | 2009                      |              |   | 2008 |  
|Cash Flows From Operating Activities:                                                             |  |                           |              |   |      |   |              |  
|Net income                                                                                        |  | $                         | 2,338,860    |   |      | $ | 5,280,433    |  
|                                                                                                  |  |                           |              |   |      |   |              |  
|Adjustments to reconcile net income to net cash from operating activities:                        |  |                           |              |   |      |   |              |  
|Depreciation, amortization and accretion:                                                         |  |                           |              |   |      |   |              |  
|Premises and equipment                                                                            |  |                           | 927,688      |   |      |   | 853,576      |  
|Net deferred loan costs                                                                           |  |                           | 1,388,296    |   |      |   | 1,423,525    |  
|Net amortization of debt and equity securities premiums and discounts                             |  |                           | 79,593       |   |      |   | (228,966     | )
|Broker fees financed under interest-rate swap agreements                                          |  |                           |             |   |      |   | 345,874      |  
|Equity trust expense, net                                                                         |  |                           | 296,913      |   |      |   | 122,942      |  
|Stock option and award expense                                                                    |  |                           | 232,185      |   |      |   | 231,835      |  
|Provision for loan losses                                                                         |  |                           | 10,355,985   |   |      |   | 2,760,691    |  
|Provision for losses on real estate acquired in settlement of loans                               |  |                           | 196,956      |   |      |   | 152,000      |  
|Losses on sales of real estate acquired in settlement of loans                                    |  |                           | 239,229      |   |      |   | 81,044       |  
|Originations of loans held for sale                                                               |  |                           | (914,107,005 | ) |      |   | (708,060,249 | )
|Proceeds from sales of loans held for sale                                                        |  |                           | 881,278,228  |   |      |   | 689,163,917  |  
|Gain on sales of loans held for sale                                                              |  |                           | (5,406,228   | ) |      |   | (2,867,917   | )
|Loss on equity securities available for sale                                                      |  |                           | 155,500      |   |      |   |             |  
|Gain on sales of debt securities available for sale                                               |  |                           | (398,886     | ) |      |   | (316,693     | )
|Gain on sale of investment in joint venture                                                       |  |                           |             |   |      |   | (30,755      | )
|Gain on derivative instruments                                                                    |  |                           |             |   |      |   | (64,322      | )
|Increase in cash value of bank-owned life insurance                                               |  |                           | (557,063     | ) |      |   | (437,959     | )
|Decrease (increase) in deferred tax asset                                                         |  |                           | 2,048,755    |   |      |   | (180,000     | )
|Excess tax benefit from stock-based compensation Excess tax benefit from stock-based compensation |  |                           | (11,380      | ) |      |   | (60,803      | )
|Increase in accrued expenses                                                                      |  |                           | 108,141      |   |      |   | 530,598      |  
|Decrease in current income taxes payable                                                          |  |                           | (261,869     | ) |      |   | (2,184,093   | )
|Changes in other assets and liabilities                                                           |  |                           | 441,233      |   |      |   | (1,657,163   | )
|                                                                                                  |  |                           |              |   |      |   |              |  
|Net adjustments                                                                                   |  |                           | (22,993,729  | ) |      |   | (20,422,918  | )
|                                                                                                  |  |                           |              |   |      |   |              |  
|Net cash used in operating activities                                                             |  |                           | (20,654,869  | ) |      |   | (15,142,485  | )
|                                                                                                  |  |                           |              |   |      |   |              |  
|Cash Flows From Investing Activities:                                                             |  |                           |              |   |      |   |              |  
|Proceeds from:                                                                                    |  |                           |              |   |      |   |              |  
|Maturities of time deposits in other banks                                                        |  |                           | 99,000       |   |      |   |             |  
|Maturities of debt securities held to maturity                                                    |  |                           |             |   |      |   | 29,000,000   |  
|Maturities of debt securities available for sale                                                  |  |                           | 1,000,000    |   |      |   | 7,000,000    |  
|Sales of debt securities available for sale                                                       |  |                           | 51,050,500   |   |      |   | 24,798,746   |  
|Redemption of FHLB stock                                                                          |  |                           | 4,571,500    |   |      |   | 7,089,000    |  
|Sales of real estate acquired in settlement of loans receivable                                   |  |                           | 3,248,200    |   |      |   | 1,682,249    |  
|Sales of equipment                                                                                |  |                           | 12,150       |   |      |   | 8,125        |  
|Sale of investment in joint venture                                                               |  |                           |             |   |      |   | 49,375       |  
|Purchases of:                                                                                     |  |                           |              |   |      |   |              |  
|Debt securities held to maturity                                                                  |  |                           |             |   |      |   | (38,861,190  | )
|Debt securities available for sale                                                                |  |                           | (56,715,014  | ) |      |   | (24,426,102  | )
|Mortgage-backed securities available for sale                                                     |  |                           | (7,003,443   | ) |      |   |             |  
|Equity securities available for sale                                                              |  |                           |             |   |      |   | (9,159,029   | )
|FHLB stock                                                                                        |  |                           | (5,325,200   | ) |      |   | (12,302,800  | )
|Bank-owned life insurance                                                                         |  |                           |             |   |      |   | (1,500,000   | )
|Premises and equipment                                                                            |  |                           | (635,405     | ) |      |   | (602,205     | )
|Principal payments received on mortgage-backed securities                                         |  |                           | 1,892,020    |   |      |   | 239,318      |  
|Net increase in loans receivable                                                                  |  |                           | (99,958,911  | ) |      |   | (95,264,406  | )
|Cash paid for equity in joint venture                                                             |  |                           |             |   |      |   | (233,691     | )
|                                                                                                  |  |                           |              |   |      |   |              |  
|Net cash used in investing activities                                                             |  | $                         | (107,764,603 | ) |      | $ | (112,482,610 | )
|                                                                                                  |  |                           |              |   |      |   |              |  

Continued on next page.



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##### Table of Contents

PULASKI FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR SIX MONTHS

ENDED MARCH 31, 2009 AND MARCH 31, 2008, CONTINUED
(UNAUDITED)





|                                                                                            |  |                           |              |   |      |   |             |  
|------------------------------------------------------------------------------------------- |  | ------------------------- | ------------ | - | ---- | - | ----------- | -
|                                                                                            |  | Six Months EndedMarch 31, |             
|                                                                                            |  | 2009                      |              |   | 2008 |  
|Cash Flows From Financing Activities:                                                       |  |                           |              |   |      |   |             |  
|Net increase in deposits                                                                    |  | $                         | 179,561,557  |   |      | $ | 19,772,369  |  
|Proceeds from (repayment of) Federal Home Loan Bank advances, net                           |  |                           | (124,500,000 | ) |      |   | 106,600,000 |  
|Proceeds from Federal Reserve Bank borrowings, net                                          |  |                           | 90,000,000   |   |      |   |            |  
|Proceeds from notes payable                                                                 |  |                           |             |   |      |   | 3,000,000   |  
|Payment on notes payable                                                                    |  |                           | (7,640,000   | ) |      |   | (170,000    | )
|Net decrease in due to other banks                                                          |  |                           | (14,377,831  | ) |      |   | (100,166    | )
|Net decrease in advance payments by borrowers for taxes and insurance                       |  |                           | (904,623     | ) |      |   | (1,412,477  | )
|Treasury stock issued for purchase of equity in joint venture                               |  |                           |             |   |      |   | 191,835     |  
|Proceeds from cash received in dividend reinvestment plan                                   |  |                           | 341,405      |   |      |   | 337,349     |  
|Proceeds from issuance of preferred stock and common stock warrants                         |  |                           | 32,501,768   |   |      |   |            |  
|Purchase of equity trust shares                                                             |  |                           | (68,200      | ) |      |   | (110,000    | )
|Excess tax benefit for stock based compensation                                             |  |                           | 11,380       |   |      |   | 60,803      |  
|Treasury stock issued for stock options exercised                                           |  |                           |             |   |      |   | 800,922     |  
|Dividends paid on common stock                                                              |  |                           | (1,951,442   | ) |      |   | (1,809,685  | )
|Dividends paid on preferred stock                                                           |  |                           | (131,056     | ) |      |   |            |  
|Common stock surrendered to satisfy tax withholding obligations of stock-based compensation |  |                           | (28,181      | ) |      |   | (146,872    | )
|Common stock repurchased                                                                    |  |                           |             |   |      |   | (388,750    | )
|                                                                                            |  |                           |              |   |      |   |             |  
|Net cash provided by financing activities                                                   |  |                           | 152,814,777  |   |      |   | 126,625,328 |  
|                                                                                            |  |                           |              |   |      |   |             |  
|Net increase (decrease) in cash and cash equivalents                                        |  |                           | 24,395,305   |   |      |   | (999,767    | )
|Cash and cash equivalents at beginning of period                                            |  |                           | 29,077,862   |   |      |   | 23,674,743  |  
|                                                                                            |  |                           |              |   |      |   |             |  
|Cash and cash equivalents at end of period                                                  |  | $                         | 53,473,167   |   |      | $ | 22,674,976  |  
|                                                                                            |  |                           |              |   |      |   |             |  
|Supplemental Disclosures of Cash Flow Information:                                          |  |                           |              |   |      |   |             |  
|Cash paid during the period for:                                                            |  |                           |              |   |      |   |             |  
|Interest on deposits                                                                        |  | $                         | 11,696,714   |   |      | $ | 16,815,115  |  
|Interest on advances from FHLB                                                              |  |                           | 2,110,196    |   |      |   | 4,603,478   |  
|Interest on other borrowings                                                                |  |                           | 227,754      |   |      |   | 16,630      |  
|Interest on subordinated debentures                                                         |  |                           | 457,860      |   |      |   | 752,692     |  
|Interest on notes payable                                                                   |  |                           | 114,323      |   |      |   | 84,762      |  
|                                                                                            |  |                           |              |   |      |   |             |  
|Cash paid during the period for interest                                                    |  |                           | 14,606,847   |   |      |   | 22,272,677  |  
|Income taxes, net                                                                           |  |                           | (659,000     | ) |      |   | 4,569,532   |  
|                                                                                            |  |                          
|Noncash Investing Activities:                                                               |  |                           |              |   |      |   |             |  
|Real estate acquired in settlement of loans receivable                                      |  |                           | 4,165,257    |   |      |   | 5,449,165   |  

See accompanying notes to the unaudited consolidated financial statements.



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PULASKI FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





|1. | BASIS OF PRESENTATION
|-- | ---------------------

The unaudited consolidated
financial statements include the accounts of Pulaski Financial Corp. (the Company) and its wholly owned subsidiary, Pulaski Bank (the Bank), and the Banks wholly owned subsidiary, Pulaski Service Corporation. All
significant intercompany accounts and transactions have been eliminated. The assets of the Company consist primarily of the investment in the outstanding shares of the Bank and its liabilities consist principally of subordinated debentures and notes
payable. Accordingly, the information set forth in this report, including the consolidated financial statements and related financial data, relates primarily to the Bank. The Company, through the Bank, operates as a single business segment,
providing traditional community banking services through its full service branch network.

In the opinion of management, the unaudited
consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the financial condition of the Company as of March 31, 2009 and September 30, 2008 and its
results of operations for the three- and six-month periods ended March 31, 2009 and 2008. The results of operations for the three- and six-month periods ended March 31, 2009 are not necessarily indicative of the operating results that may
be expected for the entire fiscal year. These unaudited consolidated financial statements should be read in conjunction with the Companys audited consolidated financial statements for the year ended September 30, 2008 contained in the
Companys 2008 Annual Report to Stockholders, which was filed as an exhibit to the Companys Annual Report on Form 10-K for the year ended September 30, 2008.

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements that affect the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those
estimates. The allowance for loan losses and fair values of financial instruments are significant estimates reported within the consolidated financial statements.

Certain reclassifications have been made to fiscal 2008 amounts to conform to the fiscal 2009 presentation.



|2. | PREFERRED STOCK
|-- | ---------------

On January 16, 2009, as part
of the U.S. Department of Treasurys Capital Purchase Program, the Company issued 32,538 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, $1,000 per share liquidation preference, and a warrant to purchase up to 778,421
shares of the Companys common stock for a period of ten years at an exercise price of $6.27 per share in exchange for $32.5 million in cash from the U.S. Department of Treasury. The proceeds, net of issuance costs consisting primarily of legal
fees, were allocated between the preferred stock and the warrant on a pro rata basis, based upon the estimated market values of the preferred stock and the warrants. As a result, $2.2 million of the proceeds were allocated to the warrant, which
increased additional paid in capital from common stock. The amount allocated to the warrant is considered a discount on the preferred stock and will be amortized using the level yield method over a five-year period through a charge to retained
earnings. Such amortization will not reduce net income, but will reduce income available for common shares.

The preferred stock pays
cumulative dividends of 5% per year for the first five years and 9% per year thereafter. After three years, the Company may, at its option, redeem the preferred stock at its liquidation preference plus accrued and unpaid dividends. The
securities purchase agreement between the Company and the U.S. Treasury limits, for three years, the rate of dividend payments on the Companys common stock to the amount of its last quarterly cash dividend prior to participation in the program
of $0.095 per share unless an increase is approved by the Treasury, limits the Companys ability to repurchase its common stock for three years, and subjects the Company to certain executive compensation limitations included in the Emergency
Economic Stabilization Act of 2008, as amended by the American Recovery and Reinvestment Act of 2009.



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|3. | EARNINGS PER SHARE
|-- | ------------------

Basic earnings per common share
is computed using the weighted average number of common shares outstanding. The dilutive effect of potential common shares outstanding is included in diluted earnings per share. The computations of basic and diluted earnings per share are presented
in the following table.



|                                                    |  |                             |            |                           |      |   |            |  |   |            |   |  |   |           
|--------------------------------------------------- |  | --------------------------- | ---------- | ------------------------- | ---- | - | ---------- |  | - | ---------- | - |  | - | ----------
|                                                    |  | Three Months EndedMarch 31, |            | Six Months EndedMarch 31,
|                                                    |  | 2009                        |            |                           | 2008 |   | 2009       |  |   | 2008      
|Net income                                          |  | $                           | 1,773,003  |                           |      | $ | 2,548,281  |  | $ | 2,338,860  |   |  | $ | 5,280,433 
|Less:                                               |  |                             |            |                           |      |   |            |  |   |            |   |  |   |           
|Preferred dividends declared                        |  |                             | (131,056   | )                         |      |   |           |  |   | (131,056   | ) |  |   |          
|Amortization of discount on preferred stock         |  |                             | (106,554   | )                         |      |   |           |  |   | (106,554   | ) |  |   |          
|                                                    |  |                             |            |                           |      |   |            |  |   |            |   |  |   |           
|Income available for common shares                  |  | $                           | 1,535,393  |                           |      | $ | 2,548,281  |  | $ | 2,101,250  |   |  | $ | 5,280,433 
|                                                    |  |                             |            |                           |      |   |            |  |   |            |   |  |   |           
|Weighted average common shares outstandingbasic    |  |                             | 10,153,221 |                           |      |   | 9,854,302  |  |   | 10,133,651 |   |  |   | 9,817,014 
|Treasury stockequity trust                         |  |                             | 87,987     |                           |      |   | 177,556    |  |   | 95,001     |   |  |   | 177,560   
|Equivalent sharesemployee stock options and awards |  |                             | 42,116     |                           |      |   | 177,318    |  |   | 50,275     |   |  |   | 203,347   
|Equivalent sharescommon stock warrant              |  |                             |           |                           |      |   |           |  |   | 45,462     |   |  |   |          
|                                                    |  |                             |            |                           |      |   |            |  |   |            |   |  |   |           
|Weighted average common shares outstandingdiluted  |  |                             | 10,283,324 |                           |      |   | 10,209,176 |  |   | 10,324,389 |   |  |   | 10,197,921
|                                                    |  |                             |            |                           |      |   |            |  |   |            |   |  |   |           
|Earnings per common share:                          |  |                             |            |                           |      |   |            |  |   |            |   |  |   |           
|Basic                                               |  | $                           | 0.15       |                           |      | $ | 0.26       |  | $ | 0.21       |   |  | $ | 0.54      
|Diluted                                             |  | $                           | 0.15       |                           |      | $ | 0.25       |  | $ | 0.20       |   |  | $ | 0.52      

Under the treasury stock method, outstanding stock options are dilutive when the average market
price of the Companys common stock, combined with the effect of any unamortized compensation expense, exceeds the option price during a period. In addition, proceeds from the assumed exercise of dilutive options along with the related tax
benefit are assumed to be used to repurchase common shares at the average market price of such stock during the period. Similarly, outstanding warrants are dilutive when the average market price of the Companys common stock exceeds the
exercise price during a period. Proceeds from the assumed exercise of dilutive warrants are assumed to be used to repurchase common shares at the average market price of such stock during the period.

The following options and warrants to purchase common shares during the three- and six-month periods ended March 31, 2009 and 2008 were not included
in the respective computations of diluted earnings per share because the exercise price of the options, when combined with the effect of the unamortized compensation expense, and the exercise price of the warrants were greater than the average
market price of the common shares and were considered anti-dilutive. The options expire in various periods from 2012 through 2019, respectively, and the warrants expire in 2019.



|                                |  |                             |  |                           |  |         |  |        
|------------------------------- |  | --------------------------- |  | ------------------------- |  | ------- |  | -------
|                                |  | Three Months EndedMarch 31, |  | Six Months EndedMarch 31,
|                                |  | 2009                        |  | 2008                      |  | 2009    |  | 2008   
|Number of option shares         |  | 747,245                     |  | 385,503                   |  | 696,873 |  | 362,471
|Equivalent anti-dilutive shares |  | 812,231                     |  | 160,370                   |  | 696,917 |  | 142,940
|Number of warrant shares        |  | 778,421                     |  |                          |  |        |  |       
|Equivalent anti-dilutive shares |  | 13,399                      |  |                          |  |        |  |       



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|4. | STOCK-BASED COMPENSATION
|-- | ------------------------

The Companys
shareholder-approved, stock-based incentive plans permit the grant of awards in the form of options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code, options that do not so qualify (non-statutory
stock options,) and grants of restricted shares of common stock. All employees, non-employee directors and consultants of the Company and its affiliates are eligible to receive awards under the plans. Except as described below, all stock option
awards issued during the six months ended March 31, 2009 were granted with an exercise price equal to the market value of the Companys shares at the date of grant and vest over a period of two to five years. In November 2008, options for
32,000 shares of the Companys common stock were awarded to directors with terms providing for immediate vesting and exercise prices equal to the market value of the Companys shares at the date of grant. The exercise period for stock
options generally may not exceed 10 years from the date of grant. Option and share awards provide for accelerated vesting if there is a change in control (as defined in the plans).

A summary of the Companys stock option program as of March 31, 2009 and changes during the six-month period then ended, is presented below:



|                               |  |                |   |  |                              |       |                         |   |                                                  |  |    
|------------------------------ |  | -------------- | - |  | ---------------------------- | ----- | ----------------------- | - | ------------------------------------------------ |  | ---
|                               |  | NumberOfShares |   |  | WeightedAverageExercisePrice |       | AggregateIntrinsicValue |   | Weighted-AverageRemainingContractualLife (years)
|Outstanding at October 1, 2008 |  | 788,233        |   |  | $                            | 10.38 |                         |   |                                                  |  |    
|Granted                        |  | 179,350        |   |  | $                            | 7.27  |                         |   |                                                  |  |    
|Exercised                      |  |               |   |  |                              |      |                         |   |                                                  |  |    
|Expired                        |  |               |   |  |                              |      |                         |   |                                                  |  |    
|Forfeited                      |  | (3,000         | ) |  | $                            | 12.99 |                         |   |                                                  |  |    
|                               |  |                |   |  |                              |       |                         |   |                                                  |  |    
|Outstanding at March 31, 2009  |  | 964,583        |   |  | $                            | 9.80  |                         | $ | 184,000                                          |  | 6.4
|                               |  |                |   |  |                              |       |                         |   |                                                  |  |    
|Exercisable at March 31, 2009  |  | 480,311        |   |  | $                            | 8.79  |                         | $ | 184,000                                          |  | 4.2
|                               |  |                |   |  |                              |       |                         |   |                                                  |  |    

The weighted-average grant-date fair value of options granted during the six months ended
March 31, 2009 was $1.82 per share. As of March 31, 2009, the total unrecognized compensation expense related to non-vested stock options and awards was $1.3 million and the related weighted average period over which it is expected to be
recognized is 3.1 years.

The fair value of stock options granted during the six-month periods ended March 31, 2009 and 2008 is
estimated on the date of grant using the Black-Scholes option pricing model with the following average assumptions:



|                         |  |                           |   |  |       |  
|------------------------ |  | ------------------------- | - |  | ----- | -
|                         |  | Six Months EndedMarch 31, |  
|                         |  | 2009                      |   |  | 2008  |  
|Risk free interest rate  |  | 4.30                      | % |  | 4.22  | %
|Expected volatility      |  | 35.53                     | % |  | 27.83 | %
|Expected life in years   |  | 5.4                       |   |  | 5.5   |  
|Dividend yield           |  | 4.27                      | % |  | 2.62  | %
|Expected forfeiture rate |  | 3.37                      | % |  | 1.28  | %

The Company maintains an Equity Trust Plan for the benefit of key loan officers and sales staff.
The plan is designed to recruit, retain and motivate top-performing loan officers and other key revenue-producing employees who are instrumental to the Companys success. The plan allows the recipients to defer a percentage of commissions
earned, which might be partially matched by the Company and paid into a rabbi trust for the benefit of the participants. The assets of the trust are limited to Company shares purchased in the open market and cash. Should the participants



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voluntarily leave the Company, they forego any unvested accrued benefits. At March 31, 2009, there
were 239,138 shares in the plan with an aggregate value of $2.7 million, which were classified as treasury stock  equity trust in the Companys consolidated financial statements, of which 87,005 were not yet vested. Vested shares in the
plan are treated as issued and outstanding when computing basic and diluted earnings per share, whereas unvested shares are treated as issued and outstanding only when computing diluted earnings per share. Excess tax benefits associated with all
stock-based compensation totaled approximately $11,000 for the six months ended March 31, 2009.



|5. | INCOME TAXES
|-- | ------------

The Company has adopted the
provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (Interpretation No. 48). At
March 31, 2009, the Company had $180,000 of unrecognized tax benefits, $139,000 of which would affect the effective tax rate if recognized. The Company recognizes interest related to uncertain tax positions in income tax expense and classifies
such interest and penalties in the liability for unrecognized tax benefits. As of March 31, 2009, the Company had approximately $41,000 accrued for the payment of interest and penalties. The tax years ended September 30, 2005 through 2008
remain open to examination by the taxing jurisdictions to which the Company is subject.



|6. | DEBT SECURITIES
|-- | ---------------

Debt securities available for sale
at March 31, 2009 consisted of two Federal Home Loan Bank bonds and one Freddie Mac bond totaling $5.0 million with a weighted average interest rate of 2.32% and a weighted average maturity of five months. Gross unrealized gains and gross
unrealized losses at March 31, 2009 totaled $2,000 and $1,700, respectively. At March 31, 2009, the Company had one Federal Home Loan Bank bond classified as available for sale that was in a continuous unrealized loss position for less
than twelve months totaling $1,700 and had a market value totaling $2.0 million. The Company has the ability and intent to hold this security until its maturity on July 28, 2009. Further, the Company believes the deterioration in value is
attributable to changes in market interest rates and not the credit quality of the issuer.



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|7. | MORTGAGE-BACKED SECURITIES
|-- | --------------------------

Mortgage-backed
securities held to maturity and available for sale at March 31, 2009 and September 30, 2008 are summarized as follows:



|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|----------------------------------------- |  | ------------------ | ---------- | - | -------------------- | - | --------------------- |  | - | ------------------- | - |  | - | ----------
|                                          |  | March 31, 2009    
|                                          |  | AmortizedCost      |            |   | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | EstimatedFair Value
|Held to Maturity:                         |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Mortgage-backed securities:               |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Freddie Mac                               |  | $                  | 2,260      |   |                      | $ | 242                   |  | $ |                    |   |  | $ | 2,502     
|Ginnie Mae                                |  |                    | 235,470    |   |                      |   | 20,247                |  |   |                    |   |  |   | 255,717   
|Fannie Mae                                |  |                    | 14,154,273 |   |                      |   | 220,602               |  |   | (6,491              | ) |  |   | 14,368,384
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Total mortgage-backed securities          |  |                    | 14,392,003 |   |                      |   | 241,091               |  |   | (6,491              | ) |  |   | 14,626,603
|Collateralized mortgage obligations -     |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Freddie Mac                               |  |                    | 22,580     |   |                      |   |                      |  |   | (26                 | ) |  |   | 22,554    
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Total held to maturity                    |  | $                  | 14,414,583 |   |                      | $ | 241,091               |  | $ | (6,517              | ) |  | $ | 14,649,157
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Weighted average rate at end of period    |  |                    | 4.72       | % |                      |   |                       |  |   |                     |   |  |   |           
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Available for Sale:                       |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Mortgage-backed securities:               |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Ginnie Mae                                |  | $                  | 557,839    |   |                      | $ | 24,629                |  | $ |                    |   |  | $ | 582,468   
|Fannie Mae                                |  |                    | 1,726,050  |   |                      |   | 28,979                |  |   |                    |   |  |   | 1,755,029 
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Total mortgage-backed securities          |  |                    | 2,283,889  |   |                      |   | 53,608                |  |   |                    |   |  |   | 2,337,497 
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Collateralized mortgage obligations:      |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Freddie Mac                               |  |                    | 1,514,063  |   |                      |   | 27,923                |  |   |                    |   |  |   | 1,541,986 
|Ginnie Mae                                |  |                    | 7,768,695  |   |                      |   | 68,602                |  |   |                    |   |  |   | 7,837,297 
|Fannie Mae                                |  |                    | 5,171,875  |   |                      |   |                      |  |   | (31,525             | ) |  |   | 5,140,350 
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Total collateralized mortgage obligations |  |                    | 14,454,633 |   |                      |   | 96,525                |  |   | (31,525             | ) |  |   | 14,519,633
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Total available for sale                  |  | $                  | 16,738,522 |   |                      | $ | 150,133               |  | $ | (31,525             | ) |  | $ | 16,857,130
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Weighted average rate at end of period    |  |                    | 3.77       | % |                      |   |                       |  |   |                     |   |  |   |           
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|                                          | 
|                                          |  | September 30, 2008
|                                          |  | AmortizedCost      |            |   | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | EstimatedFair Value
|Held to Maturity:                         |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Mortgage-backed securities:               |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Freddie Mac                               |  | $                  | 3,556      |   |                      | $ | 376                   |  | $ | (3                  | ) |  | $ | 3,929     
|Ginnie Mae                                |  |                    | 282,820    |   |                      |   | 29,312                |  |   | (308                | ) |  |   | 311,824   
|Fannie Mae                                |  |                    | 15,434,529 |   |                      |   | 48,119                |  |   | (214,043            | ) |  |   | 15,268,605
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Total mortgage-backed securities          |  |                    | 15,720,905 |   |                      |   | 77,807                |  |   | (214,354            | ) |  |   | 15,584,358
|Collateralized mortgage obligations -     |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Freddie Mac                               |  |                    | 23,592     |   |                      |   |                      |  |   | (298                | ) |  |   | 23,294    
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Total held to maturity                    |  | $                  | 15,744,497 |   |                      | $ | 77,807                |  | $ | (214,652            | ) |  | $ | 15,607,652
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Weighted average rate at end of period    |  |                    | 4.91       | % |                      |   |                       |  |   |                     |   |  |   |           
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Available for Sale:                       |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Mortgage-backed securities:               |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Ginnie Mae                                |  | $                  | 263,833    |   |                      | $ | 15,657                |  | $ |                    |   |  | $ | 279,490   
|Fannie Mae                                |  |                    | 1,957,014  |   |                      |   |                      |  |   | (14,006             | ) |  |   | 1,943,008 
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Total mortgage-backed securities          |  |                    | 2,220,847  |   |                      |   | 15,657                |  |   | (14,006             | ) |  |   | 2,222,498 
|Collateralized mortgage obligations: -    |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Ginnie Mae                                |  |                    | 8,105,406  |   |                      |   |                      |  |   | (147,238            | ) |  |   | 7,958,168 
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Total available for sale                  |  | $                  | 10,326,253 |   |                      | $ | 15,657                |  | $ | (161,244            | ) |  | $ | 10,180,666
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           
|Weighted average rate at end of period    |  |                    | 4.16       | % |                      |   |                       |  |   |                     |   |  |   |           
|                                          |  |                    |            |   |                      |   |                       |  |   |                     |   |  |   |           



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The summary below displays the length of time mortgage-backed securities held to maturity and available
for sale were in a continuous unrealized loss position as of March 31, 2009 and September 30, 2008. The Company has the ability and intent to hold these securities until such time as the values recover or the securities repay or mature.
Further, the Company believes the deterioration in value is attributable to changes in market interest rates and not the credit quality of the issuers.



|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|----------------------------------- |  | -------------------------------------------------------------------------- | ---------- | - | ----------------- | - | ------- | ------------------- |  | ---------------- | - | ------------------- | - | - | ---------------- | - | ---------- | - |  | - | ------- | -
|                                    |  | LENGTH OF TIME IN CONTINUOUS UNREALIZED LOSS POSITION ATMARCH 31, 2009     |           
|                                    |  | Less than 12 months                                                        |            |   | 12 months or more |   | Total   |                    
|                                    |  | AmortizedCost                                                              |            |   | UnrealizedLosses  |   |         | AmortizedCost       |  | UnrealizedLosses |   | AmortizedCost       |   |   | UnrealizedLosses |  
|Held to Maturity:                   |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|Mortgage-backed securities          |  | $                                                                          | 2,295,623  |   |                   | $ | 6,491   |                     |  | $                |  |                     | $ |  |                  | $ | 2,295,623  |   |  | $ | 6,491   |  
|Collateralized mortgage obligations |  |                                                                            | 22,580     |   |                   |   | 26      |                     |  |                  |  |                     |   |  |                  |   | 22,580     |   |  |   | 26      |  
|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|Total held to maturity              |  |                                                                            | 2,318,203  |   |                   |   | 6,517   |                     |  |                  |  |                     |   |  |                  |   | 2,318,203  |   |  |   | 6,517   |  
|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|                                    |  |                                                                            |            |   |                   |  
|                                    |  | EstimatedFair Value                                                        |            |   | UnrealizedLosses  |   |         | EstimatedFair Value |  | UnrealizedLosses |   | EstimatedFair Value |   |   | UnrealizedLosses |  
|Available for Sale:                 |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|Mortgage-backed securities          |  |                                                                            |           |   |                   |   |        |                     |  |                  |  |                     |   |  |                  |   |           |   |  |   |        |  
|Collateralized mortgage obligations |  |                                                                            | 5,140,350  |   |                   |   | 31,525  |                     |  |                  |  |                     |   |  |                  |   | 5,140,350  |   |  |   | 31,525  |  
|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|Total available for sale            |  |                                                                            | 5,140,350  |   |                   |   | 31,525  |                     |  |                  |  |                     |   |  |                  |   | 5,140,350  |   |  |   | 31,525  |  
|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|Total at March 31, 2009             |  | $                                                                          | 7,458,553  |   |                   | $ | 38,042  |                     |  | $                |  |                     | $ |  |                  | $ | 7,458,553  |   |  | $ | 38,042  |  
|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|Percent of total                    |  |                                                                            | 100.0      | % |                   |   | 100.0   | %                   |  |                  |  |                     |   |  |                  |   | 100.0      | % |  |   | 100.0   | %
|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|                                    | 
|                                    |  | LENGTH OF TIME IN CONTINUOUS UNREALIZED LOSS POSITION ATSEPTEMBER 30, 2008 |           
|                                    |  | Less than 12 months                                                        |            |   | 12 months or more |   | Total   |                    
|                                    |  | AmortizedCost                                                              |            |   | UnrealizedLosses  |   |         | AmortizedCost       |  | UnrealizedLosses |   | AmortizedCost       |   |   | UnrealizedLosses |  
|Held to Maturity:                   |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|Mortgage-backed securities          |  | $                                                                          | 10,201,656 |   |                   | $ | 214,354 |                     |  | $                |  |                     | $ |  |                  | $ | 10,201,656 |   |  | $ | 214,354 |  
|Collateralized mortgage obligations |  |                                                                            | 23,592     |   |                   |   | 298     |                     |  |                  |  |                     |   |  |                  |   | 23,592     |   |  |   | 298     |  
|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|Total held to maturity              |  |                                                                            | 10,225,248 |   |                   |   | 214,652 |                     |  |                  |  |                     |   |  |                  |   | 10,225,248 |   |  |   | 214,652 |  
|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|                                    |  |                                                                            |            |   |                   |  
|                                    |  | EstimatedFair Value                                                        |            |   | UnrealizedLosses  |   |         | EstimatedFair Value |  | UnrealizedLosses |   | EstimatedFair Value |   |   | UnrealizedLosses |  
|Available for Sale:                 |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|Mortgage-backed securities          |  |                                                                            | 1,943,008  |   |                   |   | 14,006  |                     |  |                  |  |                     |   |  |                  |   | 1,943,008  |   |  |   | 14,006  |  
|Collateralized mortgage obligations |  |                                                                            | 7,958,168  |   |                   |   | 147,238 |                     |  |                  |  |                     |   |  |                  |   | 7,958,168  |   |  |   | 147,238 |  
|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|Total available for sale            |  |                                                                            | 9,901,176  |   |                   |   | 161,244 |                     |  |                  |  |                     |   |  |                  |   | 9,901,176  |   |  |   | 161,244 |  
|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|Total at September 30, 2008         |  | $                                                                          | 20,126,424 |   |                   | $ | 375,896 |                     |  | $                |  |                     | $ |  |                  | $ | 20,126,424 |   |  | $ | 375,896 |  
|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  
|Percent of total                    |  |                                                                            | 100.0      | % |                   |   | 100.0   | %                   |  |                  |  |                     |   |  |                  |   | 100.0      | % |  |   | 100.0   | %
|                                    |  |                                                                            |            |   |                   |   |         |                     |  |                  |   |                     |   |   |                  |   |            |   |  |   |         |  



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|8. | LOANS RECEIVABLE
|-- | ----------------

Loans receivable at
March 31, 2009 and September 30, 2008 are summarized as follows:



|                                                |  |           |               |   |               |   |               |  
|----------------------------------------------- |  | --------- | ------------- | - | ------------- | - | ------------- | -
|                                                |  | March 31, |               |   | September 30, |  
|                                                |  | 2009      |               |   | 2008          |  
|Real estate mortgage:                           |  |           |               |   |               |   |               |  
|Residential first mortgage                      |  | $         | 265,828,645   |   |               | $ | 253,132,315   |  
|Residential second mortgage                     |  |           | 76,375,441    |   |               |   | 86,348,973    |  
|Home equity lines of credit                     |  |           | 231,874,625   |   |               |   | 225,357,406   |  
|Multi-family residential                        |  |           | 36,769,188    |   |               |   | 32,546,370    |  
|Commercial real estate                          |  |           | 298,746,152   |   |               |   | 261,166,327   |  
|Real estate construction and development:       |  |           |               |   |               |   |               |  
|Residential                                     |  |           | 28,012,333    |   |               |   | 34,511,026    |  
|Multi-family                                    |  |           | 7,058,323     |   |               |   | 9,607,101     |  
|Commercial                                      |  |           | 69,535,536    |   |               |   | 55,263,607    |  
|Commercial and industrial                       |  |           | 168,456,525   |   |               |   | 137,688,076   |  
|Consumer and installment                        |  |           | 5,554,142     |   |               |   | 6,895,479     |  
|                                                |  |           |               |   |               |   |               |  
|                                                |  |           | 1,188,210,910 |   |               |   | 1,102,516,680 |  
|Add (less):                                     |  |           |               |   |               |   |               |  
|Deferred loan costs                             |  |           | 4,837,558     |   |               |   | 5,204,730     |  
|Loans in process                                |  |           | (1,795,045    | ) |               |   | (6,223,362    | )
|Allowance for loan losses                       |  |           | (18,467,535   | ) |               |   | (12,761,532   | )
|                                                |  |           |               |   |               |   |               |  
|Total                                           |  | $         | 1,172,785,888 |   |               | $ | 1,088,736,516 |  
|                                                |  |           |               |   |               |   |               |  
|Weighted average interest rate at end of period |  |           | 5.30          | % |               |   | 6.02          | %
|                                                |  |           |               |   |               |   |               |  



|9. | DEPOSITS
|-- | --------

Deposits at March 31, 2009 and
September 30, 2008 are summarized as follows:



|                              |  |                |               |                             |                    |   |        |   |                             |  |      |  
|----------------------------- |  | -------------- | ------------- | --------------------------- | ------------------ | - | ------ | - | --------------------------- |  | ---- | -
|                              |  | March 31, 2009 |               |                             | September 30, 2008 |  
|                              |  | Amount         |               | WeightedAverageInterestRate |                    |   | Amount |   | WeightedAverageInterestRate | 
|Transaction accounts:         |  |                |               |                             |                    |   |        |   |                             |  |      |  
|Non-interest-bearing checking |  | $              | 129,308,955   |                             |                   |   |        | $ | 76,404,474                  |  |     |  
|Interest-bearing checking     |  |                | 213,811,588   |                             | 1.58               | % |        |   | 178,697,883                 |  | 2.51 | %
|Passbook savings accounts     |  |                | 26,306,886    |                             | 0.19               | % |        |   | 25,828,504                  |  | 0.32 | %
|Money market                  |  |                | 139,276,900   |                             | 0.78               | % |        |   | 149,141,121                 |  | 2.12 | %
|                              |  |                |               |                             |                    |   |        |   |                             |  |      |  
|Total transaction accounts    |  |                | 508,704,329   |                             | 0.89               | % |        |   | 430,071,982                 |  | 1.80 | %
|                              |  |                |               |                             |                    |   |        |   |                             |  |      |  
|Certificates of deposit:      |  |                |               |                             |                    |   |        |   |                             |  |      |  
|Retail                        |  |                | 283,825,519   |                             | 3.09               | % |        |   | 232,369,917                 |  | 3.50 | %
|CDARS                         |  |                | 177,402,074   |                             | 1.94               | % |        |   | 123,932,466                 |  | 2.79 | %
|Brokered                      |  |                | 124,941,000   |                             | 3.20               | % |        |   | 128,937,000                 |  | 3.85 | %
|                              |  |                |               |                             |                    |   |        |   |                             |  |      |  
|Total certificates of deposit |  |                | 586,168,593   |                             | 2.77               | % |        |   | 485,239,383                 |  | 3.41 | %
|                              |  |                |               |                             |                    |   |        |   |                             |  |      |  
|Total deposits                |  | $              | 1,094,872,922 |                             | 1.89               | % |        | $ | 915,311,365                 |  | 2.65 | %
|                              |  |                |               |                             |                    |   |        |   |                             |  |      |  



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|10. | FAIR VALUES OF ASSETS AND LIABILITIES
|--- | -------------------------------------

Effective
October 1, 2008, the Company adopted the provisions of Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS No. 157), which defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Fair value is defined under SFAS 157 as the exchange price that would be received for an asset or paid to transfer a liability
(an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Under SFAS 157, a fair value measurement should reflect all of the assumptions
that market participants would use in pricing the asset or liability, including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset, and the risk of nonperformance.

SFAS 157 specifies a three-level hierarchy for valuation techniques used to measure financial assets and financial liabilities at fair
value. This hierarchy is based on whether the valuation inputs are observable or unobservable. Financial instrument valuations are considered Level 1 when they are based on quoted prices in active markets for identical assets or liabilities. Level 2
financial instrument valuations use quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Financial instrument valuations
are considered Level 3 when they are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable, and when determination of the fair value requires
significant management judgment or estimation.

In April 2009, the Financial Accounting Standards Board issued Staff Position No. FAS 157-4,
Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (FSP FAS 157-4), which provides additional guidance on
determining fair value when the volume and level of activity for the asset or liability has significantly decreased. The FSP also includes guidance on identifying circumstances when a transaction may not be considered orderly. This FSP is effective
for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The Company is currently evaluating the potential impact the new pronouncement will have, if any,
on its financial statements.

The following disclosures exclude certain non-financial assets and liabilities, which are deferred under the
provisions of Financial Accounting Standards Board Staff Position No. FAS 157-2, Effective Date of FASB Staff Position No. 157 (FSP No. 157-2). Such non-financial assets include foreclosed real estate, long-lived
assets and goodwill, which are written down to fair value if considered impaired. The deferral of these disclosures is intended to allow additional time to consider the effect of various implementation issues relating to these non-financial assets
and liabilities, and defers disclosures required by SFAS No. 157 until the Companys fiscal year beginning October 1, 2009. The Company does not expect the adoption of the remaining provisions of this statement to have a material
effect on its financial statements.

The Company records securities available for sale and derivative financial instruments at their fair
values on a recurring basis. Additionally, the Company records other assets at their fair values on a nonrecurring basis, such as loans held for sale, loans held for investment and certain other assets. These nonrecurring fair value adjustments
typically involve application of lower-of-cost-or-market accounting or impairment write-downs of individual assets. The following is a general description of the methods used to value such assets.

Equity Securities Available for Sale. The fair values of equity securities available for sale are generally based on quoted market prices or market
prices for similar assets. However, nonpublic investments are initially valued at transaction price and subsequently adjusted when evidence is available to support such adjustments.

Debt and Mortgage-Backed Securities Available for Sale. The fair values of debt and mortgage-backed securities available for sale are generally
based on quoted market prices or market prices for similar assets.

Interest Rate Swap Assets and Liabilities. The fair values of
interest rate swap assets and liabilities are generally based on the income approach to value using observable Level II market expectations at measurement date and standard quantitative valuation techniques to convert future amounts to a single
present amount (discounted)



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assuming that participants are motivated, but not compelled to transact. Level II inputs for the swap valuations are limited to quoted prices for similar
assets or liabilities in active markets (specifically futures contracts on LIBOR for the first two years) and inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR cash and swap rates, LIBOR basis
spreads, volatilities, and credit risk at commonly quoted intervals). Mid-market pricing is used as a practical expedient for fair value measurements.

Loans Held for Sale. The fair values of loans held for sale are generally based on quoted market prices or market prices for similar assets.

Impaired Loans. The fair values of impaired loans are generally based on market prices for similar assets.

Assets and liabilities that were recorded at fair value on a recurring basis at March 31, 2009 and the level of inputs used to determine their fair values are
summarized below:



|                                             |  |                                  |        |                               |   |         |  |         |        |  |   |  
|-------------------------------------------- |  | -------------------------------- | ------ | ----------------------------- | - | ------- |  | ------- | ------ |  | - | -
|                                             |  | Carrying Value at March 31, 2009
|                                             |  |                                  |        | Fair Value Measurements Using
|                                             |  | Total                            |        | Level 1                       |   | Level 2 |  | Level 3
|                                             |  | (in thousands)                  
|Assets:                                      |  |                                  |        |                               |   |         |  |         |        |  |   |  
|Equity securities available for sale         |  | $                                | 589    |                               | $ |        |  | $       | 589    |  | $ | 
|Debt securities available for sale           |  |                                  | 5,013  |                               |   |        |  |         | 5,013  |  |   | 
|Mortage-backed securities available for sale |  |                                  | 16,857 |                               |   |        |  |         | 16,857 |  |   | 
|Interest-rate swap                           |  |                                  | 1,561  |                               |   |        |  |         | 1,561  |  |   | 
|                                             |  |                                  |        |                               |   |         |  |         |        |  |   |  
|Total assets                                 |  | $                                | 24,020 |                               | $ |        |  | $       | 24,020 |  | $ | 
|                                             |  |                                  |        |                               |   |         |  |         |        |  |   |  
|Liabilities:                                 |  |                                  |        |                               |   |         |  |         |        |  |   |  
|Interest-rate swap                           |  |                                  | 1,561  |                               |   |        |  |         | 1,561  |  |   | 
|                                             |  |                                  |        |                               |   |         |  |         |        |  |   |  
|Total liabilities                            |  | $                                | 1,561  |                               | $ |        |  | $       | 1,561  |  | $ | 
|                                             |  |                                  |        |                               |   |         |  |         |        |  |   |  

Assets that were recorded at fair value or at the lower of cost or market on a non-recurring basis at
March 31, 2009 and the level of inputs used to determine their fair values are summarized below:



|                                                |  |                                  |         |                                                     |   |         |  |         |         |  |   |   |  |   |      
|----------------------------------------------- |  | -------------------------------- | ------- | --------------------------------------------------- | - | ------- |  | ------- | ------- |  | - | - |  | - | -----
|                                                |  | Carrying Value at March 31, 2009 |         | Total LossesRecognized inQuarter EndedMarch 31,2009
|                                                |  |                                  |         | Fair Value Measurements Using                       |  
|                                                |  | Total                            |         | Level 1                                             |   | Level 2 |  | Level 3 |        
|                                                |  | (in thousands)                  
|Assets:                                         |  |                                  |         |                                                     |   |         |  |         |         |  |   |   |  |   |      
|Loans held for sale, at lower of cost or market |  | $                                | 110,201 |                                                     | $ |        |  | $       | 110,201 |  | $ |  |  | $ |     
|Impaired loans                                  |  |                                  | 45,703  |                                                     |   |        |  |         | 45,703  |  |   |  |  |   | 1,285
|                                                |  |                                  |         |                                                     |   |         |  |         |         |  |   |   |  |   |      
|Total assets                                    |  | $                                | 155,904 |                                                     | $ |        |  | $       | 155,904 |  | $ |  |  | $ | 1,285
|                                                |  |                                  |         |                                                     |   |         |  |         |         |  |   |   |  |   |      



|11. | INTEREST-RATE SWAPS
|--- | -------------------

The Company entered into two $14 million
notional value interest-rate swap contracts during 2008 totaling $28 million notional value. These contracts supported a $14 million, variable-rate, commercial loan relationship and were used to allow the commercial loan customer to pay a fixed
interest rate to the Bank, while the Bank, in turn, charged the customer a floating interest rate on the loan. Under the terms of the swap contract between the Bank and the loan customer, the customer pays the Bank a fixed interest rate of 6.58%,
while the Bank pays the customer a variable interest rate of one-month LIBOR plus 2.30%. Under the terms of a similar but separate swap contract between the Bank and a major securities broker, the Bank pays the broker a fixed interest rate of 6.58%,
while the broker pays the Bank a variable interest rate of one-month LIBOR plus 2.30%. The two contracts have identical terms except for the interest rates and interest does not begin to accrue until May 2009. The contracts are scheduled to mature
on May 15, 2015. While these two swap derivatives generally work together as an interest-rate hedge, the



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Company has not designated them for hedge treatment under SFAS No. 133. Consequently, both derivatives are marked to fair value through either a charge
or credit to current earnings.

The fair values of these contracts recorded in the consolidated balance sheets are summarized as follows:



|                                         |  |               |           |                   |   |       
|---------------------------------------- |  | ------------- | --------- | ----------------- | - | ------
|                                         |  | March 31,2009 |           | September 30,2008
|Fair value recorded in other assets      |  | $             | 1,561,000 |                   | $ | 70,000
|Fair value recorded in other liabilities |  |               | 1,561,000 |                   |   | 70,000

The gross gains and losses on these contracts recorded in the consolidated statements of income and comprehensive
income for the three- and six-month periods ended March 31, 2009 and 2008 are summarized as follows:



|                                                                         |  |                             |            |                           |      |   |      |  |   |         |   |  |   |  
|------------------------------------------------------------------------ |  | --------------------------- | ---------- | ------------------------- | ---- | - | ---- |  | - | ------- | - |  | - | -
|                                                                         |  | Three Months EndedMarch 31, |            | Six Months EndedMarch 31,
|                                                                         |  | 2009                        |            |                           | 2008 |   | 2009 |  |   | 2008   
|                                                                         |  | (in thousands)             
|Gross gains included in loss (gain) on derivative financial instruments  |  | $                           | (1,491,000 | )                         |      | $ |     |  | $ | (70,000 | ) |  | $ | 
|Gross losses included in loss (gain) on derivative financial instruments |  |                             | 1,491,000  |                           |      |   |     |  |   | 70,000  |   |  |   | 
|                                                                         |  |                             |            |                           |      |   |      |  |   |         |   |  |   |  
|Net loss (gain)                                                          |  | $                           |           |                           |      | $ |     |  | $ |        |   |  | $ | 
|                                                                         |  |                             |            |                           |      |   |      |  |   |         |   |  |   |  



|12. | GOODWILL
|--- | --------

Goodwill totaled $3.9 million at
March 31, 2009 and September 30, 2008, respectively. Goodwill represents the amount of acquisition cost over the fair value of net assets acquired in the purchase of another financial institution. The Company reviews goodwill for
impairment at least annually or more frequently if events or changes in circumstances indicate the carrying value of the asset might be impaired. Impairment is determined by comparing the implied fair value of the reporting unit goodwill with the
carrying amount of that goodwill. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. Any such adjustments are reflected in the
results of operations in the periods in which they become known. After a goodwill impairment loss is recognized, the adjusted carrying amount of goodwill becomes its new accounting basis. Because of the decline in the market value of the
Companys common stock during the six months ended March 31, 2009, the Company reviewed goodwill for impairment as of March 31, 2009 in addition to its annual review at September 30, 2008. No impairment losses were recognized
during fiscal year 2008 or the six months ended March 31, 2009.



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MANAGEMENTS DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This report contains certain forward-looking statements within the meaning of the federal securities
laws, which are made in good faith pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts; rather they are statements based on Pulaski Financial
Corp.s (the Company) current expectations regarding its business strategies, intended results and future performance. Forward-looking statements are generally preceded by terms such as expects, believes,
anticipates, intends and similar expressions.

Managements ability to predict results or the effect of future plans or
strategies is inherently uncertain. Factors which could affect actual results include interest rate trends, the general economic climate in the market area in which Pulaski Financial Corp. operates, as well as nationwide, Pulaski Financial
Corp.s ability to control costs and expenses, competitive products and pricing, loan demand, loan delinquency rates and changes in federal and state legislation and regulation. The Company provides greater detail regarding some of these
factors in its Form 10-K for the year ended September 30, 2008, including the Risk Factors section of that report. The Companys forward-looking statements may also be subject to other risks and uncertainties, including those that it may
discuss elsewhere in this report or in its other filings with the SEC. These factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. Pulaski Financial Corp. assumes no
obligation to update any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

GENERAL

Pulaski Financial Corp. is a community-based, financial
institution holding company headquartered in St. Louis, Missouri. It conducts operations primarily through Pulaski Bank (the Bank), a federally chartered savings bank with $1.5 billion in assets at March 31, 2009. Pulaski Bank
provides an array of financial products and services for businesses and consumers primarily through its twelve full-service offices in the St. Louis metropolitan area and three loan production offices in the St. Louis and Kansas City metropolitan
areas.

The Company has primarily grown its assets and deposits internally by building its residential and commercial lending operations, by opening de
novo branches, and by hiring experienced bankers with existing customer relationships in its market. The Companys goal is to continue to deliver value to its shareholders and enhance its franchise value and earnings through controlled growth
in its banking operations, while maintaining the personal, community-oriented customer service that has characterized its success to date.

COMMUNITY
BANKING STRATEGY PRODUCES MEANINGFUL GROWTH IN KEY BUSINESS LINES

The Company experienced decreases in net income of 30.4% and 55.7% during the three-
and six-month periods ended March 31, 2009, respectively, compared with the same periods last year largely as the result of increased provisions for loan losses. However, execution of its community banking strategy produced strong performance
in each of its three primary business lines, commercial banking services, retail mortgage lending and retail banking services, resulting in meaningful growth in loans receivable, core deposits, total assets, net interest income and mortgage
revenues. The Companys community banking strategy emphasizes high-quality, responsive, and personalized customer service. The Company has been successful in distinguishing itself from the larger regional banks operating in its market areas by
offering quicker decision making in the delivery of banking products and services, offering customized products where needed, and providing customers access to senior decision makers.



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Commercial Banking Services

The Companys commercial banking services are centered on serving small- to medium-sized businesses and the Companys growth in the St. Louis market continues to be driven by its staff of experienced commercial bankers and the
commercial banking relationships they generate. Total assets grew $157.2 million, or 12.1%, from $1.30 billion at September 30, 2008 to $1.46 billion at March 31, 2009, largely as the result of an $84.0 million increase in loans
receivable. Commercial loans accounted for substantially all of the growth in loans receivable as the Company continued to originate commercial loans to its most credit-worthy customers under tightened credit standards. During the six-month period,
mortgage loans secured by commercial real estate increased $37.6 million to $298.7 million, commercial and industrial loans increased $30.8 million to $168.5 million and commercial real estate construction and development loans increased $14.3
million to $69.5 million at March 31, 2009, respectively. Commercial loan originations totaled $91.4 million and $234.8 million during the three and six months ended March 31, 2009, respectively, compared with $109.8 million and
$272.3 million during the same period last year.

The Companys commercial loan customers are also among the best sources of core deposit
accounts. Commercial checking account balances increased $28.9 million to $197.6 million at March 31, 2009 compared with $168.8 million at September 30, 2008.

Retail Mortgage Lending

The Company is a conforming, residential mortgage lender that originates loans directly
through commission-based sales staffs in the St. Louis and Kansas City metropolitan areas. The Company is a leading mortgage originator in these two markets, as it has successfully leveraged its reputation for strength and quality customer service
with these staffs of experienced mortgage loan officers who have strong community relationships. Substantially all of the loans originated in the retail mortgage division are one- to four-family residential loans that are sold to investors on a
servicing-released basis. Such sales generate mortgage revenues, which is the Companys largest source of non-interest income.

The Federal
Reserves actions taken to lower market interest rates and stimulate mortgage lending activity resulted in a dramatic increase in mortgage refinancing volume beginning in late November 2008. The Company was able to capture a meaningful share of
this increased activity without significantly adding fixed costs to its infrastructure. During the three and six months ended March 31, 2009, the Company originated residential mortgage loans for sale to investors totaling $262.8 million and
$914.1 million, respectively, compared with $395.0 million and $708.1 million during the same 2008 periods, respectively. Residential loans sold to investors for the three months ended March 31, 2009 totaled $620.4 million, which
generated mortgage revenues totaling $4.3 million, compared with $402.3 million of loans sold and $1.8 million in revenues for the three months ended March 31, 2008. Residential loans sold to investors for the six months ended March 31,
2009 totaled $875.9 million, which generated mortgage revenues totaling $5.9 million, compared with $686.3 million of loans sold and $3.0 million in revenues for the six months ended March 31, 2008. The Company experienced a market-driven
decline in gross profit margins on loans sold during the 2009 periods as the result of tighter pricing in a market dominated by refinancing activity. However, because of increased efficiencies, the Companys net profit margins on loans sold
increased to 0.70% and 0.67% during the three and six months ended March 31, 2009, respectively, compared with 0.46% and 0.43% during the same 2008 periods, respectively. Loans held for sale increased $38.2 million to $110.2 million at
March 31, 2009 from $72.0 million at September 30, 2008.

Retail Banking Services

Core deposits, which include checking, money market and passbook accounts, provide a stable funding source for the Companys asset growth and produce valuable fee
income. Their growth continues to be one of the Companys primary strategic objectives. Core deposits increased $78.6 million, or 18%, to $508.7 million at March 31, 2009 from $430.1 million at September 30, 2008.
Checking accounts, which represent the cornerstone product in a customer relationship, increased $88.0 million to $343.1 million at March 31, 2009 from $255.1 million at September 30, 2008. The increase was primarily the result of a
$28.9 million increase in commercial checking accounts, a $23.3 million increase in retail checking accounts and a $35.9 million increase in non-interest bearing checking accounts related to the Companys outstanding official checks, which
it began clearing internally during the quarter ended December 31, 2008. Also enhancing its ability to attract core deposits, the Bank elected to participate in the FDICs Transaction Account Guarantee Program during the quarter ended
March 31, 2009. This program provides full FDIC insurance coverage for non interest-



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bearing transaction accounts and qualifying NOW accounts, regardless of the dollar amount, and is in addition to the standard FDIC insurance that was
temporarily increased to $250,000 per depositor. Both FDIC limits will be in effect through December 31, 2009. Money market accounts decreased $9.9 million during the six months ended March 31, 2009, but increased $11.4 million during the
March 2009 quarter to $139.3 million at March 31, 2009 primarily as the result of the introduction of a new product during March 2009 that offers the Banks customers the ability to receive FDIC insurance on deposits up to
$12.5 million. Money market and interest-bearing checking accounts carry adjustable interest rates that make them an ideal funding source for the Companys prime-adjusting commercial and home equity loans. Primarily as the result of
declining market interest rates, the weighted-average costs of interest-bearing checking accounts and money market accounts decreased to 1.58% and 0.78%, respectively, at March 31, 2009 compared with 2.51% and 2.12% at September 30, 2008.

Certificates of deposit increased $100.9 million to $586.2 million at March 31, 2009 from $485.2 million at September 30, 2008, primarily
as the result of a $51.5 million increase in retail certificates of deposit to $283.8 million and a $53.5 million increase in CDARS time deposits to $177.4 million. CDARS deposits, which are generally offered to in-market retail and commercial
customers, offer the banks customers the ability to receive FDIC insurance on deposits up to $50 million. Brokered time deposits decreased $4.0 million to $124.9 million at March 31, 2009 compared with $128.9 million at September 30,
2008, as the Company repaid certain maturing brokered deposits with increases in retail deposits. Total deposits increased $179.6 million, or 19.6%, to $1.09 billion at March 31, 2009 from $915.3 million at September 30, 2008.

Retail banking fees, which include fees charged to customers who have overdrawn their checking accounts and service charges on other retail banking products, were
$936,000 for the three months ended March 31, 2009 compared with $932,000 for the same 2008 period. Retail banking fees were $1.9 million for the six months ended March 31, 2009 compared with $2.0 million for the same period a year ago.
Primarily as the result of tightened consumer spending in the current difficult economic environment, the Bank experienced a reduction in the volume of overdrawn checking accounts during the three- and six- months ended March 31, 2009 compared
with the same period last year.



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Average Balance Sheets

The following table sets forth information regarding average daily balances of assets and liabilities as well as the total dollar amounts of interest income from average interest-earning assets and interest expense on average
interest-bearing liabilities, resultant yields, interest rate spread, net interest margin, and ratio of average interest-earning assets to average interest-bearing liabilities for the periods indicated.



|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|-------------------------------------------------------------------------------- |  | ---------------------- | --------- | - | -------------------- | - | ---------- |  | ---- | -------------- |  | - | -------------------- | - | ---------- | - | ------ |  | ---- | -
|                                                                                 |  | Three Months Ended     |          
|                                                                                 |  | March 31, 2009         |           |   | March 31, 2008       |  
|                                                                                 |  | AverageBalance         |           |   | InterestandDividends |   | Yield/Cost |  |      | AverageBalance |  |   | InterestandDividends |   | Yield/Cost |  
|                                                                                 |  | (Dollars in thousands) |          
|Interest-earning assets:                                                         |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Loans receivable:(1)                                                             |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Real estate                                                                      |  | $                      | 335,981   |   |                      | $ | 5,317      |  | 6.33 | %              |  | $ | 339,927              |   |            | $ | 5,966  |  | 7.02 | %
|Commercial                                                                       |  |                        | 594,094   |   |                      |   | 7,013      |  | 4.72 | %              |  |   | 473,324              |   |            |   | 7,649  |  | 6.46 | %
|Home equity lines of credit                                                      |  |                        | 231,975   |   |                      |   | 2,169      |  | 3.74 | %              |  |   | 224,071              |   |            |   | 3,707  |  | 6.62 | %
|Consumer                                                                         |  |                        | 3,599     |   |                      |   | 54         |  | 5.94 | %              |  |   | 4,240                |   |            |   | 63     |  | 5.89 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total loans receivable                                                           |  |                        | 1,165,649 |   |                      |   | 14,553     |  | 4.99 | %              |  |   | 1,041,562            |   |            |   | 17,385 |  | 6.68 | %
|Loans held for sale                                                              |  |                        | 153,190   |   |                      |   | 1,758      |  | 4.59 | %              |  |   | 81,205               |   |            |   | 1,017  |  | 5.01 | %
|Securities and other                                                             |  |                        | 56,263    |   |                      |   | 346        |  | 2.53 | %              |  |   | 45,854               |   |            |   | 587    |  | 5.12 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total interest-earning assets                                                    |  |                        | 1,375,102 |   |                      |   | 16,657     |  | 4.85 | %              |  |   | 1,168,621            |   |            |   | 18,989 |  | 6.50 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Non-interest-earning assets                                                      |  |                        | 70,556    |   |                      |   |            |  |      |                |  |   | 81,106               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total assets                                                                     |  | $                      | 1,445,658 |   |                      |   |            |  |      |                |  | $ | 1,249,727            |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Interest-bearing liabilities:                                                    |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Interest-bearing checking                                                        |  | $                      | 207,412   |   |                      |   | 809        |  | 1.56 | %              |  | $ | 86,672               |   |            |   | 388    |  | 1.79 | %
|Passbook savings                                                                 |  |                        | 25,440    |   |                      |   | 12         |  | 0.19 | %              |  |   | 27,852               |   |            |   | 21     |  | 0.30 | %
|Money market                                                                     |  |                        | 135,634   |   |                      |   | 266        |  | 0.78 | %              |  |   | 198,302              |   |            |   | 1,518  |  | 3.06 | %
|Certificates of deposit                                                          |  |                        | 586,746   |   |                      |   | 4,225      |  | 2.88 | %              |  |   | 505,383              |   |            |   | 5,740  |  | 4.54 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total interest-bearing deposits                                                  |  |                        | 955,232   |   |                      |   | 5,312      |  | 2.22 | %              |  |   | 818,209              |   |            |   | 7,667  |  | 3.75 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|FHLB advances                                                                    |  |                        | 109,399   |   |                      |   | 915        |  | 3.35 | %              |  |   | 240,107              |   |            |   | 2,063  |  | 3.44 | %
|Federal Reserve borrowings                                                       |  |                        | 122,922   |   |                      |   | 135        |  | 0.44 | %              |  |   | 1,890                |   |            |   | 16     |  | 3.49 | %
|Note payable                                                                     |  |                        | 1,613     |   |                      |   | 12         |  | 3.03 | %              |  |   | 2,927                |   |            |   | 38     |  | 5.15 | %
|Subordinated debentures                                                          |  |                        | 19,589    |   |                      |   | 201        |  | 4.09 | %              |  |   | 19,589               |   |            |   | 341    |  | 6.96 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total interest-bearing liabilities                                               |  |                        | 1,208,755 |   |                      |   | 6,575      |  | 2.18 | %              |  |   | 1,082,722            |   |            |   | 10,125 |  | 3.74 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Non-interest bearing liabilities:                                                |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Non-interest bearing deposits                                                    |  |                        | 109,302   |   |                      |   |            |  |      |                |  |   | 61,653               |   |            |   |        |  |      |  
|Other non-interest bearing liabilities                                           |  |                        | 14,775    |   |                      |   |            |  |      |                |  |   | 19,342               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total non-interest-bearing liabilities                                           |  |                        | 124,077   |   |                      |   |            |  |      |                |  |   | 80,995               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Stockholders equity                                                             |  |                        | 112,826   |   |                      |   |            |  |      |                |  |   | 86,010               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total liabilities and stockholders equity                                       |  | $                      | 1,445,658 |   |                      |   |            |  |      |                |  | $ | 1,249,727            |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Net interest income                                                              |  |                        |           |   |                      | $ | 10,082     |  |      |                |  |   |                      |   |            | $ | 8,864  |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Interest rate spread(2)                                                          |  |                        |           |   |                      |   |            |  | 2.67 | %              |  |   |                      |   |            |   |        |  | 2.76 | %
|Net interest margin(3)                                                           |  |                        |           |   |                      |   |            |  | 2.93 | %              |  |   |                      |   |            |   |        |  | 3.03 | %
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                        | 113.76    | % |                      |   |            |  |      |                |  |   | 107.93               | % |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  



|(1) | Includes non-accrual loans with an average balance of $14.9
million and $6.5 million for the three months ended March 31, 2009 and respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Yield on interest-earning assets less cost of interest-bearing
liabilities.
|--- | ---------------------------------------------------------------------------



|(3) | Net interest income divided by average interest-earning assets.
|--- | ---------------------------------------------------------------



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##### Table of Contents

|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|-------------------------------------------------------------------------------- |  | ---------------------- | --------- | - | -------------------- | - | ---------- |  | ---- | -------------- |  | - | -------------------- | - | ---------- | - | ------ |  | ---- | -
|                                                                                 |  | Six Months Ended       |          
|                                                                                 |  | March 31, 2009         |           |   | March 31, 2008       |  
|                                                                                 |  | AverageBalance         |           |   | InterestandDividends |   | Yield/Cost |  |      | AverageBalance |  |   | InterestandDividends |   | Yield/Cost |  
|                                                                                 |  | (Dollars in thousands) |          
|Interest-earning assets:                                                         |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Loans receivable:(1)                                                             |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Real estate                                                                      |  | $                      | 340,055   |   |                      | $ | 11,074     |  | 6.51 | %              |  | $ | 342,310              |   |            | $ | 12,186 |  | 7.12 | %
|Commercial                                                                       |  |                        | 570,434   |   |                      |   | 14,188     |  | 4.97 | %              |  |   | 449,039              |   |            |   | 15,396 |  | 6.86 | %
|Home equity lines of credit                                                      |  |                        | 229,350   |   |                      |   | 4,870      |  | 4.25 | %              |  |   | 222,215              |   |            |   | 7,900  |  | 7.11 | %
|Consumer                                                                         |  |                        | 3,664     |   |                      |   | 106        |  | 5.82 | %              |  |   | 4,300                |   |            |   | 118    |  | 5.49 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total loans receivable                                                           |  |                        | 1,143,503 |   |                      |   | 30,238     |  | 5.29 | %              |  |   | 1,017,864            |   |            |   | 35,600 |  | 6.99 | %
|Loans held for sale                                                              |  |                        | 101,402   |   |                      |   | 2,423      |  | 4.78 | %              |  |   | 66,276               |   |            |   | 1,744  |  | 5.26 | %
|Securities and other                                                             |  |                        | 56,743    |   |                      |   | 831        |  | 2.93 | %              |  |   | 42,566               |   |            |   | 1,015  |  | 4.79 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total interest-earning assets                                                    |  |                        | 1,301,648 |   |                      |   | 33,492     |  | 5.15 | %              |  |   | 1,126,706            |   |            |   | 38,359 |  | 6.81 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Non-interest-earning assets                                                      |  |                        | 77,083    |   |                      |   |            |  |      |                |  |   | 78,703               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total assets                                                                     |  | $                      | 1,378,731 |   |                      |   |            |  |      |                |  | $ | 1,205,409            |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Interest-bearing liabilities:                                                    |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Interest-bearing checking                                                        |  | $                      | 197,678   |   |                      |   | 1,868      |  | 1.89 | %              |  | $ | 74,334               |   |            |   | 639    |  | 1.72 | %
|Passbook savings                                                                 |  |                        | 25,627    |   |                      |   | 25         |  | 0.19 | %              |  |   | 28,320               |   |            |   | 47     |  | 0.34 | %
|Money market                                                                     |  |                        | 137,895   |   |                      |   | 834        |  | 1.21 | %              |  |   | 190,125              |   |            |   | 3,322  |  | 3.49 | %
|Certificates of deposit                                                          |  |                        | 552,448   |   |                      |   | 8,709      |  | 3.15 | %              |  |   | 497,397              |   |            |   | 11,861 |  | 4.77 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total interest-bearing deposits                                                  |  |                        | 913,648   |   |                      |   | 11,436     |  | 2.50 | %              |  |   | 790,176              |   |            |   | 15,869 |  | 4.02 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|FHLB advances                                                                    |  |                        | 155,277   |   |                      |   | 2,086      |  | 2.69 | %              |  |   | 225,470              |   |            |   | 4,588  |  | 4.07 | %
|Federal Reserve borrowings                                                       |  |                        | 74,538    |   |                      |   | 215        |  | 0.58 | %              |  |   | 946                  |   |            |   | 17     |  | 3.52 | %
|Note payable                                                                     |  |                        | 4,660     |   |                      |   | 113        |  | 4.87 | %              |  |   | 2,953                |   |            |   | 86     |  | 5.79 | %
|Subordinated debentures                                                          |  |                        | 19,589    |   |                      |   | 447        |  | 4.56 | %              |  |   | 19,589               |   |            |   | 734    |  | 7.50 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total interest-bearing liabilities                                               |  |                        | 1,167,712 |   |                      |   | 14,297     |  | 2.45 | %              |  |   | 1,039,134            |   |            |   | 21,294 |  | 4.10 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Non-interest bearing liabilities:                                                |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Non-interest bearing deposits                                                    |  |                        | 98,043    |   |                      |   |            |  |      |                |  |   | 60,666               |   |            |   |        |  |      |  
|Other non-interest bearing liabilities                                           |  |                        | 14,141    |   |                      |   |            |  |      |                |  |   | 20,183               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total non-interest-bearing liabilities                                           |  |                        | 112,184   |   |                      |   |            |  |      |                |  |   | 80,849               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Stockholders equity                                                             |  |                        | 98,835    |   |                      |   |            |  |      |                |  |   | 85,426               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total liabilities and stockholders equity                                       |  | $                      | 1,378,731 |   |                      |   |            |  |      |                |  | $ | 1,205,409            |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Net interest income                                                              |  |                        |           |   |                      | $ | 19,195     |  |      |                |  |   |                      |   |            | $ | 17,065 |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Interest rate spread(2)                                                          |  |                        |           |   |                      |   |            |  | 2.70 | %              |  |   |                      |   |            |   |        |  | 2.71 | %
|Net interest margin(3)                                                           |  |                        |           |   |                      |   |            |  | 2.95 | %              |  |   |                      |   |            |   |        |  | 3.03 | %
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                        | 111.47    | % |                      |   |            |  |      |                |  |   | 108.43               | % |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  



|(1) | Includes non-accrual loans with an average balance of $12.8
million and $6.5 million for the six months ended March 31, 2009 and 2008, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Yield on interest-earning assets less cost of interest-bearing
liabilities.
|--- | ---------------------------------------------------------------------------

|(3) | Net interest income divided by average interest-earning assets.
|--- | ---------------------------------------------------------------



- 20 -



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##### Table of Contents

RATE VOLUME ANALYSIS

The following table sets forth the effects of changing rates and volumes on net interest income for the periods indicated. The total change for each category of interest-earning asset and interest-bearing liability is segmented into the
change attributable to variations in volume (change in volume multiplied by prior period rate) and the change attributable to variations in interest rates (changes in rates multiplied by prior period volume). Changes in interest income and expense
attributed to both changes in volume and changes in rate are allocated proportionately to rate and volume.



|                                                      |  |                                          |        |   |                                        |   |         |     |  |   |        |   |  |      |        |   |     |   |         |   |  |   |        |  
|----------------------------------------------------- |  | ---------------------------------------- | ------ | - | -------------------------------------- | - | ------- | --- |  | - | ------ | - |  | ---- | ------ | - | --- | - | ------- | - |  | - | ------ | -
|                                                      |  | Three Months EndedMarch 31, 2009 vs 2008 |        |   | Six Months EndedMarch 31, 2009 vs 2008 |  
|                                                      |  | Volume                                   |        |   | Rate                                   |   |         | Net |  |   | Volume |   |  | Rate |        |   | Net |  
|                                                      |  | (in thousands)                           |       
|Interest-earning assets:                              |  |                                          |        |   |                                        |   |         |     |  |   |        |   |  |      |        |   |     |   |         |   |  |   |        |  
|Loans receivable:                                     |  |                                          |        |   |                                        |   |         |     |  |   |        |   |  |      |        |   |     |   |         |   |  |   |        |  
|Real estate                                           |  | $                                        | (69    | ) |                                        | $ | (580    | )   |  | $ | (649   | ) |  | $    | (80    | ) |     | $ | (1,032  | ) |  | $ | (1,112 | )
|Commercial                                            |  |                                          | 7,704  |   |                                        |   | (8,340  | )   |  |   | (636   | ) |  |      | 7,809  |   |     |   | (9,017  | ) |  |   | (1,208 | )
|Home equity lines of credit                           |  |                                          | 852    |   |                                        |   | (2,390  | )   |  |   | (1,538 | ) |  |      | 715    |   |     |   | (3,745  | ) |  |   | (3,030 | )
|Consumer                                              |  |                                          | (12    | ) |                                        |   | 3       |     |  |   | (9     | ) |  |      | (29    | ) |     |   | 17      |   |  |   | (12    | )
|                                                      |  |                                          |        |   |                                        |   |         |     |  |   |        |   |  |      |        |   |     |   |         |   |  |   |        |  
|Total loans receivable                                |  |                                          | 8,475  |   |                                        |   | (11,307 | )   |  |   | (2,832 | ) |  |      | 8,415  |   |     |   | (13,777 | ) |  |   | (5,362 | )
|Loans held for sale                                   |  |                                          | 1,299  |   |                                        |   | (558    | )   |  |   | 741    |   |  |      | 1,122  |   |     |   | (443    | ) |  |   | 679    |  
|Securities and other                                  |  |                                          | 191    |   |                                        |   | (432    | )   |  |   | (241   | ) |  |      | 407    |   |     |   | (591    | ) |  |   | (184   | )
|                                                      |  |                                          |        |   |                                        |   |         |     |  |   |        |   |  |      |        |   |     |   |         |   |  |   |        |  
|Net change in income on interest earning assets       |  |                                          | 9,965  |   |                                        |   | (12,297 | )   |  |   | (2,332 | ) |  |      | 9,944  |   |     |   | (14,811 | ) |  |   | (4,867 | )
|                                                      |  |                                          |        |   |                                        |   |         |     |  |   |        |   |  |      |        |   |     |   |         |   |  |   |        |  
|Interest-bearing liabilities:                         |  |                                          |        |   |                                        |   |         |     |  |   |        |   |  |      |        |   |     |   |         |   |  |   |        |  
|Interest-bearing checking                             |  |                                          | 751    |   |                                        |   | (330    | )   |  |   | 421    |   |  |      | 1,160  |   |     |   | 69      |   |  |   | 1,229  |  
|Passbook savings                                      |  |                                          | (2     | ) |                                        |   | (7      | )   |  |   | (9     | ) |  |      | (4     | ) |     |   | (18     | ) |  |   | (22    | )
|Money market                                          |  |                                          | (373   | ) |                                        |   | (879    | )   |  |   | (1,252 | ) |  |      | (737   | ) |     |   | (1,751  | ) |  |   | (2,488 | )
|Certificates of deposit                               |  |                                          | 4,666  |   |                                        |   | (6,181  | )   |  |   | (1,515 | ) |  |      | 3,187  |   |     |   | (6,339  | ) |  |   | (3,152 | )
|                                                      |  |                                          |        |   |                                        |   |         |     |  |   |        |   |  |      |        |   |     |   |         |   |  |   |        |  
|Total interest-bearing deposits                       |  |                                          | 5,042  |   |                                        |   | (7,397  | )   |  |   | (2,355 | ) |  |      | 3,606  |   |     |   | (8,039  | ) |  |   | (4,433 | )
|FHLB advances                                         |  |                                          | (1,095 | ) |                                        |   | (53     | )   |  |   | (1,148 | ) |  |      | (1,198 | ) |     |   | (1,304  | ) |  |   | (2,502 | )
|Federal Reserve borrowings                            |  |                                          | 232    |   |                                        |   | (113    | )   |  |   | 119    |   |  |      | 251    |   |     |   | (53     | ) |  |   | 198    |  
|Note payable                                          |  |                                          | (13    | ) |                                        |   | (13     | )   |  |   | (26    | ) |  |      | 62     |   |     |   | (35     | ) |  |   | 27     |  
|Subordinated debentures                               |  |                                          |       |   |                                        |   | (140    | )   |  |   | (140   | ) |  |      |       |   |     |   | (287    | ) |  |   | (287   | )
|                                                      |  |                                          |        |   |                                        |   |         |     |  |   |        |   |  |      |        |   |     |   |         |   |  |   |        |  
|Net change in expense on interest bearing liabilities |  |                                          | 4,166  |   |                                        |   | (7,716  | )   |  |   | (3,550 | ) |  |      | 2,721  |   |     |   | (9,718  | ) |  |   | (6,997 | )
|                                                      |  |                                          |        |   |                                        |   |         |     |  |   |        |   |  |      |        |   |     |   |         |   |  |   |        |  
|Change in net interest income                         |  | $                                        | 5,799  |   |                                        | $ | (4,581  | )   |  | $ | 1,218  |   |  | $    | 7,223  |   |     | $ | (5,093  | ) |  | $ | 2,130  |  
|                                                      |  |                                          |        |   |                                        |   |         |     |  |   |        |   |  |      |        |   |     |   |         |   |  |   |        |  



- 21 -



---

##### Table of Contents

RESULTS OF OPERATIONS

Net income for the quarter ended March 31, 2009 was $1.8 million, or $0.15 per diluted common share on 10.3 million average diluted shares outstanding, compared with net income of $2.5 million, or $0.25 per diluted
common share on 10.2 million average diluted shares outstanding, during the same quarter last year. For the six months ended March 31, 2009, net income was $2.3 million, or $0.20 per diluted common share on 10.3 million average
diluted shares outstanding, compared with $5.3 million, or $0.52 per diluted common share on a 10.2 million average diluted shares outstanding, for the same period a year ago. Net income for the three- and six-months ended March 31, 2009
was negatively impacted by a $5.7 million and $10.4 million provision for loan losses compared with $1.7 million and $2.8 million for same periods in 2008. In addition, dividends and discount amortization on preferred stock totaling $238,000, or
$0.02 per common share, reduced income available for common shares in the three and six months ended March 31, 2009.

Net interest
income rose 13.7%, or $1.2 million, to $10.1 million for the quarter ended March 31, 2009 compared with $8.9 million for the same period last quarter. For the six months ended March 31, 2009, net interest income rose to
$19.2 million compared with $17.1 million for the same six-month period last year. The increases were fueled by growth in the average balances of loans receivable and loans held for sale, partially offset by declines in the net interest margin.

The net interest margin was 2.93% for the three months ended March 31, 2009 compared with 2.96% for the quarter ended December 31, 2008 and
3.03% for the March 2008 quarter. For the six-month period, the net interest margin was 2.95% in 2009 compared with 3.03% in 2008. The Company experienced declines in interest rates on its prime-adjusting commercial and home equity loans and on its
short-term wholesale borrowings following reductions in the prime interest rate during the December 2008 quarter. However, interest rates paid on its retail deposits did not fall as quickly due to competition for deposits and, accordingly, the
Company experienced compression in its net interest margin during the fiscal 2009 periods. In addition, the significant growth in mortgage loans held for sale resulting from increased refinancing activity, which were at yields lower than loans held
in portfolio, generated increased interest income, but resulted in downward pressure on the overall yield on average interest-earning assets. Management believes the continued maturity of fixed-rate deposits and improved pricing on wholesale funding
coupled with continued price improvement on new commercial loan originations and renewals, including interest-rate floors on adjustable-rate loans, will benefit the Companys net interest margin in future periods.

Total interest and dividend income decreased $2.3 million, or 12.3%, to $16.7 million for the quarter ended March 31, 2009 compared with $19.0 million
for the same 2008 quarter. For the six months ended March 31, 2009, total interest and dividend income was $33.5 million compared with $38.4 million for the same period a year ago. The decreases were primarily due to decreases in the average
yields on loans receivable and loans held for sale, partially offset by increases in the average balances of such loans.

The average balance of loans
receivable increased to $1.17 billion and $1.14 billion during the three and six months ended March 31, 2009, respectively, compared with $1.04 billion and $1.02 billion during the same 2008 periods, respectively, primarily as the result of
commercial loan growth. As the result of declining market interest rates, the average yield on loans receivable decreased to 4.99% and 5.29% during the three and six months ended March 31, 2009, respectively, compared with 6.68% and 6.99%
during the same 2008 periods, respectively. See Community Banking Strategy Produces Meaningful Growth In Key Business Lines  Commercial Banking Services.

The average balance of loans held for sale increased to $153.2 million and $101.4 million during the three and six months ended March 31, 2009, respectively, compared with $81.2 million and $66.3 million during
the same 2008 periods, respectively, as the result of the increased refinancing activity. As the result of declining market interest rates, the average yield on loans held for sale decreased to 4.59% and 4.78% during the three and six months ended
March 31, 2009, respectively, compared with 5.01% and 5.26% during the same 2008 periods, respectively. See Community Banking Strategy Produces Meaningful Growth In Key Business Lines  Retail Mortgage Lending.

Total interest expense decreased $3.5 million, or 35.1%, to $6.6 million for the quarter ended March 31, 2009 compared with $10.1 million for the
quarter ended March 31, 2008 and decreased $7.0 million to $14.3 million during the six months ended March 31, 2009 compared with $21.3 million during the same six-month period last year. The lower expense was the result of decreases in
the average cost of funds partially offset by increases in the average balance of interest-bearing liabilities. The average cost of funds decreased from 3.74% for the quarter ended March 31, 2008 to 2.18% for the quarter



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ended March 31, 2009 while the average balance of interest-bearing liabilities increased from $1.08 billion to $1.21 billion during the same periods,
respectively. For the six-month periods, the average balance of interest-bearing liabilities increased from $1.04 billion in 2008 to $1.17 billion in 2009 while the average cost of funds decreased from 4.10% to 2.45% during the same periods,
respectively. The increased average balance in interest-bearing liabilities, which was used to fund asset growth during the period, resulted primarily from increases in the average balances of deposits (mainly checking accounts and certificates of
deposit) and, to a lesser extent, an increase in borrowings from the Federal Reserve Bank of St. Louis (Federal Reserve Bank), offset by a decrease in the average balance of advances from the Federal Home Loan Bank of Des Moines
(FHLB). The decreased average costs were the result of lower market interest rates during the period, growth in core deposits and a shift in the mix of wholesale funding sources. The Company primarily funds its assets with savings
deposits from its retail and commercial customers. This funding source is supplemented with wholesale funds consisting primarily of borrowings from the FHLB, short-term borrowings from the Federal Reserve Bank and time deposits from national
brokers. Management actively chooses among these wholesale funding sources depending on their relative costs and the Companys overall borrowing capacity at the FHLB and the Federal Reserve Bank.

Interest expense on depositsdecreased $2.4 million, or 30.7%, to $5.3 million during the quarter ended March 31, 2009 compared with
$7.7 million for the quarter ended March 31, 2008. For the six months ended March 31, 2009, interest expense on deposits was $11.4 million compared with $15.9 million for the same period a year ago. The decrease in interest expense was the
result of a decrease in the average cost partially offset by an increase in the average balance. The average balance of interest-bearing deposits increased to $955.2 million for the quarter ended March 31, 2009 from $818.2 million for the
quarter ended March 31, 2008 while the average cost of deposits decreased from 3.75% to 2.22% during the same periods, respectively. For the six-month periods, the average balance of interest-bearing deposits increased to $913.6 million from
$790.2 million while the average cost of deposits decreased from 4.02% to 2.50% during the same periods, respectively. Growth in average total deposits during the fiscal 2009 periods was the result of growth in core deposits, CDARS time deposits and
retail time deposits. The growth in core deposits combined with lower market interest rates resulted in lower average costs during the fiscal 2009 periods. See Community Banking Strategy Produces Meaningful Growth In Key Business Lines 
Retail Banking Services.

In February 2009, the FDIC adopted an interim final rule imposing a special assessment on all insured institutions due to
recent bank and savings association failures. The emergency assessment amounts to 20 basis points of assessable deposits as of June 30, 2009. The assessment will be collected on September 30, 2009. The FDIC subsequently announced that it
would reduce the special assessment to 10 basis points if Congress increases the FDICs borrowing authority with the U.S. Department of the Treasury. The assessment is expected to increase interest expense on deposits during the quarter ended
June 30, 2009. In addition, the interim rule would also permit the FDIC to impose additional emergency special assessments after June 30, 2009, of up to 10 basis points per quarter if necessary to maintain public confidence in federal
deposit insurance or as a result of deterioration in the deposit insurance fund reserve ratio due to institution failures. Any such special assessments are expected to increase interest expense on deposits if and when they become effective.

Interest expense on advances from the Federal Home Loan Bank decreased $1.1 million, or 55.6%, to $915,000 during the quarter ended
March 31, 2009 compared with $2.1 million for the quarter ended March 31, 2008 and decreased to $2.1 million during the six months ended March 31, 2009 compared with $4.6 million for the same six-month period last year as
the result of decreases in the average cost and the average balance. The average balance decreased to $109.4 million for the quarter ended March 31, 2009 from $240.1 million for the quarter ended March 31, 2008 and the average cost
decreased from 3.44% to 3.35% during the same periods, respectively. For the six-month periods, the average balance decreased to $155.3 million during 2009 from $225.5 million during 2008 and the average cost decreased from 4.07% to 2.69%
during the same periods, respectively The decreased average balances resulted from managements decision to shift a portion of these short-term borrowings to less costly short-term borrowings at the Federal Reserve Bank and growth in deposits.
The decreased average cost was the result of lower market interest rates during the 2009 period.

Interest expense on borrowings from the Federal
Reserve Bank increased to $135,000 during the quarter ended March 31, 2009 compared with $16,000 for the quarter ended March 31, 2008 as the result of an increase in the average balance to $122.9 million for the quarter ended
March 31, 2009 from $1.9 million for the quarter ended March 31, 2008 while the average costs of these borrowings decreased to 0.44% from 3.49% during the same periods, respectively. For the six months ended March 31, 2009, interest
expense on these borrowings increased $198,000 to $215,000 during 2009 compared with $17,000 for 2008. The average balance increased to $74.5 million during the six months ended March 31,



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2009 from $946,000 during the same period in 2008 while the average cost decreased from 3.52% to 0.58% for the same
periods, respectively.

Provision for Loan Losses

The
provision for loan losses for the three and six months ended March 31, 2009 was $5.7 million and $10.4 million respectively, compared with $1.7 million and $2.8 million, respectively for the same periods a year ago. See
Non-Performing AssetsandAllowance for Loan Losses.

Non-Interest Income

Total non-interest income increased 50.2% to $5.8 million for the quarter ended March 31, 2009 compared with $3.8 million for the same period last
year. For the six months ended March 31, 2009, total non-interest income increased $2.3 million to $9.1 million compared with $6.8 million for the same six-month period last year. The increases were primarily the result of strong growth in
mortgage revenues, partially offset by decreases in other non-interest income and gain on sale of sales of securities. See Community Banking Strategy Produces Meaningful Growth In Key Business Lines  Retail Mortgage Lending.

Gain on sales of securities totaled $263,000 for the three months ended March 31, 2008 on sales of $20.0 million of debt securities classified
as available for sale. There were no such sales during the three months ended March 31, 2009. For the six-month periods, gain on sales of securities totaled $243,000 in 2009 on sales of $51.1 million of debt securities classified as
available for sale compared with $317,000 in 2008 on sales of $24.8 million of available-for-sale debt securities. Such securities are primarily held as collateral to secure large commercial and municipal deposits. The total balance held in these
securities is adjusted to reflect fluctuations in the balances of the deposits they are securing.

Investment brokerage revenuestotaled
$379,000 and $641,000 for the three and six months ended March 31, 2009, respectively compared with $356,000 and $571,000, respectively for the same periods a year ago. The Company operates an investment brokerage division whose operations
consist principally of brokering bonds from wholesale brokerage houses to bank, municipal and individual investors. Revenues are generated on trading spreads and fluctuate with changes in trading volumes and market interest rates. The increased
revenues in the fiscal 2009 periods were the result of a shift in the mix of products sold resulting in higher profit margins.

Other non-interest
income totaled $144,000 and $436,000 for the three and six months ended March 31, 2009, respectively, compared with $445,000 and $1.0 million for the same 2008 periods. The decreases were primarily the result of a decrease in fees
received from a correspondent bank related to the Banks official check clearing process and impairment charges recognized in the 2009 periods for certain investments that were previously carried at historical cost. Subsequent to
September 30, 2008, the Bank began clearing its official checks internally, allowing the Bank the use of the float related to these outstanding checks. This process was previously performed by a correspondent bank that paid the Bank fees for
the use of the float.

Non-Interest Expense

Total non-interest expense increased $738,000 to $7.7 million for the quarter ended March 31, 2009 compared with $6.9 million for the same period a year ago. For the six months ended March 31, 2009 total
non-interest expense increased $1.3 million to $14.5 million compared with $13.2 million for the same six-month period last year. The increases were primarily due to increases in salaries and employee benefits expense, occupancy, equipment and data
processing expense, FDIC deposit insurance premium expense and real estate foreclosure expense and losses. Partially offsetting these increases were decreases in advertising expense, professional services expense and other non-interest expense as
the Company focused on reducing controllable expenses and began to realize benefits from a more disciplined line-item budget accountability process.

Salaries and employee benefits expenseincreased $394,000 to $3.6 million for the quarter ended March 31, 2009 compared with $3.2 million for the quarter ended March 31, 2008 and increased $715,000 to $6.9 million
for the six months ended March 31, 2009 compared with $6.2 million for the six months ended March 31, 2008. The increases were the result



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of the payment of incentives related to the increased mortgage and commercial lending volumes, which did not qualify as
capitalized loan origination expenses, and also to the reversal, in March 2008, of $364,000 in accrued performance-based incentives related to the separation of several employees.

Occupancy, equipment and data processing expense increased $94,000 to $2.1 million for the three-month period ended March 31, 2009 compared with $2.0 million for the three-month period ended
March 31, 2008 and increased $275,000 to $3.9 million for the six months ended March 31, 2009 compared with $3.7 million for the six months ended March 31, 2008. The increase was largely related to an increase in expense related to
the use of an independent security company to provide security guards at certain of the Banks branch offices, increased expenses related to the temporary relocation of one of the Banks branch offices due to water damage, and increased
expenses related to the increased level of loan and deposit activity.

Advertising expense decreased $85,000 to $209,000 for the three-month
period ended March 31, 2009 compared with $294,000 for the three-month period ended March 31, 2008 and decreased $139,000 to $495,000 for the six months ended March 31, 2009 compared with $634,000 for the six months ended
March 31, 2008. The decreases were generally due to a reduction in the overall level of advertising during the 2009 period and a more focused effort to control such expenses.

FDIC deposit insurance premium expenseincreased $253,000 to $411,000 for the three months ended March 31, 2009 compared with $158,000 for the same period in 2008 and increased $220,000 to $610,000
for the six months ended March 31, 2009 compared with $390,000 for the six months ended March 31, 2008. The increases were the result of deposit growth and the recent industry-wide increase in FDIC insurance rates.

Loss (gain) on derivative instrumentstotaled a loss of $58,000 for the quarter ended March 31, 2008 and a gain of $64,000 for the six-month period
ended March 31, 2008. There were no such gains or losses during the 2009 periods. During November 2004, the Company entered into interest rate swap agreements with notional values totaling $80 million, which were designed to convert the
fixed rates paid on certain brokered certificates of deposits into variable, LIBOR-based rates. The Company used long-haul, fair-value, hedge accounting. Under this method, any hedge ineffectiveness was deemed not material and the impact was
recognized as a charge or credit to earnings during the period in which the ineffectiveness occurred. All of these interest-rate swap agreements were called by the counterparties during the year ended September 30, 2008 due to the declining
interest-rate environment.

Real estate foreclosure losses and expense, netincludes realized losses on the final disposition
of foreclosed properties, additional write-downs for declines in the fair market values of properties which occur subsequent to foreclosure and expenses incurred in connection with maintaining the properties until they are sold. Real estate
foreclosure losses and expense, net increased $255,000 to $409,000 for the quarter ended March 31, 2009 compared with $155,000 for the same period last year and increased $368,000 to $751,000 for the six-month period ended March 31, 2009
compared to $383,000 for the same period a year ago. The increases were generally due to the overall increased foreclosure activity and the related realized losses on sales. See Non-Performing Assets and Allowance for Loan Losses.

Income Taxes

The provision for income
taxes was $762,000 and $1.1 million for the three and six months ended March 31, 2009 compared with $1.5 million and $2.6 million for the three and six months ended March 31, 2008, respectively. The effective tax rates for the
three and six months ended March 31, 2009 were 30.1% and 31.2%, respectively, compared with 37.3% and 33.4% for the same 2008 periods. The lower effective tax rates in the 2009 periods were primarily the result of a higher percentage of
non-taxable income to total pre-tax income related to bank-owned life insurance and non-taxable interest income.



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NON-PERFORMING ASSETS AND ALLOWANCE FOR LOAN LOSSES

Non-performing assets at March 31, 2009, December 31, 2008 and September 30, 2008 are summarized as follows:



|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|-------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | - | ---------------- | - | ---------- | ----------------- |  | - | ---------- | -
|                                                                                                                     |  | March 31,2009 |            |   | December 31,2008 |   |            | September 30,2008 | 
|Non-accrual loans:                                                                                                   |  |               |            |   |                  |   |            |                   |  |   |            |  
|Residential real estate:                                                                                             |  |               |            |   |                  |   |            |                   |  |   |            |  
|First mortgage                                                                                                       |  | $             | 4,526,284  |   |                  | $ | 4,330,175  |                   |  | $ | 5,903,709  |  
|Second mortgage                                                                                                      |  |               | 824,154    |   |                  |   | 628,127    |                   |  |   | 752,245    |  
|Home equity                                                                                                          |  |               | 2,342,883  |   |                  |   | 3,027,561  |                   |  |   | 1,695,073  |  
|Commercial and multi-family real estate                                                                              |  |               | 5,783,115  |   |                  |   | 1,513,516  |                   |  |   | 1,125,117  |  
|Real estate construction and development                                                                             |  |               | 372,998    |   |                  |   | 1,089,027  |                   |  |   | 133,108    |  
|Commercial and industrial                                                                                            |  |               | 3,644,934  |   |                  |   | 3,119,410  |                   |  |   | 341,250    |  
|Consumer and other                                                                                                   |  |               | 142,392    |   |                  |   | 223,022    |                   |  |   | 159,727    |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Total non-accrual loans                                                                                              |  |               | 17,636,760 |   |                  |   | 13,930,838 |                   |  |   | 10,110,229 |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Accruing loans past due 90 days or more:                                                                             |  |               |            |   |                  |   |            |                   |  |   |            |  
|Residential real estate:                                                                                             |  |               |            |   |                  |   |            |                   |  |   |            |  
|First mortgage                                                                                                       |  |               | 2,644,940  |   |                  |   | 4,909,005  |                   |  |   | 2,542,770  |  
|Second mortgage                                                                                                      |  |               | 109,535    |   |                  |   |           |                   |  |   |           |  
|Home equity                                                                                                          |  |               | 647,822    |   |                  |   | 435,579    |                   |  |   | 1,467,606  |  
|Commercial and multi-family real estate                                                                              |  |               | 14,213     |   |                  |   |           |                   |  |   | 230,845    |  
|Real estate construction and development                                                                             |  |               | 557,435    |   |                  |   | 557,435    |                   |  |   |           |  
|Consumer and other                                                                                                   |  |               | 39,771     |   |                  |   |           |                   |  |   | 7,349      |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Total accruing loans past due 90 days or more                                                                        |  |               | 4,013,716  |   |                  |   | 5,902,019  |                   |  |   | 4,248,570  |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Troubled-debt restructured:                                                                                          |  |               |            |   |                  |   |            |                   |  |   |            |  
|Current under restructured terms:                                                                                    |  |               |            |   |                  |   |            |                   |  |   |            |  
|Residential real estate:                                                                                             |  |               |            |   |                  |   |            |                   |  |   |            |  
|First mortgage                                                                                                       |  |               | 12,023,658 |   |                  |   | 9,480,307  |                   |  |   | 3,800,747  |  
|Second mortgage                                                                                                      |  |               | 1,549,511  |   |                  |   | 1,156,601  |                   |  |   | 659,033    |  
|Home equity                                                                                                          |  |               | 1,405,519  |   |                  |   | 902,739    |                   |  |   |           |  
|Commercial and multi-family real estate                                                                              |  |               | 7,895,865  |   |                  |   | 7,896,715  |                   |  |   |           |  
|Commercial and industrial                                                                                            |  |               | 1,336,788  |   |                  |   | 1,361,080  |                   |  |   | 537,422    |  
|Consumer and other                                                                                                   |  |               | 64,287     |   |                  |   |           |                   |  |   |           |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Total current troubled debt restructured                                                                             |  |               | 24,275,628 |   |                  |   | 20,797,442 |                   |  |   | 4,997,202  |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Past due under restructured terms:                                                                                   |  |               |            |   |                  |   |            |                   |  |   |            |  
|Residential real estate:                                                                                             |  |               |            |   |                  |   |            |                   |  |   |            |  
|First mortgage                                                                                                       |  |               | 2,619,663  |   |                  |   | 652,114    |                   |  |   | 1,183,967  |  
|Second mortgage                                                                                                      |  |               | 57,591     |   |                  |   | 11,591     |                   |  |   | 11,371     |  
|Home equity                                                                                                          |  |               | 93,449     |   |                  |   | 55,122     |                   |  |   | 112,081    |  
|Commercial and industrial                                                                                            |  |               | 1,020,252  |   |                  |   | 1,020,252  |                   |  |   |           |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Total past due troubled debt restructured                                                                            |  |               | 3,790,955  |   |                  |   | 1,739,079  |                   |  |   | 1,307,419  |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Total troubled debt restructured                                                                                     |  |               | 28,066,583 |   |                  |   | 22,536,521 |                   |  |   | 6,304,621  |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Total non-performing loans                                                                                           |  |               | 49,717,059 |   |                  |   | 42,369,378 |                   |  |   | 20,663,420 |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Real estate acquired in settlement of loans:                                                                         |  |               |            |   |                  |   |            |                   |  |   |            |  
|Residential real estate                                                                                              |  |               | 3,896,178  |   |                  |   | 2,505,831  |                   |  |   | 3,518,806  |  
|Commercial real estate                                                                                               |  |               | 103,500    |   |                  |   | 103,500    |                   |  |   |           |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Total real estate acquired in settlement of loans                                                                    |  |               | 3,999,678  |   |                  |   | 2,609,331  |                   |  |   | 3,518,806  |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Other nonperforming assets                                                                                           |  |               | 2,500      |   |                  |   | 91,792     |                   |  |   | 236,690    |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Total non-performing assets                                                                                          |  | $             | 53,719,237 |   |                  | $ | 45,070,501 |                   |  | $ | 24,418,916 |  
|                                                                                                                     |  |               |            |   |                  |   |            |                   |  |   |            |  
|Ratio of non-performing loans to total loans receivable                                                              |  |               | 4.17       | % |                  |   | 3.66       | %                 |  |   | 1.88       | %
|Ratio of non-performing assets to totals assets                                                                      |  |               | 3.68       | % |                  |   | 3.31       | %                 |  |   | 1.87       | %
|Ratio of allowance for loan losses to non-performing loans                                                           |  |               | 37.15      | % |                  |   | 36.97      | %                 |  |   | 61.76      | %
|Excluding troubled-debt restructured that is current under restructured terms and related allowance for loan losses: |  |               |            |   |                  |   |            |                   |  |   |            |  
|Ratio of non-performing loans to total loans receivable                                                              |  |               | 2.14       | % |                  |   | 1.86       | %                 |  |   | 1.42       | %
|Ratio of non-performing assets to totals assets                                                                      |  |               | 2.01       | % |                  |   | 1.78       | %                 |  |   | 1.49       | %
|Ratio of allowance for loan losses to non-performing loans                                                           |  |               | 66.30      | % |                  |   | 65.00      | %                 |  |   | 81.20      | %



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Non-performing loans increased to $49.7 million at March 31, 2009 from $42.4 million at December 31, 2008 and
$20.7 million at September 30, 2008, primarily as the result of increased troubled debt restructurings. The increase in troubled debt restructurings was due to managements decision to proactively modify loan repayment terms with
borrowers who were experiencing financial difficulties in the current economic climate with the belief that these actions would maximize the Banks recoveries on these loans. The restructured terms of the loans generally included a reduction of
the interest rates and, if the underlying collateral values supported the resulting carrying values of the loans, the addition of past due interest to the principal balance of the loans. Many of these borrowers were current at the time of the
modification and showed strong intent and ability to repay their obligations under the modified terms. At March 31, 2009, $24.3 million, or 86%, of the total restructured loans were performing as agreed under the modified terms of the loans.

While these modifications were generally targeted at residential mortgage loan customers, during the quarter ended December 31, 2008, the Company
restructured a $7.8 million commercial real estate loan made to a St. Louis-based customer, which was collateralized by a strip shopping center in Naples, Florida. The Companys lending practices generally limit lending outside of its two
primary market areas, St. Louis and Kansas City. However, management has had a long, successful relationship with this borrower. While the loan had been current under the previous loan terms and remains current under the restructured terms,
management determined it was necessary to temporarily reduce the interest rate and defer principal payments while the borrower attempts to secure additional tenants in the property. However, after considering the values of the borrowers
personal guarantees and the underlying collateral, the Company recorded a $1.2 million provision for loan loss related to this loan during the December 2008 quarter.

A loan is classified as a troubled debt restructuring if the Company, for economic or legal reasons related to the borrowers financial difficulties, grants a concession to the borrower that it would not
otherwise consider. A loan classified as a troubled debt restructuring will retain such classification until the borrower demonstrates the ability to pay under the terms of the restructured note through a sustained period of repayment performance,
which is generally one year. Interest income on restructured loans is accrued at the reduced rate once the borrower demonstrates the ability to pay under the terms of the restructured note through a sustained period of repayment performance, which
is generally three months for loans that were less than 30 days past due at the time of restructuring and six months for loans that were 30 days or more past due at the time of restructuring.

Also contributing to the rise in non-performing assets during the six months ended March 31, 2009 was a $7.5 million increase in non-accrual loans. During the
quarter ended March 31, 2009, three loans made to two commercial borrowers with principal balances totaling $4.0 million that were secured by residential building lots under development and raw land, were placed on non-accrual status.
Loans are placed on non-accrual status when, in the opinion of management, there is reasonable doubt as to the collectability of interest or principal. Management considers many factors before placing a loan on non-accrual, including the overall
financial condition of the borrower, the progress of managements collection efforts and the value of the underlying collateral.

The ratio of the
allowance for loan losses to loans receivable increased to 1.55% at March 31, 2009 compared with 1.35% at December 31, 2008 and 1.16% at September 30, 2008 as the result of the significant increase in the allowance. The ratio of the
allowance for loan losses to non-performing loans was 37.15% at March 31, 2009 compared with 36.97% at December 31, 2008 and 61.76% at September 30, 2008. Excluding restructured loans that were performing under their restructured
terms and the related allowance for loan losses, the ratio of the allowance for loan losses to the remaining non-performing loans was 66.3% at March 31, 2009 compared with 65.0% at December 31, 2008 and 81.2% at September 30, 2008.
Management believes the changes in this coverage ratio are appropriate due to a change in the mix of non-performing loans during the period, specifically increased troubled debt restructurings that were performing under their restructured terms and
residential first mortgage loans. At March 31, 2009, 44% of total non-performing loans were residential first mortgage loans, which carry a lower level of inherent risk than other types of loans in the Companys portfolio, especially
compared to second mortgage loans and home equity lines of credit where the Company often does not own or service the first mortgage loan.

Real estate
acquired in settlement of loans was $4.0 million at March 31, 2009 compared with $3.5 million at September 30, 2008. The balance at March 31, 2009 consisted of 52 residential real estate properties and one commercial real estate
property in the Companys two primary market areas of St. Louis and Kansas City.



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The following table summarizes the activity in the allowance for loan losses for the periods indicated.



|                                                                     |  |                             |            |               |                           |            |                   |  |   |            |   |  |   |           
|-------------------------------------------------------------------- |  | --------------------------- | ---------- | ------------- | ------------------------- | ---------- | ----------------- |  | - | ---------- | - |  | - | ----------
|                                                                     |  | Three Months EndedMarch 31, |            |               | Six Months EndedMarch 31,
|                                                                     |  | 2009                        |            | 2008          |                           |            | 2009              |  |   | 2008      
|Balance, beginning of period                                         |  | $                           | 15,663,958 |               | $                         | 11,151,483 |                   |  | $ | 12,761,532 |   |  | $ | 10,421,304
|Provision charged to expense                                         |  |                             | 5,664,407  |               |                           | 1,728,140  |                   |  |   | 10,355,985 |   |  |   | 2,760,691 
|Charge-offs:                                                         |  |                             |            |               |                           |            |                   |  |   |            |   |  |   |           
|Residential real estate first mortgage                               |  |                             | 1,008,416  |               |                           | 53,115     |                   |  |   | 1,675,520  |   |  |   | 154,565   
|Residential real estate second mortgage                              |  |                             | 386,032    |               |                           | 604,380    |                   |  |   | 856,891    |   |  |   | 738,162   
|Home equity lines of credit                                          |  |                             | 879,804    |               |                           | 610,453    |                   |  |   | 1,490,131  |   |  |   | 738,042   
|Real estate construction & development                               |  |                             | 458,400    |               |                           | 28,700     |                   |  |   | 466,703    |   |  |   | 28,700    
|Commercial & multi-family real estate                                |  |                             |           |               |                           | 374,000    |                   |  |   |           |   |  |   | 374,000   
|Commercial & industrial                                              |  |                             | 107,394    |               |                           |           |                   |  |   | 130,971    |   |  |   |          
|Consumer and other                                                   |  |                             | 31,521     |               |                           | 93,885     |                   |  |   | 75,004     |   |  |   | 141,656   
|                                                                     |  |                             |            |               |                           |            |                   |  |   |            |   |  |   |           
|Total charge-offs                                                    |  |                             | 2,871,567  |               |                           | 1,764,533  |                   |  |   | 4,695,220  |   |  |   | 2,175,125 
|                                                                     |  |                             |            |               |                           |            |                   |  |   |            |   |  |   |           
|Recoveries:                                                          |  |                             |            |               |                           |            |                   |  |   |            |   |  |   |           
|Residential real estate first mortgage                               |  |                             | 854        |               |                           |           |                   |  |   | 2,136      |   |  |   |          
|Residential real estate second mortgage                              |  |                             | 2,921      |               |                           |           |                   |  |   | 3,244      |   |  |   |          
|Home equity lines of credit                                          |  |                             | 3,482      |               |                           | 677        |                   |  |   | 16,144     |   |  |   | 106,895   
|Commercial and multi-family real estate                              |  |                             |           |               |                           |           |                   |  |   | 14,283     |   |  |   |          
|Consumer and other                                                   |  |                             | 3,480      |               |                           | 91         |                   |  |   | 9,431      |   |  |   | 2,093     
|                                                                     |  |                             |            |               |                           |            |                   |  |   |            |   |  |   |           
|Total recoveries                                                     |  |                             | 10,737     |               |                           | 768        |                   |  |   | 45,238     |   |  |   | 108,988   
|                                                                     |  |                             |            |               |                           |            |                   |  |   |            |   |  |   |           
|Balance, end of period                                               |  | $                           | 18,467,535 |               | $                         | 11,115,858 |                   |  | $ | 18,467,535 |   |  | $ | 11,115,858
|                                                                     |  |                             |            |               |                           |            |                   |  |   |            |   |  |   |           
|                                                                     |  |                             |            |              
|                                                                     |  |                             |            | March 31,2009 |                           |            | September 30,2008 |  |   |           
|Specific loan loss allowance related to non-performing loans         |  |                             |            |               | $                         | 3,937,641  |                   |  | $ | 807,629    |   |  |   |           
|Balance of non-performing loans with no specific loan loss allowance |  |                             |            |               |                           | 33,617,778 |                   |  |   | 17,704,652 |   |  |   |           
|Ratio of allowance to total loans outstanding                        |  |                             |            |               |                           | 1.55       | %                 |  |   | 1.16       | % |  |   |           

The provision for loan losses for the three months ended March 31, 2009 was $5.7 million compared with $4.7
million for the December 2008 quarter and $1.7 million for the March 2008 quarter. For the six-month periods, the provision for loan losses was $10.4 million in 2009 compared with $2.8 million in 2008. The increased provision in the fiscal 2009
periods was due to the increase in the level of non-performing loans, net charge-offs and growth in performing commercial loans, which have historically carried a higher level of inherent risk than residential loans.

Net charge-offs for the three- and six-month periods ended March 31, 2009 totaled $2.9 million, or 0.98% of average loans on an annualized basis, and $4.6 million,
or 0.81% of average loans on an annualized basis, respectively, compared with $1.8 million, or 0.68% of average loans on an annualized basis, and $2.1 million, or 0.41% of average loans on an annualized basis, for the same periods a year ago,
respectively. Management adheres to specific loan underwriting guidelines focusing primarily on residential and commercial real estate and home equity loans secured by one- to four-family and commercial properties within its primary market areas.
Because the Companys loan portfolio is typically collateralized by real estate, losses occur more frequently when property values are declining and borrowers are losing equity in the underlying collateral. Recent declines in residential real
estate values in the Companys market areas, as well as nationally, contributed to the increased charge-offs in the 2009 periods. The Company has not engaged in sub-prime lending activities.

The Company maintains the allowance for loan losses to absorb probable losses in the Companys loan portfolio. Loan losses are charged against and recoveries are
credited to the allowance. Provisions for loan losses are charged to income and credited to the allowance in an amount necessary to maintain an appropriate allowance given risks identified in the portfolio. The allowance is based upon
managements quarterly estimates of probable losses inherent in the loan portfolio. Managements estimates are determined through a method of quantifying certain risks in the portfolio that are affected primarily by changes in the nature
and volume of the portfolio combined with an analysis of past-due and classified loans, and can also be affected by the following factors: changes in lending policies and procedures, including underwriting



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standards and collections, charge-off and recovery practices, changes in national and local economic conditions and developments, assessment of collateral
values based on independent appraisals, and changes in the experience, ability, and depth of lending management staff.

The following assessments are
performed quarterly in accordance with the Companys allowance for loan losses methodology:

Homogeneous residential mortgage loans are
given one of five standard risk ratings at the time of origination. The risk ratings are assigned through the use of a credit scoring model, which assesses credit risk determinants from the borrowers credit history, the loan-to-value,
debt-to-income ratios or other personal history. The Companys historical loss rates and industry data for each credit rating, adjusted as described below, are used to determine the appropriate allocation percentage for each loan grade.
Commercial real estate, consumer and home equity loans are assigned standard risk weightings that determine the allocation percentage.

When
commercial real estate loans are over 30 days delinquent or residential, consumer and home equity loans are over 90 days past due, they are evaluated individually for impairment. Additionally, loans that demonstrate credit weaknesses that may impact
the borrowers ability to repay or the value of the collateral are also reviewed individually for impairment. The Company considers a loan to be impaired when management believes it will be unable to collect all principal and interest due
according to the contractual terms of the loan. If a loan is determined to be impaired, the Company establishes an allowance for loan losses equal to the excess of the loans carrying value over the present value of estimated future cash flows
or the fair value of collateral if the loan is collateral dependent.

The Companys methodology includes factors that allow the Company
to adjust its estimates of losses based on the most recent information available. Historical loss rates used to determine allowance provisions are adjusted to reflect the impact of current conditions, including actual collection and charge-off
experience. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the allowance for loan losses. Such agencies may require the Company to modify its allowance for loan losses based on their
judgment about information available to them at the time of their examination.

Management believes that the amount maintained in the allowance will be
adequate to absorb probable losses inherent in the portfolio. Although management believes that it uses the best information available to make such determinations, future adjustments to the allowance for loan losses may be necessary and results of
operations could be significantly and adversely affected if circumstances differ substantially from the assumptions used in making the determinations. While management believes it has established the allowance for loan losses in accordance with U.S.
generally accepted accounting principles, there can be no assurance that the Banks regulators, in reviewing the Banks loan portfolio, will not request the Bank to significantly increase its allowance for loan losses. In addition, because
future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that a substantial increase will not be necessary should the quality of any
loans deteriorate as a result of the factors discussed above. Any material increase in the allowance for loan losses could adversely affect the Companys financial condition and results of operations.

FINANCIAL CONDITION

Cash and cash equivalentsincreased $24.4 million to $53.5 million at March 31, 2009 from $29.1 million at September 30, 2008. Cash balances included overnight investments in federal funds, which increased to $26.8 million at March 31, 2009 compared
with $647,000 at September 30, 2008, primarily as the result of an increase in float related to loan fundings during the last few days of the month. Subsequent to September 30, 2008, the Bank began clearing its official checks internally,
which increased the amount of float related to such outstanding checks.

Debt securities available for sale increased to $5.0
million at March 31, 2009 compared with $0 at September 30, 2008. Mortgage-backed securities available for sale increased to $16.9 million at March 31, 2009 from $10.2 million at September 30, 2008, while
mortgage-backed securities held to maturity decreased to $14.4 million at March 31, 2009 from $15.7 million at September 30, 2008. Such securities are primarily held as collateral to secure large commercial and municipal
deposits. The total balance held in these securities is adjusted as individual securities mature to reflect fluctuations in the balances of the deposits they are securing.



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Stock in the Federal Home Loan Bank of Des Moinesincreased $754,000 to $11.6 million at March 31,
2009 from $10.9 million at September 30, 2008. The Bank is generally required to hold stock equal to 5% of its total FHLB borrowings. However, effective in December 2008, the FHLB informed its member banks that it was temporarily
suspending redemptions of its stock when members reduced their outstanding borrowings.

Deferred tax assetsdecreased $2.0 million to $6.0
million at March 31, 2009 from $8.1 million at September 30, 2008 primarily as the result of the utilization of capital loss carryovers generated by losses on the sale of the Companys entire portfolio of Fannie Mae preferred stock
during September 2008. At the time of sale, such losses were classified as capital losses for Federal income tax purposes and, accordingly, could only be deducted on the Companys income tax return to the extent they could be used to offset
capital gains. On October 3, 2008, the Emergency Economic Stabilization Act of 2008 was enacted, which provided ordinary loss treatment on such sales. However, under Statement of Accounting Standards No. 109, Accounting for Income Taxes,
these losses were treated as capital losses for financial accounting purposes at September 30, 2008, but were recognized as ordinary losses during the quarter ended December 31, 2008.

Prepaid expenses, accounts receivable and other assetsincreased $1.7 million to $9.6 million at March 31, 2009 from $7.9 million at
September 30, 2008. The increase was primarily the result of an increase in the fair value of an interest-rate swap agreement with a notional value of $14 million, which also increased other liabilities by a like amount. SeeQuantitative and Qualitative Disclosures about Market Risk.

Advances from the Federal Home Loan Bank of Des Moinesdecreased $124.5
million to $86.1 million at March 31, 2009 from $210.6 million at September 30, 2008 while borrowings from the Federal Reserve Bankincreased $90.0 million to $130.0 million at March 31, 2009 from $40.0 million at
September 30, 2008. The Company supplements its primary funding source, retail deposits, with wholesale funding sources consisting of borrowings from the FHLB, short-term borrowings from the Federal Reserve Bank of St. Louis and brokered
certificates of deposit acquired on a national level. Management actively chooses between these wholesale funding sources depending on their relative costs. Funds received from retail deposit growth during the six months ended March 31, 2009
were used to reduce the net outstanding balance of these borrowings by $34.5 million.

Note payable decreased from $7.6 million at
September 30, 2008 to $0 at March 31, 2009 as the Company repaid these borrowings from a correspondent bank using a portion of the proceeds from the sale of preferred stock to the U.S. Department of Treasury. See Note 2 of
Notes to Unaudited Consolidated Financial Statements.

Due to other banks decreased from $14.4 million at
September 30, 2008 to $0 at March 31, 2009. The balance at September 30, 2008 represented the Banks outstanding official checks that were cleared through a correspondent banks checking account. Subsequent to
September 30, 2008, the Company began to perform this clearing process internally, resulting in the decrease in the liability.

Total
stockholders equity increased $33.7 million to $116.1 million at March 31, 2009 from $82.4 million at September 30, 2008. On January 16, 2009, as part of the U.S. Department of Treasurys Capital Purchase Program,
the Company issued 32,538 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, $1,000 per share liquidation preference, and a warrant to purchase up to 778,421 shares of the Companys common stock at an exercise price of $6.27
per share in exchange for $32.5 million in cash from the U.S. Department of Treasury. See Note 2 of Notes to Unaudited Consolidated Financial Statements. Also increasing stockholders equity were net income totaling $2.3 million, common
stock issued under the Companys dividend reinvestment plan totaling $341,000, the amortization of equity trust expense of $297,000 and an increase in accumulated other comprehensive income of $171,000, partially offset by dividend payments of
$2.0 million.

LIQUIDITY AND CAPITAL RESOURCES

At
March 31, 2009, the Bank had outstanding commitments to originate loans totaling $192.0 million and commitments to sell loans totaling $245.8 million. Certificates of deposit totaling $468.8 million at March 31, 2009 were scheduled to
mature in one year or less. Based on past experience, management believes the majority of certificates of deposit maturing in one year or less will remain with the Bank.



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If the Bank or the Company require funds beyond their ability to generate them internally, the Bank has the ability to
borrow funds from the FHLB and the Federal Reserve Bank and to raise certificates of deposit on a national level through broker relationships. The borrowings from the FHLB are obtained under a blanket agreement, which assigns all investments in FHLB
stock, qualifying first residential mortgage loans, residential loans held for sale and home equity loans with a 90% or less loan-to-value ratio as collateral to secure the amounts borrowed. Total borrowings from the FHLB are subject to limitations
based upon a risk assessment of the Bank. At March 31, 2009, the Bank had approximately $229.8 million in additional borrowing authority under the arrangement with the FHLB in addition to the $86.1 million in advances outstanding at that
date.

The borrowings from the Federal Reserve Bank consist of short-term borrowings (generally maturing overnight or within 28 days) borrowed under the
Banks primary credit line at the Federal Reserves Discount Window and its Term Auction Facility. The Bank had approximately $42.4 million in additional borrowing authority at March 31, 2009 under this arrangement in addition to the
$130.0 million in borrowings outstanding at that date and had approximately $230.0 million of commercial loans pledged as collateral under this agreement.

SOURCES AND USES OF CASH

The Company is a large originator of residential mortgage loans with substantially all of such loans sold in the
secondary residential mortgage market. Consequently, the primary source and use of cash in operations is the origination and subsequent sale of loans held for sale. During the six months ended March 31, 2009, the origination of
loans held for sale used $914.1 million of cash and the sales of such loans provided cash totaling $881.3 million compared with originations and sales totaling $708.1 million and $689.2 million, respectively, during the six months ended
March 31, 2008.

The primary use of cash from investing activities is the origination of loans receivable which are held in portfolio.
During the six months ended March 31, 2009, the Company had a net increase in loans receivable of $100.0 million compared with an increase of $95.3 million for the six months ended March 31, 2008. In addition, the Company purchased $56.7
million in debt securities and $7.0 million in mortgage-backed securities during the six months ended March 31, 2009 compared with purchases of $63.3 million in debt securities and $9.2 million in equity securities during the six months ended
March 31, 2008. Sources of cash from investing activities also included sales and maturities of debt securities totaling $51.1 million and $1.0 million, during the six months ended March 31, 2009 compared with sales and maturities of
debt securities totaling $24.8 million and $36.0 million, respectively, during the six months ended March 31, 2008.

The Companys primary
sources and uses of funds from financing activities during the six months ended March 31, 2009 included a $179.6 million increase in deposits compared with a $19.8 million increase for the six months ended March 31,
2008, a $90.0 million increase in borrowings from the Federal Reserve Bank for the six months ended March 31, 2009 compared with no increase during the same period last year, a $124.5 million decrease in advances from the Federal Home Loan Bank
compared with a $106.6 million increase during the same period last year, and proceeds from the issuance of preferred stock totaling $32.5 million during January 2009.

The following table presents the maturity structure of time deposits and other maturing liabilities at March 31, 2009:



|                                      |  |                        |         |                |   |                          |  |                        |         |  |   |       
|------------------------------------- |  | ---------------------- | ------- | -------------- | - | ------------------------ |  | ---------------------- | ------- |  | - | ------
|                                      |  | March 31, 2009        
|                                      |  | Certificatesof Deposit |         | FHLBBorrowings |   | FederalReserveBorrowings |  | SubordinatedDebentures
|                                      |  | (In thousands)        
|Maturing in:                          |  |                        |         |                |   |                          |  |                        |         |  |   |       
|Three months or less                  |  | $                      | 254,994 |                | $ | 20,000                   |  | $                      | 130,000 |  | $ |      
|Over three months through six months  |  |                        | 115,994 |                |   | 5,100                    |  |                        |        |  |   |      
|Over six months through twelve months |  |                        | 97,834  |                |   | 1,500                    |  |                        |        |  |   |      
|Over twelve months                    |  |                        | 117,347 |                |   | 59,500                   |  |                        |        |  |   | 19,589
|                                      |  |                        |         |                |   |                          |  |                        |         |  |   |       
|Total                                 |  | $                      | 586,169 |                | $ | 86,100                   |  | $                      | 130,000 |  | $ | 19,589
|                                      |  |                        |         |                |   |                          |  |                        |         |  |   |       



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CONTRACTUAL OBLIGATIONS

In addition to its owned banking facilities, the Company has entered into long-term operating leases to support ongoing activities. The required payments under such commitments at March 31, 2009 are as follows:



|                             |  |   |          
|---------------------------- |  | - | ---------
|Less than one year           |  | $ | 623,676  
|Over 1 year through 3 years  |  |   | 1,133,572
|Over 3 years through 5 years |  |   | 1,000,930
|Over 5 years                 |  |   | 1,275,545
|                             |  |   |          
|Total                        |  | $ | 4,033,723
|                             |  |   |          

REGULATORY CAPITAL

The Bank is required to maintain specific amounts of capital pursuant to Office of Thrift Supervision (OTS) regulations on minimum capital standards. The OTSs minimum capital standards generally require the maintenance of
regulatory capital sufficient to meet each of three tests, hereinafter described as the tangible capital requirement, the Tier I (core) capital requirement and the risk-based capital requirement. The tangible capital requirement provides for minimum
tangible capital (defined as stockholders equity less all intangible assets) equal to 1.5% of adjusted total assets. The Tier I capital requirement provides for minimum core capital (tangible capital plus certain forms of supervisory goodwill
and other qualifying intangible assets) equal to 4.0% of adjusted total assets. The risk-based capital requirement provides for the maintenance of core capital plus a portion of unallocated loss allowances equal to 8.0% of risk-weighted assets. In
computing risk-weighted assets, the Bank multiplies the value of each asset on its balance sheet by a defined risk-weighting factor (e.g., one-to four-family conventional residential loans carry a risk-weighting factor of 50%).

The following table illustrates the Banks actual regulatory capital levels compared with its regulatory capital requirements at March 31, 2009 and
September 30, 2008.



|                                                    |  |                        |         |       |                              |   |                                 |                                                                               |        |  |      |        |  |       |         |  |       |  
|--------------------------------------------------- |  | ---------------------- | ------- | ----- | ---------------------------- | - | ------------------------------- | ----------------------------------------------------------------------------- | ------ |  | ---- | ------ |  | ----- | ------- |  | ----- | -
|                                                    |  |                        |         |       |                              |   | Regulatory Capital Requirements |                                                                              
|                                                    |  | Actual                 |         |       | For CapitalAdequacy Purposes |   |                                 | To be Categorized asWell CapitalizedUnder PromptCorrective
ActionProvisions |       
|                                                    |  | Amount                 |         | Ratio |                              |   | Amount                          |                                                                               | Ratio  |  |      | Amount |  | Ratio |        
|                                                    |  | (Dollars in thousands) |        
|As of March 31, 2009:                               |  |                        |         |       |                              |   |                                 |                                                                               |        |  |      |        |  |       |         |  |       |  
|Tangible capital (to total assets)                  |  | $                      | 126,015 |       | 8.66                         | % |                                 | $                                                                             | 21,828 |  | 1.50 | %      |  |       | N/A     |  | N/A   |  
|Total risk-based capital (to risk-weighted assets)  |  |                        | 140,545 |       | 11.76                        |   |                                 |                                                                               | 95,590 |  | 8.00 |        |  | $     | 119,487 |  | 10.00 | %
|Tier I risk-based capital (to risk-weighted assets) |  |                        | 126,015 |       | 10.55                        |   |                                 |                                                                               | N/A    |  | N/A  |        |  |       | 71,692  |  | 6.00  |  
|Tier I leverage capital (to average assets)         |  |                        | 126,015 |       | 8.66                         |   |                                 |                                                                               | 58,209 |  | 4.00 |        |  |       | 72,761  |  | 5.00  |  
|                                                    |  |                        |         |       |                              |  
|As of September 30, 2008:                           |  |                        |         |       |                              |   |                                 |                                                                               |        |  |      |        |  |       |         |  |       |  
|Tangible capital (to total assets)                  |  | $                      | 102,884 |       | 7.93                         | % |                                 | $                                                                             | 19,471 |  | 1.50 | %      |  |       | N/A     |  | N/A   |  
|Total risk-based capital (to risk-weighted assets)  |  |                        | 114,838 |       | 10.59                        |   |                                 |                                                                               | 86,769 |  | 8.00 |        |  | $     | 108,462 |  | 10.00 | %
|Tier I risk-based capital (to risk-weighted assets) |  |                        | 102,884 |       | 9.49                         |   |                                 |                                                                               | N/A    |  | N/A  |        |  |       | 65,077  |  | 6.00  |  
|Tier I leverage capital (to average assets)         |  |                        | 102,884 |       | 7.93                         |   |                                 |                                                                               | 51,923 |  | 4.00 |        |  |       | 64,904  |  | 5.00  |  

EFFECTS OF INFLATION

Changes in interest rates may have a significant impact on a banks performance because virtually all assets and liabilities of banks are monetary in nature. Interest rates do not necessarily move in the same direction or in the same
magnitude as the



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prices of goods and services. Inflation does have an impact on the growth of total assets in the banking industry, often
resulting in a need to increase equity capital at higher than normal rates to maintain an appropriate equity to asset ratio. The Companys operations are not currently impacted by inflation.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK AND OFF-BALANCE SHEET ARRANGEMENTS

There have been no material changes in the Companys quantitative or qualitative aspects of market risk during the quarter ended March 31, 2009 from those
disclosed in the Companys Annual Report on Form 10-K for the year ended September 30, 2008.

In the normal course of operations, the Company
engages in a variety of financial transactions that, in accordance with generally accepted accounting principles, are not recorded in its financial statements. These transactions involve, to varying degrees, elements of credit, interest rate and
liquidity risk. Such transactions are used primarily to manage customers requests for funding and take the form of loan commitments and lines of credit. Additionally, the Company engages in certain hedging activities, which are described in
greater detail below.

For the three and six months ended March 31, 2009, the Company did not engage in any off-balance-sheet transactions reasonably
likely to have a material effect on its financial condition, results of operations or cash flows.

The Company originates and purchases derivative
financial instruments, including interest rate lock commitments, forward contracts to sell mortgage-backed securities and interest rate swaps. Derivative financial instruments originated by the Company consist of interest rate lock commitments to
originate residential real estate loans. At March 31, 2009, the Company had issued $192.1 million of unexpired interest rate lock commitments to loan customers compared with $137.4 million of unexpired commitments at September 30, 2008.

The Company entered into two $14 million notional value interest-rate swap contracts during 2008. These contracts supported a $14 million, variable-rate,
commercial loan relationship and were used to allow the commercial loan customer to pay a fixed interest rate to the Bank, while the Bank, in turn, charged the customer a floating interest rate on the loan. Under the terms of the swap contract
between the Bank and the loan customer, the customer pays the Bank a fixed interest rate of 6.58%, while the Bank pays the customer a variable interest rate of one-month LIBOR plus 2.30%. Under the terms of a similar but separate swap contract
between the Bank and a major securities broker, the Bank pays the broker a fixed interest rate of 6.58%, while the broker pays the Bank a variable interest rate of one-month LIBOR plus 2.30%. The two contracts have identical terms except for the
interest rates and interest does not begin to accrue until May 2009. The contracts are scheduled to mature on May 15, 2015. While these two swap derivatives generally work together as an interest-rate hedge, the Company has not designated them
for hedge treatment under SFAS No. 133. Consequently, both derivatives are marked to fair value through either a charge or credit to current earnings, the net effect of which offset one another during the six months ended March 31, 2009.
The fair values of these derivative instruments recorded in other assets and other liabilities in the Companys financial statements at March 31, 2009 and September 30, 2008 were $1.6 million and $70,000, respectively.

CONTROLS AND PROCEDURES

The Company
maintains disclosure controls and procedures as such term is defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act), that are designed to ensure that the
information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the SEC) (1) is recorded, processed, summarized and reported within the time
periods specified in the SECs rules and forms, and (2) is accumulated and communicated to the Companys management including its principal executive and principal financial officers as appropriate to allow timely decisions regarding
required disclosure.

During the quarter ended March 31, 2009, the Companys management, including its principal executive officer and principal
financial officer, evaluated the effectiveness of the Companys disclosure controls and procedures as of March 31, 2009, and concluded that the Companys disclosure controls and procedures were effective as of such date.

There have been no changes in the Companys internal control over financial reporting during the quarter ended March 31, 2009 that have materially affected,
or are reasonably likely to materially affect, its internal control over financial reporting.



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IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In September 2006, the Financial Accounting Standards Board issued Statement No. 157, Fair Value Measurements (SFAS No. 157), which defines fair value, establishes a framework for
measuring fair value in generally accepted accounting standards, and expands disclosures about fair value measurements. SFAS No. 157 was effective for the Company beginning October 1, 2008. In March 2008, the FASB issued Staff Position No.
FAS 157-2 (FSP No. 157-2), which delays the effective date of SFAS No. 157 for non-financial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually), to the Companys fiscal year beginning October 1, 2009. The adoption of SFAS No. 157 did not have a material effect on the Companys financial condition or results of operations.

In April 2009, the FASB issued Staff Position (FSP) No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or
Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (FSP FAS 157-4). SFAS No. 157 defines fair value as the price that would be received to sell the asset or transfer the liability in an
orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. FSP FAS 157-4 provides additional guidance on determining when the volume and level of
activity for the asset or liability has significantly decreased. The FSP also includes guidance on identifying circumstances when a transaction may not be considered orderly and provides that a transaction price not associated with an orderly
transaction is given little, if any, weight when estimating fair value. This FSP is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. An
entity early adopting FSP FAS 157-4 must also early adopt FSP FAS 115-2 and FAS 124-2 (as defined below). The Company will adopt FSP FAS 157-4 during the quarter ended June 30, 2009. Management has evaluated the requirements of this FSP and
believes it will not have a material effect on the Companys financial condition or results of operations.

In April 2009, the FASB issued Staff
Position No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2 and FAS 124-2). FSP FAS 115-2 and FAS 124-2 clarifies the interaction of the factors that should be
considered when determining whether a debt security is other-than-temporarily impaired. For debt securities, management must assess whether (a) it has the intent to sell the security and (b) it is more likely than not that it will be
required to sell the security prior to its anticipated recovery. These steps are performed before assessing whether the entity will recover the cost basis of the investment. Previously, this assessment required management to assert it has both the
intent and the ability to hold a security for a period of time sufficient to allow for an anticipated recovery in fair value to avoid recognizing an other-than-temporary impairment. This change does not affect the need to forecast recovery of the
value of the security through either cash flows or market price. In instances when a determination is made that an other-then-temporary impairment exists but the investor does not intend to sell the debt security and it is not more likely than not
that it will be required to sell the debt security prior to its anticipated recovery, FSP FAS 115-2 and FAS 124-2 changes the presentation and amount of the other-than-temporary impairment recognized in the income statement. The other-than-temporary
impairment is separated into (a) the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of the total
other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other
factors is recognized in other comprehensive income. This FSP is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. An entity early adopting
FSP FAS 115-2 and FAS 124-2 must also early adopt FSP FAS 157-4. The Company will adopt FSP FAS 115-2 and FAS 124-2 during the quarter ended June 30, 2009. Management has evaluated the requirements of this FSP and believes it will not have a
material effect on the Companys financial condition or results of operations.

In April 2009, the FASB issued Staff Position No. FAS 107-1 and APB
28-1, Interim Disclosures about Fair Value of Financial Instruments (FSP FAS 107-1 and APB 28-1). FSP FAS 107-1 and APB 28-1 amends SFAS No. 107, Disclosures about Fair Value of Financial Instruments, to
require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial
Reporting, to require those disclosures in summarized financial information at interim reporting periods. Management has evaluated the requirements of FSP FAS 107-1 and APB 28-1 and believes it will not have a material effect on the
Companys financial condition or results of operations.



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In September 2006, the FASB issued Statement No. 158, Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans (SFAS No. 158), which requires balance sheet recognition of the funded status of pension and other postretirement benefits with the offset to accumulated other comprehensive income. Employers
will recognize actuarial gains and losses, prior service cost, and any remaining transition amounts when recognizing a plans funded status. SFAS No. 158 was effective for the Company beginning October 1, 2007. The adoption of SFAS
No. 158 did not have a material effect on the Companys financial condition or results of operations.

In February 2007, the FASB issued
Statement No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an amendment of FASB Statement No. 115 (SFAS No. 159). SFAS No. 159 provides companies with an option
to report selected financial assets and liabilities at estimated fair value. Most of the provisions of SFAS No. 159 are elective; however, the amendment to SFAS No. 115, Accounting for Certain Investments in Debt and Equity
Securities, applies to all entities that own trading and available-for-sale securities. The fair value option created by SFAS No. 159 permits an entity to measure eligible items at fair value as of specified election dates. The fair value
option (a) may generally be applied instrument by instrument, (b) is irrevocable unless a new election date occurs, and (c) must be applied to the entire instrument and not to only a portion of the instrument. SFAS No. 159 was
effective for the Company beginning October 1, 2008. The adoption of SFAS No. 159 did not have a material effect on the Companys financial condition or results of operations.

In December 2007, the FASB issued Statement No. 141 (revised 2007), Business CombinationsA Replacement of FASB Statement No. 141 (SFAS
141(R)) and Statement No. 160, Noncontrolling Interests in Consolidated Financial StatementsAn Amendment of ARB No. 51 (SFAS 160). SFAS 141(R) establishes principles and requirements for how an acquirer
recognizes and measures certain items in a business combination, as well as disclosures about the nature and financial effects of a business combination. SFAS 160 establishes accounting and reporting standards surrounding noncontrolling interests,
or minority interests, which are the portions of equity in a subsidiary not attributable, directly or indirectly, to a parent. The pronouncements are effective for fiscal years beginning on or after December 15, 2008 and apply prospectively to
business combinations. Presentation and disclosure requirements related to noncontrolling interests must be retrospectively applied. Management is currently evaluating the impact of SFAS 141(R) on its accounting for future acquisitions and the
impact of SFAS 160 on the Companys consolidated financial statements.

In March 2008, the FASB issued Statement No. 161, Disclosures about
Derivative Instruments and Hedging ActivitiesAn Amendment of FASB Statement No. 133 (SFAS 161). SFAS 161 requires enhanced qualitative disclosures about objectives and strategies for using derivatives, quantitative
disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS 161 is effective for financial statements issued for fiscal years
and interim periods beginning after November 15, 2008. Management has evaluated the requirements of SFAS 161 and believes it will not have a material effect on the Companys financial condition or results of operations.

In September 2006, the Emerging Issues Task Force Issue 06-4, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar
Life Insurance Arrangements, was ratified. This EITF Issue addresses accounting for separate agreements that split life insurance policy benefits between an employer and employee. The Issue requires the employer to recognize a liability for
future benefits payable to the employee under these agreements. The effects of applying this Issue must be recognized through either a change in accounting principle through an adjustment to equity or through the retrospective application to all
prior periods. The consensus in this Issue is effective for fiscal years beginning after December 15, 2007, with earlier application permitted. Management has evaluated the requirements of the Issue and believes it will not have a material
effect on the Companys financial condition or results of operations.

In November 2007, the Securities and Exchange Commission staff issued Staff
Accounting Bulletin No. 109, Written Loan Commitments Recorded at Fair Value through Earnings (SAB No. 109). SAB No. 109 provides revised guidance on the valuation of written loan commitments accounted for at
fair value through earnings. Former guidance under SAB No. 105, Application of Accounting Principles to Loan Commitments, indicated that the expected net future cash flows related to the associated servicing of the loan should not
be incorporated into the measurement of the fair value of a derivative loan commitment. The new guidance under SAB No. 109 requires these cash flows to be included in the fair value measurement. The SAB requires this view to be applied on a
prospective basis to derivative loan commitments issued or modified in the first quarter of 2008. The Companys application of SAB No. 109 in 2008 did not have a material effect on its consolidated financial statements.



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PART IIOTHER INFORMATION

Item 1. Legal Proceedings:

Periodically, there have been various claims and lawsuits involving the Bank, such as claims to enforce liens, condemnation proceedings on properties in which the Bank holds security interests, claims involving the making and servicing of
real property loans and other issues incident to the Banks business. Neither the Bank nor the Company is a party to any pending legal proceedings that it believes would have a material adverse effect on the financial condition or operations of
the Company.

Item 1A. Risk Factors:

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended
September 30, 2008, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently
known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds:

The following table provides information regarding the
Companys purchases of its equity securities during the three months ended March 31, 2009.

ISSUER PURCHASES OF EQUITY
SECURITIES



|                                           |  |                                              |  |                                         |  |                                                                                           |  |                                                                                                                         
|------------------------------------------ |  | -------------------------------------------- |  | --------------------------------------- |  | ----------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------
|Period                                     |  | (a)Total Number ofShares (or Units)Purchased |  | (b)Average PricePaid perShare (or Unit) |  | (c)Total Number ofShares (or Units)Purchased asPart of PubliclyAnnounced Plansor Programs |  | (d)Maximum Number(or
ApproximateDollar Value) ofShares (or Units)That May Yet BePurchased Under thePlans or Programs (1)
|January 1, 2009 through January 31, 2009   |  |                                             |  |                                        |  |                                                                                          |  | 380,619                                                                                                                 
|February 1, 2009 through February 28, 2009 |  |                                             |  |                                        |  |                                                                                          |  | 380,619                                                                                                                 
|March 1, 2009 through March 31, 2009       |  |                                             |  |                                        |  |                                                                                          |  | 380,619                                                                                                                 
|                                           |  |                                              |  |                                         |  |                                                                                           |  |                                                                                                                         
|Total                                      |  |                                             |  |                                        |  |                                                                                          |  |                                                                                                                         
|                                           |  |                                              |  |                                         |  |                                                                                           |  |                                                                                                                         



|(1) | In February 2007, the Company announced a repurchase program under which it would repurchase up to 497,000 shares of the Companys common stock. The repurchase
program will continue until it is completed or terminated by the Board of Directors. However, as part of the Companys participation in the Capital Repurchase Program of the U.S. Department of Treasurys Troubled Asset Repurchase Program,
prior to the earlier of January 16, 2012 or the date on which the preferred stock issued in that transaction has been redeemed in full or the Treasury has transferred its shares to non-affiliates, the Company cannot increase its
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| | quarterly cash dividend above $0.095 per share or repurchase any shares of its common stock, without the prior approval of the Treasury.
| | ----------------------------------------------------------------------------------------------------------------------------------------

Item 3. Defaults Upon Senior Securities: Not applicable

Item 4. Submission of Matters to a Vote of Security Holders: None

Item 5. Other Information: Not applicable

Item 6. Exhibits:



3.1

Articles of Incorporation of Pulaski Financial Corp.(1)3.2

Certificate of Amendment to Articles of Incorporation of Pulaski Financial Corp.(2)3.3

Certificate of Designations establishing Fixed Rate Cumulative Perpetual Preferred Stock, Series A, of Pulaski Financial Corp.(3)3.4

Bylaws of Pulaski Financial Corp.(4)4.1

Form of Certificate for Common Stock(5)4.2

Form of stock certificate for Fixed Rate Cumulative Perpetual Preferred Stock, Series A(3)4.3

Warrant to Purchase 778,421 Shares of Common Stock of Pulaski Financial Corp.(3)10.1

Pulaski Financial Corp. Stock-Based Deferred Compensation Plan, as amended and restated10.2

Pulaski Financial Corp. Cash-Based Deferred Compensation Plan, as amended and restated31.1

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2

Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer32.1

Section 1350 Certification of Chief Executive Officer32.2

Section 1350 Certification of Chief Financial Officer




|(1) | Incorporated by reference into this document from the Exhibits to the 2003 proxy statement as filed with the Securities
and Exchange Commission on December 27, 2002.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Incorporated by reference into this document from the Form 10-Q, as filed with the Securities and Exchange Commission on
February 17, 2004.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Incorporated herein by reference into this document from the
Form 8-K, as filed with the Securities and Exchange Commission on January 16, 2009.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Incorporated herein by reference from the Form 8-K, as filed
with the Securities and Exchange Commission on December 21, 2007.
|--- | ------------------------------------------------------------------------------------------------------------------------------



|(5) | Incorporated by reference from the Form S-1 (Registration
No. 333-56465), as amended, as filed with the Securities and Exchange Commission on June 9, 1998.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                  |  |  |  |  |  |                                      
|----------------- |  |  |  |  |  | -------------------------------------
|                  |  |  |  |  |  | PULASKI FINANCIAL CORP.              
|                  |  |  | 
|Date: May 8, 2009 |  |  |  |  |  | /s/Gary W. Douglass                  
|                  |  |  |  |  |  | Gary W. Douglass                     
|                  |  |  |  |  |  | President and Chief Executive Officer
|                  |  |  | 
|                  |  |  |  |  |  |                                      
|                  |  |  | 
|Date: May 8, 2009 |  |  |  |  |  | /s/Paul J. Milano                    
|                  |  |  |  |  |  | Paul J. Milano                       
|                  |  |  |  |  |  | Chief Financial Officer