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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended June 30, 2004



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



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Pulaski Financial Corp.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|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 office)   |  | (Zip Code)



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



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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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 is an accelerated filer (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 August 13, 2004
|Common Stock, par value $.01 per share |  | 5,482,987 shares              



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##### Table of Contents

PULASKI FINANCIAL CORP. AND SUBSIDIARIES



FORM 10-Q



June 30, 2004



TABLE OF CONTENTS



|        |  |                                                                                                                                   |  |     
|------- |  | --------------------------------------------------------------------------------------------------------------------------------- |  | ----
|        |  |                                                                                                                                   |  | Page
|PART I  |  | FINANCIAL INFORMATION                                                                                                             |  |     
|        |  |                                                                                                                                  
|Item 1. |  | Financial Statements                                                                                                              |  |     
|        |  |                                                                                                                                  
|        |  | Consolidated Balance Sheets at June 30, 2004 (Unaudited) and September 30, 2003                                                   |  | 1   
|        |  |                                                                                                                                  
|        |  | Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended June 30, 2004 and 2003 (Unaudited) |  | 2   
|        |  |                                                                                                                                  
|        |  | Consolidated Statement of Changes in Stockholders Equity for the Nine Months Ended June 30, 2004 (Unaudited)                     |  | 3   
|        |  |                                                                                                                                  
|        |  | Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2004 and 2003 (Unaudited)                                |  | 4-5 
|        |  |                                                                                                                                  
|        |  | Notes to Unaudited Consolidated Financial Statements (Unaudited)                                                                  |  | 6-8 
|        |  |                                                                                                                                  
|Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                             |  | 9-19
|        |  |                                                                                                                                  
|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                                                                        |  | 19  
|        |  |                                                                                                                                  
|Item 4. |  | Controls and Procedures                                                                                                           |  | 20  
|        |  |                                                                                                                                  
|PART II |  | OTHER INFORMATION                                                                                                                 |  |     
|        |  |                                                                                                                                  
|Item 1. |  | Legal Proceedings                                                                                                                 |  | 21  
|        |  |                                                                                                                                  
|Item 2. |  | Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities                                                  |  | 21  
|        |  |                                                                                                                                  
|Item 3. |  | Defaults Upon Senior Securities                                                                                                   |  | 22  
|        |  |                                                                                                                                  
|Item 4. |  | Submission of Matters to a Vote of Security Holders                                                                               |  | 22  
|        |  |                                                                                                                                  
|Item 5. |  | Other Information                                                                                                                 |  | 22  
|        |  |                                                                                                                                  
|Item 6. |  | Exhibits and Reports on Form 8-K                                                                                                  |  | 22  
|        |  |                                                                                                                                  
|        |  | Signatures                                                                                                                        |  |     



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##### Table of Contents

PULASKI FINANCIAL CORP. AND SUBSIDIARIES



CONSOLIDATED BALANCE SHEETS

JUNE 30, 2004 AND SEPTEMBER 30, 2003 (UNAUDITED)



|                                                                                                                                                                         |  |               |             |   |                    |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ----------- | - | ------------------ | - | ----------- | -
|                                                                                                                                                                         |  | June 30, 2004 |             |   | September 30, 2003 |  
|ASSETS                                                                                                                                                                   |  |               |             |   |                    |   |             |  
|Cash and amounts due from depository institutions                                                                                                                        |  | $             | 12,862,671  |   |                    | $ | 12,092,092  |  
|Federal funds sold and overnight deposits                                                                                                                                |  |               | 3,570,647   |   |                    |   | 6,563,554   |  
|                                                                                                                                                                         |  |               |             |   |                    |   |             |  
|Total cash and cash equivalents                                                                                                                                          |  |               | 16,433,318  |   |                    |   | 18,655,646  |  
|                                                                                                                                                                         |  |              
|Investment securities held to maturity, at amortized cost (fair value, $1,147,702 and $1,724,023 at June 30, 2004 and September 30, 2003,
respectively)                  |  |               | 1,155,000   |   |                    |   | 1,730,000   |  
|Investment securities available for sale, at fair value                                                                                                                  |  |               | 1,552,711   |   |                    |   | 2,085,861   |  
|Equity securities available for sale, at fair value                                                                                                                      |  |               | 2,418,479   |   |                    |   | 4,346,151   |  
|Mortgage-backed and related securities held to maturity, at amortized cost (fair value, $1,030,803 and $1,292,816 at June 30, 2004 and
September 30, 2003, respectively) |  |               | 944,898     |   |                    |   | 1,186,341   |  
|Mortgage-backed and related securities available for sale, at fair value                                                                                                 |  |               | 6,077,312   |   |                    |   | 7,675,453   |  
|Capital stock of Federal Home Loan Bank - at cost                                                                                                                        |  |               | 5,130,200   |   |                    |   | 3,879,500   |  
|Loans receivable held for sale, at lower of cost or market                                                                                                               |  |               | 54,187,667  |   |                    |   | 61,124,438  |  
|Loans receivable, net of allowance for loan losses of $4,962,000 and $3,866,000 at June 30, 2004 and September 30, 2003,
respectively                                    |  |               | 450,056,204 |   |                    |   | 276,894,184 |  
|Real estate acquired in settlement of loans, net of allowance for losses of $0 and $2,651 at June 30, 2004 and September 30, 2003,
respectively                          |  |               | 48,322      |   |                    |   | 35,221      |  
|Premises and equipment - net                                                                                                                                             |  |               | 10,508,930  |   |                    |   | 10,344,340  |  
|Accrued interest receivable                                                                                                                                              |  |               | 2,055,157   |   |                    |   | 1,684,444   |  
|Intangible assets                                                                                                                                                        |  |               | 545,463     |   |                    |   | 610,918     |  
|Bank owned life insurance                                                                                                                                                |  |               | 11,422,615  |   |                    |   | 7,606,589   |  
|Other assets                                                                                                                                                             |  |               | 4,060,730   |   |                    |   | 3,543,601   |  
|                                                                                                                                                                         |  |               |             |   |                    |   |             |  
|TOTAL ASSETS                                                                                                                                                             |  | $             | 566,597,006 |   |                    | $ | 401,402,687 |  
|                                                                                                                                                                         |  |               |             |   |                    |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                     |  |               |             |   |                    |   |             |  
|LIABILITIES:                                                                                                                                                             |  |               |             |   |                    |   |             |  
|Deposits                                                                                                                                                                 |  | $             | 391,373,968 |   |                    | $ | 313,606,627 |  
|Advances from Federal Home Loan Bank of Des Moines                                                                                                                       |  |               | 101,500,000 |   |                    |   | 31,500,000  |  
|Other borrowings                                                                                                                                                         |  |               | 3,915,000   |   |                    |   |            |  
|Subordinated debentures                                                                                                                                                  |  |               | 9,279,000   |   |                    |   |            |  
|Advance payments by borrowers for taxes and insurance                                                                                                                    |  |               | 1,856,534   |   |                    |   | 2,458,170   |  
|Due to other banks                                                                                                                                                       |  |               | 15,133,943  |   |                    |   | 10,977,617  |  
|Other liabilities                                                                                                                                                        |  |               | 4,926,052   |   |                    |   | 6,477,412   |  
|                                                                                                                                                                         |  |               |             |   |                    |   |             |  
|Total liabilities                                                                                                                                                        |  |               | 527,984,497 |   |                    |   | 365,019,826 |  
|                                                                                                                                                                         |  |               |             |   |                    |   |             |  
|STOCKHOLDERS EQUITY:                                                                                                                                                    |  |               |             |   |                    |   |             |  
|Preferred stock - $.01 par value per share, authorized 1,000,000 shares; none issued or outstanding                                                                      |  |               |            |   |                    |   |            |  
|Common stock - $.01 par value per share, authorized 18,000,000 shares; 7,945,770 shares issued at June 30, 2004 and September 30, 2003,
respectively                     |  |               | 79,458      |   |                    |   | 79,458      |  
|Treasury stock - at cost (2,471,623 and 2,515,040 shares at June 30, 2004 and September 30, 2003, respectively)                                                          |  |               | (17,926,402 | ) |                    |   | (17,107,849 | )
|Treasury stock - equity trust - at cost (228,833 and 198,552 shares at June 30, 2004 and September 30, 2003, respectively)                                               |  |               | (2,459,456  | ) |                    |   | (2,234,456  | )
|Additional paid-in capital                                                                                                                                               |  |               | 27,502,337  |   |                    |   | 27,058,914  |  
|Unearned MRDP shares                                                                                                                                                     |  |               | (172,395    | ) |                    |   | (320,755    | )
|Unearned ESOP shares (44,514 and 60,031 unreleased shares at June 30, 2004 and September 30, 2003, respectively)                                                         |  |               | (222,566    | ) |                    |   | (300,153    | )
|Accumulated other comprehensive (loss) income                                                                                                                            |  |               | (34,168     | ) |                    |   | 512,887     |  
|Retained earnings                                                                                                                                                        |  |               | 31,845,701  |   |                    |   | 28,694,815  |  
|                                                                                                                                                                         |  |               |             |   |                    |   |             |  
|Total stockholders equity                                                                                                                                               |  |               | 38,612,509  |   |                    |   | 36,382,861  |  
|                                                                                                                                                                         |  |               |             |   |                    |   |             |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                               |  | $             | 566,597,006 |   |                    | $ | 401,402,687 |  
|                                                                                                                                                                         |  |               |             |   |                    |   |             |  



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 NINE MONTHS ENDED JUNE 30, 2004 AND 2003 (UNAUDITED)



|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|--------------------------------------------------- |  | --------------------------- | --------- | -------------------------- | ---- | - | --------- |  | - | ---------- | - |  | - | ----------
|                                                    |  | Three Months Ended June 30, |           | Nine Months Ended June 30,
|                                                    |  | 2004                        |           |                            | 2003 |   | 2004      |  |   | 2003      
|INTEREST INCOME:                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|Loans receivable                                    |  | $                           | 6,145,104 |                            |      | $ | 5,214,344 |  | $ | 16,053,870 |   |  | $ | 15,435,395
|Investment securities                               |  |                             | 54,467    |                            |      |   | 103,053   |  |   | 175,974    |   |  |   | 300,663   
|Mortgage-backed securities                          |  |                             | 93,435    |                            |      |   | 89,149    |  |   | 306,060    |   |  |   | 313,815   
|Other                                               |  |                             | 13,401    |                            |      |   | 12,983    |  |   | 41,486     |   |  |   | 18,402    
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|Total interest income                               |  |                             | 6,306,407 |                            |      |   | 5,419,529 |  |   | 16,577,390 |   |  |   | 16,068,275
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|INTEREST EXPENSE:                                   |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|Deposits                                            |  |                             | 1,356,411 |                            |      |   | 1,098,802 |  |   | 3,667,839  |   |  |   | 3,287,683 
|Advances from Federal Home Loan Bank of Des Moines  |  |                             | 592,535   |                            |      |   | 803,371   |  |   | 1,536,970  |   |  |   | 2,722,251 
|Subordinated debentures                             |  |                             | 94,013    |                            |      |   |          |  |   | 94,965     |   |  |   |          
|Other                                               |  |                             | 30,333    |                            |      |   |          |  |   | 42,000     |   |  |   | 2,833     
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|Total interest expense                              |  |                             | 2,073,292 |                            |      |   | 1,902,173 |  |   | 5,341,774  |   |  |   | 6,012,767 
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|NET INTEREST INCOME                                 |  |                             | 4,233,115 |                            |      |   | 3,517,356 |  |   | 11,235,616 |   |  |   | 10,055,508
|PROVISION FOR LOAN LOSSES                           |  |                             | 649,965   |                            |      |   | 311,232   |  |   | 1,229,740  |   |  |   | 1,081,453 
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |  |                             | 3,583,150 |                            |      |   | 3,206,124 |  |   | 10,005,876 |   |  |   | 8,974,055 
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|NON-INTEREST INCOME:                                |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|Retail banking fees                                 |  |                             | 638,100   |                            |      |   | 487,571   |  |   | 1,714,885  |   |  |   | 1,382,960 
|Mortgage revenues                                   |  |                             | 1,296,834 |                            |      |   | 2,551,424 |  |   | 3,378,977  |   |  |   | 6,185,990 
|Insurance commissions                               |  |                             | 142,018   |                            |      |   | 84,225    |  |   | 250,715    |   |  |   | 147,972   
|Gain on sale of investment securities               |  |                             |          |                            |      |   | 49,912    |  |   | 736,084    |   |  |   | 73,819    
|Other                                               |  |                             | 205,252   |                            |      |   | 238,443   |  |   | 580,122    |   |  |   | 563,775   
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|Total non-interest income                           |  |                             | 2,282,204 |                            |      |   | 3,411,575 |  |   | 6,660,783  |   |  |   | 8,354,516 
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|NON-INTEREST EXPENSE:                               |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|Salaries and employee benefits                      |  |                             | 1,667,722 |                            |      |   | 1,971,054 |  |   | 4,582,622  |   |  |   | 4,994,747 
|Occupancy, equipment and data processing expense    |  |                             | 897,502   |                            |      |   | 740,201   |  |   | 2,676,313  |   |  |   | 2,064,531 
|Advertising                                         |  |                             | 202,743   |                            |      |   | 121,165   |  |   | 542,017    |   |  |   | 409,422   
|Professional services                               |  |                             | 206,653   |                            |      |   | 215,188   |  |   | 544,766    |   |  |   | 522,805   
|Other                                               |  |                             | 550,615   |                            |      |   | 806,673   |  |   | 1,493,327  |   |  |   | 2,210,712 
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|Total non-interest expense                          |  |                             | 3,525,235 |                            |      |   | 3,854,281 |  |   | 9,839,045  |   |  |   | 10,202,217
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|INCOME BEFORE INCOME TAXES                          |  |                             | 2,340,119 |                            |      |   | 2,763,418 |  |   | 6,827,614  |   |  |   | 7,126,354 
|                                                    |  |                             |           |                           
|INCOME TAXES                                        |  |                             | 882,985   |                            |      |   | 1,163,548 |  |   | 2,538,478  |   |  |   | 2,728,051 
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|NET INCOME                                          |  | $                           | 1,457,134 |                            |      | $ | 1,599,870 |  | $ | 4,289,136  |   |  | $ | 4,398,303 
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|Other comprehensive (loss) income                   |  | $                           | (196,746  | )                          |      | $ | 24,742    |  | $ | (547,055   | ) |  | $ | 62,753    
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|COMPREHENSIVE INCOME                                |  | $                           | 1,260,388 |                            |      | $ | 1,624,612 |  | $ | 3,742,081  |   |  | $ | 4,461,056 
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|NET INCOME PER COMMON SHARE - BASIC                 |  | $                           | 0.27      |                            |      | $ | 0.30      |  | $ | 0.80       |   |  | $ | 0.82      
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           
|NET INCOME PER COMMON SHARE - DILUTED               |  | $                           | 0.25      |                            |      | $ | 0.28      |  | $ | 0.74       |   |  | $ | 0.78      
|                                                    |  |                             |           |                            |      |   |           |  |   |            |   |  |   |           



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

NINE MONTHS ENDED JUNE 30, 2004 (UNAUDITED)



|                                                                                                                        |  |             |        |                |   |             |                          |  |                                                       |            |  |                    |          |   |                                            |   |          |                  |  |   |          |   |  |   |            |   |  |   |            |  
|----------------------------------------------------------------------------------------------------------------------- |  | ----------- | ------ | -------------- | - | ----------- | ------------------------ |  | ----------------------------------------------------- | ---------- |  | ------------------ | -------- | - | ------------------------------------------ | - | -------- | ---------------- |  | - | -------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                                                                                                        |  | CommonStock |        | Treasury Stock |   |             | AdditionalPaid-InCapital |  | UnearnedManagementRecognition &DevelopmentPlan Shares |            |  | UnearnedESOPShares |          |   | AccumulatedOtherComprehensive(Loss) Income |   |          | RetainedEarnings |  |   | Total    |  
|BALANCE, September 30, 2003                                                                                             |  | $           | 79,458 |                | $ | (19,342,305 | )                        |  | $                                                     | 27,058,914 |  | $                  | (320,755 | ) |                                            | $ | (300,153 | )                |  | $ | 512,887  |   |  | $ | 28,694,815 |   |  | $ | 36,382,861 |  
|Comprehensive income:                                                                                                   |  |             |        |                |   |             |                          |  |                                                       |            |  |                    |          |   |                                            |   |          |                  |  |   |          |   |  |   |            |   |  |   |            |  
|Net income                                                                                                              |  |             |        |                |   |             |                          |  |                                                       |            |  |                    |          |   |                                            |   |          |                  |  |   |          |   |  |   | 4,289,136  |   |  |   | 4,289,136  |  
|Unrealized loss on investment securities arising during the period, net of tax                                          |  |             |        |                |   |             |                          |  |                                                       |            |  |                    |          |   |                                            |   |          |                  |  |   | (61,240  | ) |  |   |            |   |  |   | (61,240    | )
|Less: reclassification adjustment for realized gain on sale of investment securities included in net income, net of tax |  |             |        |                |   |             |                          |  |                                                       |            |  |                    |          |   |                                            |   |          |                  |  |   | (485,815 | ) |  |   |            |   |  |   | (485,815   | )
|                                                                                                                        |  |             |        |                |   |             |                          | 
|Dividends ($.09 per share)                                                                                              |  |             |        |                |   |             |                          |  |                                                       |            |  |                    |          |   |                                            |   |          |                  |  |   |          |   |  |   | (1,138,250 | ) |  |   | (1,138,250 | )
|                                                                                                                        |  |             |        |                |   |             |                          | 
|Stock options exercised                                                                                                 |  |             |        |                |   | 744,163     |                          |  |                                                       | 14,447     |  |                    |          |   |                                            |   |          |                  |  |   |          |   |  |   |            |   |  |   | 758,610    |  
|                                                                                                                        |  |             |        |                |   |             |                          | 
|Stock repurchase (91,755 shares)                                                                                        |  |             |        |                |   | (1,562,716  | )                        |  |                                                       |            |  |                    |          |   |                                            |   |          |                  |  |   |          |   |  |   |            |   |  |   | (1,562,716 | )
|                                                                                                                        |  |             |        |                |   |             |                          | 
|Equity trust shares purchased                                                                                           |  |             |        |                |   | (225,000    | )                        |  |                                                       | 225,000    |  |                    |          |   |                                            |   |          |                  |  |   |          |   |  |   |            |   |  |   |           |  
|                                                                                                                        |  |             |        |                |   |             |                          | 
|Release of ESOP shares                                                                                                  |  |             |        |                |   |             |                          |  |                                                       | 203,976    |  |                    |          |   |                                            |   | 77,587   |                  |  |   |          |   |  |   |            |   |  |   | 281,563    |  
|                                                                                                                        |  |             |        |                |   |             |                          | 
|Amortization of Management Recognition and Development Plan shares                                                      |  |             |        |                |   |             |                          |  |                                                       |            |  |                    | 148,360  |   |                                            |   |          |                  |  |   |          |   |  |   |            |   |  |   | 148,360    |  
|                                                                                                                        |  |             |        |                |   |             |                          |  |                                                       |            |  |                    |          |   |                                            |   |          |                  |  |   |          |   |  |   |            |   |  |   |            |  
|BALANCE, June 30, 2004                                                                                                  |  | $           | 79,458 |                | $ | (20,385,858 | )                        |  | $                                                     | 27,502,337 |  | $                  | (172,395 | ) |                                            | $ | (222,566 | )                |  | $ | (34,168  | ) |  | $ | 31,845,701 |   |  | $ | 38,612,509 |  
|                                                                                                                        |  |             |        |                |   |             |                          |  |                                                       |            |  |                    |          |   |                                            |   |          |                  |  |   |          |   |  |   |            |   |  |   |            |  



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 NINE MONTHS

ENDED JUNE 30, 2004 (UNAUDITED) AND JUNE 30, 2003 (UNAUDITED)



|                                                                              |  |      |              |   |      |   |                |  
|----------------------------------------------------------------------------- |  | ---- | ------------ | - | ---- | - | -------------- | -
|                                                                              |  | 2004 |              |   | 2003 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                         |  |      |              |   |      |   |                |  
|Net income                                                                    |  | $    | 4,289,136    |   |      | $ | 4,398,303      |  
|Adjustments to reconcile net income to net cash from operating activities:    |  |      |              |   |      |   |                |  
|Depreciation, amortization and accretion:                                     |  |      |              |   |      |   |                |  
|Premises and equipment                                                        |  |      | 840,552      |   |      |   | 660,949        |  
|Management Recognition and Development Plan stock awards                      |  |      | 148,360      |   |      |   | 131,519        |  
|ESOP shares committed to be released                                          |  |      | 281,563      |   |      |   | 652,401        |  
|Loan fees, discounts and premiums - net                                       |  |      | 230,206      |   |      |   | 326,317        |  
|Provision for loan losses                                                     |  |      | 1,229,740    |   |      |   | 1,081,453      |  
|Provision for losses on real estate acquired in settlement of loans           |  |      | 21,448       |   |      |   |               |  
|Gain on sale of loans                                                         |  |      | (2,830,597   | ) |      |   | (6,185,990     | )
|Loss on sale of real estate acquired in settlement of loans                   |  |      | 4,693        |   |      |   |               |  
|Gain on sale of investment securities                                         |  |      | (736,084     | ) |      |   | (73,819        | )
|Originations of loans receivable for sale to correspondent lenders            |  |      | (640,375,131 | ) |      |   | (1,114,406,263 | )
|Proceeds from sales of loans to correspondent lenders                         |  |      | 650,142,499  |   |      |   | 1,059,721,637  |  
|Other, net                                                                    |  |      | (2,038,454   | ) |      |   | 1,139,576      |  
|                                                                              |  |      |              |   |      |   |                |  
|Net adjustments                                                               |  |      | 6,918,795    |   |      |   | (56,952,220    | )
|                                                                              |  |      |              |   |      |   |                |  
|Net cash provided by (used in) operating activities                           |  |      | 11,207,931   |   |      |   | (52,553,917    | )
|                                                                              |  |      |              |   |      |   |                |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                         |  |      |              |   |      |   |                |  
|Proceeds from sales of investment securities                                  |  |      | 2,163,232    |   |      |   | 552,209        |  
|Proceeds from maturities of investment securities                             |  |      | 2,230,000    |   |      |   |               |  
|Proceeds from redemption of FHLB stock                                        |  |      | 5,487,400    |   |      |   |               |  
|Purchase of bank-owned life insurance                                         |  |      | (3,500,000   | ) |      |   |               |  
|Net increase in bank-owned life insurance                                     |  |      | (316,026     | ) |      |   | (228,409       | )
|Purchases of investment securities and FHLB stock                             |  |      | (8,040,234   | ) |      |   | (4,387,858     | )
|Principal payments received on mortgage-backed securities                     |  |      | 1,654,849    |   |      |   | 2,800,748      |  
|Net increase in loans                                                         |  |      | (174,995,513 | ) |      |   | (25,485,098    | )
|Proceeds from sales of real estate acquired in settlement of loans receivable |  |      | 317,500      |   |      |   |               |  
|Net additions to premises and equipment                                       |  |      | (1,005,142   | ) |      |   | (4,465,272     | )
|                                                                              |  |      |              |   |      |   |                |  
|Net cash used in investing activities                                         |  |      | (176,003,934 | ) |      |   | (31,213,680    | )
|                                                                              |  |      |              |   |      |   |                |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                         |  |      |              |   |      |   |                |  
|Net increase in deposits                                                      |  |      | 77,767,341   |   |      |   | 56,105,282     |  
|Proceeds from Federal Home Loan Bank advances - net                           |  |      | 70,000,000   |   |      |   | 21,700,000     |  
|Proceeds from other borrowings                                                |  |      | 3,915,000    |   |      |   |               |  
|Proceeds from issuance of subordinated debentures                             |  |      | 9,279,000    |   |      |   |               |  
|Net increase in due to other banks                                            |  |      | 4,156,326    |   |      |   | 14,398,154     |  
|Net decrease in advance payments by borrowers for taxes and insurance         |  |      | (601,636     | ) |      |   | (543,240       | )
|Dividends paid on common stock                                                |  |      | (1,138,250   | ) |      |   | (743,185       | )
|Treasury stock issued under stock option plan                                 |  |      | 758,610      |   |      |   | 597,274        |  
|Stock repurchase                                                              |  |      | (1,562,716   | ) |      |   | (1,456,626     | )
|                                                                              |  |      |              |   |      |   |                |  
|Net cash provided by financing activities                                     |  |      | 162,573,675  |   |      |   | 90,057,659     |  
|                                                                              |  |      |              |   |      |   |                |  



(Continued)



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PULASKI FINANCIAL CORP. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CASH FLOWS FOR NINE MONTHS ENDED

ENDED JUNE 30, 2004 (UNAUDITED) AND JUNE 30, 2003 (UNAUDITED)



|                                                     |  |      |            |   |      |   |           
|---------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ----------
|                                                     |  | 2004 |            |   | 2003
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |  | $    | (2,222,328 | ) |      | $ | 6,290,061 
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     |  |      | 18,655,646 |   |      |   | 11,176,728
|                                                     |  |      |            |   |      |   |           
|CASH AND CASH EQUIVALENTS AT END OF PERIOD           |  | $    | 16,433,318 |   |      | $ | 17,466,789
|                                                     |  |      |            |   |      |   |           
|ADDITIONAL DISCLOSURES OF CASH FLOW INFORMATION:     |  |      |            |   |      |   |           
|Cash paid during the period for:                     |  |      |            |   |      |   |           
|Interest                                             |  | $    | 5,313,020  |   |      | $ | 5,864,522 
|Income taxes                                         |  |      | 3,702,886  |   |      |   | 2,220,600 
|                                                     |  |     
|NONCASH INVESTING ACTIVITIES:                        |  |      |            |   |      |   |           
|Real estate acquired in settlement of loans          |  |      | 356,741    |   |      |   |          



See accompanying notes to the
unaudited consolidated financial statements.



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PULASKI FINANCIAL CORP. AND SUBSIDIARIES



NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



|1. | FINANCIAL STATEMENTS
|-- | --------------------



The unaudited consolidated financial statements include the accounts of Pulaski Financial Corp. (the Company) and its wholly owned
subsidiaries, Pulaski Bank (the Bank) and Pulaski Financial Statutory Trust I, and the Banks wholly owned subsidiaries, Pulaski Service Corporation. All significant intercompany accounts and transactions have been eliminated. The
assets of the Company consist primarily of the outstanding shares of the Bank, and it has no significant liabilities. Accordingly, the information set forth in this report, including the consolidated financial statements and related financial data,
relates primarily to the Bank. The Company 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 June 30, 2004 and September 30, 2003 and its results of operations for the three and nine-month periods ended June 30, 2004 and 2003. The
results of operations for the three and nine-months ended June 30, 2004 and 2003 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, 2003 contained in the Companys 2003 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, 2003.



|2. | EARNINGS PER SHARE
|-- | ------------------



|                                              |  |                            |  |                            |  |           |  |          
|--------------------------------------------- |  | -------------------------- |  | -------------------------- |  | --------- |  | ---------
|                                              |  | Three Months EndedJune 30, |  | Nine Months Ended June 30,
|                                              |  | 2004                       |  | 2003                       |  | 2004      |  | 2003     
|Weighted average shares outstanding - basic   |  | 5,403,441                  |  | 5,368,706                  |  | 5,383,266 |  | 5,368,828
|Effect of dilutive stock options              |  | 387,737                    |  | 331,474                    |  | 414,092   |  | 318,868  
|                                              |  |                            |  |                            |  |           |  |          
|Weighted average shares outstanding - diluted |  | 5,791,178                  |  | 5,700,180                  |  | 5,797,358 |  | 5,687,696
|                                              |  |                            |  |                            |  |           |  |          
|Anti-dilutive shares                          |  | 29,624                     |  |                           |  | 16,178    |  | 3,242    
|                                              |  |                            |  |                            |  |           |  |          



Under the treasury
stock method, outstanding stock options are dilutive when the average market price of the Companys common stock 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. Anti-dilutive shares are those option shares with exercise prices in excess of the current market value.



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In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation 
Transition and Disclosure (SFAS 148), which provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 requires disclosures in the
interim as well as annual financial statements about the method of accounting used for stock-based employee compensation and the effect of the method on net income. The Company has elected to continue to account for stock-based employee compensation
under APB Opinion No. 25. Accordingly, no stock-based employee compensation cost related to options granted is reflected in net income, as all options granted under those plans had an exercise price equal to the market value of the underlying common
stock on the date of the grant.



The following table shows pro
forma compensation expense, net income and earnings per share as if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards No.123, Accounting for Stock Based Compensation.



|                                                                                                                               |  |                                      |           |   |                             |   |           |      |  |   |           |   |  |   |           |  
|------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------ | --------- | - | --------------------------- | - | --------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                                                                                                               |  | Three Months Ended, June 30,         |           |   | Nine Months Ended, June 30, |  
|                                                                                                                               |  | 2004                                 |           |   | 2003                        |   |           | 2004 |  |   | 2003      |  
|                                                                                                                               |  | (In thousands, except pershare data) |           |   |                             |   |           |      | 
|                                                                                                                               |  |                                      |           |  
|Net income, as reported:                                                                                                       |  | $                                    | 1,457,134 |   |                             | $ | 1,599,870 |      |  | $ | 4,289,136 |   |  | $ | 4,398,303 |  
|Deduct: Total stock-based employee compensation expense, determined under fair value method for all awards - net of tax effect |  |                                      | (36,453   | ) |                             |   | (27,365   | )    |  |   | (116,614  | ) |  |   | (81,434   | )
|                                                                                                                               |  |                                      |           |   |                             |   |           |      |  |   |           |   |  |   |           |  
|Pro forma net income attributable to common stock                                                                              |  | $                                    | 1,420,681 |   |                             | $ | 1,572,505 |      |  | $ | 4,172,522 |   |  | $ | 4,316,869 |  
|                                                                                                                               |  |                                      |           |   |                             |   |           |      |  |   |           |   |  |   |           |  
|Earnings per share:                                                                                                            |  |                                      |           |   |                             |   |           |      |  |   |           |   |  |   |           |  
|Basic -as reported                                                                                                             |  |                                      | 0.27      |   |                             |   | 0.30      |      |  |   | 0.80      |   |  |   | 0.82      |  
|Basic- pro forma                                                                                                               |  |                                      | 0.26      |   |                             |   | 0.29      |      |  |   | 0.78      |   |  |   | 0.80      |  
|                                                                                                                               |  |                                      |           |  
|Diluted -as reported                                                                                                           |  |                                      | 0.25      |   |                             |   | 0.28      |      |  |   | 0.74      |   |  |   | 0.78      |  
|Diluted -pro forma                                                                                                             |  |                                      | 0.25      |   |                             |   | 0.28      |      |  |   | 0.72      |   |  |   | 0.76      |  



3. Corporation Obligated Floating
Rate Trust Preferred Securities



On March 30, 2004,
Pulaski Financial Statutory Trust I, a Connecticut statutory trust, issued $9.0 million adjustable-rate preferred securities. The proceeds from this issuance, along with the Companys $279,000 capital contribution for the Trusts common
securities, were used to acquire $9.3 million of the Companys floating rate junior subordinated deferrable interest debentures due 2034 (the Debentures), which constitute the sole asset of the Trust. The interest rate on the
Debentures and the capital securities is variable and adjustable quarterly at 2.70% over the three-month LIBOR, with an initial rate of 3.81%. The current rate is 3.81%.



The stated maturity of the Debentures is June 17, 2034. In addition, the Debentures are subject to redemption at par at the
option of the Company, subject to prior regulatory approval, in whole or in part on any interest payment date on or after June 17, 2009.



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|4. | RECLASSIFICATIONS
|-- | -----------------



Certain reclassifications have been made to 2003 amounts to conform to the 2004 presentation.



* * * * * *



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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS



FORWARD LOOKING STATEMENTS



This report contains forward-looking statements within the meaning of
the federal securities laws. These statements are not historical facts, rather they are statements, based on the Companys current expectations, regarding its business strategies, intended results and future performance. Forward-looking
statements are preceded by terms such as expects, believes, anticipates, intends, and similar expressions.



Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause the Companys actual results, performance and
achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, general economic conditions, including changes in
market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; changes in accounting principles and guidelines; competition, demand for loan products; deposit flows; and other factors
disclosed periodically in the Companys filings with the Securities and Exchange Commission.



Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this report or made elsewhere from time to time by the
Company or on its behalf. Except as required by applicable law or regulation, the Company assumes no obligation to update any forward-looking statements.



OVERVIEW



Managements discussion and analysis of financial condition and results of operations is intended to assist in understanding the financial condition and results of
operations of the Company. The information contained in this section should be read in conjunction with the unaudited consolidated financial statements and accompanying notes thereto.



The Companys business strategy is to focus on the growth and efficiency of five core products, which includes two deposit
products, checking and money market accounts, and three loan products, residential, home equity and commercial loans. These five products provide the primary source of the Banks operating income and are the focus of
the Companys growth in the balance sheet. Driving these relationships are more than 40 seasoned residential and commercial lenders in the Companys two market locations, St. Louis and Kansas City, which include seven branch locations and
two loan production offices. During the quarter ended June 30, 2004, the Company realized important gains in each business strategy except mortgage revenue, which resulted in a 13.9% or $69.3 million increase in assets during the quarter and
a total of 41.2% or $165.2 million increase in assets year to date. Total assets were $566.6 million at June 30, 2004 compared to $401.4 million at September 30, 2003, respectively. The growth in assets stem from growth in the retained
loan portfolio, which grew $70.9 millionfor the three months and $173.2 million for the nine months ended June 30, 2004.



Net income decreased 8.9%, or $143,000 to $1.5 million, or $0.25 diluted earnings per share, for the quarter ended June 30, 2004, compared to $1.6
million, or $0.28 diluted earnings per share for the quarter ended June 30, 2003. While net interest income and retail banking revenues experienced 20.3% and 30.9% increases, respectively, mortgage revenues,
following record mortgage refinancing, declined 49.2% or $1.3 million. Provision for loan losses also increased $339,000 to $650,000 for the three months ending June 30, 2004 as the Bank experienced increased credit risk due to
the addition of $70.9 million in portfolio loans during the quarter. For the nine months ended June 30, 2004, net income and diluted earnings per share declined $109,000 and $0.04 to $4.3 million and $0.74 compared to net income of $4.4 million and
$0.78 diluted earnings per share for the nine months ended June 30, 2003. The Companys earnings benefited from higher net interest income, retail-banking



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revenue and gains on sale of investment securities, combined with lower non-interest expense, but was offset by a $2.8
million decline in mortgage revenue. Fiscal 2003 produced the best mortgage banking environment in history due to the low interest rate environment. While the decline in refinance activity has resulted in a 45.4% decline in revenues year to date,
the Companys retained loan portfolio realized extraordinary growth, increasing 62.5% or $173.2 million for the nine month period ended June 30, 2004. The growth has resulted in higher net interest income and higher retail banking fees for the
quarter and year to date periods. As the Company has transitioned out of the refinance boom, the Company has also bolstered net income through $736,000 in gains on sale of investment securities through the nine months ended June 30, 2004, all of
which came in the first two quarters of the fiscal year.



RECENT EVENTS



On June
18, 2004, the Company announced that the regular quarterly cash dividend increased 50% to 9 cents per share from 6 cents per share. The dividend was payable July 19, 2004 to stockholders of record on July 5, 2004.



On June 29, 2004, the Company announced Mr. Leon A. Felman was appointed to the board of
directors of both Pulaski Financial Corp. and Pulaski Bank. Mr. Felman became the seventh member of the board and will serve a term ending at the next annual meeting of shareholders. Mr. Felman, a major stockholder in Pulaski Financial, served on
the board of Allegiant Bancorp Inc. for more than 11 years until its acquisition earlier this year. He also serves on the board of directors of Dynex Capital Inc., a real estate investment trust based in Glen Allen, Va., and was formerly the
president and chief executive officer of Sage Systems, Inc, which operated twenty-eight Arbys restaurants in the St. Louis metropolitan area.



On July 29, 2004, the Company announced plans to build a seventh St. Louis bank facility. The new facility will be located in the Chesterfield Valley area of St. Louis,
which complements not only our retail strategy, but also our newly expanded commercial banking operations.



On July 29, 2004, the Company projected that it would reach $1 billion in assets in 3-5 years.



Managements Discussion on Core Business Strategy



The Companys retained loan portfolio, net of allowance for loan lossesincreased $173.2 million, or 62.5% to $450.1 million at June 30, 2004 from
$276.9 million at September 30, 2003. The Companys strong commitment to its three core lending products, homeequity lines of credit, residential mortgages and commercial real estate and business loans, resulted in
a $70.9 million, or 18.7%, increase in loans receivable during the quarter ended June 30, 2004 and $173.2 million, or 62.5%, increase year to date. Net interest income increased$716,000 to $4.2 million for the quarter ended June 30, 2004
compared to the same period a year ago and increased $1.2 million to $11.2 million for nine months ended June 30, 2004. Growth in net interest income was due to growth in the average balance of interest bearing assets. The average balance of
interest earning assets increased from $408.9 million for the quarter ended June 30, 2003 to $504.1 million for the quarter ended June 30, 2004. The growth in the average balance of interest earning assets was due primarily to growth in the balance
of loans receivable, but was offset by a $73.1 million decline in the average balance of loans held for sale. The Companys net interest margin increased 3 basis points from 3.46% during the nine-month period ended June 30, 2003 to 3.49% during
the nine-month period ended June 30, 2004. The net interest margin declined 8 basis points from the three months ended June 30, 2003 of 3.44% to 3.36% for the three months ended June 30, 2004, due primarily to the issuance $9.3 million of trust
preferred securities and $4 million of borrowings from a correspondent bank.



Commercial real estate and commercial and industrial (C&I)loans increased $73.7 million to $90.1 million at June 30, 2004 compared to $16.4 million at September 30, 2003. The $73.7 million growth in the newly
expanded commercial divisions portfolio includes $30.3 million of commercial real estate, $16.5 million of C&I, $16.1 million of residential (multi-family and development) and $10.8 million in construction and development. Two years ago,
the Company began originating commercial credits focusing exclusively on strong borrowers and



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collateralized by commercial real estate. The Company expanded the commercial lending team in the current fiscal year by
hiring three experienced commercial lenders from the St. Louis area, including Brian Björkman, the president of the commercial lending division. The commercial loan growth over the next three years has been targeted to be about 70% commercial
real estate and 30% C&I. Management believes that commercial relationships are essential for the long-term growth of the Company, for diversification of assets as well as expansion of the customer deposit base. At June 30, 2004, the Company had
$10.7 million in commercial deposits. The Company has one substandard commercial loan on a speculative 1-4 family residential property in the amount of $431,000.



Home equity lines of credit remain the most consistently growing interest-earning asset within the Company. The equity line
balances increased $50.1 million to $138.8 million at June 30, 2004 compared to $88.8 million at September 30, 2003. Home equity loans are approved for qualified borrowers in conjunction with the first mortgage loan applications. The large volume of
mortgage loans originated in recent years has provided many opportunities to cross-sell this product to customers. As a prime-based asset, home equity lines carry low interest rate risk characteristics and attractive yields, lending stability to the
Banks net interest margin. At June 30, 2004, the Bank had $364,900 of non-performing home equity loans or 0.26% of the home equity portfolio and had charge-offs of $15,000 during the nine months ended June 30, 2004.



Permanent and construction residential loan balances increased $52.2 million to
$225.2 million at June 30, 2004 compared to $173.0 million at September 30, 2003. Having focused on becoming a large volume mortgage lender has allowed the Bank the opportunity to carefully select loans to retain. Typically, loans originated for
portfolio matured or repriced within three years and carry higher credit risk and interest rate yields than residential loans that are originated for sale. In July 2003, following two years of declines, the Banks retained residential mortgage
portfolio began expanding in connection with the increasing interest rate environment which resulted in a significant decline in customer payoffs due to refinances. The declining prepayment levels coupled with new originations resulted in an
increase in the portfolio. At June 30, 2004, the balance of residential non-performing loans was $3.3 million. The Company has government guarantees on $530,000 of the $3.3 million of non-performing residential loans. In part due to the historically
strong collateral of the residential loan portfolio, the Company has absorbed few losses with this product, including just $23,000 during the nine months ended June 30, 2004 and $26,000 for the fiscal year ended September 30, 2003. In the Midwest
region of the United States, residential properties have not experienced any significant price declines over the last 10 years. In an economic environment that resulted in declining residential values, the Company would be at increased risk of
credit losses from non-performing loans.



Offsetting growth in the retained
portfolio, the average balance of mortgage loans held for sale declined $73.1 million to $60.3 million for the quarter ended June 30, 2004. The Bank originated fewer residential loans in 2004 due to declines mortgage refinances in the
rising rate environment. The decline in average balances during the period resulted in an $826,000 decline in interest income from loans held for sale to $747,000 for the quarter ended June 30, 2004 compared to $1.6 million for the quarter ended
June 30, 2003. Interest income on loans held for sale declined from $4.4 million for the nine month period ended June 30, 2003 to $2.0 million for the nine month period ended June 30, 2004. Mortgage revenues also declined as the volume of loan
originations and sales declined. Mortgage revenue was $1.3 million and $3.4 million for the three and nine month periods ending June 30, 2004, respectively, compared to $2.6 million and $6.2 million for the three and nine month periods ending June
30, 2003. Mortgage revenue is generated primarily through the gain on sale of whole loans to investors. Through the nine months ended June 30, 2004, the Company sold $650 million of loans to investors compared to $1.1 billion for the nine months
ended June 30, 2003.



Total liabilities increased $163.0 million
to $528.0 million at June 30, 2004 compared to $365.0 million at September 30, 2003. The Companys strategic focus on growing core liability products centers on checking account and money market deposit growth. Year to date,
demand deposit accounts have increased $13.9 million to a balance of $156.8 million. Of the $13.9 million of growth in transaction accounts, $10.7 million have stemmed from the newly expanded commercial division. While the Company offers competitive
CDs following strict pricing disciplines, it readily supports the core liability products with wholesale funding in order to support



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asset growth. Wholesale funding sources include FHLB borrowings and public brokered CDs. At June 30, 2004 the Company had
$54.4 million in brokered CDs with an average duration of less than one year and a weighted average rate of 1.52%.



The balance of checking accounts increased $13.2 million to $42.1 million at June 30, 2004 from $28.9 million at September 30, 2003. Approximately $4.1
million of the growth stems from new commercial checking accounts. Checking accounts are the lowest cost deposits for the Company and are also the primary source of retail banking revenue. Retail banking revenue increased $151,000, or 30.9%, to
$638,000 for the quarter ended June 30, 2004 compared to $488,000 for the same period ended June 30, 2003. The increase in retail banking revenue was caused by a 17.9% increase in the number of checking accounts, which went from 12,275 at June 30,
2003 to 14,471 accounts at June 30, 2004. The weighted average cost of checking account deposits was below 15 basis points.



The balance of money market accounts increased $16.8 million to $81.2 million at June 30, 2004 from $64.3 million at September 30, 2003. The Company is in
its fourth year of pursuing money market accounts as a core product and its third year of a successful marketing campaign, the Big Bertha Money Market Account. The product carries similar interest rate characteristics as the
Companys home equity loans and results in an ideal source of funds for the growth of this line of credit portfolio. Money market accounts are generally less interest rate sensitive and more stable than CD balances. The market became very
competitive in money market accounts during the last two months of the quarter, as several banks made aggressive marketing efforts to capture this market. The Company has stayed disciplined in its pricing and has seen slower growth toward the end of
the quarter. Many bank managers have become very aggressive pricing short-term deposits as they anticipate increases in the rate environment.



AVERAGE BALANCE SHEET



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. Average balances are derived from average daily balances.



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|                                                                                 |  |                              |         |                      |                              |        |             |  |      |                |  |                      |         |  |             |        |   |  |      |  
|-------------------------------------------------------------------------------- |  | ---------------------------- | ------- | -------------------- | ---------------------------- | ------ | ----------- |  | ---- | -------------- |  | -------------------- | ------- |  | ----------- | ------ | - |  | ---- | -
|                                                                                 |  | 6/30/2004 Three Months Ended |         |                      | 6/30/2003 Three Months Ended |       
|                                                                                 |  | AverageBalance               |         | InterestAndDividends |                              |        | Yield/ Cost |  |      | AverageBalance |  | InterestandDividends |         |  | Yield/ Cost |       
|                                                                                 |  | (Dollars in thousands)       |        
|Interest-earning assets:                                                         |  |                              |         |                      |                              |        |             |  |      |                |  |                      |         |  |             |        |   |  |      |  
|Loans receivable                                                                 |  | $                            | 482,229 |                      | $                            | 6,145  |             |  | 5.10 | %              |  | $                    | 388,501 |  | $           | 5,214  |   |  | 5.37 | %
|Investment securities                                                            |  |                              | 2,992   |                      |                              | 29     |             |  | 3.91 | %              |  |                      | 2,911   |  |             | 45     |   |  | 6.25 | %
|FHLB stock                                                                       |  |                              | 5,642   |                      |                              | 25     |             |  | 1.79 | %              |  |                      | 7,697   |  |             | 58     |   |  | 2.99 | %
|Mortgage-backed securities                                                       |  |                              | 7,592   |                      |                              | 94     |             |  | 4.92 | %              |  |                      | 5,189   |  |             | 89     |   |  | 6.87 | %
|Other                                                                            |  |                              | 5,690   |                      |                              | 13     |             |  | 0.94 | %              |  |                      | 4,602   |  |             | 13     |   |  | 1.13 | %
|                                                                                 |  |                              |         |                      |                              |        |             |  |      |                |  |                      |         |  |             |        |   |  |      |  
|Total interest-earning assets                                                    |  |                              | 504,145 |                      |                              | 6,306  |             |  | 5.03 | %              |  |                      | 408,900 |  |             | 5,419  |   |  | 5.30 | %
|                                                                                 |  |                              |         |                      |                              |       
|Non-interest-earning assets                                                      |  |                              | 37,129  |                      |                              |        |             |  |      |                |  |                      | 25,524  |  |             |        |   |  |      |  
|                                                                                 |  |                              |         |                      |                              |        |             |  |      |                |  |                      |         |  |             |        |   |  |      |  
|Total assets                                                                     |  | $                            | 541,274 |                      |                              |        |             |  |      |                |  | $                    | 434,424 |  |             |        |   |  |      |  
|                                                                                 |  |                              |         |                      |                              |        |             |  |      |                |  |                      |         |  |             |        |   |  |      |  
|Interest-bearing liabilities:                                                    |  |                              |         |                      |                              |        |             |  |      |                |  |                      |         |  |             |        |   |  |      |  
|Deposits                                                                         |  | $                            | 354,794 |                      | $                            | 1,356  |             |  | 1.53 | %              |  | $                    | 244,619 |  | $           | 1,099  |   |  | 1.80 | %
|FHLB advances                                                                    |  |                              | 106,830 |                      |                              | 593    |             |  | 2.22 | %              |  |                      | 132,419 |  |             | 803    |   |  | 2.43 | %
|Other borrowed money                                                             |  |                              | 3,998   |                      |                              | 30     |             |  | 3.03 | %              |  |                      |        |  |             |       |   |  |     |  
|Subordinated debentures                                                          |  |                              | 9,279   |                      |                              | 94     |             |  | 4.05 | %              |  |                      |        |  |             |       |   |  |     |  
|                                                                                 |  |                              |         |                      |                              |        |             |  |      |                |  |                      |         |  |             |        |   |  |      |  
|Total interest-bearing liabilities                                               |  |                              | 474,901 |                      |                              | 2,073  |             |  | 1.75 | %              |  |                      | 377,038 |  |             | 1,902  |   |  | 2.02 | %
|                                                                                 |  |                              |         |                      |                              |       
|Non-interest bearing liabilities                                                 |  |                              | 27,607  |                      |                              |        |             |  |      |                |  |                      | 21,790  |  |             |        |   |  |      |  
|Shareholders equity                                                             |  |                              | 38,766  |                      |                              |        |             |  |      |                |  |                      | 35,596  |  |             |        |   |  |      |  
|                                                                                 |  |                              |         |                      |                              |        |             |  |      |                |  |                      |         |  |             |        |   |  |      |  
|Total liabilities and stockholders equity                                        |  | $                            | 541,274 |                      |                              |        |             |  |      |                |  | $                    | 434,424 |  |             |        |   |  |      |  
|                                                                                 |  |                              |         |                      |                              |        |             |  |      |                |  |                      |         |  |             |        |   |  |      |  
|Net interest income                                                              |  |                              |         |                      | $                            | 4,233  |             |  |      |                |  |                      |         |  | $           | 3,517  |   |  |      |  
|                                                                                 |  |                              |         |                      |                              |        |             |  |      |                |  |                      |         |  |             |        |   |  |      |  
|Interest rate spread                                                             |  |                              |         |                      |                              |        |             |  | 3.28 | %              |  |                      |         |  |             |        |   |  | 3.28 | %
|                                                                                 |  |                              |         |                      |                              |       
|Net interest margin                                                              |  |                              |         |                      |                              |        |             |  | 3.36 | %              |  |                      |         |  |             |        |   |  | 3.44 | %
|                                                                                 |  |                              |         |                      |                              |       
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                              |         |                      |                              | 106.16 | %           |  |      |                |  |                      |         |  |             | 108.45 | % |  |      |  
|                                                                                 |  |                              |         |                      |                              |        |             |  |      |                |  |                      |         |  |             |        |   |  |      |  



|                                                                                 |  |                             |         |                       |                             |        |             |  |      |                |  |                       |         |  |             |        |   |  |      |  
|-------------------------------------------------------------------------------- |  | --------------------------- | ------- | --------------------- | --------------------------- | ------ | ----------- |  | ---- | -------------- |  | --------------------- | ------- |  | ----------- | ------ | - |  | ---- | -
|                                                                                 |  | 6/30/2004 Nine Months Ended |         |                       | 6/30/2003 Nine Months Ended |       
|                                                                                 |  | AverageBalance              |         | Interest andDividends |                             |        | Yield/ Cost |  |      | AverageBalance |  | Interest andDividends |         |  | Yield/ Cost |       
|                                                                                 |  | (Dollars in thousands)      |        
|Interest-earning assets:                                                         |  |                             |         |                       |                             |        |             |  |      |                |  |                       |         |  |             |        |   |  |      |  
|Loans receivable                                                                 |  | $                           | 408,176 |                       | $                           | 16,054 |             |  | 5.24 | %              |  | $                     | 369,050 |  | $           | 15,435 |   |  | 5.58 | %
|Investment securities                                                            |  |                             | 3,434   |                       |                             | 109    |             |  | 4.23 | %              |  |                       | 2,911   |  |             | 136    |   |  | 6.24 | %
|FHLB stock                                                                       |  |                             | 4,518   |                       |                             | 67     |             |  | 1.98 | %              |  |                       | 7,340   |  |             | 165    |   |  | 2.99 | %
|Mortgage-backed securities                                                       |  |                             | 8,071   |                       |                             | 306    |             |  | 5.06 | %              |  |                       | 6,101   |  |             | 314    |   |  | 6.86 | %
|Other                                                                            |  |                             | 5,675   |                       |                             | 41     |             |  | 0.98 | %              |  |                       | 2,187   |  |             | 18     |   |  | 1.12 | %
|                                                                                 |  |                             |         |                       |                             |        |             |  |      |                |  |                       |         |  |             |        |   |  |      |  
|Total interest-earning assets                                                    |  |                             | 429,874 |                       |                             | 16,577 |             |  | 5.14 | %              |  |                       | 387,589 |  |             | 16,068 |   |  | 5.53 | %
|                                                                                 |  |                             |         |                       |                             |       
|Non-interest-earning assets                                                      |  |                             | 34,780  |                       |                             |        |             |  |      |                |  |                       | 21,935  |  |             |        |   |  |      |  
|                                                                                 |  |                             |         |                       |                             |        |             |  |      |                |  |                       |         |  |             |        |   |  |      |  
|Total assets                                                                     |  | $                           | 464,655 |                       |                             |        |             |  |      |                |  | $                     | 409,524 |  |             |        |   |  |      |  
|                                                                                 |  |                             |         |                       |                             |        |             |  |      |                |  |                       |         |  |             |        |   |  |      |  
|Interest-bearing liabilities:                                                    |  |                             |         |                       |                             |        |             |  |      |                |  |                       |         |  |             |        |   |  |      |  
|Deposits                                                                         |  | $                           | 315,715 |                       | $                           | 3,668  |             |  | 1.55 | %              |  | $                     | 227,257 |  | $           | 3,288  |   |  | 1.93 | %
|FHLB advances                                                                    |  |                             | 83,026  |                       |                             | 1,537  |             |  | 2.47 | %              |  |                       | 127,285 |  |             | 2,722  |   |  | 2.85 | %
|Other borrowed money                                                             |  |                             | 1,854   |                       |                             | 42     |             |  | 3.02 | %              |  |                       | 88      |  |             | 3      |   |  | 4.30 | %
|Subordinated debentures                                                          |  |                             | 3,148   |                       |                             | 95     |             |  | 4.02 | %              |  |                       |        |  |             |       |   |  |     |  
|                                                                                 |  |                             |         |                       |                             |        |             |  |      |                |  |                       |         |  |             |        |   |  |      |  
|Total interest-bearing liabilities                                               |  |                             | 403,743 |                       |                             | 5,342  |             |  | 1.76 | %              |  |                       | 354,630 |  |             | 6,013  |   |  | 2.26 | %
|                                                                                 |  |                             |         |                       |                             |       
|Non-interest bearing liabilities                                                 |  |                             | 22,860  |                       |                             |        |             |  |      |                |  |                       | 20,288  |  |             |        |   |  |      |  
|Shareholders equity                                                             |  |                             | 37,775  |                       |                             |        |             |  |      |                |  |                       | 34,606  |  |             |        |   |  |      |  
|                                                                                 |  |                             |         |                       |                             |        |             |  |      |                |  |                       |         |  |             |        |   |  |      |  
|Total liabilities and stockholders equity                                        |  | $                           | 464,378 |                       |                             |        |             |  |      |                |  | $                     | 409,524 |  |             |        |   |  |      |  
|                                                                                 |  |                             |         |                       |                             |        |             |  |      |                |  |                       |         |  |             |        |   |  |      |  
|Net interest income                                                              |  |                             |         |                       | $                           | 11,235 |             |  |      |                |  |                       |         |  | $           | 10,055 |   |  |      |  
|                                                                                 |  |                             |         |                       |                             |        |             |  |      |                |  |                       |         |  |             |        |   |  |      |  
|Interest rate spread                                                             |  |                             |         |                       |                             |        |             |  | 3.38 | %              |  |                       |         |  |             |        |   |  | 3.27 | %
|                                                                                 |  |                             |         |                       |                             |       
|Net interest margin                                                              |  |                             |         |                       |                             |        |             |  | 3.49 | %              |  |                       |         |  |             |        |   |  | 3.46 | %
|                                                                                 |  |                             |         |                       |                             |       
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                             |         |                       |                             | 106.47 | %           |  |      |                |  |                       |         |  |             | 109.29 | % |  |      |  



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Additional Discussion on Financial Condition



Cash and cash equivalents decreased $2.2 million, from $18.7 million at September 30, 2003 to $16.4 million at June 30, 2004. The
decrease in cash resulted from a decrease of overnight deposits, which typically accumulate from proceeds wired from investors on loan sales.



The balance of Federal Home Loan Bank advances increased $70.0 million to $101.5 million at June 30, 2004 from $31.5 million at September 30, 2003. The increase in
advances was used to fund loan growth. The Company is currently limited to 40% of its total assets or $226.6 million in borrowing capacity from the FHLB of Des Moines subject to sufficient collateral. At June 30, 2004, the weighted average rate of
the FHLB borrowings was 2.47% with a weighted average maturity of 1.76 years.



The Company also added two new liabilities during the year designed to bolster the consolidated regulatory capital levels of the organization. On March 30, 2004, the Company issued $9.0 million of trust preferred securities. In
addition, the Company borrowed another $4 million from a correspondent bank and contributed the proceeds into the Bank as capital.



Balances due to other banks increased $4.2 million to $15.1 million at June 30, 2004. Due to other banks is the balance of checks drawn on a correspondent
Banks checking account. On a daily basis, the Company settles with the correspondent bank. The balances primarily represent the checks issued to fund loans on the final business day of the month.



Bank owned life insurance (BOLI) increased $3.8 million to $11.4 million
at June 30, 2004 from $7.6 million at September 30, 2003. In response to the growth in costs related to employee benefits, the Bank has invested in key-man life insurance. In accordance with Office of Thrift Supervision guidance, the Bank has
limited its investment in BOLI to less than 25% of Tier I capital.



Total
stockholders equity increased $2.2 million to $38.6 million at June 30, 2004 from $36.4 million at September 30, 2003. The increase was primarily attributable to net income for the nine months of $4.3 million. Offsetting the increase in
equity was the repurchase of 91,755 shares of common stock for $1.6 million and the payment of dividends of $1.1 million.



NON-PERFORMING ASSETS AND DELINQUENCIES



Total non-performing assets decreased $620,000 from $4.3 million at September 30, 2003 to
$3.6 million at June 30, 2004. In the second quarter, the Company sold a pool of $2.5 million in non-performing residential loans to an investor, but was offset by declines in credit quality of approximately $1.9 million of residential real estate
loans. The allowance for loan losses has increased $1.1 million to $5.0 million at June 30, 2004 from $3.9 million at September 30, 2003. The allowance as a percentage of nonperforming loans increased from 91.3% at September 30, 2003 to 137.6% at
June 30, 2004, while the allowance as a percentage of total loans has decreased from 1.13% at September 30, 2003 to 0.97% at June 30, 2004.



PROVISION FOR LOAN LOSSES



The provision for loan losses was $650,000 and $1.2 million for the three and nine-month periods ended June 30, 2004 compared to
$311,000 and $1.1 million for the three and nine-month period ended June 30, 2003. The increase in the provision for loan losses during the quarter ended June 30, 2004 was due primarily to the addition of $70.9 million in portfolio loans and the
higher concentration of commercial loans, which carry a higher level of risk than other loans in the portfolio.



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##### Table of Contents

The provision for loan losses is determined by management as the amount to bring the allowance for loan losses to a level
that is considered adequate to absorb losses inherent in the loan portfolio. The allowance for loan losses is a critical accounting estimate reported within the consolidated financial statements. The allowance is based upon quarterly management
estimates of expected losses inherent in the loan portfolio. Management estimates are determined by 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, but can also be affected by the following factors: changes in lending policies and procedures, including underwriting standards and collections, charge-off and recovery practices, changes in national and local
economic conditions and developments, and changes in the experience, ability, and depth of lending management staff.



Because 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, the Banks five-year historical loan loss experience has been low at $185,000 annually. While the losses have increased slightly over the last five years, the balance of the allowance has increased
dramatically, almost doubling in the last two fiscal years. The growth in the allowance for loan losses was due to an increase in risk in the loan porfolio. The Company was historically a lender of only one-to-four family conforming residential
loans. Today the Company has expanded its loan portfolio to include higher risk home equity, commercial and construction loans. Because the Companys loan portfolio is typically collateralized by real properties, losses occur more frequently
when property values are declining and borrowers are losing equity in the Companys collateral. At present, the property values in the Companys lending areas have been stable and appreciating.



The following table is a summary of our loan loss experience for the periods indicated:



|                                               |  |                            |        |   |      |   |        |  
|---------------------------------------------- |  | -------------------------- | ------ | - | ---- | - | ------ | -
|                                               |  | Nine Months Ended June 30, |       
|                                               |  | 2004                       |        |   | 2003 |  
|                                               |  | (In thousands)             |       
|                                               |  |                           
|Allowance for loan losses, beginning of period |  | $                          | 3,866  |   |      | $ | 2,553  |  
|Provision for loan losses                      |  |                            | 1,230  |   |      |   | 1,081  |  
|                                               |  |                           
|Loans charged-off                              |  |                            | (145   | ) |      |   | (120   | )
|Recoveries of loans previously charged-off     |  |                            | 11     |   |      |   | 2      |  
|                                               |  |                            |        |   |      |   |        |  
|Allowance for loan losses, end of period       |  |                            | 4,962  |   |      |   | 3,516  |  
|                                               |  |                            |        |   |      |   |        |  
|                                               |  |                           
|Ratio of allowance to total loans outstanding  |  |                            | 0.97   | % |      |   | 0.85   | %
|Ratio of allowance to nonperforming loans      |  |                            | 137.60 | % |      |   | 126.08 | %



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 ratio, the affordability ratios or other personal history. Five-year historical loss rates and industry data for each credit rating 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 impaired, the Company records a loss valuation 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.



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The Companys methodology includes factors that allow the Company to adjust its estimates of losses based on the
most recent information available. Historic loss rates used to determine allowance provisions are adjusted to reflect the impact of current conditions, including actual collection and charge-off experience.



DISCUSSION OF OTHER
NON-INTEREST INCOME AND EXPENSE FROM OPERATIONS FOR THREE AND NINE
MONTHS ENDED JUNE 30, 2004



Gain on sale of investment securities was $0 and $736,000 for the three and nine month periods ending June 30, 2004, respectively, compared to $50,000 and $74,000 in gains on sale of investment securities for the three and nine month
periods ending June 30, 2003, respectively. The increase in the gain for the nine month period was the result of the sale of certain equity securities held by the Company, which were sold during the second quarter. The Companys investment
policy allows it to purchase up to 5% ownership in other publicly traded thrift holding companies. The Company typically purchases well-capitalized thrift stocks that are close to St. Louis and trading at a low valuation.



Insurance Commissionsincreased $58,000 to $142,000 for the three-month period ending
June 30, 2004 compared to the three-month period ending June 30, 2003. For the nine-month period ending June 30, 2004 insurance commissions were $251,000 compared to $148,000 for nine months ending June 30, 2003. Insurance commission is revenue
derived from non-deposit investments offered through the Banks subsidiary. The revenue has increased in the current year as management has added staff to this sales activity.



Salaries and employee benefits expense decreased $303,000 to $1.7 million for the three-month period ended June 30, 2004 from $2.0
million for the three-month period ended June 30, 2003. In June of 2003, the Company released additional shares from the ESOP, which resulted in an additional $403,000 of salary expense during the quarter ended June 30, 2003. For the nine-month
period ending June 30, 2004 salaries and employee benefits expense was down $412,000 to $4.6 million due primarily to lower ESOP expense in 2004.



Occupancy and equipment related expenses increased $157,000 to $897,000 during the three-month period ended June 30, 2004 and $612,000 to $2.7 million during the
nine-month period ended June 30, 2004. The growth in the occupancy and equipment related expenses relate to the opening of two new bank locations and the operations center during the last year.



Other expense declined $256,000 to $551,000 during the three-month period ended June
30, 2004 compared to the three-month period ended June 30, 2003. For the nine-month period, other expense was down $717,000. The decline in other expense was primarily attributed to the $613,000 in early termination fees to retire $10 million in
long-term FHLB advances incurred during fiscal 2003, with $242,000 of expense occurring during the three months ended June 30, 2003.



INCOME TAXES



The provision for income taxes was $883,000 for the three-month period ended June 30, 2004 compared to $1.2 million for the three-month period ended June
30, 2003. The provision for income tax was $2.5 million and $2.7 million for the periods ending June 30, 2004 and June 30, 2003, respectively. The effective tax rates for the nine-month periods ended June 30, 2004 and 2003 were 37.2% and 38.3%,
respectively.



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##### Table of Contents

LIQUIDITY AND CAPITAL RESOURCES



At June 30, 2004, the Bank had outstanding commitments to originate loans of $105.7 million
and commitments to sell loans on a best efforts basis of $116.2 million. At the same date, certificates of deposit that are scheduled to mature in one year or less totaled $163.5 million. Based on past experience, management believes the majority of
maturing certificates of deposit will remain with the Bank.



If the Bank or the
Company requires funds beyond its ability to generate them internally, the Bank has the ability to borrow funds from the FHLB 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 LTV as collateral to secure the amounts borrowed. Total borrowings from the FHLB are subject to limitations based upon a risk assessment of the Bank, which currently allows for a
line of credit equal to 40% of the Banks assets. At June 30, 2004, the Bank had approximately $226.3 million in available borrowing authority under the above-mentioned arrangement, $101.5 million of which had been borrowed in advances from the
FHLB. The Company also maintains a $12 million line of credit with a correspondent bank.



SOURCES AND USES OF CASH



The Company is a large originator of residential mortgage loans with more than 75% of the loans being sold into the secondary residential mortgage investment community.
Consequently, the primary source and use of cash in operations is to originate loans for sale, which used $640.4 million in cash during the nine months ended June 30, 2004 and provided proceeds of cash of $650.1 million from loan sales. Also,
the Company realized $2.8 million of gains on sale of loans.



The primary use
of cash from investing activities is also from loans that are originated for the portfolio. During the nine months ended June 30, 2004, the Company had a net increase of $175.0 million in loans, which increased substantially from $25.5
million for the nine months ended June 30, 2003. See the Managements Discussion on Core Business Strategy above for a discussion on the growth of the retained loan portfolio.



The Companys primary source of funds from financing activities came from increased deposit and advance balances. Deposit
balances increased $77.8 million and FHLB advances increased $70.0 million during the nine-months ended June 30, 2004. During the nine months ended June 30, 2004, the Company also received $9.3 million from the issuance of trust preferred securities
and borrowed an additional $3.9 million from a correspondent bank. Both transactions resulted in an increase in the Banks regulatory capital levels.



The following table presents the maturity structure of time deposits and other maturing liabilities at June 30, 2004:



|                                      |  |                              |         |                |   |                 |  |                   |       |                        |   |        |  |   |      
|------------------------------------- |  | ---------------------------- | ------- | -------------- | - | --------------- |  | ----------------- | ----- | ---------------------- | - | ------ |  | - | -----
|                                      |  | June 30, 2004 (In thousands)
|                                      |  | Certificatesof Deposit       |         | FHLBBorrowings |   | OtherBorrowings |  | Due to OtherBanks |       | SubordinatedDebentures
|Three months or less                  |  | $                            | 65,969  |                | $ | 65,000          |  | $                 |      |                        | $ | 15,134 |  | $ |     
|Over three months through six months  |  |                              | 43,524  |                |   |                |  |                   |      |                        |   |       |  |   |     
|Over six months through twelve months |  |                              | 54,054  |                |   | 10,000          |  |                   |      |                        |   |       |  |   |     
|Over twelve months                    |  |                              | 71,032  |                |   | 26,500          |  |                   | 3,915 |                        |   |       |  |   | 9,279
|                                      |  |                              |         |                |   |                 |  |                   |       |                        |   |        |  |   |      
|Total                                 |  | $                            | 234,579 |                | $ | 101,500         |  | $                 | 3,915 |                        | $ | 15,134 |  | $ | 9,279
|                                      |  |                              |         |                |   |                 |  |                   |       |                        |   |        |  |   |      



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In addition to our owned banking facilities, the Company has entered into long-term leasing arrangements to support
ongoing activities. The required payments under such commitments and other obligations at June 30, 2004 are as follows:



|                                  |  |                  |          
|--------------------------------- |  | ---------------- | ---------
|                                  |  | June 30, 2004   
|                                  |  | Operating Leases
|Less than one year                |  | $                | 264,681  
|Over 1 year but less than 5 years |  |                  | 786,652  
|Over 5 years                      |  |                  |         
|                                  |  |                  |          
|Total                             |  | $                | 1,051,333
|                                  |  |                  |          



The Bank is required to maintain
specific amounts of capital pursuant to Office of Thrift Supervision (OTS) regulations on minimum capital standards. The OTS 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 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
3.0% of adjusted total assets. The risk-based capital requirements provide 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-weighted factor of 50%).



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The following table illustrates the Banks regulatory capital levels compared to its regulatory capital requirements
at June 30, 2004.



|                                                    |  |        |        |       |                              |   |        |                                                                                |        |  |      |        |  |       |        |  |       |  
|--------------------------------------------------- |  | ------ | ------ | ----- | ---------------------------- | - | ------ | ------------------------------------------------------------------------------ | ------ |  | ---- | ------ |  | ----- | ------ |  | ----- | -
|                                                    |  | Actual |        |       | For Capital AdequacyPurposes |   |        | To be Categorized asWell CapitalizedUnder
PromptCorrective Action Provisions |       
|(Dollars in Thousands)                              |  | Amount |        | Ratio |                              |   | Amount |                                                                                | Ratio  |  |      | Amount |  | Ratio |       
|As of June 30, 2004:                                |  |        |        |       |                              |   |        |                                                                                |        |  |      |        |  |       |        |  |       |  
|Tangible capital (to total assets)                  |  | $      | 48,397 |       | 8.57                         | % |        | $                                                                              | 8,476  |  | 1.50 | %      |  |       | N/A    |  | N/A   |  
|Total risk-based capital (to risk-weighted assets)  |  |        | 53,774 |       | 12.65                        | % |        |                                                                                | 34,016 |  | 8.00 | %      |  | $     | 42,520 |  | 10.00 | %
|Tier I risk-based capital (to risk-weighted assets) |  |        | 48,942 |       | 11.51                        | % |        |                                                                                | 21,260 |  | 5.00 | %      |  |       | 25,512 |  | 6.00  | %
|Tier I total capital (to total assets)              |  |        | 48,942 |       | 8.66                         | % |        |                                                                                | 22,603 |  | 4.00 | %      |  |       | 28,254 |  | 5.00  | %
|                                                    |  |        |        |       |                              |  
|As of September 30, 2003:                           |  |        |        |       |                              |   |        |                                                                                |        |  |      |        |  |       |        |  |       |  
|Tangible capital (to total assets)                  |  | $      | 32,686 |       | 8.21                         | % |        | $                                                                              | 5,972  |  | 1.50 | %      |  |       | N/A    |  | N/A   |  
|Total risk-based capital (to risk-weighted assets)  |  |        | 36,334 |       | 11.77                        | % |        |                                                                                | 24,703 |  | 8.00 | %      |  | $     | 30,878 |  | 10.00 | %
|Tier I risk-based capital (to risk-weighted assets) |  |        | 32,686 |       | 10.59                        | % |        |                                                                                | 15,439 |  | 5.00 | %      |  |       | 18,527 |  | 6.00  | %
|Tier I total capital (to total assets)              |  |        | 32,686 |       | 8.21                         | % |        |                                                                                | 15,925 |  | 4.00 | %      |  |       | 19,906 |  | 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 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.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



There has been no material change in the Companys quantitative or qualitative aspects
of market risk during the quarter ended June 30, 2004, from that disclosed in the Companys Annual Report on Form 10-K for the year ended September 30, 2003 other than an increase of approximately $14.5 million in Tier 1 capital, which will
result in reducing the Companys interest rate sensitivity.



We utilize
derivative financial instruments to assist in our management of interest rate sensitivity of certain assets. Derivative financial instruments issued by us consist of interest rate lock commitments to originate residential loans. Commitments to
originate loans consist exclusively of residential real estate loans. These net loan



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commitments and loans held for sale are hedged with forward contracts to sell mortgage-backed securities. As of June 30,
2004 and September 30, 2003, we had interest rate lock commitments of $60.5 million and $25.0 million and forward contracts of $11.8 million and $0, respectively.



ITEM 4. CONTROLS AND PROCEDURES



The Companys management, including the Companys principal executive officer and principal financial officer, have evaluated the effectiveness
of the Companys disclosure controls and procedures, as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the Exchange Act). Based upon their evaluation, the
principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Companys disclosure controls and procedures were effective for the purpose of ensuring 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.



EFFECTS OF NEW
ACCOUNTING STANDARDS



In
January 2003, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 46  Consolidation of Variable Interest Entities, an interpretation of ARB No. 51. This Interpretation was recently reissued in
December 2003 as FASB Interpretation No. 46 (revised December 2003) (FIN46R). FIN 46R is intended to achieve more consistent application of consolidation policies to variable interest entities and, thus, to improve comparability between enterprises
engaged in similar activities even if some of those activities are conducted through variable interest entities. Including the assets, liabilities, and results of activities of variable interest entities in the consolidated financial statements of
their primary beneficiaries will provide more complete information about the resources, obligations, risks and opportunities of the consolidated enterprise. FIN 46R applies immediately to variable interest entities created after January 31, 2003,
and to variable interest entities in which an enterprise obtains an interest after that date. For public companies, it applies no later than the end of the first reporting period ending after December 15, 2003 to variable interest entities in which
an enterprise holds a variable interest that it acquired before February 1, 2003. FIN 46R may be applied prospectively with a cumulative-effect adjustment as of the date on which it is first applied or by restating previously issued financial
statements for one or more years with a cumulative-effect adjustment as of the beginning of the first year restated. On December 31, 2003, we implemented FIN 46R, which did not have a material effect on our consolidated financial statements.



On March 9, 2004, the SEC issued Staff Accounting Bulletin No.
105, Application of Accounting Principles to Loan Commitments (SAB 105). SAB 105 contains specific guidance on the inputs to a valuation-recognition model to measure loan commitments accounted for at fair value. SAB 105 requires that fair-value
measurement include only differences between the guaranteed interest rate in the loan commitment and a market interest rate, excluding any expected future cash flows related to the customer relationship or loan servicing. As such, SAB 105 limits
opportunities to recognize an asset related to a loan commitment to originate a mortgage loan that will be held for sale prior to funding. The guidance in SAB 105 is applied to mortgage loan commitments that are accounted for as derivatives and are
entered into after March 31, 2004. The implementation of SAB 105 did not have a material affect on our consolidated financial statements.



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##### Table of Contents



PART II - OTHER INFORMATION



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##### Table of Contents

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 or 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 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities:



The following table provides information regarding the Companys purchases of its equity securities during the three months ended June 30, 2004.



ISSUER PURCHASES OF EQUITY SECURITIES



|                                     |  |                                             |  |                                       |       |                                                                                           |        |                                                                                                                         |       
|------------------------------------ |  | ------------------------------------------- |  | ------------------------------------- | ----- | ----------------------------------------------------------------------------------------- | ------ | ----------------------------------------------------------------------------------------------------------------------- | ------
|Period                               |  | (a) TotalNumberof Shares(or Units)Purchased |  | (b)AveragePricePaid perShare(or Unit) |       | (c)Total Number ofShares (or Units)Purchased as Partof PubliclyAnnounced Plansor Programs |        | (d)Maximum Number(or ApproximateDollar Value) ofShares (or Units) thatMay Yet BePurchased Under thePlans or
Programs(1)
|April 1, 2004 through April 30, 2004 |  | 9,090                                       |  |                                       | 18.50 |                                                                                           | 9,090  |                                                                                                                         | 75,169
|May 1, 2004 through May 31, 2004     |  | 19,200                                      |  |                                       | 17.55 |                                                                                           | 19,200 |                                                                                                                         | 55,969
|June 1, 2004 through June 30, 2004   |  | 29,400                                      |  |                                       | 16.97 |                                                                                           | 29,400 |                                                                                                                         | 26,569
|Total                                |  | 57,690                                      |  | $                                     | 17.40 |                                                                                           | 57,690 |                                                                                                                         | N/A   

---

|(1) | In February 2003, Pulaski Financial Corp. announced a repurchase program under which it would repurchase up to 140,000 shares of Pulaski Banks common stock. On July 21, 2003
the Company declared a two-for-one stock split of its common stock, increasing the shares authorized under this program to 280,000. The repurchase program will continue until it is completed or terminated by the Board of Directors.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Item 3. Defaults Upon Senior Securities: Not applicable



|Item | 4. Submission of Matters to a Vote of Security Holders: Not applicable
|---- | ----------------------------------------------------------------------



Item 5. Other information: Not applicable



Item 6. Exhibits and Reports on Form 8-K



| | A. | Exhibits
| | -- | --------



|     |  |                                                                                   
|---- |  | ----------------------------------------------------------------------------------
|3.1  |  | Articles of Incorporation of Pulaski Financial Corp.*                             
|     | 
|3.2  |  | Certificate of Amendment to Articles of Incorporation of Pulaski Financial Corp.**
|     | 
|3.3  |  | Bylaws of Pulaski Financial Corp.*                                                
|     | 
|4.0  |  | Form of Certificate for Common Stock***                                           
|     | 
|31.1 |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer                 
|     | 
|31.2 |  | Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer             
|     | 
|32.1 |  | Section 1350 Certification of Chief Executive Officer                             
|     | 
|32.2 |  | Section 1350 Certification of Chief Financial Officer                             

---

|* | 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.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | Incorporated by reference into this document from the Form 10-Q, as filed with the Securities and Exchange Commission on February 17, 2003.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------

|*** | 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.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



|B. | Reports on Form 8-K
|-- | -------------------



On April 15, 2004, the Company furnished a Form 8-K in which it announced certain information about its recently completed quarter, the timing of its
second quarter earnings release, and the timing and procedure for participating in a conference call to discuss the second quarter results. The press release announcing the financial results was attached by exhibit.



On April 29, 2004, the Company furnished a Form 8-K in which it announced
under Item 12 its financial condition and results of operations for the quarter ended March 31, 2004. The press release announcing the financial results was attached by exhibit.



On June 29, 2004, the Company furnished a Form 8-K in which it announced under Item 9 the appointment of Leon A. Felman as a
director of the Company and the Bank. The press release announcing the appointment was attached by exhibit.



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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: August 13, 2004 |  | /S/ William A. Donius                          
|                      |  | William A. Donius                              
|                      |  | Chairman, President and Chief Executive Officer
|                      | 
|Date: August 13, 2004 |  | /S/ Ramsey K. Hamadi                           
|                      |  | Ramsey K. Hamadi                               
|                      |  | Chief Financial Officer                        



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