##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)

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

For the quarterly period ended June 30, 2008

OR



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

For the transition period from  to

0-24571

Commission File Number





Pulaski Financial Corp.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Missouri                                                       |  | 43-1816913                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)



|                                          |  |           
|----------------------------------------- |  | ----------
|12300 Olive Boulevard St. Louis, Missouri |  | 63141-6434
|(Address of principal executive offices)  |  | (Zip Code)

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

Not Applicable

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





Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

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



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

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

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



|                                       |  |                              
|-------------------------------------- |  | -----------------------------
|Class                                  |  | Outstanding at August 7, 2008
|Common Stock, par value $.01 per share |  | 10,202,737 shares            









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##### Table of Contents

PULASKI FINANCIAL CORP. AND SUBSIDIARIES

FORM 10-Q

JUNE 30, 2008

TABLE OF CONTENTS



|                             |  |                                                                                                                                   |  |     
|---------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                             |  |                                                                                                                                   |  | Page
|PART I FINANCIAL INFORMATION |  |                                                                                                                                  
|                             |  |                                                                                                                                  
|Item 1.                      |  | Financial Statements                                                                                                              |  |     
|                             |  |                                                                                                                                  
|                             |  | Consolidated Balance Sheets at June 30, 2008 and September 30, 2007 (Unaudited)                                                   |  | 1   
|                             |  |                                                                                                                                  
|                             |  | Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended June 30, 2008 and 2007 (Unaudited) |  | 2   
|                             |  |                                                                                                                                  
|                             |  | Consolidated Statement of Stockholders Equity for the Nine Months Ended June 30, 2008
(Unaudited)                                |  | 3   
|                             |  |                                                                                                                                  
|                             |  | Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2008 and 2007
(Unaudited)                                |  | 4   
|                             |  |                                                                                                                                  
|                             |  | Notes to Unaudited Consolidated Financial Statements                                                                              |  | 6   
|                             |  |                                                                                                                                  
|Item 2.                      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                             |  | 12  
|                             |  |                                                                                                                                  
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                                                                        |  | 27  
|                             |  |                                                                                                                                  
|Item 4.                      |  | Controls and Procedures                                                                                                           |  | 29  
|                             | 
|PART II OTHER INFORMATION    |  |                                                                                                                                  
|                             |  |                                                                                                                                  
|Item 1.                      |  | Legal Proceedings                                                                                                                 |  | 31  
|                             |  |                                                                                                                                  
|Item 1A.                     |  | Risk Factors                                                                                                                      |  | 31  
|                             |  |                                                                                                                                  
|Item 2.                      |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                       |  | 31  
|                             |  |                                                                                                                                  
|Item 3.                      |  | Defaults Upon Senior Securities                                                                                                   |  | 31  
|                             |  |                                                                                                                                  
|Item 4.                      |  | Submission of Matters to a Vote of Security Holders                                                                               |  | 32  
|                             |  |                                                                                                                                  
|Item 5.                      |  | Other Information                                                                                                                 |  | 32  
|                             |  |                                                                                                                                  
|Item 6.                      |  | Exhibits                                                                                                                          |  | 32  
|                             |  |                                                                                                                                  
|                             |  | Signatures                                                                                                                        |  |     



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##### Table of Contents

PULASKI FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2008 AND SEPTEMBER 30, 2007
(UNAUDITED)



|                                                                                                                                                                        |  |              |               |   |                   |   |               |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------------- | - | ----------------- | - | ------------- | -
|                                                                                                                                                                        |  | June 30,2008 |               |   | September 30,2007 |  
|ASSETS                                                                                                                                                                  |  |              |               |   |                   |   |               |  
|                                                                                                                                                                        |  |             
|Cash and amounts due from depository institutions                                                                                                                       |  | $            | 20,811,138    |   |                   | $ | 20,537,008    |  
|Federal funds sold and overnight deposits                                                                                                                               |  |              | 12,779,643    |   |                   |   | 3,236,735     |  
|                                                                                                                                                                        |  |              |               |   |                   |   |               |  
|Total cash and cash equivalents                                                                                                                                         |  |              | 33,590,781    |   |                   |   | 23,773,743    |  
|Equity securities available for sale, at fair value                                                                                                                     |  |              | 12,089,064    |   |                   |   | 3,964,629     |  
|Debt securities available for sale, at fair value                                                                                                                       |  |              | 1,000,000     |   |                   |   | 7,043,172     |  
|Debt securities held to maturity, at amortized cost (fair value, $5,979,231 at September 30, 2007)                                                                      |  |              |              |   |                   |   | 5,979,878     |  
|Mortgage-backed and related securities held to maturity, at amortized cost (fair value, $16,308,304 and $399,629 at June 30, 2008 and
September 30, 2007, respectively) |  |              | 16,650,700    |   |                   |   | 371,480       |  
|Mortgage-backed securities available for sale, at fair value                                                                                                            |  |              | 2,341,736     |   |                   |   | 2,655,202     |  
|Capital stock of Federal Home Loan Bank, at cost                                                                                                                        |  |              | 11,761,000    |   |                   |   | 8,305,500     |  
|Loans receivable held for sale, at lower of cost or market                                                                                                              |  |              | 78,369,931    |   |                   |   | 58,536,280    |  
|Loans receivable, net of allowance for loan losses of $11,909,229 and $10,421,304 at June 30, 2008 and September 30, 2007,
respectively                                 |  |              | 1,060,131,150 |   |                   |   | 949,826,147   |  
|Real estate acquired in settlement of loans, net of allowance for losses of $214,000 and $74,035 at June 30, 2008 and September 30,
2007, respectively                  |  |              | 4,779,226     |   |                   |   | 3,089,656     |  
|Premises and equipment, net                                                                                                                                             |  |              | 19,934,501    |   |                   |   | 20,389,445    |  
|Bank-owned life insurance                                                                                                                                               |  |              | 27,304,795    |   |                   |   | 25,059,509    |  
|Accrued interest receivable                                                                                                                                             |  |              | 5,917,825     |   |                   |   | 6,605,153     |  
|Goodwill                                                                                                                                                                |  |              | 3,938,524     |   |                   |   | 3,938,524     |  
|Core deposit intangible                                                                                                                                                 |  |              | 394,540       |   |                   |   | 500,668       |  
|Deferred tax asset                                                                                                                                                      |  |              | 5,425,159     |   |                   |   | 5,050,795     |  
|Other assets                                                                                                                                                            |  |              | 6,960,071     |   |                   |   | 6,375,126     |  
|                                                                                                                                                                        |  |              |               |   |                   |   |               |  
|Total assets                                                                                                                                                            |  | $            | 1,290,589,003 |   |                   | $ | 1,131,464,907 |  
|                                                                                                                                                                        |  |              |               |   |                   |   |               |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                    |  |              |               |   |                   |   |               |  
|                                                                                                                                                                        |  |             
|Liabilities:                                                                                                                                                            |  |              |               |   |                   |   |               |  
|Deposits                                                                                                                                                                |  | $            | 833,362,945   |   |                   | $ | 835,488,696   |  
|Advances from Federal Home Loan Bank of Des Moines                                                                                                                      |  |              | 223,000,000   |   |                   |   | 158,400,000   |  
|Borrowings from the Federal Reserve Bank of St. Louis                                                                                                                   |  |              | 95,000,000    |   |                   |   |              |  
|Notes payable                                                                                                                                                           |  |              | 7,725,000     |   |                   |   | 2,980,000     |  
|Subordinated debentures                                                                                                                                                 |  |              | 19,589,000    |   |                   |   | 19,589,000    |  
|Advance payments by borrowers for taxes and insurance                                                                                                                   |  |              | 2,900,540     |   |                   |   | 2,957,793     |  
|Accrued interest payable                                                                                                                                                |  |              | 1,093,213     |   |                   |   | 2,530,722     |  
|Due to other banks                                                                                                                                                      |  |              | 13,651,836    |   |                   |   | 17,484,741    |  
|Other liabilities                                                                                                                                                       |  |              | 7,926,076     |   |                   |   | 11,229,464    |  
|                                                                                                                                                                        |  |              |               |   |                   |   |               |  
|Total liabilities                                                                                                                                                       |  |              | 1,204,248,610 |   |                   |   | 1,050,660,416 |  
|                                                                                                                                                                        |  |              |               |   |                   |   |               |  
|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; 13,068,618 shares issued at June 30, 2008 and
September 30, 2007                                   |  |              | 130,687       |   |                   |   | 130,687       |  
|Treasury stockat cost; 2,871,108 and 3,133,228 shares at June 30, 2008 and September 30, 2007, respectively                                                            |  |              | (16,342,274   | ) |                   |   | (17,040,449   | )
|Treasury stockequity trustat cost; 226,809 and 230,225 shares at June 30, 2008 and September 30, 2007,
respectively                                                   |  |              | (2,848,968    | ) |                   |   | (3,030,198    | )
|Additional paid-in capital                                                                                                                                              |  |              | 51,626,947    |   |                   |   | 50,560,264    |  
|Accumulated other comprehensive loss                                                                                                                                    |  |              | (637,750      | ) |                   |   | (66,283       | )
|Retained earnings                                                                                                                                                       |  |              | 54,411,751    |   |                   |   | 50,250,470    |  
|                                                                                                                                                                        |  |              |               |   |                   |   |               |  
|Total stockholders equity                                                                                                                                              |  |              | 86,340,393    |   |                   |   | 80,804,491    |  
|                                                                                                                                                                        |  |              |               |   |                   |   |               |  
|Total liabilities and stockholders equity                                                                                                                              |  | $            | 1,290,589,003 |   |                   | $ | 1,131,464,907 |  
|                                                                                                                                                                        |  |              |               |   |                   |   |               |  

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, 2008 AND 2007 (UNAUDITED)



|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|--------------------------------------------------------- |  | -------------------------- | ---------- | - | ------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                          |  | Three Months EndedJune 30, |            |   | Nine Months EndedJune 30, |  
|                                                          |  | 2008                       |            |   | 2007                      |   |            | 2008 |  |   | 2007       |  
|Interest and Dividend Income:                             |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Loans receivable                                          |  | $                          | 16,995,252 |   |                           | $ | 17,793,950 |      |  | $ | 54,338,828 |   |  | $ | 50,283,652 |  
|Debt and equity securities                                |  |                            | 296,567    |   |                           |   | 230,094    |      |  |   | 906,399    |   |  |   | 700,287    |  
|Mortgage-backed securities                                |  |                            | 249,476    |   |                           |   | 38,532     |      |  |   | 318,459    |   |  |   | 121,386    |  
|Capital stock of the Federal Home Loan Bank of Des Moines |  |                            | 118,627    |   |                           |   | 154,852    |      |  |   | 387,757    |   |  |   | 340,436    |  
|Other                                                     |  |                            | 16,587     |   |                           |   | 49,771     |      |  |   | 84,056     |   |  |   | 157,633    |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Total interest and dividend income                        |  |                            | 17,676,509 |   |                           |   | 18,267,199 |      |  |   | 56,035,499 |   |  |   | 51,603,394 |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Interest Expense:                                         |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Deposits                                                  |  |                            | 5,663,501  |   |                           |   | 8,293,269  |      |  |   | 21,532,078 |   |  |   | 22,612,704 |  
|Advances from Federal Home Loan Bank of Des Moines        |  |                            | 1,798,663  |   |                           |   | 2,274,896  |      |  |   | 6,386,963  |   |  |   | 6,533,852  |  
|Borrowings from the Federal Reserve Bank of St. Louis     |  |                            | 389,740    |   |                           |   | 42         |      |  |   | 406,370    |   |  |   | 42         |  
|Subordinated debentures                                   |  |                            | 250,398    |   |                           |   | 376,902    |      |  |   | 985,000    |   |  |   | 1,132,516  |  
|Notes payable                                             |  |                            | 66,225     |   |                           |   | 55,738     |      |  |   | 151,792    |   |  |   | 171,642    |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Total interest expense                                    |  |                            | 8,168,527  |   |                           |   | 11,000,847 |      |  |   | 29,462,203 |   |  |   | 30,450,756 |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Net interest income                                       |  |                            | 9,507,982  |   |                           |   | 7,266,352  |      |  |   | 26,573,296 |   |  |   | 21,152,638 |  
|Provision for loan losses                                 |  |                            | 2,140,974  |   |                           |   | 1,911,482  |      |  |   | 4,901,665  |   |  |   | 3,166,517  |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Net interest income after provision for loan losses       |  |                            | 7,367,008  |   |                           |   | 5,354,870  |      |  |   | 21,671,631 |   |  |   | 17,986,121 |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Non-Interest Income:                                      |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Mortgage revenues                                         |  |                            | 1,855,884  |   |                           |   | 2,010,526  |      |  |   | 5,300,597  |   |  |   | 4,490,328  |  
|Retail banking fees                                       |  |                            | 960,784    |   |                           |   | 918,714    |      |  |   | 2,921,437  |   |  |   | 2,455,910  |  
|Investment brokerage revenues                             |  |                            | 266,032    |   |                           |   | 158,584    |      |  |   | 836,701    |   |  |   | 534,240    |  
|Gain on the sales of securities                           |  |                            | 7,848      |   |                           |   |           |      |  |   | 324,540    |   |  |   | 143,720    |  
|Bank-owned life insurance income                          |  |                            | 307,327    |   |                           |   | 247,550    |      |  |   | 745,286    |   |  |   | 758,615    |  
|Other                                                     |  |                            | 115,761    |   |                           |   | 44,976     |      |  |   | 629,824    |   |  |   | 537,813    |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Total non-interest income                                 |  |                            | 3,513,636  |   |                           |   | 3,380,350  |      |  |   | 10,758,385 |   |  |   | 8,920,626  |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Non-Interest Expense:                                     |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Salaries and employee benefits                            |  |                            | 4,511,077  |   |                           |   | 2,813,355  |      |  |   | 10,730,990 |   |  |   | 8,263,409  |  
|Occupancy, equipment and data processing expense          |  |                            | 1,768,148  |   |                           |   | 1,453,797  |      |  |   | 5,221,281  |   |  |   | 4,135,708  |  
|Advertising                                               |  |                            | 292,520    |   |                           |   | 394,409    |      |  |   | 926,949    |   |  |   | 1,013,292  |  
|Professional services                                     |  |                            | 435,395    |   |                           |   | 318,109    |      |  |   | 1,143,197  |   |  |   | 979,070    |  
|FDIC deposit insurance premium expense                    |  |                            | 181,600    |   |                           |   | 21,633     |      |  |   | 571,890    |   |  |   | 61,691     |  
|Gain on derivative instruments                            |  |                            | (266,238   | ) |                           |   | (131,123   | )    |  |   | (330,560   | ) |  |   | (444,793   | )
|Data processing termination (recovery) expense            |  |                            | (180,000   | ) |                           |   |           |      |  |   | (180,000   | ) |  |   | 219,534    |  
|Real estate foreclosure losses and expense, net           |  |                            | 677,274    |   |                           |   | 142,804    |      |  |   | 1,060,716  |   |  |   | 463,396    |  
|Other                                                     |  |                            | 1,116,312  |   |                           |   | 764,056    |      |  |   | 3,011,521  |   |  |   | 2,232,753  |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Total non-interest expense                                |  |                            | 8,536,088  |   |                           |   | 5,777,040  |      |  |   | 22,155,984 |   |  |   | 16,924,060 |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Income before income taxes                                |  |                            | 2,344,556  |   |                           |   | 2,958,180  |      |  |   | 10,274,032 |   |  |   | 9,982,687  |  
|Income tax expense                                        |  |                            | 685,260    |   |                           |   | 974,637    |      |  |   | 3,334,302  |   |  |   | 3,308,408  |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Net income                                                |  | $                          | 1,659,296  |   |                           | $ | 1,983,543  |      |  | $ | 6,939,730  |   |  | $ | 6,674,279  |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Other comprehensive loss                                  |  |                            | (637,750   | ) |                           |   | (76,971    | )    |  |   | (571,467   | ) |  |   | (64,038    | )
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Comprehensive income                                      |  | $                          | 1,021,546  |   |                           | $ | 1,906,572  |      |  | $ | 6,368,263  |   |  | $ | 6,610,241  |  
|                                                          |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Per Share Amounts:                                        |  |                            |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Basic earnings per share                                  |  | $                          | 0.17       |   |                           | $ | 0.20       |      |  | $ | 0.70       |   |  | $ | 0.68       |  
|Weighted average common shares outstandingbasic          |  |                            | 9,983,506  |   |                           |   | 9,825,886  |      |  |   | 9,872,309  |   |  |   | 9,826,523  |  
|Diluted earnings per share                                |  | $                          | 0.16       |   |                           | $ | 0.19       |      |  | $ | 0.68       |   |  | $ | 0.65       |  
|Weighted average common shares outstandingdiluted        |  |                            | 10,271,469 |   |                           |   | 10,266,592 |      |  |   | 10,222,348 |   |  |   | 10,267,007 |  

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, 2008 (UNAUDITED)



|                                                                                   |  |             |         |               |   |             |                          |  |   |                                   |   |  |                  |          |   |       |   |            |   |  |   |            |  
|---------------------------------------------------------------------------------- |  | ----------- | ------- | ------------- | - | ----------- | ------------------------ |  | - | --------------------------------- | - |  | ---------------- | -------- | - | ----- | - | ---------- | - |  | - | ---------- | -
|                                                                                   |  | CommonStock |         | TreasuryStock |   |             | AdditionalPaid-InCapital |  |   | AccumulatedOtherComprehensiveLoss |   |  | RetainedEarnings |          |   | Total |  
|Balance, September 30, 2007                                                        |  | $           | 130,687 |               | $ | (20,070,647 | )                        |  | $ | 50,560,264                        |   |  | $                | (66,283  | ) |       | $ | 50,250,470 |   |  | $ | 80,804,491 |  
|Comprehensive income:                                                              |  |             |         |               |   |             |                          |  |   |                                   |   |  |                  |          |   |       |   |            |   |  |   |            |  
|Net income                                                                         |  |             |        |               |   |            |                          |  |   |                                  |   |  |                  |         |   |       |   | 6,939,730  |   |  |   | 6,939,730  |  
|Change in unrealized loss on investment securities, net of tax                     |  |             |        |               |   |            |                          |  |   |                                  |   |  |                  | (370,252 | ) |       |   |           |   |  |   | (370,252   | )
|Realized gain on sales of investment securities included in net income, net of tax |  |             |        |               |   |            |                          |  |   |                                  |   |  |                  | (201,215 | ) |       |   |           |   |  |   | (201,215   | )
|                                                                                   |  |             |         |               |   |             |                          |  |   |                                   |   |  |                  |          |   |       |   |            |   |  |   |            |  
|Comprehensive income                                                               |  |             |        |               |   |            |                          |  |   |                                  |   |  |                  | (571,467 | ) |       |   | 6,939,730  |   |  |   | 6,368,263  |  
|                                                                                   |  |             |         |               |   |             |                          |  |   |                                   |   |  |                  |          |   |       |   |            |   |  |   |            |  
|Dividends ($0.095 per share)                                                       |  |             |        |               |   |            |                          |  |   |                                  |   |  |                  |         |   |       |   | (2,778,449 | ) |  |   | (2,778,449 | )
|Stock options exercised (245,542 shares)                                           |  |             |         |               |   | 1,002,056   |                          |  |   | 151,566                           |   |  |                  |         |   |       |   |           |   |  |   | 1,153,622  |  
|Stock option and award expense                                                     |  |             |        |               |   |            |                          |  |   | 342,682                           |   |  |                  |         |   |       |   |           |   |  |   | 342,682    |  
|Stock issued under dividend reinvestment plan (52,528 shares)                      |  |             |        |               |   | 214,367     |                          |  |   | 320,692                           |   |  |                  |         |   |       |   |           |   |  |   | 535,059    |  
|Stock repurchased (49,761 shares)                                                  |  |             |        |               |   | (574,611    | )                        |  |   |                                  |   |  |                  |         |   |       |   |           |   |  |   | (574,611   | )
|Treasury stock issued (13,811 shares)                                              |  |             |        |               |   | 56,363      |                          |  |   | 135,472                           |   |  |                  |         |   |       |   |           |   |  |   | 191,835    |  
|Purchase of equity trust shares                                                    |  |             |        |               |   | (110,000    | )                        |  |   |                                  |   |  |                  |         |   |       |   |           |   |  |   | (110,000   | )
|Release of equity trust shares (20,252 shares)                                     |  |             |        |               |   | 291,230     |                          |  |   | (291,230                          | ) |  |                  |         |   |       |   |           |   |  |   |           |  
|Forfeiture of equity trust shares (63,610 shares)                                  |  |             |        |               |   |            |                          |  |   | (366,835                          | ) |  |                  |         |   |       |   |           |   |  |   | (366,835   | )
|Amortization of equity trust expense                                               |  |             |        |               |   |            |                          |  |   | 704,021                           |   |  |                  |         |   |       |   |           |   |  |   | 704,021    |  
|Excess tax benefit from stock-based compensation                                   |  |             |        |               |   |            |                          |  |   | 70,315                            |   |  |                  |         |   |       |   |           |   |  |   | 70,315     |  
|                                                                                   |  |             |         |               |   |             |                          |  |   |                                   |   |  |                  |          |   |       |   |            |   |  |   |            |  
|Balance, June 30, 2008                                                             |  | $           | 130,687 |               | $ | (19,191,242 | )                        |  | $ | 51,626,947                        |   |  | $                | (637,750 | ) |       | $ | 54,411,751 |   |  | $ | 86,340,393 |  
|                                                                                   |  |             |         |               |   |             |                          |  |   |                                   |   |  |                  |          |   |       |   |            |   |  |   |            |  

See accompanying notes to the unaudited consolidated financial statements.



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PULASKI FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR NINE MONTHS

ENDED JUNE
30, 2008 AND JUNE 30, 2007 (UNAUDITED)



|                                                                              |  |                           |                |   |      |   |                |  
|----------------------------------------------------------------------------- |  | ------------------------- | -------------- | - | ---- | - | -------------- | -
|                                                                              |  | Nine Months EndedJune 30, |               
|                                                                              |  | 2008                      |                |   | 2007 |  
|Cash Flows From Operating Activities:                                         |  |                           |                |   |      |   |                |  
|Net income                                                                    |  | $                         | 6,939,730      |   |      | $ | 6,674,279      |  
|                                                                              |  |                           |                |   |      |   |                |  
|Adjustments to reconcile net income to net cash from operating activities:    |  |                           |                |   |      |   |                |  
|Depreciation, amortization and accretion:                                     |  |                           |                |   |      |   |                |  
|Premises and equipment                                                        |  |                           | 1,293,554      |   |      |   | 1,114,030      |  
|Net deferred loan costs                                                       |  |                           | 2,067,365      |   |      |   | 2,407,782      |  
|Net amortization of debt and equity securities premiums and discounts         |  |                           | (292,468       | ) |      |   | (483,126       | )
|Broker fees financed under interest-rate swap agreements                      |  |                           | 464,751        |   |      |   | 147,699        |  
|Equity trust expense, net                                                     |  |                           | 337,186        |   |      |   | 649,784        |  
|Stock option and award expense                                                |  |                           | 342,682        |   |      |   | 230,774        |  
|Provision for loan losses                                                     |  |                           | 4,901,665      |   |      |   | 3,166,517      |  
|Provision for losses on real estate acquired in settlement of loans           |  |                           | 352,000        |   |      |   | 115,535        |  
|Losses on sales of real estate acquired in settlement of loans                |  |                           | 459,137        |   |      |   | 121,519        |  
|Originations of loans held for sale                                           |  |                           | (1,037,872,467 | ) |      |   | (1,016,307,926 | )
|Proceeds from sales of loans held for sale                                    |  |                           | 1,022,323,551  |   |      |   | 994,921,955    |  
|Gain on sales of loans held for sale                                          |  |                           | (4,284,735     | ) |      |   | (3,528,955     | )
|Gain on sales of equity securities available for sale                         |  |                           | (70,027        | ) |      |   | (143,720       | )
|Gain on sales of debt securities available for sale                           |  |                           | (254,513       | ) |      |   |               |  
|Gain on sale of investment in joint venture                                   |  |                           | (30,755        | ) |      |   |               |  
|Gain on derivative instruments                                                |  |                           | (330,560       | ) |      |   | (444,793       | )
|Increase in cash value of bank-owned life insurance                           |  |                           | (745,286       | ) |      |   | (758,615       | )
|Increase (decrease) in accrued expenses                                       |  |                           | 230,675        |   |      |   | (493,999       | )
|Tax benefit from release of equity trust shares                               |  |                           |               |   |      |   | (150,824       | )
|Excess tax benefit from stock-based compensation                              |  |                           | (70,315        | ) |      |   | (55,466        | )
|Increase (decrease) in current income taxes payable                           |  |                           | (2,410,006     | ) |      |   | 2,162,952      |  
|Changes in other assets and liabilities                                       |  |                           | (2,450,594     | ) |      |   | (1,296,614     | )
|                                                                              |  |                           |                |   |      |   |                |  
|Net adjustments                                                               |  |                           | (16,039,160    | ) |      |   | (18,625,491    | )
|                                                                              |  |                           |                |   |      |   |                |  
|Net cash used in operating activities                                         |  |                           | (9,099,430     | ) |      |   | (11,951,212    | )
|                                                                              |  |                           |                |   |      |   |                |  
|Cash Flows From Investing Activities:                                         |  |                           |                |   |      |   |                |  
|Proceeds from sales of debt securities available for sale                     |  |                           | 45,664,024     |   |      |   |               |  
|Proceeds from sales of equity securities available for sale                   |  |                           | 425,985        |   |      |   | 772,648        |  
|Proceeds from maturities of investment in time deposits                       |  |                           |               |   |      |   | 693,000        |  
|Proceeds from maturities of debt securities available for sale                |  |                           | 7,000,000      |   |      |   |               |  
|Proceeds from maturities of debt securities held to maturity                  |  |                           | 45,100,000     |   |      |   | 40,000,000     |  
|Proceeds from redemption of FHLB stock                                        |  |                           | 10,521,800     |   |      |   | 10,289,300     |  
|Purchase of bank-owned life insurance                                         |  |                           | (1,500,000     | ) |      |   |               |  
|Purchases of debt securities available for sale                               |  |                           | (46,319,632    | ) |      |   |               |  
|Purchases of equity securities available for sale                             |  |                           | (9,334,113     | ) |      |   | (223,592       | )
|Purchases of debt securities held to maturity                                 |  |                           | (38,861,190    | ) |      |   | (37,542,697    | )
|Purchases of FHLB stock                                                       |  |                           | (13,977,300    | ) |      |   | (9,656,600     | )
|Principal payments received on mortgage-backed securities                     |  |                           | 603,499        |   |      |   | 492,567        |  
|Net increase in loans                                                         |  |                           | (139,916,933   | ) |      |   | (143,857,078   | )
|Proceeds from sales of real estate acquired in settlement of loans receivable |  |                           | 3,772,649      |   |      |   | 3,720,400      |  
|Proceeds from sale of investment in joint venture                             |  |                           | 49,375         |   |      |   |               |  
|Proceeds from disposal of equipment                                           |  |                           | 9,856          |   |      |   | 637            |  
|Cash paid for equity in joint venture                                         |  |                           | (233,691       | ) |      |   | (100,000       | )
|Purchases of premises and equipment                                           |  |                           | (848,466       | ) |      |   | (1,846,030     | )
|                                                                              |  |                           |                |   |      |   |                |  
|Net cash used in investing activities                                         |  |                           | (137,844,137   | ) |      |   | (137,257,445   | )
|                                                                              |  |                           |                |   |      |   |                |  



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PULASKI FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR NINE MONTHS ENDED

ENDED JUNE 30, 2008 AND JUNE 30, 2007 (UNAUDITED)



|                                                                      |  |                            |             |   |      |   |             |  
|--------------------------------------------------------------------- |  | -------------------------- | ----------- | - | ---- | - | ----------- | -
|                                                                      |  | Nine Months Ended June 30, |            
|                                                                      |  | 2008                       |             |   | 2007 |  
|Cash Flows From Financing Activities:                                 |  |                            |             |   |      |   |             |  
|Net (decrease) increase in deposits                                   |  | $                          | (2,182,008  | ) |      | $ | 170,295,372 |  
|Proceeds from (repayment of) Federal Home Loan Bank advances, net     |  |                            | 64,600,000  |   |      |   | (4,800,000  | )
|Proceeds from Federal Reserve Bank borrowings, net                    |  |                            | 95,000,000  |   |      |   |            |  
|Proceeds from notes payable                                           |  |                            | 5,000,000   |   |      |   |            |  
|Payment on notes payable                                              |  |                            | (255,000    | ) |      |   | (170,000    | )
|Net (decrease) increase in due to other banks                         |  |                            | (3,832,905  | ) |      |   | 1,659,508   |  
|Net decrease in advance payments by borrowers for taxes and insurance |  |                            | (57,253     | ) |      |   | (709,306    | )
|Treasury stock issued for purchase of equity in joint venture         |  |                            | 191,835     |   |      |   |            |  
|Proceeds from cash received in dividend reinvestment plan             |  |                            | 535,059     |   |      |   | 287,610     |  
|Purchase of equity trust shares                                       |  |                            | (110,000    | ) |      |   | (732,500    | )
|Tax benefit from release of equity trust shares                       |  |                            |            |   |      |   | 150,824     |  
|Excess tax benefit for stock based compensation                       |  |                            | 70,315      |   |      |   | 55,466      |  
|Treasury stock issued for stock options exercised                     |  |                            | 1,153,622   |   |      |   | 355,706     |  
|Dividends paid on common stock                                        |  |                            | (2,778,449  | ) |      |   | (2,593,120  | )
|Stock repurchases                                                     |  |                            | (574,611    | ) |      |   | (642,585    | )
|                                                                      |  |                            |             |   |      |   |             |  
|Net cash provided by financing activities                             |  |                            | 156,760,605 |   |      |   | 163,156,975 |  
|                                                                      |  |                            |             |   |      |   |             |  
|Net increase in cash and cash equivalents                             |  |                            | 9,817,038   |   |      |   | 13,948,318  |  
|Cash and cash equivalents at beginning of period                      |  |                            | 23,773,743  |   |      |   | 22,123,258  |  
|                                                                      |  |                            |             |   |      |   |             |  
|Cash and cash equivalents at end of period                            |  | $                          | 33,590,781  |   |      | $ | 36,071,576  |  
|                                                                      |  |                            |             |   |      |   |             |  
|Supplemental Disclosures of Cash Flow Information:                    |  |                            |             |   |      |   |             |  
|Cash paid during the period for:                                      |  |                            |             |   |      |   |             |  
|Interest on deposits                                                  |  | $                          | 22,969,430  |   |      | $ | 22,347,762  |  
|Interest on advances from FHLB and other borrowings                   |  |                            | 6,774,911   |   |      |   | 6,525,405   |  
|Interest on subordinated debentures                                   |  |                            | 1,004,560   |   |      |   | 1,132,754   |  
|Interest on notes payable                                             |  |                            | 150,811     |   |      |   | 115,335     |  
|                                                                      |  |                            |             |   |      |   |             |  
|Cash paid during the period for interest                              |  |                            | 30,899,712  |   |      |   | 30,121,256  |  
|Income taxes, net                                                     |  |                            | 5,454,933   |   |      |   | 1,715,663   |  
|Non cash Investing Activities:                                        |  |                            |             |   |      |   |             |  
|Real estate acquired in settlement of loans receivable                |  | $                          | 6,276,664   |   |      | $ | 4,085,091   |  

See accompanying notes to the unaudited consolidated financial statements.



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PULASKI FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



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

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

In the opinion of management, the unaudited
consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the financial condition of the Company as of June 30, 2008 and September 30, 2007 and its results
of operations for the three- and nine-month periods ended June 30, 2008 and 2007. The results of operations for the three- and nine-month periods ended June 30, 2008 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, 2007 contained in the
Companys 2007 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, 2007.

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

Certain reclassifications have been made to 2007 amounts to conform to the 2008 presentation. In accordance with Statement of Financial Accounting Standards No, 91, Accounting for Nonrefundable Fees and Costs
Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases, the Company reclassified certain direct fees and costs associated with the origination and sale of loans held for sale during the three- and nine-month periods
ended June 30, 2007 into mortgage revenues to conform to the 2008 presentation in the Companys consolidated statements of income and comprehensive income. The net effect of these reclassifications decreased appraisal revenues, title
policy revenues and salaries and benefits expense $233,000, $184,000 and $310,000, respectively and increased mortgage revenues $107,000 during the three months ended June 30, 2007. For the nine months ended June 30, 2007, the net effect
of these reclassifications decreased appraisal revenues, title policy revenues and salaries and benefits expense $615,000, $543,000 and $738,000, respectively and increased mortgage revenues $421,000.



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

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



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|                                                    |  |                            |            |                           |   |            |  |      |            |  |   |           
|--------------------------------------------------- |  | -------------------------- | ---------- | ------------------------- | - | ---------- |  | ---- | ---------- |  | - | ----------
|                                                    |  | Three Months EndedJune 30, |            | Nine Months EndedJune 30,
|                                                    |  | 2008                       |            | 2007                      |   | 2008       |  | 2007
|Weighted average shares outstandingbasic           |  |                            | 9,983,506  |                           |   | 9,825,886  |  |      | 9,872,309  |  |   | 9,826,523 
|Treasury stockequity trust                         |  |                            | 169,391    |                           |   | 149,433    |  |      | 174,847    |  |   | 131,176   
|Equivalent sharesemployee stock options and awards |  |                            | 118,572    |                           |   | 291,273    |  |      | 175,192    |  |   | 309,308   
|                                                    |  |                            |            |                           |   |            |  |      |            |  |   |           
|Weighted average shares outstandingdiluted         |  |                            | 10,271,469 |                           |   | 10,266,592 |  |      | 10,222,348 |  |   | 10,267,007
|                                                    |  |                            |            |                           |   |            |  |      |            |  |   |           
|Net income per sharebasic                          |  | $                          | 0.17       |                           | $ | 0.20       |  | $    | 0.70       |  | $ | 0.68      
|Net income per sharediluted                        |  | $                          | 0.16       |                           | $ | 0.19       |  | $    | 0.68       |  | $ | 0.65      

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

The following
options to purchase shares during the three- and nine-month periods ended June 30, 2008 and 2007 were not included in the respective computations of diluted earnings per share because the exercise price of the options, when combined with the
effect of the unamortized compensation expense, was greater than the average market price of the common shares and were considered anti-dilutive. These options expire in various periods from 2014 through 2018, respectively.



|                                |  |                            |  |                           |  |         |  |        
|------------------------------- |  | -------------------------- |  | ------------------------- |  | ------- |  | -------
|                                |  | Three Months EndedJune 30, |  | Nine Months EndedJune 30,
|                                |  | 2008                       |  | 2007                      |  | 2008    |  | 2007   
|Number of option shares         |  | 478,898                    |  | 144,828                   |  | 401,139 |  | 131,707
|Equivalent anti-dilutive shares |  | 166,909                    |  | 38,391                    |  | 150,821 |  | 34,240 



|3. | STOCK-BASED COMPENSATION
|-- | ------------------------

The Companys
shareholder-approved, stock-based incentive plans permit the grant of awards in the form of options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code, options that do not so qualify (non-statutory
stock options,) and grants of restricted shares of common stock. All employees, non-employee directors and consultants of the Company and its affiliates are eligible to receive awards under the plans. Except as described below, all stock option
awards issued during the nine months ended June 30, 2008 were granted with an exercise price equal to the market value of the Companys shares at the date of grant and vest over a period of two to five years. The exercise period for stock
options generally may not exceed 10 years from the date of grant. Generally, option and share awards provide for accelerated vesting if there is a change in control (as defined in the plans). On December 19, 2007, the Company granted 20,300
stock option awards to non-employee directors with exercise prices equal to market value of the Companys shares at the date of grant. These stock option awards were immediately vested on the date of grant and are exercisable for a period of
five years from the date of grant. The Company recorded compensation expense during the quarter ended December 31, 2007 totaling $48,000 in connection with these awards.



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A summary of the Companys stock option program as of June 30, 2008 and changes during the
nine-month period then ended, is presented below:



|                               |  |                 |   |  |                              |       |                                      |   |                                                  |  |    
|------------------------------ |  | --------------- | - |  | ---------------------------- | ----- | ------------------------------------ | - | ------------------------------------------------ |  | ---
|                               |  | NumberOf Shares |   |  | WeightedAverageExercisePrice |       | AggregateIntrinsicValue(in millions) |   | Weighted-AverageRemainingContractualLife (years)
|Outstanding at October 1, 2007 |  | 780,008         |   |  | $                            | 8.51  |                                      |   |                                                  |  |    
|Granted                        |  | 322,550         |   |  |                              | 11.48 |                                      |   |                                                  |  |    
|Exercised                      |  | (245,542        | ) |  |                              | 4.70  |                                      |   |                                                  |  |    
|Expired                        |  | (31,570         | ) |  |                              | 13.67 |                                      |   |                                                  |  |    
|Forfeited                      |  | (44,763         | ) |  |                              | 14.33 |                                      |   |                                                  |  |    
|                               |  |                 |   |  |                              |       |                                      |   |                                                  |  |    
|Outstanding at June 30, 2008   |  | 780,683         |   |  | $                            | 10.39 |                                      | $ | 1.1                                              |  | 6.7
|                               |  |                 |   |  |                              |       |                                      |   |                                                  |  |    
|Exercisable at June 30, 2008   |  | 371,448         |   |  | $                            | 8.17  |                                      | $ | 1.1                                              |  | 4.2
|                               |  |                 |   |  |                              |       |                                      |   |                                                  |  |    

The aggregate intrinsic value of stock options exercised during the nine months ended
June 30, 2008 and 2007 was $1.1 million and $551,000, respectively. The weighted average grant-date fair value of options granted during the nine months ended June 30, 2008 was $2.99 per share. As of June 30, 2008, the total
unrecognized compensation expense related to non-vested stock options and awards was $1.3 million and the related weighted average period over which it is expected to be recognized is 3.7 years.

The fair value of stock options granted during the nine-month periods ended June 30, 2008 and 2007 is estimated on the date of grant using the
Black-Scholes option pricing model with the following average assumptions:



|                         |  |                           |   |  |       |  
|------------------------ |  | ------------------------- | - |  | ----- | -
|                         |  | Nine Months EndedJune 30, |  
|                         |  | 2008                      |   |  | 2007  |  
|Risk free interest rate  |  | 4.22                      | % |  | 4.56  | %
|Expected volatility      |  | 27.83                     | % |  | 27.50 | %
|Expected life in years   |  | 5.5                       |   |  | 5.7   |  
|Dividend yield           |  | 2.62                      | % |  | 2.13  | %
|Expected forfeiture rate |  | 1.28                      | % |  | 1.24  | %

The Company maintains an Equity Trust Plan for the benefit of key loan officers and sales staff.
The plan is designed to recruit, retain and motivate top-performing loan officers and other key revenue-producing employees who are instrumental to the Companys success. Currently, none of the Companys executive officers participate in
the plan. The plan allows the recipients to defer a percentage of commissions earned, which might be partially matched by the Company and paid into a rabbi trust for the benefit of the participants. The assets of the trust are limited to the
purchase of Company shares in the open market and cash. Should the participants voluntarily leave the Company, they forego any unvested accrued benefits. At June 30, 2008, there were 226,973 shares in the plan totaling $2.8 million, which were
classified as treasury stock  equity trust in the Companys consolidated financial statements, of which 157,401 were not yet vested. Vested shares in the plan are treated as issued and outstanding when computing basic and diluted earnings
per share, whereas unvested shares are treated as issued and outstanding only when computing diluted earnings per share. Since the majority of the Companys mortgage loans originated are sold on a servicing-released basis, most of the deferred
expense is recorded as a reduction of the mortgage revenue realized upon sale. Excess tax benefits associated with all share based payments totaled approximately $70,000 for the nine months ended June 30, 2008.



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|4. | INCOME TAXES
|-- | ------------

The Company adopted the provisions of
Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (Interpretation No. 48), on October 1,
2007. At October 1, 2007, the Company had $120,000 of unrecognized tax benefits, $108,000 of which would affect the effective tax rate if recognized. The Company recognizes interest related to uncertain tax positions in income tax expense and
classifies such interest and penalties in the liability for unrecognized tax benefits. As of June 30, 2008, the Company had approximately $12,000 accrued for the payment of interest and penalties. The tax years ended September 30, 2004
through 2006 remain open to examination by the taxing jurisdictions to which the Company is subject.

Pursuant to recent Securities and
Exchange Commission guidance, the Company did not provide the tabular reconciliation disclosures required by Interpretation No. 48. The Company will provide all required Interpretation No. 48 disclosures in its 2008 Annual Report on Form
10-K.



|5. | EQUITY SECURITIES AVAILABLE FOR SALE
|-- | ------------------------------------

Equity
securities available for sale at June 30, 2008 and September 30, 2007 are summarized as follows:



|                        |  |              |            |   |                   |   |           |  
|----------------------- |  | ------------ | ---------- | - | ----------------- | - | --------- | -
|                        |  | June 30,2008 |            |   | September 30,2007 |  
|Amortized cost          |  | $            | 13,121,253 |   |                   | $ | 4,004,798 |  
|Gross unrealized gains  |  |              |           |   |                   |   | 74,272    |  
|Gross unrealized losses |  |              | (1,032,189 | ) |                   |   | (114,441  | )
|                        |  |              |            |   |                   |   |           |  
|Estimated fair value    |  | $            | 12,089,064 |   |                   | $ | 3,964,629 |  
|                        |  |              |            |   |                   |   |           |  

Included in equity securities available for sale at June 30, 2008 were 350,000 shares of
Fannie Mae 8.25% Series S fixed-rate preferred stock with total amortized cost of $8.9 million. The total market value of these Fannie Mae securities at June 30, 2008 was $8.0 million, which was $851,000 less than the Companys original
cost, resulting in a $527,000 after-tax charge to other comprehensive income. At June 30, 2008, these securities had been in a continuous loss position for less than four months. Management evaluated these securities to determine whether they
should be considered other-than-temporarily impaired at June 30, 2008. The quoted market prices for these securities had been volatile during the quarter in response to the national mortgage credit crisis. The high and low market value of these
securities during the quarter ended June 30, 2008 totaled $8.8 million and $7.9 million, respectively. These uncertainties and general market and economic conditions resulted in further material declines and subsequent partial recoveries in the
quoted market prices for the Fannie Mae preferred stocks subsequent to June 30, 2008. The high and low market value of the Companys securities during the month ended July 31, 2008 totaled $8.0 million and $4.8 million, respectively.
When evaluating the likelihood that the carrying value of the securities would fully recover in future periods, management considered, among other things, the severity and the continuous duration of the declines in the fair value of these
securities, the Companys ability and intent to hold these securities into the foreseeable future, the issuers high credit rating, the securities investment-grade rating and recent actions by the United States Congress in response
to the national credit crisis and the financial condition of Fannie Mae. Management determined from this evaluation process that the decline in value at June 30, 2008 was not other than temporary. Management will continue to evaluate the
likelihood of whether any future decline in value is other than temporary. If, in future periods, management determines that it is not probable that the market value of these securities will recover to the Companys original cost, the Company
would record a charge to earnings to reflect the other-than-temporary impairment of the securities.



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|6. | LOANS RECEIVABLE
|-- | ----------------

Loans receivable at June 30,
2008 and September 30, 2007 are summarized as follows:



|                                                |  |              |               |   |                   |   |             |  
|----------------------------------------------- |  | ------------ | ------------- | - | ----------------- | - | ----------- | -
|                                                |  | June 30,2008 |               |   | September 30,2007 |  
|Real estate mortgage:                           |  |              |               |   |                   |   |             |  
|One- to four-family residential                 |  | $            | 323,092,466   |   |                   | $ | 332,205,536 |  
|Multi-family residential                        |  |              | 32,848,209    |   |                   |   | 30,219,199  |  
|Commercial real estate                          |  |              | 255,410,295   |   |                   |   | 200,205,837 |  
|                                                |  |             
|Real estate construction and development:       |  |              |               |   |                   |   |             |  
|Residential                                     |  |              | 42,958,878    |   |                   |   | 45,427,668  |  
|Multi-family                                    |  |              | 15,409,267    |   |                   |   | 13,899,603  |  
|Commercial                                      |  |              | 44,625,869    |   |                   |   | 39,594,005  |  
|                                                |  |             
|Commercial and industrial                       |  |              | 130,815,397   |   |                   |   | 77,641,815  |  
|Equity lines                                    |  |              | 224,221,258   |   |                   |   | 219,539,073 |  
|Consumer and installment                        |  |              | 6,964,777     |   |                   |   | 6,918,612   |  
|                                                |  |              |               |   |                   |   |             |  
|                                                |  |              | 1,076,346,416 |   |                   |   | 965,651,348 |  
|                                                |  |             
|Add (less):                                     |  |              |               |   |                   |   |             |  
|Deferred loan costs                             |  |              | 5,193,049     |   |                   |   | 5,162,991   |  
|Loans in process                                |  |              | (9,499,086    | ) |                   |   | (10,566,888 | )
|Allowance for loan losses                       |  |              | (11,909,229   | ) |                   |   | (10,421,304 | )
|                                                |  |              |               |   |                   |   |             |  
|Total                                           |  | $            | 1,060,131,150 |   |                   | $ | 949,826,147 |  
|                                                |  |              |               |   |                   |   |             |  
|Weighted average interest rate at end of period |  |              | 6.11          | % |                   |   | 7.44        | %
|                                                |  |              |               |   |                   |   |             |  



|7. | DEPOSITS
|-- | --------

Deposits at June 30, 2008 and
September 30, 2007 are summarized as follows:



|                              |  |               |             |                             |                    |   |        |   |                             |  |      |  
|----------------------------- |  | ------------- | ----------- | --------------------------- | ------------------ | - | ------ | - | --------------------------- |  | ---- | -
|                              |  | June 30, 2008 |             |                             | September 30, 2007 |  
|                              |  | Amount        |             | WeightedAverageInterestRate |                    |   | Amount |   | WeightedAverageInterestRate | 
|Transaction accounts:         |  |               |             |                             |                    |   |        |   |                             |  |      |  
|Non-interest-bearing checking |  | $             | 69,602,804  |                             |                   |   |        | $ | 57,004,801                  |  |     |  
|Interest-bearing checking     |  |               | 139,864,919 |                             | 2.14               | % |        |   | 57,815,627                  |  | 1.79 | %
|Passbook savings accounts     |  |               | 27,240,722  |                             | 0.30               | % |        |   | 28,908,862                  |  | 0.29 | %
|Money market                  |  |               | 174,412,522 |                             | 2.21               | % |        |   | 173,949,915                 |  | 4.05 | %
|                              |  |               |             |                             |                    |   |        |   |                             |  |      |  
|Total transaction accounts    |  |               | 411,120,967 |                             | 1.69               | % |        |   | 317,679,205                 |  | 2.57 | %
|                              |  |               |             |                             |                    |   |        |   |                             |  |      |  
|Certificates of deposit:      |  |               |             |                             |                    |   |        |   |                             |  |      |  
|Less than $100,000            |  |               | 221,284,544 |                             | 3.39               | % |        |   | 239,400,859                 |  | 5.45 | %
|$100,000 and greater          |  |               | 200,957,434 |                             | 3.75               | % |        |   | 278,408,632                 |  | 4.73 | %
|                              |  |               |             |                             |                    |   |        |   |                             |  |      |  
|Total certificates of deposit |  |               | 422,241,978 |                             | 3.56               | % |        |   | 517,809,491                 |  | 5.06 | %
|                              |  |               |             |                             |                    |   |        |   |                             |  |      |  
|Total deposits                |  | $             | 833,362,945 |                             | 2.64               | % |        | $ | 835,488,696                 |  | 4.11 | %
|                              |  |               |             |                             |                    |   |        |   |                             |  |      |  



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|8. | SALE-LEASEBACK OF OFFICE BUILDINGS
|-- | ----------------------------------

The Bank
entered into an Agreement of Purchase and Sale, dated May 21, 2008, with United Trust Fund Limited Partnership (the Agreement) pursuant to which the Bank agreed to sell the property located at 12300 Olive Boulevard, St. Louis,
Missouri, which is the Banks headquarters, for $6.8 million and the property located at One Pulaski Center Drive, St. Louis, Missouri, which houses the Banks mortgage lending and appraisal divisions, for $5.2 million. Pursuant
to the Agreement, the Bank will enter into lease agreements with a wholly-owned subsidiary of the purchaser to lease back the properties. The Agreement specifies initial lease terms of fifteen years and gives the Bank the right, under specified
terms and conditions, to extend the terms of the leases for four additional periods of five years each. In addition to rent, the Bank will be required to pay all taxes, insurance and maintenance costs that arise through the use of the properties.

The Agreement and the signing of the leases are subject to completion of customary due diligence by the buyer and confirmation by the Bank
that it will be permitted to obtain operating lease treatment for the leases under U.S. generally accepted accounting principles. The Company expects to realize an after-tax gain of approximately $4.0 million on the sale of the properties,
which will be recognized ratably over the fifteen-year life of the leases.



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##### Table of Contents

MANAGEMENTS DISCUSSION
AND ANALYSIS OF

FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

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

Managements ability to predict results or the effect of future plans or strategies is inherently uncertain. Factors which could affect
actual results include interest rate trends, the general economic climate in the market area in which Pulaski Financial Corp. operates, as well as nationwide, Pulaski Financial Corp.s ability to control costs and expenses, competitive products
and pricing, loan demand, loan delinquency rates and changes in federal and state legislation and regulation. The Company provides greater detail regarding some of these factors in its Form 10-K for the year ended September 30, 2007, including
the Risk Factors section of that report. The Companys forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this report or in its other filings with the SEC. These
factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. Subject to applicable law and regulation, Pulaski Financial Corp. assumes no obligation to update any
forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

GENERAL

Pulaski Financial Corp. is a community-based, financial institution holding company headquartered in St. Louis, Missouri. It
conducts operations primarily through Pulaski Bank (the Bank), a federally chartered savings bank with $1.29 billion in assets at June 30, 2008. Pulaski Bank provides an array of financial products and services for businesses and
consumers primarily through its twelve full-service offices in the St. Louis metropolitan area and three loan production offices in the St. Louis and Kansas City metropolitan areas.

The Company has primarily grown its assets and deposits internally by building its residential and commercial lending operations, by opening de novo branches, and by hiring experienced bankers with existing customer
relationships in its market. The Company opened its twelfth full-service bank location in October 2007. The Companys goal is to become St. Louis leading community bank and to continue to deliver value to its shareholders and enhance its
franchise value and earnings through controlled growth in its banking operations, while maintaining the personal, community-oriented customer service that has characterized its success to date.

OVERVIEW OF RESULTS

During the three- and nine-month periods ended
June 30, 2008, Pulaski Financial Corp. experienced strong results in many areas of its business. While net income decreased 16.3% in the June 2008 quarter compared to last years quarter as the result of a $989,000 after-tax charge for
separation-related expenses resulting from the resignation of the Companys former chief executive officer, net interest income increased 30.8% and non-interest income increased 3.9% year-over-year. For the nine-month period, net income
increased 4.0% in 2008 compared to last years period, driven by a 25.6% increase in net interest income and a 20.6% increase in non-interest income. Also significantly affecting net income in 2008 were substantial increases in the provision
for loan losses. The growth in non-interest income was bolstered by solid mortgage revenues and strong growth in retail banking fees and investment brokerage revenues. Driving these results were strong lending volumes and robust core deposit growth,
which resulted in significant balance sheet growth during the nine-month period. See Results of Operations.



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The Companys strategic plan centers on continued growth as a premier St. Louis community bank and is focused on
growth in each of the Companys core products: commercial loans, residential loans and checking and money market deposit accounts. Total assets increased $159.1 million, or 14.1%, to $1.29 billion at June 30, 2008 from $1.13 billion
at September 30, 2007. Approximately 75% of this growth came during the Companys first 2008 fiscal quarter, as total assets at June 30, 2008 increased $39.7 million, or 3.2%, when compared to December 31, 2007. The growth
in total assets was primarily due to $110.3 million of growth in loans receivable and $19.8 million of growth in loans held for sale during the nine months ended June 30, 2008. The growth in loans receivable stemmed almost entirely from growth
in the commercial portfolio, as mortgage loans secured by commercial real estate increased $55.2 million to $255.4 million and commercial and industrial loans increased $53.2 million to $130.8 million at June 30, 2008, respectively. These
increases were consistent with the Companys continued focus on profitable growth in these core loan products and were bolstered by the Companys new banking locations and additional lending staff.

Core deposits, which consist of checking, money market and passbook savings accounts, have been a key component of the Companys growth and their growth is the
primary focus of the Companys strategic plan. Primarily as the result of increased commercial relationships, successful marketing efforts and new branch locations, core deposits increased 29.4%, or $93.4 million, to $411.1 million at
June 30, 2008 from $317.7 million at September 30, 2007. This growth included a $94.6 million increase in checking account balances to $209.5 million and a $463,000 increase in money market deposit accounts to $174.4 million at
June 30, 2008. Certificates of deposit decreased $95.6 million to $422.2 million at June 30, 2008, primarily as the result of an $82.0 million decrease in brokered certificates of deposit to $108.4 million, which management
treats as a wholesale funding source. These brokered deposits were replaced with lower-costing borrowings from the Federal Home Loan Bank and the Federal Reserve Bank. Total deposits decreased $2.1 million, or 0.3%, to $833.4 million at
June 30, 2008 from $835.5 million at September 30, 2007.

The Company has expanded its physical footprint over the last few years to better serve
the key business centers of the St. Louis metropolitan area. Since 2005, the Company has opened or acquired six new full-service bank locations in the central corridor of St. Louis, including three new locations opened in calendar year 2007. Many of
the areas key business districts are located in this central corridor. The addition of these new bank locations combined with strong marketing efforts and focused talent acquisition has resulted in rapid growth in the Companys balance
sheet. The three banking locations opened in 2007, Richmond Heights, Clayton and downtown St. Louis, saw combined deposit growth of $40.1 million during the nine months ended June 30, 2008 and had combined total deposits of $55.1 million
at June 30, 2008.



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AVERAGE BALANCE SHEETS

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



|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|-------------------------------------------------------------------------------- |  | ---------------------- | --------- | - | -------------------- | - | ---------- |  | ---- | -------------- |  | - | -------------------- | - | ---------- | - | ------ |  | ---- | -
|                                                                                 |  | Three Months Ended     |          
|                                                                                 |  | June 30, 2008          |           |   | June 30, 2007        |  
|                                                                                 |  | AverageBalance         |           |   | InterestandDividends |   | Yield/Cost |  |      | AverageBalance |  |   | InterestandDividends |   | Yield/Cost |  
|                                                                                 |  | (Dollars in thousands) |          
|Interest-earning assets:                                                         |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Loans receivable:(1)                                                             |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Real estate and commercial                                                       |  | $                      | 825,025   |   |                      | $ | 12,908     |  | 6.26 | %              |  | $ | 679,536              |   |            | $ | 12,242 |  | 7.21 | %
|Consumer                                                                         |  |                        | 4,003     |   |                      |   | 64         |  | 6.35 | %              |  |   | 4,156                |   |            |   | 64     |  | 6.19 | %
|Home equity                                                                      |  |                        | 223,781   |   |                      |   | 3,073      |  | 5.49 | %              |  |   | 211,077              |   |            |   | 4,177  |  | 7.92 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total loans receivable                                                           |  |                        | 1,052,809 |   |                      |   | 16,045     |  | 6.10 | %              |  |   | 894,769              |   |            |   | 16,483 |  | 7.37 | %
|Loans held for sale                                                              |  |                        | 68,290    |   |                      |   | 950        |  | 5.57 | %              |  |   | 82,297               |   |            |   | 1,311  |  | 6.37 | %
|Debt securities, net                                                             |  |                        | 13,276    |   |                      |   | 80         |  | 2.41 | %              |  |   | 15,939               |   |            |   | 193    |  | 4.84 | %
|Equity securities, net                                                           |  |                        | 12,614    |   |                      |   | 217        |  | 6.87 | %              |  |   | 3,897                |   |            |   | 37     |  | 3.82 | %
|FHLB stock                                                                       |  |                        | 13,488    |   |                      |   | 119        |  | 3.52 | %              |  |   | 9,376                |   |            |   | 155    |  | 6.61 | %
|Mortgage-backed securities                                                       |  |                        | 13,961    |   |                      |   | 249        |  | 7.15 | %              |  |   | 3,268                |   |            |   | 39     |  | 4.72 | %
|Other                                                                            |  |                        | 3,235     |   |                      |   | 17         |  | 2.05 | %              |  |   | 3,994                |   |            |   | 49     |  | 4.98 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total interest-earning assets                                                    |  |                        | 1,177,673 |   |                      |   | 17,677     |  | 6.00 | %              |  |   | 1,013,540            |   |            |   | 18,267 |  | 7.21 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Non-interest-earning assets                                                      |  |                        | 85,238    |   |                      |   |            |  |      |                |  |   | 79,619               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total assets                                                                     |  | $                      | 1,262,911 |   |                      |   |            |  |      |                |  | $ | 1,093,159            |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Interest-bearing liabilities:                                                    |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Demand deposit                                                                   |  | $                      | 112,716   |   |                      | $ | 491        |  | 1.74 | %              |  | $ | 63,163               |   |            | $ | 276    |  | 1.75 | %
|Savings                                                                          |  |                        | 27,444    |   |                      |   | 23         |  | 0.33 | %              |  |   | 30,070               |   |            |   | 25     |  | 0.34 | %
|Money market                                                                     |  |                        | 193,162   |   |                      |   | 1,085      |  | 2.25 | %              |  |   | 154,342              |   |            |   | 1,647  |  | 4.27 | %
|Time deposits                                                                    |  |                        | 415,005   |   |                      |   | 4,065      |  | 3.92 | %              |  |   | 497,293              |   |            |   | 6,345  |  | 5.10 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total interest-bearing deposits                                                  |  |                        | 748,327   |   |                      |   | 5,664      |  | 3.03 | %              |  |   | 744,868              |   |            |   | 8,293  |  | 4.45 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|FHLB advances                                                                    |  |                        | 249,422   |   |                      |   | 1,799      |  | 2.88 | %              |  |   | 173,481              |   |            |   | 2,275  |  | 5.25 | %
|Federal Reserve borrowings                                                       |  |                        | 69,923    |   |                      |   | 390        |  | 2.23 | %              |  |   | 3                    |   |            |   |       |  | 6.23 | %
|Notes payable                                                                    |  |                        | 5,831     |   |                      |   | 66         |  | 4.54 | %              |  |   | 3,150                |   |            |   | 56     |  | 7.08 | %
|Subordinated debentures                                                          |  |                        | 19,589    |   |                      |   | 250        |  | 5.11 | %              |  |   | 19,589               |   |            |   | 377    |  | 7.70 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total interest-bearing liabilities                                               |  |                        | 1,093,092 |   |                      |   | 8,169      |  | 2.99 | %              |  |   | 941,091              |   |            |   | 11,001 |  | 4.68 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Non-interest bearing liabilities:                                                |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Non-interest bearing deposits                                                    |  |                        | 63,872    |   |                      |   |            |  |      |                |  |   | 48,208               |   |            |   |        |  |      |  
|Other non-interest bearing liabilities                                           |  |                        | 18,590    |   |                      |   |            |  |      |                |  |   | 22,458               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total non-interest-bearing liabilities                                           |  |                        | 82,462    |   |                      |   |            |  |      |                |  |   | 70,666               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Stockholders equity                                                             |  |                        | 87,357    |   |                      |   |            |  |      |                |  |   | 81,402               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total liabilities and stockholders equity                                       |  | $                      | 1,262,911 |   |                      |   |            |  |      |                |  | $ | 1,093,159            |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Net interest income                                                              |  |                        |           |   |                      | $ | 9,508      |  |      |                |  |   |                      |   |            | $ | 7,266  |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Interest rate spread(2)                                                          |  |                        |           |   |                      |   |            |  | 3.01 | %              |  |   |                      |   |            |   |        |  | 2.53 | %
|Net interest margin(3)                                                           |  |                        |           |   |                      |   |            |  | 3.23 | %              |  |   |                      |   |            |   |        |  | 2.87 | %
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                        | 107.74    | % |                      |   |            |  |      |                |  |   | 107.70               | % |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  



|(1) | Includes non-accrual loans with an average balance of $5.4 million and $2.0 million for the three months ended
June 30, 2008 and 2007, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

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

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



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|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|-------------------------------------------------------------------------------- |  | ---------------------- | --------- | - | -------------------- | - | ---------- |  | ---- | -------------- |  | - | -------------------- | - | ---------- | - | ------ |  | ---- | -
|                                                                                 |  | Nine Months Ended      |          
|                                                                                 |  | June 30, 2008          |           |   | June 30, 2007        |  
|                                                                                 |  | AverageBalance         |           |   | InterestandDividends |   | Yield/Cost |  |      | AverageBalance |  |   | InterestandDividends |   | Yield/Cost |  
|                                                                                 |  | (Dollars in thousands) |          
|Interest-earning assets:                                                         |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Loans receivable:(1)                                                             |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Real estate and commercial                                                       |  | $                      | 802,534   |   |                      | $ | 40,490     |  | 6.73 | %              |  | $ | 642,794              |   |            | $ | 34,575 |  | 7.17 | %
|Consumer                                                                         |  |                        | 4,201     |   |                      |   | 182        |  | 5.76 | %              |  |   | 3,974                |   |            |   | 192    |  | 6.43 | %
|Home equity                                                                      |  |                        | 222,735   |   |                      |   | 10,973     |  | 6.57 | %              |  |   | 207,800              |   |            |   | 12,616 |  | 8.10 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total loans receivable                                                           |  |                        | 1,029,470 |   |                      |   | 51,645     |  | 6.69 | %              |  |   | 854,568              |   |            |   | 47,383 |  | 7.39 | %
|Loans held for sale                                                              |  |                        | 66,945    |   |                      |   | 2,694      |  | 5.37 | %              |  |   | 63,072               |   |            |   | 2,900  |  | 6.13 | %
|Debt securities, net                                                             |  |                        | 15,019    |   |                      |   | 391        |  | 3.47 | %              |  |   | 16,074               |   |            |   | 579    |  | 4.80 | %
|Equity securities, net                                                           |  |                        | 9,962     |   |                      |   | 516        |  | 6.90 | %              |  |   | 4,069                |   |            |   | 121    |  | 3.97 | %
|FHLB stock                                                                       |  |                        | 12,284    |   |                      |   | 388        |  | 4.21 | %              |  |   | 8,957                |   |            |   | 340    |  | 5.07 | %
|Mortgage-backed securities                                                       |  |                        | 6,597     |   |                      |   | 318        |  | 6.44 | %              |  |   | 3,413                |   |            |   | 121    |  | 4.74 | %
|Other                                                                            |  |                        | 3,356     |   |                      |   | 83         |  | 3.34 | %              |  |   | 4,139                |   |            |   | 159    |  | 5.08 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total interest-earning assets                                                    |  |                        | 1,143,633 |   |                      |   | 56,035     |  | 6.53 | %              |  |   | 954,292              |   |            |   | 51,603 |  | 7.21 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Non-interest-earning assets                                                      |  |                        | 80,874    |   |                      |   |            |  |      |                |  |   | 73,643               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total assets                                                                     |  | $                      | 1,224,507 |   |                      |   |            |  |      |                |  | $ | 1,027,935            |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Interest-bearing liabilities:                                                    |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Demand deposit                                                                   |  | $                      | 87,081    |   |                      | $ | 1,130      |  | 1.73 | %              |  | $ | 61,114               |   |            | $ | 853    |  | 1.86 | %
|Savings                                                                          |  |                        | 28,029    |   |                      |   | 70         |  | 0.33 | %              |  |   | 30,454               |   |            |   | 83     |  | 0.36 | %
|Money market                                                                     |  |                        | 191,134   |   |                      |   | 4,407      |  | 3.07 | %              |  |   | 152,041              |   |            |   | 4,820  |  | 4.23 | %
|Time deposits                                                                    |  |                        | 470,034   |   |                      |   | 15,925     |  | 4.52 | %              |  |   | 449,177              |   |            |   | 16,857 |  | 5.00 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total interest-bearing deposits                                                  |  |                        | 776,278   |   |                      |   | 21,532     |  | 3.70 | %              |  |   | 692,786              |   |            |   | 22,613 |  | 4.35 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|FHLB advances                                                                    |  |                        | 233,425   |   |                      |   | 6,387      |  | 3.65 | %              |  |   | 167,854              |   |            |   | 6,532  |  | 5.19 | %
|Federal Reserve borrowings                                                       |  |                        | 23,853    |   |                      |   | 406        |  | 2.27 | %              |  |   | 1                    |   |            |   |       |  | 6.23 | %
|Notes payable                                                                    |  |                        | 3,909     |   |                      |   | 152        |  | 5.18 | %              |  |   | 3,234                |   |            |   | 172    |  | 7.08 | %
|Subordinated debentures                                                          |  |                        | 19,589    |   |                      |   | 985        |  | 6.70 | %              |  |   | 19,589               |   |            |   | 1,133  |  | 7.71 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total interest-bearing liabilities                                               |  |                        | 1,057,054 |   |                      |   | 29,462     |  | 3.72 | %              |  |   | 883,464              |   |            |   | 30,450 |  | 4.60 | %
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Non-interest bearing liabilities:                                                |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Non-interest bearing deposits                                                    |  |                        | 61,730    |   |                      |   |            |  |      |                |  |   | 46,097               |   |            |   |        |  |      |  
|Other non-interest bearing liabilities                                           |  |                        | 19,656    |   |                      |   |            |  |      |                |  |   | 19,492               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total non-interest-bearing liabilities                                           |  |                        | 81,386    |   |                      |   |            |  |      |                |  |   | 65,589               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Stockholders equity                                                             |  |                        | 86,067    |   |                      |   |            |  |      |                |  |   | 78,882               |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Total liabilities and stockholders equity                                       |  | $                      | 1,224,507 |   |                      |   |            |  |      |                |  | $ | 1,027,935            |   |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Net interest income                                                              |  |                        |           |   |                      | $ | 26,573     |  |      |                |  |   |                      |   |            | $ | 21,153 |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  
|Interest rate spread(2)                                                          |  |                        |           |   |                      |   |            |  | 2.81 | %              |  |   |                      |   |            |   |        |  | 2.61 | %
|Net interest margin(3)                                                           |  |                        |           |   |                      |   |            |  | 3.10 | %              |  |   |                      |   |            |   |        |  | 2.96 | %
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                        | 108.19    | % |                      |   |            |  |      |                |  |   | 108.02               | % |            |   |        |  |      |  
|                                                                                 |  |                        |           |   |                      |   |            |  |      |                |  |   |                      |   |            |   |        |  |      |  



|(1) | Includes non-accrual loans with an average balance of $6.2 million and $1.3 million for the nine months ended
June 30, 2008 and 2007, respectively.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------

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

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



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RATE VOLUME ANALYSIS

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



|                                                      |  |                                         |       |   |                                         |   |         |     |  |   |        |   |  |      |        |   |     |   |        |   |  |   |        |  
|----------------------------------------------------- |  | --------------------------------------- | ----- | - | --------------------------------------- | - | ------- | --- |  | - | ------ | - |  | ---- | ------ | - | --- | - | ------ | - |  | - | ------ | -
|                                                      |  | Three Months EndedJune 30, 2008 vs 2007 |       |   | Nine Months EndedJune 30, 2008 vs 200 7 |  
|                                                      |  | Volume                                  |       |   | Rate                                    |   |         | Net |  |   | Volume |   |  | Rate |        |   | Net |  
|                                                      |  | ( In thousands)                         |       |   | ( In thousands)                         |  
|Interest-earning assets:                              |  |                                         |       |   |                                         |   |         |     |  |   |        |   |  |      |        |   |     |   |        |   |  |   |        |  
|Loans receivable:                                     |  |                                         |       |   |                                         |   |         |     |  |   |        |   |  |      |        |   |     |   |        |   |  |   |        |  
|Real estate and commercial                            |  | $                                       | 7,862 |   |                                         | $ | (7,196  | )   |  | $ | 666    |   |  | $    | 9,172  |   |     | $ | (3,257 | ) |  | $ | 5,915  |  
|Consumer                                              |  |                                         | (8    | ) |                                         |   | 8       |     |  |   |       |   |  |      | 16     |   |     |   | (26    | ) |  |   | (10    | )
|Home Equity                                           |  |                                         | 1,501 |   |                                         |   | (2,605  | )   |  |   | (1,104 | ) |  |      | 1,300  |   |     |   | (2,943 | ) |  |   | (1,643 | )
|                                                      |  |                                         |       |   |                                         |   |         |     |  |   |        |   |  |      |        |   |     |   |        |   |  |   |        |  
|Total loans receivable                                |  |                                         | 9,355 |   |                                         |   | (9,793  | )   |  |   | (438   | ) |  |      | 10,488 |   |     |   | (6,226 | ) |  |   | 4,262  |  
|Loans held for sale                                   |  |                                         | (208  | ) |                                         |   | (153    | )   |  |   | (361   | ) |  |      | 249    |   |     |   | (455   | ) |  |   | (206   | )
|Debt securities, net                                  |  |                                         | (28   | ) |                                         |   | (85     | )   |  |   | (113   | ) |  |      | (36    | ) |     |   | (152   | ) |  |   | (188   | )
|Equity securities, net                                |  |                                         | 133   |   |                                         |   | 47      |     |  |   | 180    |   |  |      | 262    |   |     |   | 133    |   |  |   | 395    |  
|FHLB stock                                            |  |                                         | 263   |   |                                         |   | (299    | )   |  |   | (36    | ) |  |      | 139    |   |     |   | (91    | ) |  |   | 48     |  
|Mortgage-backed securities                            |  |                                         | 181   |   |                                         |   | 29      |     |  |   | 210    |   |  |      | 142    |   |     |   | 55     |   |  |   | 197    |  
|Other                                                 |  |                                         | (8    | ) |                                         |   | (24     | )   |  |   | (32    | ) |  |      | (29    | ) |     |   | (47    | ) |  |   | (76    | )
|                                                      |  |                                         |       |   |                                         |   |         |     |  |   |        |   |  |      |        |   |     |   |        |   |  |   |        |  
|Net change in income on interest earning assets       |  |                                         | 9,688 |   |                                         |   | (10,278 | )   |  |   | (590   | ) |  |      | 11,215 |   |     |   | (6,783 | ) |  |   | 4,432  |  
|                                                      |  |                                         |       |   |                                         |   |         |     |  |   |        |   |  |      |        |   |     |   |        |   |  |   |        |  
|Interest-bearing liabilities:                         |  |                                         |       |   |                                         |   |         |     |  |   |        |   |  |      |        |   |     |   |        |   |  |   |        |  
|Demand deposits                                       |  |                                         | 225   |   |                                         |   | (10     | )   |  |   | 215    |   |  |      | 374    |   |     |   | (97    | ) |  |   | 277    |  
|Savings                                               |  |                                         | (1    | ) |                                         |   | (1      | )   |  |   | (2     | ) |  |      | (7     | ) |     |   | (6     | ) |  |   | (13    | )
|Money market                                          |  |                                         | 1,970 |   |                                         |   | (2,532  | )   |  |   | (562   | ) |  |      | 1,507  |   |     |   | (1,920 | ) |  |   | (413   | )
|Time deposits                                         |  |                                         | (951  | ) |                                         |   | (1,329  | )   |  |   | (2,280 | ) |  |      | 1,102  |   |     |   | (2,034 | ) |  |   | (932   | )
|                                                      |  |                                         |       |   |                                         |   |         |     |  |   |        |   |  |      |        |   |     |   |        |   |  |   |        |  
|Total interest-bearing deposits                       |  |                                         | 1,243 |   |                                         |   | (3,872  | )   |  |   | (2,629 | ) |  |      | 2,976  |   |     |   | (4,057 | ) |  |   | (1,081 | )
|FHLB advances                                         |  |                                         | 3,814 |   |                                         |   | (4,290  | )   |  |   | (476   | ) |  |      | 2,857  |   |     |   | (3,002 | ) |  |   | (145   | )
|Federal Reserve borrowings                            |  |                                         | 390   |   |                                         |   |        |     |  |   | 390    |   |  |      | 406    |   |     |   |       |   |  |   | 406    |  
|Notes payable                                         |  |                                         | 119   |   |                                         |   | (109    | )   |  |   | 10     |   |  |      | 45     |   |     |   | (65    | ) |  |   | (20    | )
|Subordinated debentures                               |  |                                         |      |   |                                         |   | (127    | )   |  |   | (127   | ) |  |      |       |   |     |   | (148   | ) |  |   | (148   | )
|                                                      |  |                                         |       |   |                                         |   |         |     |  |   |        |   |  |      |        |   |     |   |        |   |  |   |        |  
|Net change in expense on interest bearing liabilities |  |                                         | 5,566 |   |                                         |   | (8,398  | )   |  |   | (2,832 | ) |  |      | 6,284  |   |     |   | (7,272 | ) |  |   | (988   | )
|                                                      |  |                                         |       |   |                                         |   |         |     |  |   |        |   |  |      |        |   |     |   |        |   |  |   |        |  
|Change in net interest income                         |  | $                                       | 4,122 |   |                                         | $ | (1,880  | )   |  | $ | 2,242  |   |  | $    | 4,931  |   |     | $ | 489    |   |  | $ | 5,420  |  
|                                                      |  |                                         |       |   |                                         |   |         |     |  |   |        |   |  |      |        |   |     |   |        |   |  |   |        |  



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##### Table of Contents

RESULTS OF OPERATIONS

Net income for the quarter ended June 30, 2008 was $1.7 million, or $0.16 per diluted share on 10.3 million average diluted shares outstanding, compared with net income of $2.0 million, or $0.19 per diluted share on
10.3 million average diluted shares outstanding, during the same quarter last year. For the nine months ended June 30, 2008, net income was $6.9 million, or $0.68 per diluted share on 10.2 million average diluted shares
outstanding, compared with $6.7 million, or $0.65 per diluted share on a 10.3 million average diluted shares outstanding, for the same period a year ago. Results for the three- and nine-month periods ended June 30, 2008 included an
after-tax charge of $989,000, or $0.10 per diluted share, for a separation payment and other expenses related to the resignation of the Companys former chief executive officer on May 1, 2008.

Net Interest Income

Net interest income rose 30.8%, or
$2.2 million, to $9.5 million for the quarter ended June 30, 2008 compared with $7.3 million for the same period last year. For the nine months ended June 30, 2008, net interest income rose to $26.6 million compared with $21.2
million for the same nine-month period last year. The increases were fueled primarily by improvement in the Companys net interest margin, which increased to 3.23% during the quarter ended June 30, 2008 from 2.87% for the quarter ended
June 30, 2007. For the nine-month period, the net interest margin increased to 3.10% in 2008 compared with 2.96% in 2007. The increased net interest margin was due primarily to an increase in core deposits, which are typically the
Companys lowest cost of funds, combined with lower wholesale funding costs.

Total interest and dividend income decreased $591,000, or
3.2%, to $17.7 million for the quarter ended June 30, 2008 compared with $18.3 million for the comparable 2007 quarter. The decrease was primarily due to a decrease in the average yield on loans receivable from 7.37% during the quarter ended
June 30, 2007 to 6.10% during the quarter ended June 30, 2008, partially offset by an increase in the average balance of loans receivable, which increased $158.0 million to $1.05 billion for the June 2008 quarter. For the nine months ended
June 30, 2008, total interest income increased $4.4 million, or 8.6%, to $56.0 million compared with $51.6 million for the same nine-month period last year, primarily due to an increase in the average balance of loans, offset by a decrease
in the average yield on loans. The average balance of loans receivable increased to $1.03 billion during the nine months ended June 30, 2008 compared with $854.6 million during the nine months ended June 30, 2007. The average yield on
loans receivable for the nine-month periods decreased from 7.39% during 2007 to 6.69% during 2008. The decreases in the average loan yields were due to lower market interest rates during the 2008 periods.

Total interest expense decreased $2.8 million, or 25.7%, to $8.2 million for the quarter ended June 30, 2008 compared with $11.0 million during the
quarter ended June 30, 2007 and decreased $989,000 to $29.5 million during the nine months ended June 30, 2008 compared with $30.5 million during the same nine-month period last year. The lower expense was the result of decreases in the
average cost of funds partially offset by increases in the average balance of interest-bearing liabilities.

The average cost of funds decreased from 4.68%
for the quarter ended June 30, 2007 to 2.99% for the quarter ended June 30, 2008 while the average balance of interest-bearing liabilities increased from $941.1 million to $1.09 billion during the same periods, respectively. For the
nine-month periods, the average cost of funds decreased from 4.60% during 2007 to 3.72% during 2008 while the average balance of interest-bearing liabilities increased from $883.5 million to $1.06 billion during the same periods, respectively.

The increased average balances in interest-bearing liabilities resulted from increases in the average balances of deposits, advances from the Federal Home
Loan Bank of Des Moines (FHLB) and borrowings from the Federal Reserve Bank of St. Louis (Federal Reserve Bank), which were used to fund asset growth during the periods. The decreased average costs were the result of lower
market interest rates during the periods, growth in core deposits and a shift in the mix of wholesale funding sources. The Company primarily funds its assets with savings deposits from its retail and commercial customers, which are typically its
lowest-cost funding source. This funding source is supplemented with wholesale funds consisting primarily of borrowings from the FHLB, time deposits from national brokers and short-term borrowings from the Federal Reserve Bank. Management actively
chooses between these wholesale funding sources depending on their relative costs and the Companys overall borrowing capacity at the FHLB and the Federal Reserve Bank. As a result of the 275 basis point decline in the Federal Reserve
Boards target federal funds rate during the nine months ended June 30, 2008



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combined with increased national demand for brokered time deposits, the Company had the ability to secure borrowings from the FHLB and the Federal Reserve
Bank at rates substantially lower than those available for brokered time deposits. During the nine months ended June 30, 2008, management shifted $82.0 million in maturing brokered time deposits into lower-cost FHLB and Federal Reserve Bank
borrowings.

Interest expense on depositsdecreased $2.6 million, or 31.7%, to $5.7 million during the quarter ended June 30, 2008
compared with $8.3 million for the quarter ended June 30, 2007 and decreased $1.1 million to $21.5 million during the nine months ended June 30, 2008 compared with $22.6 million for the same nine-month period last year as the result
of decreases in the average cost partially offset by increases in the average balance. The average balance of interest-bearing deposits increased to $748.3 million for the quarter ended June 30, 2008 from $744.9 million for the quarter ended
June 30, 2007 while the average cost of deposits decreased from 4.45% to 3.03% during the same periods, respectively. For the nine-month periods, the average balance of interest-bearing deposits increased to $776.3 million during 2008 from
$692.8 million during 2007 while the average cost decreased from 4.35% to 3.70% during the same periods, respectively. Growth in average total deposits during the 2008 periods was the result of core deposit growth partially offset by a decline
in the balance of brokered time deposits. This change in the mix of deposits combined with lower market interest rates resulted in lower average costs during the 2008 periods.

Interest expense on advances from the Federal Home Loan Bank decreased $476,000, or 20.9%, to $1.8 million during the quarter ended June 30, 2008 compared with $2.3 million for the quarter
ended June 30, 2007 and was $6.4 million during the nine months ended June 30, 2008 compared with $6.5 million for the same nine-month period last year as the result of decreases in the average cost partially offset by increases in the
average balance. The average balance increased to $249.4 million for the quarter ended June 30, 2008 from $173.5 million for the quarter ended June 30, 2007 while the average cost decreased from 5.25% to 2.88% during the same periods,
respectively. For the nine-month periods, the average balance increased to $233.4 million during 2008 from $167.9 million during 2007 while the average cost decreased from 5.19% to 3.65% during the same periods, respectively. The increased average
balances resulted from additional borrowings, which were used to fund asset growth and replace higher-cost maturing brokered certificates of deposit. The decreased average costs were the result of lower market interest rates during the 2008 periods.

Interest expense on borrowings from the Federal Reserve Bank increased to $390,000 during the quarter ended June 30, 2008 compared with
$42 for the quarter ended June 30, 2007 and was $406,000 during the nine months ended June 30, 2008 compared with $42 for the same nine-month period last year as the result of increases in the average balance. The average balance increased
to $69.9 million for the quarter ended June 30, 2008 from $3,000 for the quarter ended June 30, 2007, and for the nine-month period, increased to $23.9 million during 2008 from $1,000 during 2007. The average cost of these borrowings
during the three and nine months ended June 30, 2008 was 2.23% and 2.27%, respectively. During the 2008 periods, the Company supplemented its wholesale borrowing needs with lower-costing, short-term borrowings from the Discount Window of the
Federal Reserve Bank. The proceeds of these borrowings were used to fund asset growth and replace higher-cost maturing brokered certificates of deposit.

Provision for Loan Losses

The provision for loan losses for the three and nine months ended June 30, 2008 was $2.1
million and $4.9 million, respectively, compared with $1.9 million and $3.2 million, respectively, for the same periods a year ago. The provision for loan losses in the current-year periods related primarily to substantial growth in performing
commercial loans, which carry a higher level of inherent risk than residential loans, charge-offs and an increase in the level of non-performing loans. The ratio of nonperforming loans to total loans increased from 1.03% at September 30, 2007
to 1.40% at June 30, 2008. The balance of nonperforming loans increased $5.6 million to $16.1 million at June 30, 2008 from $10.5 million at September 30, 2007. See Non-Performing AssetsandAllowance for Loan Losses.

Non-Interest Income

Total non-interest
income increased 3.9% to $3.5 million for the quarter ended June 30, 2008 compared with $3.4 million for the same period in the prior year primarily as the result of higher retail banking fees and investment brokerage revenues,
partially offset by a decrease in mortgage revenues. For the nine months ended June 30, 2008, total non-interest income increased $1.8 million, or 20.6%, to $10.8 million compared with $8.9 million for the same nine-month period last year as
the result of significant increases in mortgage revenues, retail banking fees, investment brokerage revenues and gain on the sales of securities.



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Mortgage revenues decreased 7.7% to $1.9 million during the quarter ended June 30, 2008 on loan
sales of $331.7 million, compared with mortgage revenues of $2.0 million during the quarter ended June 30, 2007 on loan sales of $399.3 million. For the nine months ended June 30, 2008, mortgage revenues increased to $5.3 million on
loan sales of $1.0 billion compared with revenues of $4.5 million on loan sales of $991.4 million for the same nine-month period last year. The Company experienced a modest reduction in loan sales activity in the June 2008 quarter as the result of
weakened loan demand caused by an overall shrinkage in the number of qualified, credit-worthy borrowers in the market as may potential borrowers were impacted by the national credit crisis. However, the Company realized higher gross revenue margins
during the 2008 periods due primarily to a shift in the mix of the types of loans originated to products with higher sales margins and to reduced market competition. Mortgage revenues for the three and nine months ended June 30, 2008 were
reduced by a $200,000 settlement payment related to early payment defaults on loans sold to one of the Companys major loan investors. Management currently does not anticipate similar settlements with its other investors.

Retail banking fees increased 4.6% to $961,000 during the quarter ended June 30, 2008 from $919,000 during the same 2007 quarter. For the nine months
ended June 30, 2008, retail banking fees increased to $2.9 million, or 19.0%, compared with $2.5 million for the same nine-month period last year. The increases were primarily the result of the increase in core deposits and a change in the
Companys policy on account overdraft fees.

Investment brokerage revenuestotaled $266,000 and $837,000 for the three and nine months
ended June 30, 2008, respectively, compared with $159,000 and $534,000, respectively, for the same periods a year ago. The Company operates an investment brokerage division whose operations consist principally of brokering bonds from wholesale
brokerage houses to bank, municipal and individual investors. Revenues are generated on trading spreads and fluctuate with changes in trading volumes and market interest rates. The increased revenues in the 2008 periods were the result of successful
sales efforts to new customers combined with an improved bond sales environment caused by the steepened interest-rate yield curve.

Gain on sales of
securities totaled $8,000 for the three months ended June 30, 2008 and resulted from the sale of $20.9 million of debt securities classified as available for sale and $426,000 in equity securities classified as available for sale
compared with no gain on sales for the same period a year ago. Gain on sales of securities totaled $325,000 for the nine months ended June 30, 2008 and resulted from sales of $45.7 million of debt securities classified as available for
sale and $426,000 in equity securities available for sale compared with a $144,000 gain for the nine months ended June 30, 2007 on sales of $773,000 of available-for-sale equity securities.

Non-Interest Expense

Total non-interest expense
increased $2.8 million to $8.5 million for the quarter ended June 30, 2008 compared with $5.8 million for the same period a year ago and increased $5.2 million to $22.2 million for the nine months ended June 30, 2008 compared with
$16.9 million for the nine months ended June 30, 2007. Non-interest expense for the 2008 periods included a $1.6 million charge for the separation payment, related payroll taxes and legal expenses resulting from the resignation of the
Companys former chief executive officer on May 1, 2008. In addition, the strategic growth in the number of banking locations in 2007 significantly increased non-interest expense during the 2008 periods.

Salaries and employee benefits expenseincreased $1.7 million to $4.5 million for the quarter ended June 30, 2008 compared with $2.8 million for the
quarter ended June 30, 2007 and increased $2.5 million to $10.7 million for the nine months ended June 30, 2008 compared with $8.3 million for the nine months ended June 30, 2007. Salaries and employee benefits expense for the 2008
periods included $1.4 million in separation payments and $21,000 in related payroll taxes resulting from the resignation of the Companys former chief executive officer. In addition, the increases resulted from the expenses associated with the
additional employees at the new Clayton and downtown St. Louis bank locations opened during the second half of calendar year 2007 and staff expansion necessary to support increased commercial loan activity.

Occupancy, equipment and data processing expense increased $314,000 to $1.8 million for the three-month period ended June 30, 2008 compared with $1.5
million for the three-month period ended June 30, 2007 and increased to $5.2 million for



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the nine months ended June 30, 2008 compared with $4.1 million for the nine months ended June 30, 2007. The increases were primarily due to the new
Clayton and downtown St. Louis bank locations and increased data processing costs related to increased loan and deposit activity.

Advertising
expense decreased $102,000 to $293,000 for the three-month period ended June 30, 2008 compared with $394,000 for the three-month period ended June 30, 2007 and decreased $86,000 to $927,000 for the nine months ended June 30,
2008 compared with $1.0 million for the nine months ended June 30, 2007. The decreases were generally due to a reduction in the overall level of advertising during the 2008 periods.

Professional fees increased $117,000 to $435,000 for the three-month period ended June 30, 2008 compared with $318,000 for the three-month period ended June 30, 2007 and increased $164,000 to
$1.1 million for the nine months ended June 30, 2008 compared with $979,000 for the nine months ended June 30, 2007. The increases were primarily due to $123,000 in legal expenses related to the resignation of the Companys former
chief executive officer.

FDIC deposit insurance premium expenseincreased $160,000 to $182,000 for the quarter ended June 30, 2008
compared with the same 2007 quarter and increased $510,000 to $572,000 for the nine months ended June 30, 2008 compared with $62,000 for the nine months ended June 30, 2007. The increase was a result of the final utilization, during the
quarter ended December 31, 2007, of the one-time assessment credit which was provided to eligible insured depository institutions under the Federal Deposit Insurance Reform Act of 2005. Absent any premium increase resulting from recent bank
failures, management expects future quarterly FDIC insurance premium expense to be consistent with the amount recorded in the quarter ended June 30, 2008.

Gain on derivative instrumentswas $266,000 for the quarter ended June 30, 2008 compared with a gain of $131,000 for the quarter ended June 30, 2007. Gains on derivative instruments were $331,000 and $445,000 for the
nine-month periods ended June 30, 2008 and 2007, respectively. The Company entered into interest rate swap agreements during November 2004 which were designed to convert the fixed rates paid on certain brokered certificates of deposits into
variable, LIBOR-based rates. The Company uses long-haul, fair-value, hedge accounting. Under this method, any hedge ineffectiveness was deemed not material and the impact was recognized as a charge or credit to earnings during the period in which
the change occurred. See Quantitative and Qualitative Disclosures About Market Risk and Off-Balance Sheet Arrangements.

Data processing
termination expensetotaled $220,000 for the nine months ended June 30, 2007 due to the write off, during December 2006, of capitalized expenses related to the termination of a contract to convert the Companys core data processing
system. The Company recovered $180,000 of this expense during the quarter ended June 30, 2008.

Real estate foreclosure losses and
expense, netinclude realized losses on the final disposition of foreclosed properties, additional write-downs for declines in the fair market values of properties which occur subsequent to foreclosure and expenses incurred in
connection with maintaining the properties until they are sold. Real estate foreclosure losses and expense, net increased $534,000 to $677,000 for the quarter ended June 30, 2008 compared with $143,000 for the same quarter last year and
increased $597,000 to $1.1 million for the nine-month period ended June 30, 2008 compared with $463,000 for the same nine-month period last year. The increases were generally due to the overall increased foreclosure activity and the related
realized losses on sales, and to a $200,000 additional write-down during the June 2008 quarter related to a $2.3 million commercial office building in St. Louis County, Missouri. See Non-Performing Assets.

Income Taxes

The provision for income taxes was
$685,000 and $3.3 million for the three and nine months ended June 30, 2008, respectively, compared with $975,000 and $3.3 million for the three and nine months ended June 30, 2007, respectively. The effective tax rate for the nine months
ended June 30, 2008 was 32.5% compared with 33.1% for the same 2007 period. The lower effective tax rate was primarily the result of a $150,000 benefit in the December 2007 quarter related to a change in the estimated amount of the
Companys tax liability.



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NON-PERFORMING ASSETS

Non-performing assets at June 30, 2008 and September 30, 2007 are summarized as follows:



|                                                |  |                        |        |   |                   |   |        |  
|----------------------------------------------- |  | ---------------------- | ------ | - | ----------------- | - | ------ | -
|                                                |  | June 30,2008           |        |   | September 30,2007 |  
|                                                |  | (Dollars in thousands) |       
|Non-accrual loans:                              |  |                        |        |   |                   |   |        |  
|Residential real estate                         |  | $                      | 2,725  |   |                   | $ | 2,082  |  
|Commercial real estate                          |  |                        | 1,133  |   |                   |   | 3,708  |  
|Real estate construction and development        |  |                        | 218    |   |                   |   |       |  
|Commercial and industrial                       |  |                        | 240    |   |                   |   |       |  
|Home equity                                     |  |                        | 948    |   |                   |   | 554    |  
|Other                                           |  |                        | 93     |   |                   |   | 105    |  
|                                                |  |                        |        |   |                   |   |        |  
|Total non-accrual loans                         |  |                        | 5,357  |   |                   |   | 6,449  |  
|                                                |  |                        |        |   |                   |   |        |  
|Accruing loans past due 90 days or more:        |  |                        |        |   |                   |   |        |  
|Residential real estate                         |  |                        | 2,809  |   |                   |   | 2,564  |  
|Commercial real estate                          |  |                        | 553    |   |                   |   | 44     |  
|Real estate construction and development        |  |                        | 953    |   |                   |   |       |  
|Home equity                                     |  |                        | 1,301  |   |                   |   | 1,064  |  
|Other                                           |  |                        | 46     |   |                   |   | 150    |  
|                                                |  |                        |        |   |                   |   |        |  
|Total accruing loans past due 90 days or more   |  |                        | 5,662  |   |                   |   | 3,822  |  
|                                                |  |                        |        |   |                   |   |        |  
|Troubled-debt restructurings                    |  |                        | 5,076  |   |                   |   | 209    |  
|                                                |  |                        |        |   |                   |   |        |  
|Total non-performing loans                      |  |                        | 16,095 |   |                   |   | 10,480 |  
|Real estate acquired in settlement of loans     |  |                        | 4,779  |   |                   |   | 3,090  |  
|Other nonperforming assets                      |  |                        | 43     |   |                   |   | 43     |  
|                                                |  |                        |        |   |                   |   |        |  
|Total non-performing assets                     |  | $                      | 20,917 |   |                   | $ | 13,613 |  
|                                                |  |                        |        |   |                   |   |        |  
|Ratio of non-performing loans to total loans    |  |                        | 1.40   | % |                   |   | 1.03   | %
|Ratio of non-performing assets to totals assets |  |                        | 1.62   | % |                   |   | 1.20   | %

Nonperforming loans increased to $16.1 million at June 30, 2008 from $10.5 million at September 30,
2007. The increase was primarily due to an increase in troubled debt restructurings to $5.1 million at June 30, 2008 compared with $209,000 at September 30, 2007 caused by the restructuring of a $3.4 million commercial real estate loan.
The largest restructured credit at June 30, 2008 was a $3.4 million loan secured by commercial real estate. Because of the borrowers weakened financial condition, the loan was restructured during the quarter ended June 30, 2008 to
reduce the interest rate to a rate that was closer to current market rates, and to extend the amortization term from 25 to 30 years. The remaining balance of troubled debt restructurings at June 30, 2008 consisted of 16 residential mortgage
loans to 9 borrowers. The restructured terms of the loans generally included a reduction of the interest rates and the addition of past due interest to the principal balance of the loans. At June 30, 2008, one restructured loan totaling
$119,000 was past due 90 days or more under the restructured loan terms. Management believes the loans are adequately collateralized and properly valued at June 30, 2008.

Non-accrual loans decreased from $6.4 million to $5.4 million during the nine-month period ended June 30, 2008 primarily as a result of the foreclosure on a $2.3 million loan secured by commercial real estate
during January 2008 which was



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previously classified as non-accrual. Non-accrual residential real estate loans at June 30, 2008 consisted of 30 individual loans totaling $2.7 million.
Non-accrual commercial loans at June 30, 2008 consisted of five loans secured by commercial real estate totaling $1.1 million.

Accruing loans greater
than 90 days past due increased from $3.8 million at September 30, 2007 to $5.7 million at June 30, 2008, primarily as the result of the weakened economic environment. The major components of the increase included a $953,000 increase
in real estate construction and development loans, a $509,000 increase in commercial and multi-family real estate loans, a $245,000 increase in loans secured by residential real estate and a $237,000 increase in home equity loans. Loans are placed
on non-accrual status when, in the opinion of management, there is reasonable doubt as to the collectability of interest or principal. Management considers many factors before placing a loan on non-accrual, including the overall financial condition
of the borrower, the progress of managements collection efforts and the value of the underlying collateral.

Real estate acquired in settlement of
loans totaled $4.8 million at June 30, 2008 compared with $3.1 million at September 30, 2007. The balance at June 30, 2008 consisted of 22 residential real estate properties and three commercial real estate properties in the
Companys two primary market areas of St. Louis and Kansas City. The Companys largest foreclosed property at June 30, 2008 was a $2.3 million commercial office building in St. Louis County, Missouri. The property was acquired through
foreclosure in January 2008 and management is currently working through lease issues with the tenant and a potential purchaser. Lease payments are being paid as agreed.

The total balance of impaired loans at June 30, 2008 and September 30, 2007 was $12.0 million and $6.7 million, respectively. Impaired loans with specific allowance for loan losses totaled $6.9 million and
$847,000 at June 30, 2008 and September 30, 2007, respectively, and the specific allowance for loan losses related to these loans totaled $1.1 million and $493,000 at June 30, 2008 and September 30, 2007, respectively. Impaired
loans with no specific allowance for loan losses totaled $5.1 million and $5.9 million at June 30, 2008 and September 30, 2007, respectively.

ALLOWANCE FOR LOAN LOSSES

The following table is a summary of the activity in the allowance for loan losses for the periods indicated:



|                                                                    |  |                           |        |   |                   |   |        |  
|------------------------------------------------------------------- |  | ------------------------- | ------ | - | ----------------- | - | ------ | -
|                                                                    |  | Nine Months EndedJune 30, |       
|                                                                    |  | 2008                      |        |   | 2007              |  
|                                                                    |  | (Dollars In Thousands)    |       
|Balance, beginning of period                                        |  | $                         | 10,421 |   |                   | $ | 7,817  |  
|Provision charged to expense                                        |  |                           | 4,902  |   |                   |   | 3,167  |  
|Recoveries                                                          |  |                           | 116    |   |                   |   | 26     |  
|Charge-offs:                                                        |  |                           |        |   |                   |   |        |  
|Residential real estate - first liens                               |  |                           | (567   | ) |                   |   | (240   | )
|Residential real estate - second and other liens                    |  |                           | (1,238 | ) |                   |   | (415   | )
|Real estate construction and development                            |  |                           | (150   | ) |                   |   |       |  
|Home equity                                                         |  |                           | (1,014 | ) |                   |   | (250   | )
|Commercial and multi-family real estate                             |  |                           | (374   | ) |                   |   |       |  
|Consumer and other                                                  |  |                           | (187   | ) |                   |   | (106   | )
|                                                                    |  |                           |        |   |                   |   |        |  
|Total charge-offs                                                   |  |                           | (3,530 | ) |                   |   | (1,011 | )
|                                                                    |  |                           |        |   |                   |   |        |  
|Balance, end of period                                              |  | $                         | 11,909 |   |                   | $ | 9,999  |  
|                                                                    |  |                           |        |   |                   |   |        |  
|                                                                    |  |                          
|                                                                    |  | June 30,2008              |        |   | September 30,2007 |  
|Specific loan loss reserves related to non-performing loans         |  | $                         | 1,082  |   |                   | $ | 493    |  
|Balance of non-performing loans with no specific loan loss reserves |  | $                         | 9,220  |   |                   | $ | 9,633  |  
|Ratio of allowance to total loans outstanding                       |  |                           | 1.04   | % |                   |   | 1.02   | %

Net charge-offs for the quarter ended June 30, 2008 totaled $1.3 million, or 0.48% of average loans on an
annualized basis



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compared with $422,000, or 0.17% of average loans on an annualized basis, for the same quarter last year. For the nine-month periods, net charge-offs totaled
$3.4 million, or 0.42% of average loans on an annualized basis, in 2008 compared with $985,000, or 0.14% of average loans on an annualized basis in 2007. Net charge-offs in the June 2008 quarter included $911,000 in charge-offs on single-family
residential first and second mortgage loans, $276,000 in charge-offs on home equity loans and $121,000 in charge-offs on real estate construction and development loans. Management adheres to specific loan underwriting guidelines focusing primarily
on residential and commercial real estate and home equity loans secured by one- to four-family and commercial properties within its primary market areas and, as a result, while charge-offs in the 2008 period increased, the Companys five-year
average annual historical charge-off experience has been low, totaling only $565,000, or 0.05% of average loans. The Company was historically a lender of only 1-4 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 estate, losses occur more frequently when property values are declining and borrowers are
losing equity in the underlying collateral. Recent declines in residential real estate values in the Companys market areas, as well as nationally, contributed to the increased charge-offs in 2008. The Company has not engaged in sub-prime
lending activities.

The provision for loan losses is determined by management as the amount necessary to bring the allowance for loan losses to a level
that is considered adequate to absorb probable losses 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 probable losses inherent in the loan portfolio. Managements estimates are determined by quantifying certain risks in the portfolio that are affected primarily by changes in the size and composition of the portfolio combined with
an analysis of past-due and classified loans, but can also be affected by: changes in lending policies and procedures, including underwriting standards and collections, charge-off and recovery practices and changes in national and local economic
conditions and developments.

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 loans are individually reviewed and assigned a credit risk rating on an annual basis by the
internal loan committee. Consumer and home equity loans are assigned standard risk weightings that determine the allocation percentage.

Generally, when commercial loans are over 30 days delinquent or residential, consumer or 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.

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 the allowance are adjusted to reflect the impact of current conditions, including actual collection and charge-off experience. Any material
increase in non-performing loans could adversely affect our financial condition and results of operation.

Management believes that the amount maintained
in the allowance will be adequate to absorb probable losses inherent in the portfolio. Although management believes that it uses the best information available to make such determinations, future adjustments to the allowance for loan losses may be
necessary and results of operations could be significantly and adversely affected if circumstances differ substantially from the assumptions used in making the determinations. While management believes it has established the allowance for loan
losses in accordance with U.S. generally accepted accounting principles, there can be no assurance that the Banks regulators, in reviewing the Banks loan portfolio, will not request the Bank to significantly increase its allowance for
loan losses. In addition, because future events affecting borrowers and collateral



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cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that a substantial increase will not
be necessary should the quality of any loans deteriorate as a result of the factors discussed above. Any material increase in the allowance for loan losses could adversely affect the Companys financial condition and results of operations.

FINANCIAL CONDITION

Equity securities available
for saleincreased $8.1 million to $12.1 million at June 30, 2008 from $4.0 million at September 30, 2007 largely resulting from the purchase of $8.9 million of Fannie Mae 8.25% Series S fixed-rate preferred stock during December
2007 and February 2008. The total market value of these Fannie Mae securities at June 30, 2008 was $8.0 million, which was $851,000 less than the Companys original cost, resulting in a $527,000 after-tax charge to other comprehensive
income. See Note 5 of Notes to Unaudited Consolidated Financial Statements.

Debt securities held to maturitydecreased from $6.0
million at September 30, 2007 to $0 at June 30, 2008 and debt securities available for sale decreased from $7.0 million at September 30, 2007 to $1.0 million at June 30, 2008, while mortgage-backed securities
held to maturity increased to $16.7 million at June 30, 2008 from $371,000 at September 30, 2007. Such securities are primarily held as collateral to secure large commercial and municipal deposits. The total balance held in these
securities is adjusted as individual securities mature to reflect fluctuations in the balances of the deposits they are securing. The increase in mortgage-backed securities resulted primarily from the securitization of $16.3 million of individual
portfolio loans into Fannie Mae mortgage-backed securities during April 2008.

Stock in the Federal Home Loan Bank of Des Moinesincreased
$3.5 million to $11.8 million at June 30, 2008 from $8.3 million at September 30, 2007. The increase was due to the increase in the balance of advances from the FHLB, as the Bank is generally required to hold stock equal to 5% of its
total FHLB borrowings.

Advances from the Federal Home Loan Bank of Des Moinesincreased $64.6 million to $223.0 million at June 30,
2008 from $158.4 million at September 30, 2007 and borrowings from the Federal Reserve Bank of St. Louisincreased to $95.0 million at June 30, 2008 from $0 at September 30, 2007. The Company supplements its primary
funding source, retail deposits, with wholesale funding sources consisting of borrowings from the FHLB, brokered certificates of deposit acquired on a national level and short-term borrowings from the Discount Window of the Federal Reserve Bank.
Management actively chooses between these wholesale funding sources depending on their relative costs. The increased balances were used to fund asset growth and replace maturing brokered certificates of deposit. See Net Interest Income.

Notes payableincreased $4.7 million to $7.7 million at June 30, 2008 compared with $3.0 million at September 30, 2007. See
Liquidity and Capital Resources.

Accrued interest payable decreased $1.4 million to $1.1 million at June 30, 2008 compared with
$2.5 million at September 30, 2007 due primarily to a reduction in the balance of brokered time deposits during the period, which pay interest at maturity.

Due to other banks decreased $3.8 million to $13.7 million at June 30, 2008 compared with $17.5 million at September 30, 2007. Due to other banks represents 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.

Total stockholders equity at June 30, 2008 was $86.3 million, an increase of $5.5 million from $80.8 million at September 30, 2007. The
increase was primarily attributable to net income totaling $6.9 million, the exercise of 245,542 stock options for $1.2 million and the amortization of equity trust expense of $704,000, partially offset by dividend payments of $2.8 million, the
repurchase, during the quarter ended December 31, 2007, of 32,500 shares of the Companys common stock in the open market at a total cost of $389,000 and the repurchase of 17,271 shares of the Companys common stock at a total cost of
$186,000 from participants in the Companys stock-based compensation plans to facilitate their payroll tax withholding requirements. Accumulated other comprehensive loss increased $571,000 at June 30, 2008 from $66,000 at
September 30, 2007, primarily as the result of a decline in the fair market value of Fannie Mae preferred stock.



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LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2008, the Bank had outstanding commitments to originate loans totaling $133.2 million and commitments to sell loans totaling $165.8 million. At June 30, 2008, certificates of deposit totaling
$363.7 million were scheduled to mature in one year or less. Based on past experience, management believes the majority of certificates of deposit maturing in one year or less will remain with the Bank.

If the Bank or the Company require funds beyond their ability to generate them internally, the Bank has the ability to borrow funds from the FHLB and the Federal Reserve
Bank and to raise certificates of deposit on a national level through broker relationships. The borrowings from the FHLB are obtained under a blanket agreement, which assigns all investments in FHLB stock, qualifying first residential mortgage
loans, residential loans held for sale and home equity loans with a 90% or less loan-to-value ratio as collateral to secure the amounts borrowed. Total borrowings from the FHLB are subject to limitations based upon a risk assessment of the Bank. At
June 30, 2008, the Bank had approximately $59.7 million in additional borrowing authority under the arrangement with the FHLB in addition to the $223.0 million in advances outstanding at that date.

The borrowings from the Federal Reserve Bank consist of short-term borrowings (generally maturing overnight or within 28 days) borrowed under the Banks primary
credit line at the Federal Reserves Discount Window. The Bank had approximately $65.8 million in additional borrowing authority at June 30, 2008 under this arrangement in addition to the $95.0 million in borrowings outstanding at that
date and had approximately $214.4 million of commercial loans pledged as collateral under this agreement.

In addition, at June 30, 2008, the Company
had the following borrowings with a correspondent bank:



|                                          |  |                       |      |                   |   |    
|----------------------------------------- |  | --------------------- | ---- | ----------------- | - | ---
|                                          |  | TotalAmountAuthorized |      | AmountOutstanding
|                                          |  | (In Millions)        
|Revolving line of credit with no maturity |  | $                     | 10.0 |                   | $ |   
|Term note maturing May 20, 2010           |  |                       | 2.7  |                   |   | 2.7
|Term note maturing September 30, 2008     |  |                       | 7.0  |                   |   | 5.0
|                                          |  |                       |      |                   |   |    
|                                          |  | $                     | 19.7 |                   | $ | 7.7
|                                          |  |                       |      |                   |   |    

SOURCES AND USES OF CASH

The Company is a large originator of residential mortgage loans with substantially all of such loans sold in the secondary residential mortgage market. Consequently, the primary source and use of cash in
operations is the origination and subsequent sale of loans held for sale. During the nine months ended June 30, 2008, the origination of loans held for sale used $1.04 billion of cash and the sales of such loans provided cash totaling
$1.02 billion compared with originations of $1.02 billion and sales of $994.9 million during the nine months ended June 30, 2007.

The primary use of
cash from investing activities is the origination of loans receivable which are held in portfolio. During the nine months ended June 30, 2008, the Company had a net increase in loans receivable of $139.9 million compared with an
increase of $143.9 million for the nine months ended June 30, 2007. In addition, the Company purchased $85.2 million in debt securities and $9.3 million in equity securities during the nine months ended June 30, 2008 compared with
purchases of $37.5 million in debt securities and $224,000 in equity securities during the nine months ended June 30, 2007. Sources of cash from investing activities also included sales and maturities of debt securities totaling $45.7 million
and $52.1 million, respectively, during the nine months ended June 30, 2008 compared to sales and maturities of debt securities totaling $0 and $40.0 million, respectively, during the nine months ended June 30, 2007.

The Companys primary sources and uses of funds from financing activities during the nine months ended June 30, 2008 included a $2.2 million
decrease in deposits compared with a $170.3 million increase for the nine months ended June 30, 2007, a $64.6 million increase in advances from the Federal Home Loan Bank compared with a $4.8 million decrease during the same period last year
and a $95.0 million increase in borrowings from the Federal Reserve Bank for the nine months ended June 30, 2008 compared with no increase during the same period last year.



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The following table presents the maturity structure of time deposits and other maturing liabilities at June 30,
2008:



|                                      |  |                        |         |                |   |              |  |                 |       |                   |   |        |  |   |       
|------------------------------------- |  | ---------------------- | ------- | -------------- | - | ------------ |  | --------------- | ----- | ----------------- | - | ------ |  | - | ------
|                                      |  | June 30, 2008         
|                                      |  | Certificatesof Deposit |         | FHLBBorrowings |   | NotesPayable |  | OtherBorrowings |       | Due to OtherBanks
|                                      |  | (In thousands)        
|Maturing in:                          |  |                        |         |                |   |              |  |                 |       |                   |   |        |  |   |       
|Three months or less                  |  | $                      | 131,799 |                | $ | 131,900      |  | $               | 5,000 |                   | $ | 95,000 |  | $ | 13,652
|Over three months through six months  |  |                        | 157,381 |                |   | 5,000        |  |                 |      |                   |   |       |  |   |      
|Over six months through twelve months |  |                        | 74,474  |                |   | 20,000       |  |                 |      |                   |   |       |  |   |      
|Over twelve months                    |  |                        | 58,588  |                |   | 66,100       |  |                 | 2,725 |                   |   |       |  |   |      
|                                      |  |                        |         |                |   |              |  |                 |       |                   |   |        |  |   |       
|Total                                 |  | $                      | 422,242 |                | $ | 223,000      |  | $               | 7,725 |                   | $ | 95,000 |  | $ | 13,652
|                                      |  |                        |         |                |   |              |  |                 |       |                   |   |        |  |   |       

CONTRACTUAL OBLIGATIONS

In addition to its owned banking facilities, the Company has entered into long-term operating leases to support ongoing activities. The required payments under such commitments at June 30, 2008 are as follows:



|                             |  |   |          
|---------------------------- |  | - | ---------
|Less than one year           |  | $ | 598,994  
|Over 1 year through 3 years  |  |   | 1,014,632
|Over 3 years through 5 years |  |   | 935,775  
|Over 5 years                 |  |   | 1,533,586
|                             |  |   |          
|Total                        |  | $ | 4,082,987
|                             |  |   |          

REGULATORY CAPITAL

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

The following table illustrates the Banks actual regulatory capital levels compared with its regulatory capital requirements at June 30, 2008 and
September 30, 2007.



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|                                                    |  |                        |         |       |                              |   |                                 |                                                                               |        |  |      |        |  |       |         |  |       |  
|--------------------------------------------------- |  | ---------------------- | ------- | ----- | ---------------------------- | - | ------------------------------- | ----------------------------------------------------------------------------- | ------ |  | ---- | ------ |  | ----- | ------- |  | ----- | -
|                                                    |  |                        |         |       |                              |   | Regulatory Capital Requirements |                                                                              
|                                                    |  | Actual                 |         |       | For CapitalAdequacy Purposes |   |                                 | To be Categorized asWell
CapitalizedUnder PromptCorrective ActionProvisions |       
|                                                    |  | Amount                 |         | Ratio |                              |   | Amount                          |                                                                               | Ratio  |  |      | Amount |  | Ratio |        
|                                                    |  | (Dollars in thousands) |        
|As of June 30, 2008:                                |  |                        |         |       |                              |   |                                 |                                                                               |        |  |      |        |  |       |         |  |       |  
|Tangible capital (to total assets)                  |  | $                      | 106,652 |       | 8.29                         | % |                                 | $                                                                             | 19,302 |  | 1.50 | %      |  |       | N/A     |  | N/A   |  
|Total risk-based capital (to risk-weighted assets)  |  |                        | 117,465 |       | 10.76                        | % |                                 |                                                                               | 87,340 |  | 8.00 | %      |  | $     | 109,175 |  | 10.00 | %
|Tier I risk-based capital (to risk-weighted assets) |  |                        | 106,652 |       | 9.77                         | % |                                 |                                                                               | 54,588 |  | 5.00 | %      |  |       | 65,505  |  | 6.00  | %
|Tier I leverage capital (to average assets)         |  |                        | 106,652 |       | 8.29                         | % |                                 |                                                                               | 51,473 |  | 4.00 | %      |  |       | 64,341  |  | 5.00  | %
|                                                    |  |                        |         |       |                              |  
|As of September 30, 2007:                           |  |                        |         |       |                              |   |                                 |                                                                               |        |  |      |        |  |       |         |  |       |  
|Tangible capital (to total assets)                  |  | $                      | 98,974  |       | 8.79                         | % |                                 | $                                                                             | 16,892 |  | 1.50 | %      |  |       | N/A     |  | N/A   |  
|Total risk-based capital (to risk-weighted assets)  |  |                        | 108,751 |       | 11.18                        | % |                                 |                                                                               | 77,790 |  | 8.00 | %      |  | $     | 97,237  |  | 10.00 | %
|Tier I risk-based capital (to risk-weighted assets) |  |                        | 98,974  |       | 10.18                        | % |                                 |                                                                               | 48,618 |  | 5.00 | %      |  |       | 58,342  |  | 6.00  | %
|Tier I leverage capital (to average assets)         |  |                        | 98,974  |       | 8.79                         | % |                                 |                                                                               | 45,045 |  | 4.00 | %      |  |       | 56,307  |  | 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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

AND OFF-BALANCE SHEET ARRANGEMENTS

There have been no material changes in the Companys quantitative or qualitative aspects of market risk during the quarter ended June 30, 2008 from that disclosed in the Companys Annual Report on Form 10-K for the year ended
September 30, 2007.

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

For the nine months ended June 30, 2008, the Company did not engage in any off-balance-sheet transactions reasonably likely to have a material effect on its
financial condition, results of operations or cash flows.

The Company originates and purchases derivative financial instruments, including interest rate
lock commitments, forward contracts to sell mortgage-backed securities and interest rate swaps. Derivative financial instruments originated by the Company consist of interest rate lock commitments to originate residential loans. Commitments to
originate loans consist primarily of residential real estate loans. At June 30, 2008, the Company had issued $133.2 million of unexpired interest rate lock commitments to loan customers compared with $144.7 million of unexpired commitments at
September 30, 2007.

The Company typically economically hedges these derivative commitments through one of two means  either by obtaining a
corresponding best-efforts lock commitment with an investor to sell the loan at an agreed upon price, or by forward sales of mortgage-backed securities, which is a means of matching a corresponding derivative asset that has similar



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characteristics as the bank-issued commitment but changes directly opposite in fair value from market movements. Loans hedged through forward sales of
mortgage-backed securities are sold individually or in pools on a mandatory delivery basis to investors, whereas the best efforts sales are locked on a loan-by-loan basis shortly after issuing the rate lock commitments to customers. The Company had
outstanding forward commitments to sell mortgage-backed securities totaling $15.0 million in notional value at September 30, 2007. These hedges were matched against $15.3 million of interest rate lock commitments at September 30, 2007 that
were to be sold through the mandatory delivery of loan pool sales. The carrying value of the interest rate lock commitment liabilities included in the consolidated balance sheets was a credit balance totaling $125,000 at September 30, 2007. The
carrying value of the forward sales commitment assets included in the consolidated balance sheets was a credit balance totaling $25,000 at September 30, 2007. There were no such forward commitments outstanding at June 30, 2008.

The Company entered into interest rate swap agreements during November 2004 which were designed to convert the fixed rates paid on certain brokered certificates of
deposit into variable, LIBOR-based rates. The effect of the swap agreements result in the counterparty paying the fixed rate to the Company while the Company pays the variable LIBOR-based rate to the counterparty. Effective January 1, 2006, the
Company designated $80.0 million of interest rate swaps as fair value hedges of $80.0 million of the fixed-rate, brokered certificates of deposit under Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Financial Instruments and Hedging Activities (SFAS No. 133) using long-haul, fair-value, hedge accounting. At June 30, 2008, these fair value hedges were considered to be highly effective. Any hedge ineffectiveness was
deemed not material and the impact was recognized as a charge or credit to earnings, as appropriate, during the period in which the change occurred. The notional amounts of the liabilities being hedged were $10.0 million and $80.0 million at
June 30, 2008 and September 30, 2007, respectively. During the nine months ended June 30, 2008, interest rate swaps with notional amounts totaling $70 million were called by the counterparty under the terms of the contracts in
response to the declining interest rate environment and the remaining $10 million in notional amount was scheduled to be called on July 28, 2008. At June 30, 2008, swaps in a net settlement payable position totaled $13,000 and there were
no swaps in a net settlement receivable position. At September 30, 2007, there were no swaps in a net settlement receivable position and swaps in a net settlement payable position totaled $864,000. Net gains of $266,000 and $331,000 were
recognized on fair value hedges during the three and nine months ended June 30, 2008, respectively, compared with net gains of $131,000 and $445,000 during the three and nine months ended June 30, 2007, respectively.

The maturity date, notional amounts, interest rates paid and received and fair value of the Companys interest rate swap agreements as of June 30, 2008 and
September 30, 2007 are summarized as follows:



|                   |  |                |            |                  |      |   |                      |      |                    |                                 |   |         |                |  |                  |            |  |                      |   |  |                                 |   |  |   |          |  
|------------------ |  | -------------- | ---------- | ---------------- | ---- | - | -------------------- | ---- | ------------------ | ------------------------------- | - | ------- | -------------- |  | ---------------- | ---------- |  | -------------------- | - |  | ------------------------------- | - |  | - | -------- | -
|                   |  |                |            | June 30, 2008    |      |   |                      |      | September 30, 2007 |                                
|Maturity Date      |  | NotionalAmount |            | InterestRatePaid |      |   | InterestRateReceived |      |                    | EstimatedFair ValueOf Liability |   |         | NotionalAmount |  | InterestRatePaid |            |  | InterestRateReceived |   |  | EstimatedFair ValueOf Liability |  
|October 20, 2008   |  | $              |           |                  |     |   |                      |     |                    |                                 | $ |        |                |  | $                | 10,000,000 |  | 5.50                 | % |  | 4.30                            | % |  | $ | (55,664  | )
|November 19, 2009  |  |                |           |                  |     |   |                      |     |                    |                                 |   |        |                |  |                  | 10,000,000 |  | 5.52                 | % |  | 3.50                            | % |  |   | (26,557  | )
|November 23, 2009  |  |                |           |                  |     |   |                      |     |                    |                                 |   |        |                |  |                  | 10,000,000 |  | 5.46                 | % |  | 3.75                            | % |  |   | (72,534  | )
|November 26, 2010  |  |                |           |                  |     |   |                      |     |                    |                                 |   |        |                |  |                  | 10,000,000 |  | 5.49                 | % |  | 4.13                            | % |  |   | (205,111 | )
|November 26, 2010  |  |                |           |                  |     |   |                      |     |                    |                                 |   |        |                |  |                  | 5,000,000  |  | 5.48                 | % |  | 4.13                            | % |  |   | (101,518 | )
|November 26, 2010  |  |                |           |                  |     |   |                      |     |                    |                                 |   |        |                |  |                  | 5,000,000  |  | 5.47                 | % |  | 4.13                            | % |  |   | (100,482 | )
|January 24, 2010   |  |                |           |                  |     |   |                      |     |                    |                                 |   |        |                |  |                  | 10,000,000 |  | 5.44                 | % |  | 3.70                            | % |  |   | (43,702  | )
|January 28, 2011   |  |                | 10,000,000 |                  | 2.44 | % |                      | 4.30 | %                  |                                 |   | (12,644 | )              |  |                  | 10,000,000 |  | 5.47                 | % |  | 4.30                            | % |  |   | (178,348 | )
|February 25, 2011  |  |                |           |                  |     |   |                      |     |                    |                                 |   |        |                |  |                  | 5,000,000  |  | 5.47                 | % |  | 4.80                            | % |  |   | (48,365  | )
|September 14, 2012 |  |                |           |                  |     |   |                      |     |                    |                                 |   |        |                |  |                  | 5,000,000  |  | 5.58                 | % |  | 4.25                            | % |  |   | (31,931  | )
|                   |  |                |            |                  |      |   |                      |      |                    |                                 |   |         |                |  |                  |            |  |                      |   |  |                                 |   |  |   |          |  
|Total              |  | $              | 10,000,000 |                  |      |   |                      |      |                    |                                 | $ | (12,644 | )              |  | $                | 80,000,000 |  |                      |   |  |                                 |   |  | $ | (864,212 | )
|                   |  |                |            |                  |      |   |                      |      |                    |                                 |   |         |                |  |                  |            |  |                      |   |  |                                 |   |  |   |          |  



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The gross amounts of interest paid to and received from the counterparty under the swap agreements and the related
average interest rates during the three and nine months ended June 30, 2008 and 2007 are as follows:



|                                |  |                            |       |   |                           |   |         |      |  |   |         |   |  |   |         |  
|------------------------------- |  | -------------------------- | ----- | - | ------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                |  | Three Months EndedJune 30, |       |   | Nine Months EndedJune 30, |  
|                                |  | 2008                       |       |   | 2007                      |   |         | 2008 |  |   | 2007    |  
|Interest paid (variable rate):  |  |                            |       |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Total amount (000s)             |  | $                          | 228.6 |   |                           | $ | 1,080.8 |      |  | $ | 1,805.9 |   |  | $ | 3,207.7 |  
|Average interest rate           |  |                            | 2.74  | % |                           |   | 5.40    | %    |  |   | 4.25    | % |  |   | 5.35    | %
|                                |  |                            |       |  
|Interest received (fixed rate): |  |                            |       |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Total amount (000s)             |  | $                          | 469.8 |   |                           | $ | 898.3   |      |  | $ | 2,068.5 |   |  | $ | 2,510.3 |  
|Average interest rate           |  |                            | 5.64  | % |                           |   | 4.49    | %    |  |   | 4.87    | % |  |   | 4.18    | %

CONTROLS AND PROCEDURES

Pulaski Financial maintains disclosure controls and procedures as such term is defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities
Exchange Act of 1934, as amended (the Exchange Act), that are designed to ensure that the information required to be disclosed in the reports that Pulaski Financial 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 Pulaski Financials management
including its principal executive and principal financial officers as appropriate to allow timely decisions regarding required disclosure.

During the
quarter ended June 30, 2008, Pulaski Financials management, including Pulaski Financials principal executive officer and principal financial officer, evaluated the effectiveness of Pulaski Financials disclosure controls and
procedures as of June 30, 2008, and concluded that Pulaski Financials disclosure controls and procedures were effective as of such date.

There
have been no changes in the Companys internal control over financial reporting during the quarter ended June 30, 2008 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over
financial reporting.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements (SFAS No. 157), which defines fair value, establishes a framework for measuring fair value in generally
accepted accounting standards, and expands disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal
years. In March 2008, the FASB issued Staff Position No. FAS 157-2 (FSP No. 157-2), which delays the effective date of SFAS No. 157 for nonfinancial assets and liabilities, except for items that are recognized or disclosed at
fair value in the financial statements on a recurring basis (at least annually), to fiscal years and interim periods beginning after November 15, 2008. Management has evaluated the requirements of SFAS No. 157 and believes it will not have
a material effect on the Companys financial condition or results of operations.

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

In February 2007, the FASB issued Statement No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an amendment of FASB Statement No. 115 (SFAS
No. 159). SFAS No. 159 provides companies with an option to report selected financial assets and liabilities at estimated fair value. Most of the provisions of SFAS No. 159



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are elective; however, the amendment to SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, applies to all entities that own
trading and available-for-sale securities. The fair value option created by SFAS No. 159 permits an entity to measure eligible items at fair value as of specified election dates. The fair value option (a) may generally be applied instrument by
instrument, (b) is irrevocable unless a new election date occurs, and (c) must be applied to the entire instrument and not to only a portion of the instrument. SFAS No. 159 is effective as of the beginning of an entitys first
fiscal year beginning after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of the fiscal year, has not yet issued financial
statements for any interim period of such year, and also elects to apply the provisions of SFAS No. 157. Management has evaluated the requirements of SFAS No. 159 and believes it will not have a material effect on the Companys
financial condition or results of operations.

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

In March 2008, the FASB issued
Statement No. 161, Disclosures about Derivative Instruments and Hedging ActivitiesAn Amendment of FASB Statement No. 133 (SFAS 161). SFAS 161 requires enhanced qualitative disclosures about objectives and
strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS 161 is effective for
financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Management is currently evaluating the impact of SFAS 161 on Companys consolidated financial statements.

In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of SFAS No. 109,
Accounting for Income Taxes (Interpretation No. 48), which clarifies the accounting for uncertainty in income taxes in financial statements and prescribes a recognition threshold and measurement attribute for financial
statement recognition and measurement of a tax position taken or expected to be taken. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Interpretation
No. 48 was effective for the Company beginning October 1, 2007. The adoption of Interpretation No. 48 did not have a material effect on the Companys financial condition or results of operations.

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

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



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##### Table of Contents

PART IIOTHER INFORMATION



|Item 1. | Legal Proceedings:
|------- | ------------------

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



|Item 1A. | Risk Factors:
|-------- | -------------

In addition to the other information set
forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended September 30, 2007, which could materially affect our business,
financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may
materially adversely affect our business, financial condition and/or operating results.



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

The following table provides information regarding the Companys purchases of its equity securities during the three months ended June 30, 2008.

ISSUER PURCHASES OF EQUITY SECURITIES



|                                     |  |                                            |  |                                       |       |                                                                                           |       |                                                                                                                          |        
|------------------------------------ |  | ------------------------------------------ |  | ------------------------------------- | ----- | ----------------------------------------------------------------------------------------- | ----- | ------------------------------------------------------------------------------------------------------------------------ | -------
|Period                               |  | (a)TotalNumberof Shares(or Units)Purchased |  | (b)AveragePricePaid perShare(or Unit) |       | (c)Total Number ofShares (or Units)Purchased
asPart of PubliclyAnnounced Plansor Programs |       | (d)Maximum Number(or ApproximateDollar Value) ofShares (or Units)That May Yet
BePurchased Under thePlans or Programs (1)
|April 1, 2008 through April 30, 2008 |  | 3,577                                      |  | $                                     | 10.90 |                                                                                           | 3,577 |                                                                                                                          | 386,203
|May 1, 2008 through May 31, 2008     |  |                                           |  |                                       |      |                                                                                           |      |                                                                                                                          | 386,203
|June 1, 2008 through June 30, 2008   |  |                                           |  |                                       |      |                                                                                           |      |                                                                                                                          | 386,203
|Total                                |  | 3,577                                      |  | $                                     | 10.90 |                                                                                           | 3,577 |                                                                                                                          |        



|(1) | In February 2007, the Company announced a repurchase program under which it would repurchase up to 497,000 shares of the Companys common stock. The repurchase program will
continue until it is completed or terminated by the Board of Directors.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 3. | Defaults Upon Senior Securities: Not applicable
|------- | -----------------------------------------------



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##### Table of Contents

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



|Item 5. | Other Information: Not applicable
|------- | ---------------------------------



|Item 6. | Exhibits:
|------- | ---------



|     |  |                                                                                                                   
|---- |  | ------------------------------------------------------------------------------------------------------------------
|3.1  |  | Articles of Incorporation of Pulaski Financial Corp.*                                                             
|     | 
|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****                                                                          
|     | 
|10.1 |  | Agreement of Purchase and Sale, dated May 21, 2008, between Pulaski Bank and United Trust Fund Limited Partnership
|     | 
|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, 2004.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------

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

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



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##### Table of Contents

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 8, 2008 |  |  |  | /s/ Gary W. Douglass                 
|                     |  |  |  | Gary W. Douglass                     
|                     |  |  |  | President and Chief Executive Officer
|                     |  | 
|Date: August 8, 2008 |  |  |  | /s/ Ramsey K. Hamadi                 
|                     |  |  |  | Ramsey K. Hamadi                     
|                     |  |  |  | Chief Financial Officer