##### Table of Contents

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



---



FORM 10-K



---



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



For the fiscal year ended September 30, 2004



OR



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



Commission File No.: 0-24571



---



PULASKI FINANCIAL CORP.

(Exact name of registrant as specified in its charter)



---



|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Missouri                                                       |  | 43-1816913                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)



12300 Olive
Boulevard, St. Louis, Missouri 63141

(Address of principal executive offices)



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



---



Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.01 per
share

(Title of class)



---



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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrants knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ̈.



Indicate by check mark whether the registrant is an
accelerated filer (as defined in Rule 12b-2 of the Act.)    Yes  x    No ̈.



The market value of
the voting and non-voting common equity held by non-affiliates as of the last business day of the registrants most recently completed second fiscal quarter was $91.7 million.



There were issued and outstanding 5,534,826 shares of the registrants common stock as of December 14, 2004



---



---

##### Table of Contents

Documents Incorporated by Reference



Portions of 2004 Annual Report to Stockholders (Part II).

Portions of the Definitive Proxy Statement for the 2005 Annual Meeting of Stockholders (Part III).



---

##### Table of Contents

INDEX



|           |  |                                                                                                                  |  |         
|---------- |  | ---------------------------------------------------------------------------------------------------------------- |  | --------
|           |  |                                                                                                                  |  | Page No.
|PART I     |  |                                                                                                                  |  |         
|           |  |                                                                                                                 
|Item 1.    |  | Business                                                                                                         |  | 1       
|           |  |                                                                                                                 
|Item 2.    |  | Properties                                                                                                       |  | 29      
|           |  |                                                                                                                 
|Item 3.    |  | Legal Proceedings                                                                                                |  | 31      
|           |  |                                                                                                                 
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                              |  | 31      
|           |  |                                                                                                                 
|PART II    |  |                                                                                                                  |  |         
|           |  |                                                                                                                 
|Item 5.    |  | Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 31      
|           |  |                                                                                                                 
|Item 6.    |  | Selected Financial Data                                                                                          |  | 32      
|           |  |                                                                                                                 
|Item 7.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operation                             |  | 32      
|           |  |                                                                                                                 
|Item 7A.   |  | Quantitative and Qualitative Disclosure About Market Risk                                                        |  | 32      
|           |  |                                                                                                                 
|Item 8.    |  | Financial Statements and Supplementary Data                                                                      |  | 32      
|           |  |                                                                                                                 
|Item 9.    |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                             |  | 32      
|           |  |                                                                                                                 
|Item 9A.   |  | Controls and Procedures                                                                                          |  | 32      
|           |  |                                                                                                                 
|Item 9B.   |  | Other Information                                                                                                |  | 33      
|           |  |                                                                                                                 
|PART III   |  |                                                                                                                  |  |         
|           |  |                                                                                                                 
|Item 10.   |  | Directors and Executive Officers of the Registrant                                                               |  | 33      
|           |  |                                                                                                                 
|Item 11.   |  | Executive Compensation                                                                                           |  | 33      
|           |  |                                                                                                                 
|Item 12.   |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                   |  | 33      
|           |  |                                                                                                                 
|Item 13.   |  | Certain Relationships and Related Transactions                                                                   |  | 34      
|           |  |                                                                                                                 
|Item 14.   |  | Principal Accountant Fees and Services                                                                           |  | 34      
|           |  |                                                                                                                 
|PART IV    |  |                                                                                                                  |  |         
|           |  |                                                                                                                 
|Item 15.   |  | Exhibits and Financial Statement Schedules                                                                       |  | 35      
|           |  |                                                                                                                 
|SIGNATURES |  |                                                                                                                  |  | 37      



---

##### Table of Contents

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 statements based on Pulaski Financial
Corp.s 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 delinquency rates and changes in federal and state legislation and
regulation. 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.



PART I



Item 1. Business



General



Pulaski Financial Corp. (the Company or the
Registrant) is the holding company for Pulaski Bank (the Bank). The Companys primary asset is its investment in the Bank, but also maintains an investment securities portfolio for liquidity. The Company has both
subordinated debt in the form of trust preferred securities and other borrowings, the proceeds from which have been injected in the Bank as capital. Accordingly, the information set forth in this report, including the consolidated financial
statements and related financial data, relates primarily to the Bank.



The Bank is regulated by the Office of Thrift Supervision (the OTS), its primary regulator, and by the Federal Deposit Insurance Corporation (the FDIC), the insurer of its deposits. The Banks deposits are
insured by the FDIC up to applicable legal limits under the Savings Association Insurance Fund (the SAIF). The Bank has been a member of the Federal Home Loan Bank (the FHLB) System since 1946.



The Bank is a community oriented financial institution offering traditional
financial services. The Banks business consists principally of attracting retail deposits from the general public and using them to originate mortgage loans secured by one-to four-family residences and, home equity loans and commercial
mortgages. To a lesser extent, the Company also originates commercial and industrial loans that are secured by inventory, equipment and other assets.



Market Area



The Bank has developed two distinct market areas in the metropolitan areas of St. Louis and Kansas City. In St. Louis, the Bank conducts operations out of
its main office and six branch offices located in St. Louis County, the city of St. Louis and St Charles County. During fiscal 2003, the Bank opened a mortgage lending office in Johnson County, Kansas. Subsequently, the Bank acquired a retail branch
location approximately six miles from the Johnson County lending office in the neighboring county of Jackson County, Missouri. Most of the Banks depositors live in the areas surrounding its branches. However, the Banks lending area is
broader, consisting of the entire metropolitan areas of St. Louis and Kansas City.



1



---

##### Table of Contents

Competition



The Bank faces intense competition attracting savings deposits (its primary source of lendable funds) and originating loans. Its most direct competition
for savings deposits has historically come from commercial banks, other thrift institutions, and credit unions located in its market area. The Bank has faced additional significant competition for investors funds from short-term money market
securities and other corporate and government securities.



At
June 30, 2004, which is the most recent date for which data is available from the Federal Deposit Insurance Corporation, the Bank held approximately, 0.86% of the deposits in the St. Louis, Missouri-Illinois Metropolitan Statistical Area, which was
the 19thlargest market share out of 134 financial institutions with offices in this metropolitan statistical area.
Also at June 30, 2004, the Bank held approximately 0.09% of the deposits in the Kansas City, Missouri-Kansas Metropolitan Statistical Area, which was the 118thlargest market share out of 154 financial institutions with offices in this metropolitan statistical area. In addition, banks owned by large bank holding companies such as US Bancorp, Bank of America
Corporation and Union Planters Corp. also operate in our market area. These institutions are significantly larger than us and, therefore, have significantly greater resources that allow them to offer a wider variety of products and services.



The Banks competition for loans comes principally from
other financial institutions, mortgage banking companies and mortgage brokers. The Bank expects competition to increase in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in the
financial services industry. Technological advances, for example, have lowered barriers to market entry, allowed banks to expand their geographic reach by providing services over the Internet and made it possible for non-depository institutions to
offer products and services that traditionally have been provided by banks. The Gramm-Leach-Bliley Act, which permits affiliation among banks, securities firms and insurance companies also has changed the competitive environment as several
non-traditional banking companies have begun collecting deposits in the metropolitan areas of St. Louis and Kansas City.



Lending Activities



General. The following table sets forth the composition of the Banks loan portfolio at the dates indicated.



|                                                     |  |                        |         |   |         |        |   |        |   |         |         |  |        |        |  |   |         |   |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|---------------------------------------------------- |  | ---------------------- | ------- | - | ------- | ------ | - | ------ | - | ------- | ------- |  | ------ | ------ |  | - | ------- | - |  | ------ | - |  | ------- | ------- | - | ------ | ------ | - | ------- | - | ------- | - |  | ------ | -
|                                                     |  | At September 30,       |        
|                                                     |  | 2004                   |         |   | 2003    |        |   | 2002   |   |         | 2001    |  |        | 2000   | 
|                                                     |  | Amount                 |         |   | Percent |        |   | Amount |   |         | Percent |  |        | Amount |  |   | Percent |   |  | Amount |   |  | Percent |         |   | Amount |        |   | Percent |  
|                                                     |  | (Dollars in thousands) |        
|Real Estate Loans:                                   |  |                        |         |   |         |        |   |        |   |         |         |  |        |        |  |   |         |   |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|One to four family residential                       |  | $                      | 248,311 |   |         | 47.79  | % |        | $ | 167,410 |         |  | 59.25  | %      |  | $ | 157,776 |   |  | 66.70  | % |  | $       | 155,900 |   |        | 75.36  | % |         | $ | 169,770 |   |  | 79.87  | %
|Real estate construction & development               |  |                        | 34,195  |   |         | 6.58   |   |        |   | 12,531  |         |  | 4.44   |        |  |   | 3,656   |   |  | 1.55   |   |  |         | 6,221   |   |        | 3.01   |   |         |   | 3,631   |   |  | 1.71   |  
|Multi-family residential                             |  |                        | 8,571   |   |         | 1.65   |   |        |   | 4,205   |         |  | 1.49   |        |  |   | 3,780   |   |  | 1.60   |   |  |         | 697     |   |        | 0.34   |   |         |   | 914     |   |  | 0.43   |  
|Commercial                                           |  |                        | 44,341  |   |         | 8.53   |   |        |   | 4,700   |         |  | 1.66   |        |  |   | 8,147   |   |  | 3.44   |   |  |         | 1,409   |   |        | 0.68   |   |         |   | 412     |   |  | 0.19   |  
|                                                     |  |                        |         |   |         |        |   |        |   |        
|Total real estate loans                              |  |                        | 335,418 |   |         | 64.55  |   |        |   | 188,846 |         |  | 66.84  |        |  |   | 173,359 |   |  | 73.29  |   |  |         | 164,227 |   |        | 79.39  |   |         |   | 174,727 |   |  | 82.20  |  
|                                                     |  |                        |         |   |         |        |   |        |   |        
|Commercial and industrial                            |  |                        | 22,038  |   |         | 4.24   |   |        |   |        |         |  |       |        |  |   |        |   |  |       |   |  |         |        |   |        |       |   |         |   |        |   |  |       |  
|                                                     |  |                        |         |   |         |        |   |        |   |        
|Consumer and Other Loans:                            |  |                        |         |   |         |        |   |        |   |         |         |  |        |        |  |   |         |   |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Automobile loans                                     |  |                        | 1,813   |   |         | 0.35   |   |        |   | 2,592   |         |  | 0.92   |        |  |   | 5,886   |   |  | 2.49   |   |  |         | 12,109  |   |        | 5.85   |   |         |   | 21,450  |   |  | 10.09  |  
|Home equity loans                                    |  |                        | 158,462 |   |         | 30.50  |   |        |   | 89,298  |         |  | 31.61  |        |  |   | 55,410  |   |  | 23.42  |   |  |         | 28,586  |   |        | 13.82  |   |         |   | 14,396  |   |  | 6.77   |  
|Other                                                |  |                        | 1,895   |   |         | 0.36   |   |        |   | 1,794   |         |  | 0.63   |        |  |   | 1,893   |   |  | 0.80   |   |  |         | 1,956   |   |        | 0.94   |   |         |   | 1,983   |   |  | 0.94   |  
|                                                     |  |                        |         |   |         |        |   |        |   |         |         |  |        |        |  |   |         |   |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Total consumer and other loans                       |  |                        | 162,170 |   |         | 31.21  |   |        |   | 93,684  |         |  | 33.16  |        |  |   | 63,189  |   |  | 26.71  |   |  |         | 42,651  |   |        | 20.61  |   |         |   | 37,829  |   |  | 17.80  |  
|                                                     |  |                        |         |   |         |        |   |        |   |         |         |  |        |        |  |   |         |   |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Total loans                                          |  |                        | 519,626 |   |         | 100.00 | % |        |   | 282,530 |         |  | 100.00 | %      |  |   | 236,548 |   |  | 100.00 | % |  |         | 206,878 |   |        | 100.00 | % |         |   | 212,556 |   |  | 100.00 | %
|                                                     |  |                        |         |   |         |        |   |        |   |         |         |  |        |        |  |   |         |   |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Less:                                                |  |                        |         |   |         |        |   |        |   |         |         |  |        |        |  |   |         |   |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Loans in process                                     |  |                        | 6,615   |   |         |        |   |        |   | 3,083   |         |  |        |        |  |   | 7,293   |   |  |        |   |  |         | 1,577   |   |        |        |   |         |   | 2,288   |   |  |        |  
|Unamortized loan origination costs, net of loan fees |  |                        | (3,152  | ) |         |        |   |        |   | (1,313  | )       |  |        |        |  |   | (879    | ) |  |        |   |  |         | (658    | ) |        |        |   |         |   | (1,017  | ) |  |        |  
|Allowance for loan losses                            |  |                        | 5,579   |   |         |        |   |        |   | 3,866   |         |  |        |        |  |   | 2,553   |   |  |        |   |  |         | 1,844   |   |        |        |   |         |   | 1,366   |   |  |        |  
|                                                     |  |                        |         |   |         |        |   |        |   |         |         |  |        |        |  |   |         |   |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  
|Total loans receivable, net                          |  | $                      | 510,584 |   |         |        |   |        | $ | 276,894 |         |  |        |        |  | $ | 227,581 |   |  |        |   |  | $       | 204,115 |   |        |        |   |         | $ | 209,919 |   |  |        |  
|                                                     |  |                        |         |   |         |        |   |        |   |         |         |  |        |        |  |   |         |   |  |        |   |  |         |         |   |        |        |   |         |   |         |   |  |        |  



2



---

##### Table of Contents

Residential Mortgage Lending.



The majority of the Banks mortgage production is sold on a best efforts, flow basis, servicing released, to more than
fifteen different regional and national secondary market investors. This strategy enables the Bank to have a much larger lending capacity, provide a much more comprehensive product offering and drastically reduce the interest rate, prepayment and
credit risks associated with residential lending. This strategy also allows the Bank to offer more competitive interest rates. Loans originated for sale are closed in the name of the Bank and held in warehouse until they are sold to the
investors, typically within 30 days. The loans held in warehouse provide an attractive asset yield because the Bank is able to fund a longer-term asset (typically a 30 year mortgage) with low yielding, short term funds. Loan sale activity is the
Banks largest source of non-interest income.



The Bank is
a direct endorsement lender with the Federal Housing Administration (FHA). Consequently, the Banks FHA approved direct endorsement underwriters are authorized to approve or reject FHA-insured loans up to maximum amounts established
by FHA. The Bank is also an automatic lender with the Veterans Administration (VA), which enables designated qualified Bank personnel to approve or reject loans on behalf of VA.



The Bank offers a variety of adjustable-rate mortgage (ARM)
loans. These ARM loans may be sold in the secondary market or originated for portfolio investment. The loan fees charged, interest rates and other provisions of the Banks ARM loans are determined by the Bank on the basis of its own pricing
criteria, the composition and interest rate risk of its current loan portfolio and market conditions. Interest rates and payments on the Banks ARM loans generally are adjusted periodically to a rate typically equal to 2.00% to 3.75% above the
one-year constant maturity U.S. Treasury index. The periodic interest rate cap (the maximum amount by which the interest rate may be increased or decreased in a given period) on the Banks ARM loans is generally 2% per adjustment period and the
lifetime interest rate cap is generally 6% over the initial interest rate of the loan. The Bank qualifies the borrower based on the borrowers ability to repay the ARM loan based on the maximum interest rate at the first adjustment in the case
of one-year ARM loans, and based on the initial interest rate in the case of ARM loans that adjust after two or more years. The Bank does not originate negative amortization loans for portfolio investment. The Bank believes that the periodic
adjustment feature of its ARM loans provides flexibility to meet competitive conditions as to initial rate concessions while preserving the Banks return on equity objectives by limiting the duration of the initial rate concession.



Borrower demand for ARM loans versus fixed-rate mortgage loans is a
function of the level of current and expected market interest rates and the difference between the initial interest rates and fees charged for each type of loan. The relative amount of fixed-rate mortgage loans and ARM loans that can be originated
at any time is largely determined by the demand for each.



The
retention of ARM loans in the Banks loan portfolio helps reduce the Banks exposure to changes in interest rates. There are, however, unquantifiable credit risks resulting from the potential of increased costs to be paid by the customer
due to changed rates. During periods of rising interest rates, the risk of default on ARM loans increases as a result of repricing and the increased costs to the borrower. Furthermore, because the ARM loans originated by the Bank generally provide,
as a marketing incentive, for initial rates of interest below the rates which would apply were the adjustment index used for pricing initially (discounting), these



3



---

##### Table of Contents

loans are theoretically subject to increased risks of default, delinquency, or prepayment. Another consideration is that
although ARM loans allow the Bank to increase the sensitivity of its asset base to changes in interest rates, the extent of this interest sensitivity is limited by the periodic and lifetime interest rate adjustment limits. Because of these
considerations, the Bank has no assurance that yields on ARM loans will be sufficient to offset increases in the Banks cost of funds.



The Bank requires title insurance insuring the status of its lien on all of its real estate secured loans and also requires that fire and extended
coverage casualty insurance (and, if appropriate, flood insurance) be maintained in an amount equal to the greater of the outstanding loan balance or the full replacement cost of the dwelling.



The Banks lending policies generally limit the maximum loan-to-value
ratio on first mortgage loans secured by owner-occupied properties to 80% of the lesser of the appraisal value or the purchase price. Typically, the Bank will make loans in excess of that limit provided the borrower obtains mortgage insurance or the
customer demonstrates sufficient credit history and ability to service the debt. In some cases, borrowers choose to obtain subordinate financing to limit the first mortgage to 80% or less. These second mortgages are priced with enhanced yields so
that the Bank is compensated for the absence of mortgage insurance. In the cases of loans guaranteed by FHA or VA, the Bank offers loans on loan-to-value ratios of up to 97% and 100%, respectively.



The Bank generally obtains appraisals on its real estate loans from outside
appraisers, but, in limited instances (i.e., loan-to-value ratios less than 55%), may waive its outside appraisal requirement.



Construction and Development Loans. The Company also originates real estate construction and development loans that consist primarily of 1-4 family
residence construction loans made to both developers and retail mortgage customers. Loan disbursements are closely monitored by the management of the Bank to ensure funds are being used strictly for the purposes agreed upon in the loan covenants.
The Company employs both internal staff and external title company experts to ensure loan disbursements are substantiated by regular inspections and review. Construction and development loans are similar to all residential loans in that borrowers
are underwritten according to their adequacy of repayment sources at the time of approval. Unlike conventional residential lending signs of deterioration in the customers ability to repay the loan is measured throughout the life of the loan and not
just at origination or when the loan becomes past due. In most instances, loan amounts are limited to 85% of the appraised value upon completion of the construction project. Credit risk for construction and development loans arise from borrowers
lacking the ability or willingness to repay the loan, or by a shortfall in the collateral value in relation the outstanding loan balance in cases of default.



Commercial Real Estate Loans. The Bank engages in commercial real estate lending, typically through direct originations. The Bank has expanded its
commercial real estate portfolio to provide diversification and to generate assets that are sensitive to fluctuations in interest rates. Commercial real estate loans are generally prime-based floating rate loans, or short-term (1-5 year) fixed-rate
loans. The Banks commercial loan policy limits the Banks lending limit to 15% of its unimpaired capital plus reserves, which was $8.5 million at September 30, 2004. Loans secured by commercial real estate generally have larger loan
values and involve greater risks than one- to four-family residential mortgage loans. Payments on loans secured by such properties are often dependent on successful management and operation of the properties. Repayment of such loans may be subject
to a greater extent to adverse conditions in the real estate market or the economy. The Bank seeks to minimize these risks in a variety of ways, including limiting the size of such loans and strictly scrutinizing the financial condition of the
borrower, the quality of the collateral and the



4



---

##### Table of Contents

management of the property securing the loan. The Bank also obtains loan guarantees from financially capable parties. The
Banks lending personnel or an agent of the Bank inspects all of the properties securing the Banks commercial real estate loans before the loan is made. The Bank also obtains appraisals on each property in accordance with applicable
regulations.



Commercial and Industrial Loans. The
Company also originates commercial and industrial loans that are secured by other property such as inventory, equipment and finished goods.



The Banks largest commercial loan was a $3.8 million loan secured by commercial real estate. This loan was performing according to its terms at
September 30, 2004. All commercial loans are evaluated for the adequacy of repayment sources at the time of approval and are regularly reviewed for any possible deterioration in the ability of the borrower to repay the loan. In most instances,
collateral is required to provide an additional source of repayment in the event of default by the borrower. The structure of the collateral varies from loan to loan depending on the financial strength of the borrower, the amount and terms of the
loan, and the collateral available to be pledged.



Unlike
residential mortgage loans, which generally are made on the basis of a borrowers ability to make repayment from his or her employment or other income, and which are secured by real property whose value tends to be more easily ascertainable,
commercial loans are of higher risk and typically are made on the basis of the borrowers ability to make repayment from the cash flow of the borrowers business. As a result, the availability of funds for the repayment of commercial loans
may depend substantially on the success of the business itself. Further, any collateral securing such loans may depreciate over time, may be difficult to appraise and may fluctuate in value.



Consumer and Other Loans. The Banks consumer loan department
makes consumer loans to residents of the metropolitan areas of St. Louis and Kansas City. These loans consist primarily of home equity lines of credit (HELOC), but also include automobile loans, unsecured loans, and other secured
consumer goods loans.



Home equity lines of credit are secured
with a deed of trust and are issued up to 100% of the appraised or assessed value of the property securing the line of credit, less the outstanding balance on the first mortgage. Home equity loans with greater than 90% LTV are insured with mortgage
insurance by the Bank. Interest rates on the home equity lines of credit are adjustable and are tied to the current prime interest rate. This rate is obtained from the Wall Street Journal and adjusts on a monthly basis. The Banks introductory
rate on HELOC loans is also the floor rate on all new originations. Interest rates are based upon the loan-to-value ratio of the property with better rates given to borrowers with more equity. Home equity lines of credit, which are secured by
residential properties, are secured by stronger collateral than automobile loans and because of the adjustable rate structure, contain less interest rate risk to the Bank. Lending up to 100% of the value of the property presents greater credit risk
to the Bank. Consequently, the Bank limits this product to customers with a favorable credit history.



The automobile loans currently in the portfolio consist of fixed-rate loans secured by both new and used cars and light trucks. New cars are financed for
a period of up to 72 months while used cars are financed for 60 months or less depending on the year and model. Collision and comprehensive insurance coverage is required on all automobile loans.



Consumer loans entail greater risk than residential mortgage loans,
particularly in the case of consumer loans that are unsecured or secured by rapidly depreciating assets such as automobiles. In such cases, any



5



---

##### Table of Contents

repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding
loan balance as a result of the greater likelihood of damage, loss or depreciation. The remaining deficiency often does not warrant further substantial collection efforts against the borrower beyond obtaining a deficiency judgment. In addition,
consumer loan collections are dependent on the borrowers continuing financial stability, and thus are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various Federal
and state laws, including Federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans. Such loans may also give rise to claims and defenses by a consumer loan borrower against an assignee of such loans
such as the Bank, and a borrower may be able to assert against such assignee claims and defenses that it has against the seller of the underlying collateral.



Other Banking Operations. The Company also offers fixed income security trading and sales and the sales of title insurance.



The title insurance business, which is a division of the Bank, began
operations in the third quarter of fiscal 2004. The division provides traditional title insurance services and products, including owners policies of insurance, lenders policies of insurance and miscellaneous title information products
(e.g., letter reports). The policies are issued primarily on residential transactions; however, the division also performs certain commercial transactions. Customers of the title division consist primarily of residential mortgage customers
that have been referred to the title division.



The Bank also
operates a fixed income sales division that was formed shortly after fiscal year end. The division was formed following the hiring of five veteran management and sales personnel who have an average of 20 years experience in fixed income investment
trading and sales. The business consists primarily of buying and selling bonds for community bank investment portfolio managers in Missouri, Illinois and surrounding states. The business will not include developing portfolio for trading for the
Bank.



Loan Maturity and Repricing. The following table
sets forth certain information at September 30, 2004 regarding the dollar amount of loans maturing in the Banks portfolio based on their contractual terms to maturity, but does not include potential prepayments. Demand loans, loans having no
stated schedule of repayments and no stated maturity, and overdrafts are reported as due in one year or less. Mortgage loans that have adjustable rates are shown as maturing at their next repricing date.



|                                         |  |                   |         |                                       |   |                     |  |       |        |  |   |        
|---------------------------------------- |  | ----------------- | ------- | ------------------------------------- | - | ------------------- |  | ----- | ------ |  | - | -------
|                                         |  | DueWithinOne Year |         | Due After One Year Through Five Years |   | DueBeyondFive Years |  | Total
|                                         |  | (In thousands)   
|Commercial and industrial                |  | $                 | 17,590  |                                       | $ | 3,345               |  | $     | 1,103  |  | $ | 22,038 
|Real estate construction and development |  |                   | 32,930  |                                       |   | 950                 |  |       | 315    |  |   | 34,195 
|Residential real estate                  |  |                   | 72,565  |                                       |   | 148,845             |  |       | 35,472 |  |   | 256,882
|Consumer and other                       |  |                   | 156,836 |                                       |   | 3,044               |  |       | 2,290  |  |   | 162,170
|Commercial real estate                   |  |                   | 32,694  |                                       |   | 9,537               |  |       | 2,110  |  |   | 44,341 
|                                         |  |                   |         |                                       |   |                     |  |       |        |  |   |        
|Total loans                              |  | $                 | 312,615 |                                       | $ | 165,721             |  | $     | 41,290 |  | $ | 519,626
|                                         |  |                   |         |                                       |   |                     |  |       |        |  |   |        



6



---

##### Table of Contents

The following table sets forth, as of September 30, 2004, the dollar amount of all loans due or repricing
after September 30, 2005, which have fixed interest rates and have adjustable interest rates.



|                                         |  |                |        |            |   |        
|---------------------------------------- |  | -------------- | ------ | ---------- | - | -------
|                                         |  | Fixed          |        | Adjustable
|                                         |  | (In thousands)
|Commercial and industrial                |  | $              | 4,448  |            | $ |       
|Real estate construction and development |  |                | 950    |            |   | 315    
|Residential real estate                  |  |                | 67,689 |            |   | 116,628
|Consumer and other                       |  |                | 2,390  |            |   | 2,944  
|Commercial real estate                   |  |                | 11,363 |            |   | 284    
|                                         |  |                |        |            |   |        
|Total                                    |  | $              | 86,840 |            | $ | 120,171
|                                         |  |                |        |            |   |        



Scheduled contractual
principal repayments of loans generally do not reflect the actual life of such assets. The average life of loans is substantially less than their contractual terms because of prepayments. In addition, due-on-sale clauses on loans generally give the
Bank the right to declare loans immediately due and payable if, among other things, the borrower sells the real property subject to the mortgage and the loan is not repaid. The average life of mortgage loans tends to increase, however, when current
mortgage loan market rates are substantially higher than rates on existing mortgage loans and, conversely, decreases when rates on existing mortgage loans are substantially higher than current mortgage loan market rates.



Loan Marketing and Processing. Loan applicants come through direct
marketing efforts by loan officers of the Bank, as well as through referrals by REALTORs, financial planners, previous and present customers and, to a far lesser extent, through television, Internet and print advertising promotions. All types of
loans may be originated in any of the Banks offices, though most loans are closed at the Banks main office. Loans are serviced from the Banks main office. Loans sold into the secondary mortgage market are generally serviced by the
purchaser. Loans sold on a participation basis are serviced by the Bank. Loan officers are compensated for their loan production based upon the dollar volume closed, as well as the gain on the sale produced.



Upon receipt of a loan application from a prospective borrower, a credit
report and other data are obtained to verify specific information relating to the loan applicants employment, income and credit standing. An appraisal of the real estate offered as collateral is performed by a fee appraiser approved by the
Bank and licensed or certified by the State of Missouri.



An
internal loan committee approves commercial loans up to $3.0 million, while all loans above this level are approved by the board of directors. Residential loans in the amount of $400,000 or less may be approved by one Senior Officer and an
underwriter. Loans over $400,000 and up to $750,000 require the approval of the Senior Vice President of Lending in conjunction with underwriters, Senior Officers and a member of the Executive Committee, depending upon the amount of the loan. Any
loans in excess of $750,000 require consent of the Executive Committee and approval by the Senior Vice President of Lending. Consumer and auto loan approvals are delegated to several consumer loan officers who can individually lend up to $50,000.



7



---

##### Table of Contents

Loan applicants are promptly notified of the decision of the Bank. Interest rates are subject to change
if the approved loan is not closed within the time of the commitment, which usually is 60 to 90 days.



Loan Originations, Sales and Purchases.



To manage its interest rate risk position, the Bank generally sells the fixed-rate mortgage loans that it originates. The sale of loans in the secondary
mortgage market reduces the Banks risk that the interest rates paid on deposits will increase while the Bank holds long-term, fixed-rate loans in its portfolio. It also allows the Bank to continue to fund loans when deposit flows decline or
funds are not otherwise available. Mortgage loans generally have been sold with servicing released. Gains, net of origination expense, from the sale of such loans are recorded at the time of sale. Generally a loan is committed to be sold and a price
for the loan is determined at the same time the interest rate on the loan is locked in with the customer, which may be at the time the applicant applies for the loan or anytime up to the date of closing. This eliminates the risk to the Bank that a
rise in market interest rates will reduce the value of a mortgage before it can be sold.



Additionally, the Bank generally negotiates a best efforts delivery, which minimizes any exposure from loans that do not close. Certain loans are sold on a mandatory-delivery basis. Loans sold in this manner are
hedged against changes in interest rate risk through forward sales of mortgage-backed securities. The issuing of interest rate commitments by the Bank is considered a derivative investment and changes in market value are reported on the Banks
consolidated balance sheet and statement of income and comprehensive income.



8



---

##### Table of Contents

The following table shows total loans originated, purchased, sold and repaid during the periods
indicated.



|                                                                         |  |                           |           |   |      |   |            |      |  |   |          |  
|------------------------------------------------------------------------ |  | ------------------------- | --------- | - | ---- | - | ---------- | ---- |  | - | -------- | -
|                                                                         |  | Years Ended September 30, |          
|                                                                         |  | 2004                      |           |   | 2003 |   |            | 2002 | 
|                                                                         |  | (In thousands)            |          
|Total gross loans, including loans held for sale, at beginning of period |  | $                         | 343,703   |   |      | $ | 332,943    |      |  | $ | 244,723  |  
|                                                                         |  |                           |          
|Loans originated:                                                        |  |                           |           |   |      |   |            |      |  |   |          |  
|Commercial and industrial                                                |  |                           | 22,038    |   |      |   |           |      |  |   |         |  
|Real estate construction an development                                  |  |                           | 21,808    |   |      |   | 7,809      |      |  |   | 3,614    |  
|Consumer and other                                                       |  |                           | 1,030,780 |   |      |   | 1,633,838  |      |  |   | 834,257  |  
|Commercial real estate                                                   |  |                           | 96,823    |   |      |   | 9,532      |      |  |   | 4,046    |  
|Consumer and other                                                       |  |                           | 167,679   |   |      |   | 119,351    |      |  |   | 65,288   |  
|                                                                         |  |                           |           |   |      |   |            |      |  |   |          |  
|Total loans originated                                                   |  |                           | 1,339,128 |   |      |   | 1,770,530  |      |  |   | 907,205  |  
|                                                                         |  |                           |           |   |      |   |            |      |  |   |          |  
|Loans purchased:                                                         |  |                           |           |   |      |   |            |      |  |   |          |  
|Residential real estate                                                  |  |                           | 731       |   |      |   | 305        |      |  |   | 446      |  
|Commercial real estate                                                   |  |                           | 10,292    |   |      |   | 10,931     |      |  |   | 13,051   |  
|                                                                         |  |                           |           |   |      |   |            |      |  |   |          |  
|Loans sold:                                                              |  |                           |           |   |      |   |            |      |  |   |          |  
|Total whole loans sold                                                   |  |                           | (872,310  | ) |      |   | (1,567,394 | )    |  |   | (701,003 | )
|                                                                         |  |                           |          
|Mortgage loan principal repayments                                       |  |                           | (109,111  | ) |      |   | (86,605    | )    |  |   | (44,713  | )
|Consumer loan repayments and all other                                   |  |                           | (143,195  | ) |      |   | (117,007   | )    |  |   | (86,766  | )
|                                                                         |  |                           |           |   |      |   |            |      |  |   |          |  
|Net loan activity                                                        |  |                           | 225,535   |   |      |   | 10,760     |      |  |   | 88,220   |  
|                                                                         |  |                           |           |   |      |   |            |      |  |   |          |  
|Total gross loans, including loans held for sale, at end of period       |  | $                         | 569,238   |   |      | $ | 343,703    |      |  | $ | 332,943  |  
|                                                                         |  |                           |           |   |      |   |            |      |  |   |          |  



Loan Origination
and Other Fees. The Bank, in some instances, receives loan origination fees and discount points. Loan fees and points are a percentage of the principal amount of the loan which are charged to the borrower for funding the loan. The
amount of points charged by the Bank varies, though the range generally is between 0% and 2%. Current accounting standards require fees received (net of certain loan origination costs) for originating loans to be deferred and amortized into interest
income over the contractual life of the loan. Net deferred fees or costs associated with loans that are prepaid are recognized as interest income adjustments at the time of prepayment. Deferred fees or costs are recognized as mortgage revenue on
loans that are sold to investors.



Nonperforming Assets and
Delinquencies. All commercial loans are evaluated for the adequacy of repayment sources at the time of approval and are regularly reviewed for any possible deterioration in the ability of the borrower to repay the loan. Residential mortgage loan
borrowers are typically only downgraded after origination when they have failed to make a required payment. The Bank follows the following collection procedures for all types of loans, excluding consumer loans, although larger customers are
typically contacted sooner. The first notice is mailed to the borrower 18 days after the payment due date. Attempts to contact the



9



---

##### Table of Contents

borrower by telephone generally begin approximately 20 days after the payment due date. If a satisfactory response is not
obtained, continuous follow-up contacts are attempted until the loan has been brought current. At the 45thday after
the due date, a default letter is sent. Before the 60thday of delinquency, attempts to interview the borrower,
preferably in person, are made to establish: (1) the cause of the delinquency; (2) whether the cause is temporary; (3) the attitude of the borrower toward the debt; and (4) a mutually satisfactory arrangement for curing the default. Also, in the
case of second mortgage loans, before the 60thday of delinquency, all superior lien holders are contacted to
determine: (1) the status and unpaid principal balance of each superior lien; (2) whether any mortgage constituting a superior lien has been sold to any investor; and (3) whether the borrower is also delinquent under a superior lien and what the
affected lien holder intends to do to resolve the delinquency.



If the borrower cannot be reached and does not respond to collection efforts, a personal collection visit or property inspection is made and a photograph of the exterior is taken. The physical condition and occupancy status of the property
is determined before recommending further servicing action. Such inspection normally takes place on or about the 45thday of delinquency. Generally, after 60 days into the delinquency procedure, the Bank notifies the borrower that home ownership counseling is available for eligible homeowners. If by the 91stday of delinquency, or sooner if the borrower is chronically delinquent and all reasonable means of obtaining payment on time have been exhausted,
foreclosure, according to the terms of the security instrument and applicable law, is initiated.



When a consumer loan borrower fails to make a required payment, the Bank institutes collection procedures. The first notice is mailed to the borrower 15
days following the payment due date. The Bank daily receives a computer-generated collection report. The customer is contacted by telephone to ascertain the nature of the delinquency. If by the 30thday following the payment due date, no progress has been made, a written notice is mailed informing the borrowers of their right to cure the delinquency
within 20 days and of the Banks intent to begin legal action if the delinquency is not corrected. Depending on the type of property held as collateral, the Bank either obtains a judgment in small claims court or takes action to repossess the
collateral.



Loans are placed on non-accrual status when, in
the opinion of management, there is reasonable doubt as to the timely collectibility of interest or principal. Non-accrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates
there is no longer any reasonable doubt as to the timely collectibility of interest or principal.



The Banks Board of Directors is informed on a quarterly basis as to the status of all mortgage and consumer loans that are delinquent 90 days or
more, the status on all loans currently in foreclosure, and the status of all foreclosed and repossessed property owned by the Bank.



10



---

##### Table of Contents

The following table sets forth information with respect to the Banks non-performing assets at the
dates indicated.



|                                                                 |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|---------------------------------------------------------------- |  | ---------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | - |  | ---- | ----- | - |  | - | ----- | -
|                                                                 |  | At September 30,       |      
|                                                                 |  | 2004                   |       |   | 2003 |   |       | 2002 |  |   | 2001  |   |  | 2000 |      
|                                                                 |  | (Dollars in thousands) |      
|Loans accounted for on a non-accrual basis:                      |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Commercial and industrial                                        |  | $                      |      |   |      | $ |      |      |  | $ |      |   |  | $    |      |   |  | $ |      |  
|Real estate construction and development                         |  |                        |      |   |      |   |      |      |  |   |      |   |  |      |      |   |  |   |      |  
|Residential real estate                                          |  |                        | 370   |   |      |   | 264   |      |  |   | 303   |   |  |      | 173   |   |  |   | 314   |  
|Commercial real estate                                           |  |                        |      |   |      |   |      |      |  |   |      |   |  |      |      |   |  |   |      |  
|Consumer and other                                               |  |                        | 159   |   |      |   | 202   |      |  |   | 120   |   |  |      | 173   |   |  |   | 101   |  
|                                                                 |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Total                                                            |  |                        | 529   |   |      |   | 466   |      |  |   | 423   |   |  |      | 346   |   |  |   | 415   |  
|                                                                 |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Accruing loans which are contractually past due 90 days or more: |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Commercial and industrial                                        |  |                        |      |   |      |   |      |      |  |   |      |   |  |      |      |   |  |   |      |  
|Real estate construction and development                         |  |                        |      |   |      |   |      |      |  |   |      |   |  |      |      |   |  |   |      |  
|Residential real estate                                          |  |                        | 3,495 |   |      |   | 3,550 |      |  |   | 1,920 |   |  |      | 1,935 |   |  |   | 1,297 |  
|Commercial real estate                                           |  |                        |      |   |      |   |      |      |  |   |      |   |  |      |      |   |  |   |      |  
|Consumer and other                                               |  |                        | 247   |   |      |   | 181   |      |  |   | 156   |   |  |      | 158   |   |  |   | 217   |  
|                                                                 |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Total                                                            |  |                        | 3,742 |   |      |   | 3,731 |      |  |   | 2,076 |   |  |      | 2,093 |   |  |   | 1,514 |  
|                                                                 |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Troubled debt restructurings                                     |  |                        |      |   |      |   | 37    |      |  |   | 7     |   |  |      | 222   |   |  |   | 158   |  
|                                                                 |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Non-performing loans (1)                                         |  |                        | 4,271 |   |      |   | 4,234 |      |  |   | 2,506 |   |  |      | 2,661 |   |  |   | 2,087 |  
|Real estate owned (net)                                          |  |                        | 1,068 |   |      |   | 35    |      |  |   |      |   |  |      |      |   |  |   | 28    |  
|Other non-performing assets                                      |  |                        | 7     |   |      |   | 14    |      |  |   | 8     |   |  |      |      |   |  |   | 7     |  
|                                                                 |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Total non-performing assets                                      |  | $                      | 5,346 |   |      | $ | 4,283 |      |  | $ | 2,514 |   |  | $    | 2,661 |   |  | $ | 2,122 |  
|                                                                 |  |                        |       |   |      |   |       |      |  |   |       |   |  |      |       |   |  |   |       |  
|Total non-performing loans as a percentage of net loans          |  |                        | 0.76  | % |      |   | 1.24  | %    |  |   | 0.77  | % |  |      | 1.09  | % |  |   | 0.92  | %
|Total non-performing loans as a percentage of total assets       |  |                        | 0.67  | % |      |   | 1.05  | %    |  |   | 0.68  | % |  |      | 0.92  | % |  |   | 0.74  | %
|Total non-performing assets as a percentage of total assets      |  |                        | 0.84  | % |      |   | 1.07  | %    |  |   | 0.68  | % |  |      | 0.92  | % |  |   | 0.75  | %

---

|(1) | Includes $848,000, $654,000, $288,000, $684,000, and $444,000 of FHA/VA loans at September 30, 2004, 2003, 2002, 2001 and 2000, respectively, the principal and interest payments on
which are fully insured.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



11



---

##### Table of Contents

Interest income that would have been recorded for the years ended September 30, 2004 and September 30,
2003, had non-accruing loans been current according to their original terms amounted to $29,000 and $69,000, respectively. The amount of interest related to these loans included in interest income was $13,000 for the year ended September 30, 2004
and $27,000 for the year ended September 30, 2003.



Real
Estate Owned. Real estate acquired by the Bank as a result of foreclosure or by deed-in-lieu of foreclosure is classified as real estate owned until it is sold. When property is acquired it is recorded at the lower of its cost, which is the
unpaid principal balance of the related loan plus foreclosure costs, or fair market value. Subsequent to foreclosure, the property is carried at the lower of the foreclosed amount or fair value. Upon receipt of a new appraisal and market analysis,
the carrying value is written down through a charge to income, if appropriate. The balance of real estate owned increased from $35,000 at September 30, 2003 to $1.1 million at September 30, 2004. The increase in real estate owned is attributed to
the Banks acquisition of two large residential properties in settlement of debts outstanding by residential mortgage customers. Each of the two properties have appraised values of approximately one half million dollars after being written down
to 93% of appraised value. When writing real estate down to appraised value, the Company typically recognizes an additional 7% below fair market value in order to leave allowances for selling costs.



Asset Classification. The Bank has adopted the Uniform Credit
Classification Policy issued by the Federal Financial Institutions Examination Council, which was subsequently adopted by the OTS regarding problem assets of savings institutions. The regulations require that each insured institution review and
classify its assets on a regular basis. In addition, in connection with examinations of insured institutions, OTS examiners have authority to identify problem assets and, if appropriate, require them to be classified. There are three classifications
for problem assets: substandard, doubtful and loss. Substandard assets must have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not
corrected. Doubtful assets have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and
there is a high possibility of loss. An asset classified as loss is considered uncollectible and of such little value that continuance as an asset of the institution without establishment of a specific reserve is not warranted. If an asset or
portion thereof is classified as loss, the insured institution establishes specific allowances for loan losses for the full amount of the portion of the asset classified as loss. A portion of general loan loss allowances established to cover
possible losses related to assets classified substandard or doubtful may be included in determining an institutions regulatory capital, while specific valuation allowances for loan losses generally do not qualify as regulatory capital. OTS
regulations also require that assets that do not currently expose an institution to a sufficient degree of risk to warrant classification as loss, doubtful or substandard but do possess credit deficiencies or potential weakness deserving
managements close attention shall be designated special mention by either the institution or its examiners



The Banks Chief Executive Officer, Chief Financial Officer, Executive Vice President and collection department personnel meet quarterly to review
all classified assets, to approve action plans developed to resolve the problems associated with the assets and to review recommendations for new classifications, any changes in classifications and recommendations for reserves.



12



---

##### Table of Contents

The following table sets forth the number and amount of classified loans at September 30, 2004:



|                                       |  |                        |  |          |     |             |   |                 |   |        |  |        |  |        |       |        |   |  |   |  
|-------------------------------------- |  | ---------------------- |  | -------- | --- | ----------- | - | --------------- | - | ------ |  | ------ |  | ------ | ----- | ------ | - |  | - | -
|                                       |  | Loss                   |  | Doubtful |     | Substandard |   | Special Mention
|                                       |  | Number                 |  | Amount   |     | Number      |   | Amount          |   | Number |  | Amount |  | Number |       | Amount
|                                       |  | (Dollars in thousands)
|Real estate:                           |  |                        |  |          |     |             |   |                 |   |        |  |        |  |        |       |        |   |  |   |  
|Commercial and industrial              |  |                       |  | $        |    |             |  |                 | $ |       |  |       |  | $      |      |        |  |  | $ | 
|Real estate construction & development |  |                       |  |          |    |             |  |                 |   |       |  |       |  |        |      |        |  |  |   | 
|Residential                            |  | 3                      |  |          | 45  |             |  |                 |   |       |  | 25     |  |        | 2,767 |        |  |  |   | 
|Commercial                             |  |                       |  |          |    |             |  |                 |   |       |  | 1      |  |        | 433   |        |  |  |   | 
|                                       |  |                        |  |          |     |             |   |                
|Consumer:                              |  |                        |  |          |     |             |   |                 |   |        |  |        |  |        |       |        |   |  |   |  
|Automobile loans                       |  | 17                     |  |          | 56  |             |  |                 |   |       |  | 19     |  |        | 71    |        |  |  |   | 
|Home Equity loans                      |  | 1                      |  |          | 15  |             |   |                 |   |        |  | 5      |  |        | 198   |        |   |  |   |  
|Other                                  |  |                       |  |          |    |             |  |                 |   |       |  |       |  |        |      |        |   |  |   |  
|                                       |  |                        |  |          |     |             |   |                 |   |        |  |        |  |        |       |        |   |  |   |  
|Total                                  |  | 21                     |  | $        | 116 |             |  |                 | $ |       |  | 50     |  | $      | 3,469 |        |  |  | $ | 
|                                       |  |                        |  |          |     |             |   |                 |   |        |  |        |  |        |       |        |   |  |   |  



Allowance for Loan
Losses. In originating loans, the Bank recognizes that losses will be experienced and that the risk of loss will vary with, among other things, the type of loan being made, the creditworthiness of the borrower over the term of the loan, general
economic conditions and, in the case of a secured loan, the quality of the security for the loan. All charged-off loans are charged to the allowance and all recoveries are credited to it. The allowance for loan losses is established through a
provision for loan losses charged to the Banks income. The allowance for loan losses is based on managements periodic evaluation of the Banks past loan loss experience, known and inherent risks in the portfolio, adverse situations
which may affect the borrowers ability to repay, the estimated value of any underlying collateral and current economic conditions. The Bank periodically recognizes losses on loans, which have active collection efforts through the use of
specific valuation allowances or SVA in order to reduce loan balances below the market value of the collateral.



The following assessments are performed quarterly in accordance with the Bank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, the affordability ratios and other
personal history. Five-year historical loss rates and industry data for each credit rating is 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.



13



---

##### Table of Contents

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



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 the Bank believes it has established its existing allowance for loan losses in accordance
with accounting principles generally accepted in the United States, there can be no assurance that the Banks regulators, in reviewing the Banks loan portfolio, will not request the Bank to increase significantly its allowance for loan
losses. In addition, because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that substantial increases 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 will adversely affect the Banks financial condition and results of operations.



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 will adversely affect the Banks financial condition and results of operations.



The following table sets forth an analysis of the Banks allowance for loan losses for the periods indicated.



|                                                                                              |  |                        |        |   |      |   |       |      |  |   |        |   |  |      |       |   |  |   |       |  
|--------------------------------------------------------------------------------------------- |  | ---------------------- | ------ | - | ---- | - | ----- | ---- |  | - | ------ | - |  | ---- | ----- | - |  | - | ----- | -
|                                                                                              |  | At September 30,       |       
|                                                                                              |  | 2004                   |        |   | 2003 |   |       | 2002 |  |   | 2001   |   |  | 2000 |      
|                                                                                              |  | (Dollars in thousands) |       
|Allowance at beginning of period                                                              |  | $                      | 3,866  |   |      | $ | 2,553 |      |  | $ | 1,844  |   |  | $    | 1,366 |   |  | $ | 986   |  
|Provision for loan losses                                                                     |  |                        | 1,934  |   |      |   | 1,487 |      |  |   | 1,011  |   |  |      | 752   |   |  |   | 499   |  
|                                                                                              |  |                        |        |   |     
|Charge-offs:                                                                                  |  |                        |        |   |      |   |       |      |  |   |        |   |  |      |       |   |  |   |       |  
|Commercial and industrial                                                                     |  | $                      |       |   |      | $ |      |      |  | $ |       |   |  | $    |      |   |  | $ |      |  
|Real estate construction and development                                                      |  |                        |       |   |      |   |      |      |  |   |       |   |  |      |      |   |  |   |      |  
|Residential real estate                                                                       |  |                        | 73     |   |      |   | 26    |      |  |   | 34     |   |  |      | 20    |   |  |   | 10    |  
|Consumer and other                                                                            |  |                        | 161    |   |      |   | 160   |      |  |   | 286    |   |  |      | 255   |   |  |   | 123   |  
|                                                                                              |  |                        |        |   |      |   |       |      |  |   |        |   |  |      |       |   |  |   |       |  
|Total charge-offs                                                                             |  |                        | 234    |   |      |   | 186   |      |  |   | 320    |   |  |      | 275   |   |  |   | 133   |  
|Recoveries                                                                                    |  |                        | 13     |   |      |   | 12    |      |  |   | 18     |   |  |      | 1     |   |  |   | 14    |  
|                                                                                              |  |                        |        |   |      |   |       |      |  |   |        |   |  |      |       |   |  |   |       |  
|Net charge-offs                                                                               |  |                        | 221    |   |      |   | 174   |      |  |   | 302    |   |  |      | 274   |   |  |   | 119   |  
|                                                                                              |  |                        |        |   |      |   |       |      |  |   |        |   |  |      |       |   |  |   |       |  
|Allowance at end of period                                                                    |  | $                      | 5,579  |   |      | $ | 3,866 |      |  | $ | 2,553  |   |  | $    | 1,844 |   |  | $ | 1,366 |  
|                                                                                              |  |                        |        |   |      |   |       |      |  |   |        |   |  |      |       |   |  |   |       |  
|Allowance for loss losses as a percentage of total loans outstanding at the end of the period |  |                        | 0.99   | % |      |   | 1.13  | %    |  |   | 0.78   | % |  |      | 0.76  | % |  |   | 0.61  | %
|Net charge-offs as a percentage of average loans outstanding during the period                |  |                        | 0.05   | % |      |   | 0.05  | %    |  |   | 0.12   | % |  |      | 0.12  | % |  |   | 0.06  | %
|Allowance for loan losses as a percentage of non-performing loans                             |  |                        | 130.64 | % |      |   | 91.31 | %    |  |   | 101.89 | % |  |      | 69.30 | % |  |   | 65.45 | %



14



---

##### Table of Contents

The following table sets forth the breakdown of the allowance for loan losses by loan category at the
dates indicated.



|                                         |  |                        |       |                                             |        |   |        |      |                                             |  |        |        |  |                                             |       |  |        |   |                                             |   |       |        |        |                                                  |  |   |       |  |        |  
|---------------------------------------- |  | ---------------------- | ----- | ------------------------------------------- | ------ | - | ------ | ---- | ------------------------------------------- |  | ------ | ------ |  | ------------------------------------------- | ----- |  | ------ | - | ------------------------------------------- | - | ----- | ------ | ------ | ------------------------------------------------ |  | - | ----- |  | ------ | -
|                                         |  | At September 30,       |      
|                                         |  | 2004                   |       |                                             | 2003   |   |        | 2002 |                                             |  | 2001   |        |  | 2000                                        |      
|                                         |  | Amount                 |       | Percentof LoansIn EachCategoryto TotalLoans |        |   | Amount |      | Percentof LoansIn EachCategoryto TotalLoans |  |        | Amount |  | Percentof LoansIn EachCategoryto TotalLoans |       |  | Amount |   | Percentof LoansIn EachCategoryto TotalLoans |   |       | Amount |        | Percent of Loans In Each Category to Total Loans | 
|                                         |  | (Dollars in thousands) |      
|Commercial and industrial                |  | $                      | 219   |                                             | 4.24   | % |        | $    |                                            |  |       | %      |  | $                                           |      |  |       | % |                                             | $ |      |        |       | %                                                |  | $ |      |  |       | %
|Residential real estate                  |  |                        | 2,248 |                                             | 49.44  |   |        | $    | 1,788                                       |  | 60.74  |        |  | $                                           | 1,348 |  | 69.85  |   |                                             | $ | 1,237 |        | 78.70  |                                                  |  | $ | 917   |  | 82.01  |  
|Real estate construction and development |  |                        | 448   |                                             | 6.58   |   |        |      | 185                                         |  | 4.44   |        |  |                                             |      |  |       |   |                                             |   |      |        |       |                                                  |  |   |      |  |       |  
|Commercial real estate                   |  |                        | 335   |                                             | 8.53   |   |        |      | 382                                         |  | 1.66   |        |  |                                             | 118   |  | 3.44   |   |                                             |   |      |        | 0.68   |                                                  |  |   |      |  | .19    |  
|Consumer and other                       |  |                        | 2,329 |                                             | 31.21  |   |        |      | 1,511                                       |  | 33.16  |        |  |                                             | 1,087 |  | 26.71  |   |                                             |   | 607   |        | 20.62  |                                                  |  |   | 369   |  | 17.80  |  
|Unallocated                              |  |                        |      |                                             |       |   |        |      |                                            |  |       |        |  |                                             |      |  |       |   |                                             |   |      |        |       |                                                  |  |   | 80    |  |       |  
|                                         |  |                        |       |                                             |        |   |        |      |                                             |  |        |        |  |                                             |       |  |        |   |                                             |   |       |        |        |                                                  |  |   |       |  |        |  
|Total allowance for loan losses          |  | $                      | 5,579 |                                             | 100.00 | % |        | $    | 3,866                                       |  | 100.00 | %      |  | $                                           | 2,553 |  | 100.00 | % |                                             | $ | 1,844 |        | 100.00 | %                                                |  | $ | 1,366 |  | 100.00 | %
|                                         |  |                        |       |                                             |        |   |        |      |                                             |  |        |        |  |                                             |       |  |        |   |                                             |   |       |        |        |                                                  |  |   |       |  |        |  



15



---

##### Table of Contents

Investment Activities



The Bank is permitted under applicable law to invest in various types of liquid assets, including U.S. Treasury obligations, securities of various federal
agencies and state and municipal governments, deposits at the FHLB-Des Moines, certificates of deposit of federally insured institutions, certain bankers acceptances and federal funds. Subject to various restrictions, savings institutions may
also invest a portion of their assets in commercial paper, corporate debt securities, equity securities and mutual funds. Savings institutions like the Bank are also required to maintain an investment in FHLB stock and a minimum level of liquid
assets.



The Company maintains a portfolio of mortgage-backed
securities in the form of Ginnie Mae, Freddie Mac and Fannie Mae participation certificates. Ginnie Mae certificates are guaranteed as to principal and interest by the full faith and credit of the United States, while Freddie Mac and Fannie Mae
certificates are guaranteed by the respective agencies. Mortgage-backed securities generally entitle the Company to receive a pro rata portion of the cash flows from an identified pool of mortgages. The Company maintains a portfolio of
collateralized mortgage obligations (CMOs), which are securities issued by special purpose entities generally collateralized by pools of mortgage-backed securities called  tranches. The cash flows from such pools are
segmented and paid in accordance with a predetermined priority to various classes of securities issued by the entity. The Companys CMOs are short-maturity tranches.



The Investment Committee, comprised of the Companys President and Chief Executive Officer and Chief Financial Officer,
determines appropriate investments in accordance with the Board of Directors approved investment policies and procedures. Investments are made following certain considerations, which include the Companys liquidity position and
anticipated cash needs and sources (which in turn include outstanding commitments, upcoming maturities, estimated deposits and anticipated loan amortization and repayments). Further, the effect that the proposed investment would have on the
Companys credit and interest rate risk, and risk-based capital is considered. The interest rate, yield, settlement date and maturity are also reviewed.



All of the Companys debt securities and mortgage-backed securities carry market risk insofar as increases in market interest rates would generally
cause a decline in their market value. They also carry prepayment risk insofar as they may be called or repaid before their stated maturity during times of low market interest rates, so that the Company may have to reinvest the funds at a lower
interest rate.



The following table sets forth the carrying
value of the Companys investment and mortgage-backed securities portfolio at the dates indicated. The Companys investment securities portfolio at September 30, 2004 did not contain securities of any issuer with an aggregate book value in
excess of 10% of retained earnings, excluding those issued by the government or its agencies.



16



---

##### Table of Contents

|                                     |  |                           |       |      |   |       |  |   |      
|------------------------------------ |  | ------------------------- | ----- | ---- | - | ----- |  | - | -----
|                                     |  | Years Ended September 30,
|                                     |  | 2004                      |       | 2003 |   | 2002 
|                                     |  | (In thousands)           
|Held to maturity at amortized cost:  |  |                           |       |      |   |       |  |   |      
|Investment securities:               |  |                           |       |      |   |       |  |   |      
|Certificates of Deposit              |  | $                         | 715   |      | $ | 1,730 |  | $ |     
|                                     |  |                           |       |      |   |       |  |   |      
|Mortgage-backed securities:          |  |                           |       |      |   |       |  |   |      
|Mortgage-backed securities           |  | $                         | 784   |      | $ | 1,072 |  | $ | 1,592
|CMOs                                 |  |                           | 80    |      |   | 114   |  |   | 203  
|                                     |  |                           |       |      |   |       |  |   |      
|Total mortgage-backed Securities     |  | $                         | 864   |      | $ | 1,186 |  | $ | 1,795
|                                     |  |                           |       |      |   |       |  |   |      
|FHLB stock                           |  | $                         | 7,538 |      | $ | 3,880 |  | $ | 5,840
|                                     |  |                           |      
|Available for sale, at fair value:   |  |                           |       |      |   |       |  |   |      
|Investment securities:               |  |                           |       |      |   |       |  |   |      
|U.S. Treasury and agency obligations |  | $                         | 9,224 |      | $ | 2,086 |  | $ | 2,914
|Other                                |  |                           | 279   |      |   |      |  |   |     
|                                     |  |                           |       |      |   |       |  |   |      
|Total investment securities          |  | $                         | 9,503 |      | $ | 2,086 |  | $ | 2,914
|                                     |  |                           |       |      |   |       |  |   |      
|Mortgage-backed securities:          |  |                           |       |      |   |       |  |   |      
|Fannie Mae                           |  | $                         | 5,710 |      | $ | 7,675 |  | $ | 5,687
|                                     |  |                           |      
|Equity securities                    |  | $                         | 3,483 |      | $ | 4,346 |  | $ | 1,963



The following table
sets forth the maturities and weighted average yields of the securities in the Companys investment and mortgage-backed securities portfolios at September 30, 2004. Expected maturities of mortgage-backed securities will differ from contractual
maturities due to scheduled repayments and because borrowers may have the right to call or prepay obligations with or without prepayment penalties. At September 30, 2004, the Companys portfolio did not include any callable securities. The
following table does not take into consideration the effects of scheduled repayments or the effects of possible prepayments.



17



---

##### Table of Contents

|                                     |  |                           |       |                      |                          |   |        |                          |                      |  |                       |        |  |                      |       |  |        |   |                      |   |       |  |      |  
|------------------------------------ |  | ------------------------- | ----- | -------------------- | ------------------------ | - | ------ | ------------------------ | -------------------- |  | --------------------- | ------ |  | -------------------- | ----- |  | ------ | - | -------------------- | - | ----- |  | ---- | -
|                                     |  | At September 30, 2004     |      
|                                     |  | Due in Less Than One Year |       |                      | Due in One to Five Years |   |        | Due in Five to Ten Years |                      |  | Due in Over Ten Years |       
|                                     |  | Amount                    |       | WeightedAverageYield |                          |   | Amount |                          | WeightedAverageYield |  |                       | Amount |  | WeightedAverageYield |       |  | Amount |   | WeightedAverageYield |  
|                                     |  | (Dollars in thousands)    |      
|Held to maturity:                    |  |                           |       |                      |                          |   |        |                          |                      |  |                       |        |  |                      |       |  |        |   |                      |   |       |  |      |  
|Investment securities:               |  |                           |       |                      |                          |   |        |                          |                      |  |                       |        |  |                      |       |  |        |   |                      |   |       |  |      |  
|Certificates of Deposit              |  | $                         | 715   |                      | 1.71                     | % |        | $                        |                     |  |                      |        |  | $                    |      |  |       |   |                      | $ |      |  |     |  
|Mortgage-backed securities:          |  |                           |       |                      |                          |   |        |                          |                      |  |                       |        |  |                      |       |  |        |   |                      |   |       |  |      |  
|Mortgage-backed securities           |  | $                         |      |                      |                         |   |        | $                        | 66                   |  | 9.30                  | %      |  | $                    | 15    |  | 11.87  | % |                      | $ | 703   |  | 8.51 | %
|CMOs                                 |  |                           |      |                      |                         |   |        |                          |                     |  |                      |        |  |                      |      |  |       |   |                      |   | 81    |  | 2.53 | %
|                                     |  |                           |       |                      |                          |   |        |                          |                      |  |                       |        |  |                      |       |  |        |   |                      |   |       |  |      |  
|Total mortgage-backed securities     |  | $                         |      |                      |                         |   |        | $                        | 66                   |  | 9.30                  | %      |  | $                    | 15    |  | 11.87  | % |                      | $ | 784   |  | 7.89 | %
|                                     |  |                           |       |                      |                          |   |        |                          |                      |  |                       |        |  |                      |       |  |        |   |                      |   |       |  |      |  
|Available for sale:                  |  |                           |       |                      |                          |   |        |                          |                      |  |                       |        |  |                      |       |  |        |   |                      |   |       |  |      |  
|Investment securities:               |  |                           |       |                      |                          |   |        |                          |                      |  |                       |        |  |                      |       |  |        |   |                      |   |       |  |      |  
|U.S. Treasury and agency obligations |  | $                         | 9,224 |                      | 2.32                     | % |        | $                        |                     |  |                      |        |  | $                    |      |  |       |   |                      | $ |      |  |     |  
|Other                                |  |                           |      |                      |                         |   |        |                          |                     |  |                      |        |  |                      |      |  |       |   |                      |   | 279   |  | 3.90 | %
|                                     |  |                           |       |                      |                          |   |        |                          |                      |  |                       |        |  |                      |       |  |        |   |                      |   |       |  |      |  
|Total investment securities          |  | $                         | 9,224 |                      | 2.32                     | % |        | $                        |                     |  |                      |        |  | $                    |      |  |       |   |                      | $ | 279   |  | 3.90 | %
|                                     |  |                           |       |                      |                          |   |        |                          |                      |  |                       |        |  |                      |       |  |        |   |                      |   |       |  |      |  
|Mortgage-backed securities:          |  |                           |       |                      |                          |   |        |                          |                      |  |                       |        |  |                      |       |  |        |   |                      |   |       |  |      |  
|Mortgage-backed securities           |  | $                         |      |                      |                         |   |        |                          | 340                  |  | 5.99                  | %      |  | $                    | 4,361 |  | 3.82   | % |                      | $ | 1,009 |  | 7.14 | %



Sources of Funds



General. Deposits, loan repayments, loan sales and FHLB borrowings
are the major sources of the Banks funds for lending and other investment purposes. Scheduled loan repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are influenced significantly by
general interest rates and money market conditions. Borrowings from FHLB-Des Moines, other borrowing arrangements and proceeds from the issuance of trust preferred securities, may be used to compensate for reductions in the availability of funds
from other sources.



Deposit Accounts. The Banks
depositors reside predominately in the State of Missouri. Deposits are attracted from within the Banks market area through the offering of a broad selection of commercial and retail deposit instruments, including checking accounts, negotiable
order of withdrawal (NOW) accounts, money market deposit accounts, regular savings accounts, certificates of deposit, retirement savings plans and treasury management services. Deposit account terms vary according to the minimum balance
required, the time periods the funds must remain on deposit, and the interest rate, among other factors. In determining the terms of its deposit accounts, the Bank considers current market interest rates, the pricing of competitors, and
profitability to the Bank, matching deposit and loan products and its customer preferences and concerns. The Banks Asset Liability Committee regularly reviews its deposit mix and pricing. The following table sets forth the balances (inclusive
of interest credited) of deposits in the various types of accounts offered by the Bank at the dates indicated.



18



---

##### Table of Contents

|                                 |  |                        |         |                  |        |   |        |      |                  |  |        |        |  |                  |         |  |        |  
|-------------------------------- |  | ---------------------- | ------- | ---------------- | ------ | - | ------ | ---- | ---------------- |  | ------ | ------ |  | ---------------- | ------- |  | ------ | -
|                                 |  | At September 30,       |        
|                                 |  | 2004                   |         |                  | 2003   |   |        | 2002 |                 
|                                 |  | Amount                 |         | Percent of Total |        |   | Amount |      | Percent of Total |  |        | Amount |  | Percent of Total |        
|                                 |  | (Dollars in thousands) |        
|Non-interest-bearing             |  | $                      | 16,207  |                  | 3.98   | % |        | $    | 9,395            |  | 3.00   | %      |  | $                | 5,736   |  | 2.85   | %
|NOW checking                     |  |                        | 35,243  |                  | 8.66   |   |        |      | 25,848           |  | 8.24   |        |  |                  | 21,591  |  | 10.73  |  
|Regular savings                  |  |                        | 33,702  |                  | 8.28   |   |        |      | 32,657           |  | 10.41  |        |  |                  | 27,539  |  | 13.68  |  
|Money market deposit             |  |                        | 80,006  |                  | 19.67  |   |        |      | 64,337           |  | 20.52  |        |  |                  | 41,898  |  | 20.82  |  
|Certificates which mature (1):   |  |                        |         |                  |        |   |        |      |                  |  |        |        |  |                  |         |  |        |  
|Within 1 year                    |  |                        | 164,621 |                  | 40.47  |   |        |      | 139,595          |  | 44.51  |        |  |                  | 78,048  |  | 38.78  |  
|After 1 year, but within 3 years |  |                        | 70,910  |                  | 17.43  |   |        |      | 29,481           |  | 9.40   |        |  |                  | 18,707  |  | 9.29   |  
|Certificate maturing thereafter  |  |                        | 6,109   |                  | 1.50   |   |        |      | 12,294           |  | 3.92   |        |  |                  | 7,751   |  | 3.85   |  
|                                 |  |                        |         |                  |        |   |        |      |                  |  |        |        |  |                  |         |  |        |  
|Total                            |  | $                      | 406,798 |                  | 100.00 | % |        | $    | 313,607          |  | 100.00 | %      |  | $                | 201,270 |  | 100.00 | %
|                                 |  |                        |         |                  |        |   |        |      |                  |  |        |        |  |                  |         |  |        |  

---

|(1) | At September 30, 2004, 2003 and 2002, jumbo certificates amounted to $103.2 million, $62.5 million and $28.7 million, respectively.
|--- | -----------------------------------------------------------------------------------------------------------------------------------



The following table indicates the amount of the Banks jumbo
certificates of deposit by time remaining until maturity as of September 30, 2004. Jumbo certificates of deposit represent minimum deposits of $100,000 and are not issued at premium interest rates; however, special rates are offered to
President Club members who have deposits of $50,000 or more.



|                         |  |                      |        
|------------------------ |  | -------------------- | -------
|Maturity Period          |  | Amount(In thousands)
|Three months or less     |  | $                    | 24,142 
|Over 3 through 6 months  |  |                      | 38,624 
|Over 6 through 12 months |  |                      | 19,867 
|Over 12 months           |  |                      | 20,523 
|                         |  |                      |        
|Total                    |  | $                    | 103,156
|                         |  |                      |        



19



---

##### Table of Contents

Time Deposits by Rates. The following table sets forth the certificates of deposits in the Bank
classified by rates at the dates indicated.



|             |  |                          |         |      |   |         |  |   |        
|------------ |  | ------------------------ | ------- | ---- | - | ------- |  | - | -------
|             |  | Year Ended September 30,
|             |  | 2004                     |         | 2003 |   | 2002   
|             |  | (In thousands)          
|0.00 - 1.99% |  | $                        | 141,154 |      | $ | 90,188  |  | $ | 35,741 
|2.00 - 2.99% |  |                          | 60,548  |      |   | 53,479  |  |   | 30,178 
|3.00 - 3.99% |  |                          | 27,326  |      |   | 19,336  |  |   | 13,077 
|4.00 - 4.99% |  |                          | 10,911  |      |   | 14,925  |  |   | 15,498 
|5.00 - 5.99% |  |                          | 1,577   |      |   | 3,313   |  |   | 6,028  
|6.00 - 6.99% |  |                          |        |      |   |        |  |   | 3,841  
|7.00 - 7.99% |  |                          | 124     |      |   | 128     |  |   | 143    
|             |  |                          |         |      |   |         |  |   |        
|Total        |  | $                        | 241,640 |      | $ | 181,369 |  | $ | 104,506
|             |  |                          |         |      |   |         |  |   |        



Time Deposits by
Maturities. The following table sets forth the amount and maturities of time deposits at September 30, 2004.



|             |  |                |         |                                 |   |                                |  |                                  |        |            |   |       |  |   |       |  |   |        
|------------ |  | -------------- | ------- | ------------------------------- | - | ------------------------------ |  | -------------------------------- | ------ | ---------- | - | ----- |  | - | ----- |  | - | -------
|             |  | Amount Due    
|             |  | WithinOne Year |         | After 1 Year But Within 2 Years |   | After 2 YearsBut Within3 Years |  | After 3 Years But Within 4 Years |        | Thereafter |   | Total
|             |  | (In thousands)
|0.00 - 1.99% |  | $              | 126,161 |                                 | $ | 13,623                         |  | $                                | 1,370  |            | $ |      |  | $ |      |  | $ | 141,154
|2.00 - 2.99% |  |                | 29,563  |                                 |   | 27,792                         |  |                                  | 678    |            |   | 1,418 |  |   | 1,097 |  |   | 60,548 
|3.00 - 3.99% |  |                | 6,390   |                                 |   | 6,011                          |  |                                  | 12,950 |            |   | 1,684 |  |   | 291   |  |   | 27,326 
|4.00 - 4.99% |  |                | 1,789   |                                 |   | 832                            |  |                                  | 6,671  |            |   | 1,276 |  |   | 343   |  |   | 10,911 
|5.00 - 5.99% |  |                | 594     |                                 |   | 265                            |  |                                  | 718    |            |   |      |  |   |      |  |   | 1,577  
|6.00 - 6.99% |  |                |        |                                 |   |                               |  |                                  |       |            |   |      |  |   |      |  |   |       
|7.00 - 7.99% |  |                | 124     |                                 |   |                               |  |                                  |       |            |   |      |  |   |      |  |   | 124    
|             |  |                |         |                                 |   |                                |  |                                  |        |            |   |       |  |   |       |  |   |        
|Total        |  | $              | 164,621 |                                 | $ | 48,523                         |  | $                                | 22,387 |            | $ | 4,378 |  | $ | 1,731 |  | $ | 241,640
|             |  |                |         |                                 |   |                                |  |                                  |        |            |   |       |  |   |       |  |   |        



20



---

##### Table of Contents

Deposit Activity. The following table sets forth the deposit activities of the Bank for the
periods indicated.



|                                      |  |                           |         |      |   |         |  |   |        
|------------------------------------- |  | ------------------------- | ------- | ---- | - | ------- |  | - | -------
|                                      |  | Years Ended September 30,
|                                      |  | 2004                      |         | 2003 |   | 2002   
|                                      |  | (In thousands)           
|Beginning balance                     |  | $                         | 313,607 |      | $ | 201,270 |  | $ | 189,710
|                                      |  |                           |         |      |   |         |  |   |        
|Net increase before interest credited |  |                           | 92,001  |      |   | 110,934 |  |   | 8,766  
|Interest credited                     |  |                           | 1,191   |      |   | 1,403   |  |   | 2,794  
|                                      |  |                           |         |      |   |         |  |   |        
|Net increase in savings deposits      |  |                           | 93,192  |      |   | 112,337 |  |   | 11,560 
|                                      |  |                           |         |      |   |         |  |   |        
|Ending balance                        |  | $                         | 406,799 |      | $ | 313,607 |  | $ | 201,270
|                                      |  |                           |         |      |   |         |  |   |        



Borrowings. The
Bank uses advances from the FHLB-Des Moines to supplement its supply of lendable funds and to meet deposit withdrawal requirements. The FHLB-Des Moines functions as a central reserve bank providing credit for savings associations and certain other
member financial institutions. As a member, the Bank is required to own capital stock in the FHLB-Des Moines and is authorized to apply for advances on the security of such stock and certain of its mortgage loans and other assets (principally
securities which are obligations of, or guaranteed by, the U.S. Government) provided certain creditworthiness standards have been met. Advances are made pursuant to several different credit programs. Each credit program has its own interest rate and
range of maturities. Depending on the program, limitations on the amount of advances are based on the financial condition of the member institution and the adequacy of collateral pledged to secure the credit. The line of credit is subject to
available collateral of one-to four- family residential loans, home equity loans and loans held for sale. Periodically, the FHLB performs collateral audits in order to review the quality of the collateral, which could result in reduced borrowing
capacity.



21



---

##### Table of Contents

The following table sets forth certain information regarding the Banks use of FHLB advances during
the periods indicated.



|                                                    |  |                           |         |   |      |   |         |      |  |   |         |  
|--------------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                    |  | Years Ended September 30, |        
|                                                    |  | 2004                      |         |   | 2003 |   |         | 2002 | 
|                                                    |  | (Dollars in thousands)    |        
|Maximum balance at any month end, during the period |  | $                         | 160,500 |   |      | $ | 154,000 |      |  | $ | 116,800 |  
|Average balance, during the period                  |  |                           | 96,023  |   |      |   | 122,084 |      |  |   | 74,780  |  
|Period end balance                                  |  |                           | 154,600 |   |      |   | 31,500  |      |  |   | 116,800 |  
|Weighted average interest rate:                     |  |                           |         |   |      |   |         |      |  |   |         |  
|At end of period                                    |  |                           | 2.53    | % |      |   | 4.55    | %    |  |   | 3.44    | %
|During the period                                   |  |                           | 2.45    | % |      |   | 2.71    | %    |  |   | 4.85    | %



Personnel



As of September 30, 2004, the Bank had the equivalent of 258 full-time
employees. The employees are not represented by a collective bargaining unit, and the Bank believes its relationship with its employees is good.



Subsidiary Activities



Other than the Bank, the Company maintains one wholly-owned subsidiary, Pulaski Financial Statutory Trust I (the Trust), a Connecticut
statutory trust. The Trust issued $9.0 million of adjustable-rate preferred securities in March 2004. The proceeds of the offering were dividends to the holding Company, which was then injected into the Bank as Tier 1 capital.



The Banks subsidiary, Pulaski Service Corporation, sells insurance
products and annuities. Federal savings associations generally may invest up to 3% of their assets in service corporations, provided that any amount in excess of 2% is used primarily for community, inner city and community development projects. At
September 30, 2004, the Banks equity investment in its subsidiary was $390,000 or 0.06% of the Banks assets.



Executive Officers of the Registrant



The following table sets forth certain information regarding the executive officers of the Company and the Bank.



|                        |  |         |  |                                                          
|----------------------- |  | ------- |  | ---------------------------------------------------------
|Name                    |  | Age (1) |  | Position                                                 
|William A. Donius       |  | 46      |  | Chairman, President, Chief Executive Officer and Director
|Ramsey K. Hamadi        |  | 35      |  | Chief Financial Officer                                  
|Christopher K. Reichert |  | 40      |  | Executive Vice President                                 

---

|(1) | As of September 30, 2004.
|--- | -------------------------



22



---

##### Table of Contents

Biographical Information



Set forth below is certain information regarding the executive officers of the Company and the Bank. Unless otherwise stated, each executive officer
has held his or her current occupation for the last five years. There are no family relationships among the executive officers.



William A. Donius has served as President and Chief Executive Officer of the Bank since December 1, 1997. Mr. Donius is also the Chairman of the
Board of the Company and the Bank.



Ramsey K. Hamadijoined the Bank in June 2000 as Controller before being named Chief Financial Officer in July 2001. Prior to joining the Bank, Mr. Hamadi was a Safety and Soundness Examiner at the Federal Reserve Bank of St. Louis.



Christopher K. Reichert joined the Bank in 1999 as Senior Vice
President of Lending before being named Executive Vice President in January 2001.



REGULATION



General



The Bank is subject to extensive regulation, examination and supervision
by the OTS, as its chartering agency, and the FDIC, as the deposit insurer. The Bank is a member of the FHLB System and its deposit accounts are insured up to applicable limits by the SAIF managed by the FDIC. The Bank must file reports with the OTS
and the FDIC concerning its activities and financial condition in addition to obtaining regulatory approvals prior to entering into certain transactions such as mergers with, or acquisitions of, other financial institutions. There are periodic
examinations by the OTS and the FDIC to test the Banks safety and soundness and compliance with various regulatory requirements. This regulation and supervision establishes a comprehensive framework of activities in which an institution can
engage and is intended primarily for the protection of the insurance fund and depositors. The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and
examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes. Any change in such regulatory requirements and policies, whether by the OTS, the FDIC
or through legislation, could have a material adverse impact on the Company, the Bank and their operations. The Company, as a savings and loan holding company, is required to file certain reports with, and otherwise comply with the rules and
regulations of the OTS under federal laws. Certain of the regulatory requirements applicable to the Bank and to the Company are referred to below or elsewhere herein.



The description of statutory provisions and regulations set forth in this document do not purport to be a complete
description of such statutes and regulations and their effects on the Company and the Bank.



Federal Savings Institution Regulation



Business Activities. The activities of federal savings institutions are governed by federal laws and regulations. These laws and regulations delineate the nature and extent of the activities in which federal
associations may engage. In particular, many types of lending authority for federal associations, e.g., commercial, non-residential real property and consumer loans, are limited to a specified percentage of the institutions capital assets.



23



---

##### Table of Contents

Loans to One Borrower. Federal laws provide that savings institutions are generally subject to the
national bank limits on loans to one borrower. A savings institution may not make a loan or extend credit to a single or related group of borrowers in excess of 15% of the Banks unimpaired capital and surplus. An additional amount may be
loaned, equal to 10% of unimpaired capital and surplus, if secured by readily-marketable collateral.



QTL Test. Federal law requires savings institutions to meet a qualified thrift lender (QTL) test. Under the test, a savings bank is
required to either be a domestic building and loan association within the definition of the Internal Revenue Code of 1986, as amended (the Code), or maintain at least 65% of its portfolio assets (total assets less
(i) specified liquid assets up to 20% of total assets, (ii) intangibles, including goodwill, and (iii) the value of property used to conduct business) in certain qualified thrift investments (primarily residential mortgages and related
investments, including certain mortgage-backed securities) on a monthly basis in 9 out of every 12 months.



A savings institution that fails the QTL test is subject to certain operating restrictions and may be required to convert to a bank charter. As of
September 30, 2004, the Bank meets the QTL test.



Limitation
on Capital Distributions. OTS regulations impose limitations upon all capital distributions by a savings institution, such as cash dividends, payments to repurchase its shares and payments to shareholders of another institution in a cash-out
merger. Under the regulations, an application to and the prior approval of the OTS is required prior to any capital distribution if the institution does not meet the criteria for expedited treatment of applications under OTS regulations
(i.e., generally examination ratings in the two top categories), the total capital distributions for the calendar year exceed net income for that year plus the amount of retained net income for the preceding two years, the institution would
be undercapitalized following the distribution or the distribution would otherwise be contrary to a statute, regulation or agreement with OTS. If an application is not required, the institution must still provide prior notice to OTS of the capital
distribution. If the Banks capital fell below its regulatory requirements or the OTS notified it that it was in need of more than normal supervision, the Banks ability to make capital distributions could be restricted. In addition, the
OTS could prohibit a proposed capital distribution by any institution, which would otherwise be permitted by the regulation, if the OTS determines that such distribution would constitute an unsafe or unsound practice.



Assessments. Savings institutions are required to pay assessments to
the OTS to fund the agencys operations. The general assessment, paid on a semi-annual basis, is computed as a percentage upon the savings institutions total assets, including consolidated subsidiaries, as reported in the Banks
latest quarterly thrift financial report.



Branching.
The OTS regulations authorize federally chartered savings associations to branch nationwide to the extent allowed by federal statute. This permits federal savings and loan associations with interstate networks to more easily diversify their loan
portfolios and lines of business geographically. The OTS authority preempts any state law purporting to regulate branching by federal savings institutions.





Community Reinvestment Act. Under the Community Reinvestment Act
(CRA), as implemented by OTS regulations, a savings institution has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate
income



24



---

##### Table of Contents

neighborhoods. The CRA does not establish specific lending requirements or programs for financial institutions nor does
it limit an institutions discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the CRA. The CRA requires the OTS, in connection with its examination of a savings
institution, to assess the institutions record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by such institution. The CRA also requires all institutions to make
public disclosure of their CRA ratings. The Bank received a Satisfactory CRA rating in its most recent examination.



Transactions with Related Parties. The Banks authority to engage in certain transactions with affiliates (i.e., any company that
controls or is under common control with an institution, including the Company and any non-savings institution subsidiaries) is limited by federal law. The aggregate amount of covered transactions with any individual affiliate is limited to 10% of
the capital and surplus of the savings institution. The aggregate amount of covered transactions with all affiliates is limited to 20% of the savings institutions capital and surplus. Certain transactions with affiliates are required to be
secured by collateral in an amount and of a type described in federal law. The purchase of low quality assets from affiliates is generally prohibited. Transactions with affiliates must be on terms and under circumstances that are at least as
favorable as those prevailing at the time for comparable transactions with non-affiliated companies. In addition, savings institutions are prohibited from lending to any affiliate that is engaged in activities that are not permissible for bank
holding companies and no savings institution may purchase the securities of any affiliate other than a subsidiary.



The Banks authority to extend credit to executive officers, directors and 10% shareholders (insiders) as well as entities controlled by
such persons is also governed by federal law. Such loans are required to be made on terms substantially the same as those offered to unaffiliated individuals and may not involve more than the normal risk of repayment. An exception exists for loans
made pursuant to a benefit or compensation program that is widely available to all employees of the institution and does not give preference to insiders over other employees. The law limits both the individual and aggregate amount of loans the Bank
may make to insiders based, in part, on the Banks capital position and requires certain board approval procedures to be followed.



Enforcement. The OTS has primary enforcement responsibility over savings institutions and has the authority to bring actions against the
institution and all institution-affiliated parties, including stockholders, and any attorneys, appraisers and accountants who knowingly or recklessly participate in wrongful action likely to have an adverse effect on an insured institution. Formal
enforcement action may range from the issuance of a capital directive or cease and desist order to removal of officers and/or directors to institution of receivership, conservatorship or termination of deposit insurance. Civil penalties cover a wide
range of violations and can amount to $25,000 per day, or even $1 million per day in especially egregious cases. The FDIC has the authority to recommend to the Director of the OTS that enforcement action to be taken with respect to a particular
savings institution. If action is not taken by the Director, the FDIC has the authority to take such action under certain circumstances. Federal law also establishes criminal penalties for certain violations.



Standards for Safety and Soundness. The federal banking agencies have
adopted Interagency Guidelines Prescribing Standards for Safety and Soundness. The guidelines set forth the safety and soundness standards that the federal banking agencies use to identify and address problems at insured depository institutions
before capital becomes impaired. If the OTS determines that an institution fails to meet any standard prescribed by the guidelines, the OTS may require the institution to submit an acceptable plan to achieve compliance with the standard.



25



---

##### Table of Contents

Capital Requirements. The OTS capital regulations require savings institutions to meet three
minimum capital standards: a 1.5% tangible capital ratio, a 4% leverage ratio (3% for institutions receiving the highest rating on the CAMELS financial institution rating system), and an 8% risk-based capital ratio. In addition, the prompt
corrective action standards discussed below also establish, in effect, a minimum 2% tangible capital standard, a 4% leverage capital ratio (3% for institutions receiving the highest rating in the CAMELS financial institution rating system) and,
together with the risk-based capital standard itself, a 4% Tier I risk-based capital standard. The OTS regulations also require that, in meeting the tangible, leverage and risk-based capital standards, institutions must generally deduct investments
in and loans to subsidiaries engaged in activities as principal that are not permissible for a national bank.



The risk-based capital standard for savings institutions requires the maintenance of Tier 1 (core) and total capital (which is defined as core capital and
supplementary capital) to risk weighted assets of 4% and 8%, respectively. In determining the amount of risk-weighted assets, all assets, including certain off-balance sheet assets, recourse obligations and direct credit substitutes are multiplied
by a risk-weight of 0% to 100%, as assigned by the OTS capital regulation based on the risks OTS believes are inherent in the type of asset. Core capital is defined as common stockholders equity (including retained earnings), certain
non-cumulative perpetual preferred stock and related surplus, and minority interests in equity accounts of consolidated subsidiaries less intangibles other than certain mortgage servicing rights and credit card relationships. The components of
supplementary capital currently include cumulative preferred stock, long-term perpetual preferred stock, mandatory convertible securities, subordinated debt and intermediate preferred stock and allowance for loan and lease losses. Allowance for loan
and lease losses includable in supplementary capital is limited to a maximum of 1.25% of risk-weighted assets and up to 45% of unrealized gains in available-for-sale securities with readily determinable fair values. Overall, the amount of
supplementary capital included as part of total capital cannot exceed 100% of core capital.



The OTS also has authority to establish individual minimum capital requirements in appropriate cases upon a determination that an institutions capital level is or may become inadequate in light of the particular
circumstances.



Prompt Corrective Regulatory Action. The
OTS is required to take certain supervisory actions against undercapitalized institutions, the severity of which depends upon the institutions degree of under-capitalization. Generally, a savings institution that has a ratio of total capital
to risk-weighted assets of less than 8%, a ratio of Tier I (core) capital to risk-weighted assets of less than 4% or a ratio of core capital to total assets of less than 4% (3% or less for institutions with the highest examination rating) is
considered to be under-capitalized. A savings institution that has a total risk-based capital ratio less than 6%, a Tier 1 capital ratio of less than 3% or a leverage ratio that is less than 3% is considered to be significantly
undercapitalized and a savings institution that has a tangible capital to assets ratio equal to or less than 2% is deemed to be critically undercapitalized. Subject to a narrow exception, the OTS is required to appoint a receiver
or conservator for an institution that is critically undercapitalized. The regulation also provides that a capital restoration plan must be filed with the OTS within 45 days of the date a savings institution receives notice that it is
undercapitalized, significantly undercapitalized or critically undercapitalized. Compliance with the plan must be guaranteed by any parent holding company. In addition, numerous mandatory supervisory actions
become immediately applicable to an undercapitalized institution, including, but not limited to, increased monitoring by regulators and restrictions on growth, capital distributions and expansion. The OTS could also take any one of a number of
discretionary supervisory actions, including the issuance of a capital directive and the replacement of senior executive officers and directors.



26



---

##### Table of Contents

Insurance on Deposit Accounts. The Federal Deposit Insurance Corporation maintains a risk-based
system by which institutions are assigned to one of three categories based on their capitalization and one of three subcategories based on examination ratings and other supervisory information. An institutions assessment rate depends upon the
categories to which it is assigned. Assessment rates for Savings Association Insurance Fund member institutions are determined semiannually by the Federal Deposit Insurance Corporation and currently range from zero basis points of deposits for
healthy institutions to 27 basis points of deposits for the riskiest.



The Federal Deposit Insurance Corporation has authority to increase insurance assessments. A significant increase in Savings Association Insurance Fund insurance premiums would likely have an adverse effect on the operating expenses and
results of operations of the Bank. Management cannot predict what insurance assessment rates will be in the future.



Insurance of deposits may be terminated the Federal Deposit Insurance Corporation upon finding that the institution has engaged in unsafe or unsound
practices, is in unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the Federal Deposit Insurance Corporation or the Office of Thrift Supervision. The management of
the Bank does not know of any practice, condition or violation that might lead to termination of deposit insurance.



Federal Home Loan Bank System.The Bank is a member of the FHLB System, which consists of 12 regional FHLBs. The FHLB provides a central credit
facility primarily for member institutions. The Bank, as a member of the FHLB, is required to acquire and hold shares of capital stock in that FHLB in an amount at least equal to 5% of the aggregate or 1/20 of its advances (borrowings) from the
FHLB.



The FHLBs are required to provide funds for the
resolution of insolvent thrifts and to contribute funds for affordable housing programs. These requirements could reduce the amount of dividends that the FHLBs pay to their members and could also result in the FHLBs imposing a higher rate of
interest on advances to their members.



Federal Reserve
SystemThe FRB regulations require savings institutions to maintain non-interest-earning reserves against their transaction accounts (primarily NOW and regular checking accounts). The regulations generally require that, during calendar year
2004, reserves be maintained against aggregate transaction accounts as follows: a 3% reserve ratio is assessed on net transaction accounts over up to and including $47.6 million; a 10% reserve ratio is applied over $47.6 million. The first $7.0
million of otherwise reservable balances (subject to adjustments by the FRB) were exempted from the reserve requirements. The Bank has complied with the foregoing requirements.



27



---

##### Table of Contents

Holding Company Regulation



The Company is a non-diversified unitary savings and loan holding company within the meaning of federal law. The
Gramm-Leach-Bliley Act of 1999 provides that no company may acquire control of a savings association after May 4, 1999 unless it engages only in the financial activities permitted for financial holding companies under the law or for multiple savings
and loan holding companies as described below. Further, the Gramm-Leach-Bliley Act specifies that, subject to a grandfather provision, existing savings and loan holding companies may only engage in such activities. The Company qualifies for the
grandfathering and is therefore not restricted in terms of its activities. Upon any non-supervisory acquisition by the Company of another savings association as a separate subsidiary, the Company would become a multiple savings and loan holding
company and would be limited to activities permitted multiple holding companies by OTS regulation. However, OTS has issued an interpretation concluding that multiple savings holding companies may also engage in activities permitted for financial
holding companies, including lending, trust services, insurance activities and underwriting, investment banking and real estate investments.



A savings and loan holding company is prohibited from, directly or indirectly, acquiring more than 5% of the voting stock of another savings institution
or savings and loan holding company, without prior written approval of the Office of Thrift Supervision and from acquiring or retaining control of a depository institution that is not insured by the Federal Deposit Insurance Corporation. In
evaluating applications by holding companies to acquire savings institutions, the Office of Thrift Supervision considers the financial and managerial resources and future prospects of the company and institution involved, the effect of the
acquisition on the risk to the deposit insurance funds, the convenience and needs of the community and competitive factors.



The Office of Thrift Supervision may not approve any acquisition that would result in a multiple savings and loan holding company controlling savings
institutions in more than one state, subject to two exceptions; (i) the approval of interstate supervisory acquisitions by savings and loan holding companies and (ii) the acquisition of a savings institution in another state if the laws of the state
of the target savings institution specifically permit such acquisitions. The states vary in the extent to which they permit interstate savings and loan holding company acquisitions.



Although savings and loan holding companies are not currently subject to specific capital requirements or specific
restrictions on the payment of dividends or other capital distributions, federal regulations do prescribe such restrictions on subsidiary savings institutions as described below. The Bank must notify the Office of Thrift Supervision 30 days before
declaring any dividend to the Company. In addition, the financial impact of a holding company on its subsidiary institution is a matter that is evaluated by the Office of Thrift Supervision and the agency has authority to order cessation of
activities or divestiture of subsidiaries deemed to pose a threat to the safety and soundness of the institution.



Acquisition of the Company.Under the Federal Change in Bank Control Act (CIBCA), a notice must be submitted to the Office of Thrift
Supervision if any person (including a company), a group acting in concert, seeks to acquire 10% or more of the Companys outstanding voting stock, unless the Office of Thrift Supervision has found that the acquisition will not result in a
change in control of the Company. Under the CIBCA, the Office of Thrift Supervision has 60 days from the filing of a complete notice to act, taking into consideration certain factors, including the financial and managerial resources of the acquirer
and the anti-trust effect of the acquisition. Any company that so acquires control would then be subject to regulation as a savings and loan holding company.



28



---

##### Table of Contents

Item 2. Properties



The Bank
conducts its business through seven full-service banking offices. The following table sets forth information on those offices as of September 30, 2004.



|                                                       |  |                        |  |                   |       |     |              |        |     |                            |       
|------------------------------------------------------ |  | ---------------------- |  | ----------------- | ----- | --- | ------------ | ------ | --- | -------------------------- | ------
|Location                                               |  | YearOpened             |  | Net BookValue (1) |       |     | Owned/Leased |        |     | Approximate Square Footage
|                                                       |  | (Dollars in thousands)
|Main Office:                                           |  |                        |  |                   |       |     |              |        |     |                            |       
|                                                       |  |                        |  |                  
|12300 Olive Boulevard St. Louis, Missouri 63141        |  | 1978                   |  | $                 | 3,327 |     |              | Owned  |     |                            | 29,000
|                                                       |  |                        |  |                  
|Branch Offices:                                        |  |                        |  |                   |       |     |              |        |     |                            |       
|199 Jamestown Mall Florissant, Missouri 63034          |  | 1998                   |  |                   | 42    |     |              | Leased | (2) |                            | 2,500 
|                                                       |  |                        |  |                  
|3760 South Grand Avenue St. Louis, Missouri 63118      |  | 1967                   |  |                   | 639   |     |              | Owned  |     |                            | 3,500 
|                                                       |  |                        |  |                  
|4226 Bayless Road St. Louis, Missouri 63123            |  | 2001                   |  |                   | 607   |     |              | Owned  | (3) |                            | 3,200 
|                                                       |  |                        |  |                  
|1928 Zumbehl Road St. Charles, Missouri 63303          |  | 2000                   |  |                   | 868   |     |              | Owned  |     |                            | 2,800 
|                                                       |  |                        |  |                  
|1700 OFallon Road OFallon, Missouri 63304            |  | 2003                   |  |                   | 1,475 |     |              | Owned  |     |                            | 4,000 
|                                                       |  |                        |  |                  
|8442 Wornall Road Kansas City, Missouri 64114          |  | 2003                   |  |                   | 598   |     |              | Owned  |     |                            | 3,500 
|                                                       |  |                        |  |                  
|Other Offices:                                         |  |                        |  |                   |       |     |              |        |     |                            |       
|12152 Olive Boulevard St. Louis, Missouri 63141        |  | 2002                   |  |                   | 65    |     |              | Leased | (4) |                            | 5,000 
|                                                       |  |                        |  |                  
|6600 College Boulevard Overland Park, Kansas 66211     |  | 2002                   |  |                   | 516   |     |              | Leased | (5) |                            | 10,045
|                                                       |  |                        |  |                  
|One Insurance Center Plaza St. Louis, Missouri 63141   |  | 2003                   |  |                   | 2,442 |     |              | Owned  | (6) |                            | 26,000
|                                                       |  |                        |  |                  
|Chesterfield Tower Center Chesterfield, Missouri 63005 |  |                        |  |                   | 122   | (7) |              |        |     |                            |       

---

|(1) | Represents the net book value of land, buildings, furniture, fixtures and equipment owned by the Bank.
|--- | ------------------------------------------------------------------------------------------------------

|(2) | Includes the period the office was located at 6955 Parker Road at Highway 367 in Florissant. The office was moved to its current site in October 1998. Lease expires on August 31,
2006.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



29



---

##### Table of Contents

|(3) | The Bank purchased the building at 4226 Bayless Road and disposed of the lease of the former office location 4225 Bayless Road in January, 2001.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Houses administrative staff. Lease expires August 31, 2007.
|--- | -----------------------------------------------------------

|(5) | Houses mortgage lending division. Lease expires October 31, 2008.
|--- | -----------------------------------------------------------------

|(6) | Planned office space for the mortgage lending division anticipated to open in February 2005.
|--- | --------------------------------------------------------------------------------------------

|(7) | New office anticipated to open in May 2005.
|--- | -------------------------------------------



30



---

##### Table of Contents

Item 3. Legal Proceedings



The Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business which, in the aggregate, involve amounts which are believed by management to be immaterial to the
financial condition and results of operations of the Company.



Item 4. Submission of Matters to a Vote of Security Holders



None.



PART II



Item 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities



The information required by this item is incorporated herein by reference to the section captioned Common Stock Information in the Annual
Report to Stockholders.



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 PubliclyAnnouncedPlans or
Programs |     | (d)Maximum Number(or approximateDollar Value) ofShares (or Units)that May Yet BePurchased Underthe Plans or Programs
|July 1, 2004 through July 31, 2004           |  | 77                                          |  | $                                     | 18.50 |                                                                                            | 77  |                                                                                                                      | 26,492
|August 1, 2004 through August 31, 2004       |  | 156                                         |  |                                       | 17.52 |                                                                                            | 156 |                                                                                                                      | 26,336
|September 1, 2004 through September 30, 2004 |  |                                            |  |                                       |      |                                                                                            |    |                                                                                                                      | 26,336
|Total                                        |  | 233                                         |  | $                                     | 17.52 |                                                                                            | 233 |                                                                                                                      | N/A   
|                                             |  |                                             |  |                                       |       |                                                                                            |     |                                                                                                                      |       

---

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



31



---

##### Table of Contents

Item 6. Selected Financial Data



The information required by this item is incorporated herein by reference to the section captioned Selected Consolidated Financial Information in the Annual Report to Stockholders.



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations



The information required by this item is incorporated herein by reference to the section captioned Managements Discussion and Analysis of
Financial Condition and Results of Operations in the Annual Report to Stockholders.



Item 7A. Quantitative and Qualitative Disclosures About Market Risk



The information required by this item is incorporated herein by reference to the section captioned Managements Discussion and Analysis of
Financial Condition and Results of Operations - Market Risk Analysis in the Annual Report to Stockholders.



Item 8. Financial Statements and Supplementary Data



The financial statements and supplementary data are included in Item 15.



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure



There have been no changes in or disagreements with accountants on accounting and financial disclosure that have not been previously reported by the
Company. For information regarding the Companys change in accountants during fiscal 2003, see the section captioned Proposal 2-Ratification of Independent Auditors in the Proxy Statement.



Item 9A. Controls and Procedures



The Companys management, including the Companys principal executive officer and principal financial officer, have evaluated the effectiveness of the Companys disclosure controls and procedures, as such term is
defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the Exchange Act). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end
of the period covered by this report, the Companys disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange
Act with the Securities and Exchange Commission (the SEC) (1) is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and (2) is accumulated and communicated to the
Companys management, including its principal executive and principal financial officers as appropriate to allow timely decisions regarding required disclosure. In addition, based on that evaluation, no change in the Companys internal
control over financial reporting occurred during the year ended September 30, 2004 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



32



---

##### Table of Contents

Item 9B. Other Information



None



PART III



Item 10. Directors and Executive Officers of the Registrant



For information concerning the Board of Directors of the Company, the information contained under the section captioned Proposal 1 - Election of Directors in the Proxy Statement is incorporated herein by
reference. Reference is made to the cover page of this Form 10-K and to the section captioned Compliance with Section 16(a) of the Exchange Act in the Companys annual meeting proxy statement for information regarding compliance
with Section 16 of the Exchange Act.



For information
concerning the Companys code of ethics, the information contained under the section captioned Corporate Governance-Code of Business Conduct is incorporated herein by reference. A copy of the code of ethics is available, without
charge, upon written request to Christine A. Munro, Corporate Secretary, Pulaski Financial Corp., 12300 Olive Blvd, St. Louis, MO 63141.



Item 11. Executive Compensation



The information contained under the sections captioned Executive Compensation and Directors Compensation in the Proxy Statement is incorporated herein by reference.



Item 12. Security Ownership of Certain Beneficial Owners and Management



| | (a) | Security Ownership of Certain Beneficial Owners
| | --- | -----------------------------------------------



Information required by this item is incorporated herein by reference to the section captioned Stock Ownership in the Proxy Statement.



| | (b) | Security Ownership of Management
| | --- | --------------------------------



The information required by this item is incorporated herein by reference to the sections captioned Stock Ownership in the Proxy Statement.



| | (c) | Changes in Control
| | --- | ------------------



The Company is not aware of any arrangements, including any pledge by any person of securities of the Company, the operation of which may at a subsequent
date result in a change in control of the Company.



33



---

##### Table of Contents

| | (d) | Equity Compensation Plan Information
| | --- | ------------------------------------



The following table sets forth information about the Company common stock that may be issued upon exercise of options, warrants and rights under all of
the Companys equity compensation plans as of September 30, 2004.



|                                                          |  |                                                                                                 |  |                                                                                 |      |                                                                                                                                               |        
|--------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------- | ---- | --------------------------------------------------------------------------------------------------------------------------------------------- | -------
|Plan category                                             |  | Number of securities to be issued upon exercise of outstanding options, warrants and
rights (a) |  | Weighted-average exercise price of outstanding options, warrants and rights (b) |      | Number of securities remaining available for future issuance under equity compensationplans (excludingsecurities reflected incolumn (a)) (c )
|Equity compensation plans approved by securityholders     |  | 571,613                                                                                         |  | $                                                                               | 8.10 |                                                                                                                                               | 112,428
|Equity compensation plans not approved by securityholders |  | 60,510                                                                                          |  | $                                                                               | 7.06 |                                                                                                                                               |       
|                                                          |  |                                                                                                 |  |                                                                                 |      |                                                                                                                                               |        
|Total                                                     |  | 632,123                                                                                         |  | $                                                                               | 8.00 |                                                                                                                                               | 112,428
|                                                          |  |                                                                                                 |  |                                                                                 |      |                                                                                                                                               |        

---

|(1) | Consists of non-statutory stock options granted in 2001 outside of the Company s stock option plans. Each of the options was granted at a price equal to the fair market value
of Pulaski Financial common stock of the date of grant. All of the options vest rateably over a five-year period beginning on the first anniversary date of grant and expire ten years from date of grant. However, in the event of a change in control
(as defined in the Companys 2000 Stock-Based Incentive Plan) all options will become exerciseable until the expiration of the term of the option, regardless of termination of employment.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 13. Certain Relationships and Related Transactions



The information set forth under the section captioned Transactions with Management in the Proxy Statement is incorporated by reference.



Item 14. Principal Accountant Fees and Services



The information set forth under the section captioned Ratification of Independent Auditors in the Proxy Statement is incorporated by reference.



34



---

##### Table of Contents

PART IV



Item 15. Exhibits and Financial Statement Schedules



The following documents are filed as part of this report:



1. Financial Statements



Independent Auditors Report

Consolidated Balance Sheets at September 30, 2004 and 2003

Consolidated Statements of Income and Comprehensive Income for the Years Ended September 30, 2004, 2003 and 2002

Consolidated Statements of Changes in Stockholders Equity for the Years Ended September 30, 2004, 2003 and 2002

Consolidated Statements of Cash Flows for the Years Ended September 30, 2004, 2003 and 2002

Notes to Consolidated Financial Statements for the Years ended September 30, 2004, 2003 and 2002



Such financial statements are incorporated herein by reference to the
Consolidated Financial Statements and Notes thereto included in the Annual Report to Stockholders.



2. Financial Statement Schedules



Independent Auditors Report



To the Board of Directors

and Stockholders of Pulaski Financial Corp.:



We have audited the consolidated statements of income and comprehensive
income, stockholders equity and cash flows of Pulaski Financial Corp. and subsidiaries for the year ended September 30, 2002. These financial statements are the responsibility of the Companys management. Our responsibility is to express
an opinion on these financial statements based on our audit.



We conducted our
audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects the results of Pulaski Financial Corp. and subsidiaries
operations and their cash flows for the year ended September 30, 2002, in conformity with accounting principles generally accepted in the United States.



/s/ Ernst & Young LLP



October 23, 2002

St. Louis, Missouri



3. Exhibits



The exhibits listed below are filed as part of this report or are
incorporated by reference herein.



|     |  |                                                                                                
|---- |  | -----------------------------------------------------------------------------------------------
|3.1  |  | Articles of Incorporation of Pulaski Financial Corp.1                                          
|     | 
|3.2  |  | Bylaws of Pulaski Financial Corp.1                                                             
|     | 
|4.0  |  | Form of Certificate for Common Stock2                                                          
|     | 
|10.1 |  | Employment Agreement between Pulaski Financial Corp. and William A. Donius3                    
|     | 
|10.2 |  | Pulaski Financial Corp. 2002 Stock Option Plan.1                                               
|     | 
|10.3 |  | Pulaski Financial Corp. 2000 Stock-Based Incentive Plan4                                       
|     | 
|10.4 |  | Amendment to Pulaski Financial Corp. 2002 Stock Option Plan5                                   
|     | 
|10.5 |  | Pulaski Financial Corp. Deferred Compensation Plan (Equity Trust Plan)6                      
|     | 
|10.6 |  | Employment Agreement between Pulaski Bank and William A. Donius7                               
|     | 
|13.0 |  | Annual Report to Stockholders                                                                  
|     | 
|21.0 |  | Subsidiaries of Pulaski Financial Corp.                                                        
|     | 
|23.1 |  | Consent of KPMG LLP                                                                            
|     | 
|23.2 |  | Consent of Ernst & Young LLP                                                                   
|     | 
|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 Chief Financial Officer                              
|     | 
|32.1 |  | Chief Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



35



---

##### Table of Contents

|     |  |                                                                                                
|---- |  | -----------------------------------------------------------------------------------------------
|32.2 |  | Chief Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

---

|1 | Incorporated herein by reference to Pulaski Financial Corps Definitive Proxy Statement for the 2003 Annual Meeting of Stockholders.
|- | ------------------------------------------------------------------------------------------------------------------------------------

|2 | Incorporated herein by reference from the Form S-1 (Registration No. 333-56465), as amended, as filed on June 9, 1998.
|- | ----------------------------------------------------------------------------------------------------------------------

|3 | Incorporated herein by reference to Pulaski Financial Corp.s Form 10-Q for the quarterly period ended March 31, 2002, as filed on May 15, 2002.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------

|4 | Incorporated herein by reference to Pulaski Financial Corp.s Definitive Proxy Statement for the 2000 Annual Meeting of Stockholders.
|- | -------------------------------------------------------------------------------------------------------------------------------------

|5 | Incorporated herein by reference to Pulaski Financial Corp.s Form 10-Q for the quarterly period ended March 31, 2004, as filed on May 14, 2004.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------

|6 | Incorporated herein by reference to Pulaski Financial Corp.s Form 10-K for the year ended September 30, 2003, as filed on December 27, 2003.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------

|7 | Incorporated herein by reference to Pulaski Financial Corp.s Form 10-K for the year ended September 30, 2001, as filed on December 27, 2001.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------



36



---

##### Table of Contents

SIGNATURES



Pursuant to the
requirements of Section 13 or 15(d) 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.(Registrant)/s/ William A. DoniusWilliam A. DoniusPresident and Chief Executive Officer




Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



|                             |  |                                                                      |  |                  
|---------------------------- |  | -------------------------------------------------------------------- |  | -----------------
|NAME                         |  | TITLE                                                                |  | DATE             
|/s/ William A. Donius        |  | President and Chief Executive Officer (principal executive officer)  |  | December 14, 2004
|William A. Donius            |  |                                                                     
|                             |  |                                                                     
|/s/ Ramsey K. Hamadi         |  | Chief Financial Officer (principal
accounting and financial officer) |  | December 14, 2004
|Ramsey K. Hamadi             |  |                                                                     
|                             |  |                                                                     
|/s/ Christopher K. Reichert  |  | Executive Vice-President and
Director                                |  | December 7, 2004 
|Christopher K. Reichert      |  |                                                                     
|                             |  |                                                                     
|/s/ Robert A. Ebel           |  | Director                                                             |  | December 7, 2004 
|Robert A. Ebel               |  |                                                                     
|                             |  |                                                                     
|/s/ E. Douglas Britt         |  | Director                                                             |  | December 7, 2004 
|E. Douglas Britt             |  |                                                                     
|                             |  |                                                                     
|/s/ Leon A. Felman           |  | Director                                                             |  | December 14, 2004
|Leon A. Felman               |  |                                                                     
|                             |  |                                                                     
|/s/ Timothy K. Reeves        |  | Director                                                             |  | December 8, 2004 
|Timothy K. Reeves            |  |                                                                     
|                             |  |                                                                     
|/s/ William M. Corrigan, Jr. |  | Director                                                             |  | December 10, 2004
|William M. Corrigan, Jr.     |  |                                                                     



37