EX-99.4 9 dex994.htm PULASKI CORP UNAUDITED CONSOLIDATED FIN STMTS AT SEPT 30, 06 & 05 & 9 MONTHS 06 PULASKI CORP UNAUDITED CONSOLIDATED FIN STMTS AT SEPT 30, 06 & 05 & 9 MONTHS 06

Exhibit 99.4

PULASKI INVESTMENT CORPORATION

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

AT SEPTEMBER 30, 2006 AND 2005

PULASKI INVESTMENT CORPORATION

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

 

     (Unaudited)
September 30,
2006
    December 31,
2005
 

ASSETS

    

Cash and due from banks

   $ 22,623     $ 28,117  

Investment securities

    

Held-to-maturity securities

     150       230  

Available-for-sale securities

     54,741       76,245  
                
     54,891       76,475  

Loans - net

     385,037       328,330  

Premises and equipment, net

     24,398       23,841  

Accrued interest receivable

     1,870       1,649  

Other real estate owned

     3       323  

Goodwill

     613       613  

Title plants

     6,233       6,233  

Other intangible assets, net

     496       568  

Other assets

     7,249       5,668  
                
   $ 503,413     $ 471,817  
                

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Deposits:

    

Noninterest bearing

   $ 68,367     $ 82,183  

Interest bearing

     338,244       313,588  
                
     406,611       395,771  

Federal funds purchased

     4,000       -0-  

Other borrowed funds

     45,439       26,680  

Accrued interest payable

     866       616  

Other liabilities

     5,039       8,729  
                

Total liabilities

     461,955       431,796  

Shareholders’ equity:

    

Common stock

     610       610  

Additional paid-in capital

     699       699  

Retained earnings

     40,569       39,133  

Accumulated other comprehensive income

     (420 )     (421 )
                

Total shareholders’ equity

     41,458       40,021  
                
   $ 503,413     $ 471,817  
                

See notes to consolidated financial statements.


PULASKI INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(dollars in thousands)

 

     Nine Months Ended
September 30,
   Three Months Ended
September 30,
     2006    2005    2006    2005

Interest income:

           

Loans, including fees

   $ 21,765    $ 18,885    $ 7,956    $ 6,952

Investment securities:

           

Taxable

     2,112      864      655      264

Tax–exempt

     5      7      2      2

Other

     442      370      158      166
                           
     24,324      20,126      8,771      7,384

Interest expense:

           

Deposits

     7,543      4,125      2,911      1,775

Other

     1,836      1,372      763      422
                           
     9,379      5,497      3,674      2,197
                           

Net interest income

     14,945      14,629      5,097      5,187

Provision for loan losses

     299      903      299      372
                           

Net interest income after provision for loan losses

     14,646      13,726      4,798      4,815

Other income:

           

Income from fiduciary activities

     692      650      235      221

Service charges on deposit accounts

     1,665      1,178      581      450

Gain on sale of mortgage loans held for sale

     6,592      7,173      2,121      2,801

Other

     14,884      15,720      4,940      5,628
                           
     23,833      24,721      7,877      9,100

Other expenses:

           

Salaries and employee benefits

     21,538      21,007      7,227      7,443

Occupancy and equipment expense

     4,796      4,497      1,619      1,647

Other

     7,871      8,558      2,806      3,199
                           
     34,205      34,062      11,652      12,289
                           

Income before income taxes

     4,274      4,385      1,023      1,626

Income taxes

     1,710      1,745      450      628
                           

Net income

   $ 2,564    $ 2,640    $ 573    $ 998
                           

See notes to consolidated financial statements.

 

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PULASKI INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

For the Nine Months Ended September 30, 2005 and September 30, 2006

(dollar in thousands)

 

     Common
Stock
   Capital
Surplus
   Retained
Earnings
    Accumulated
Other
Comprehensive
Income
    Total  

Balance at December 31, 2004

   $ 610    $ 699    $ 34,308     $ (236 )   $ 35,381  

Comprehensive income

            

Net income

           2,640         2,640  

Other comprehensive income

            

Change in unrealized losses on available-for-sale securities, net of deferred income taxes

             (140 )     (140 )
                  

Total comprehensive income

               2,500  
                  

Cash dividends declared

           (1,128 )       (1,128 )
                                      

Balance at September 30, 2005

   $ 610    $ 699    $ 35,820     $ (376 )   $ 36,753  
                                      

Balance at December 31, 2005

   $ 610    $ 699    $ 39,133     $ (421 )   $ 40,021  

Comprehensive income

            

Net income

           2,564         2,564  

Other comprehensive income

             1       1  

Change in unrealized losses on available-for-sale securities, net of deferred income taxes

            
                  

Total comprehensive income

               2,565  
                  

Cash dividends declared

           (1,128 )       (1,128 )
                                      

Balance at September 30, 2006

   $ 610    $ 699    $ 40,569     $ (420 )   $ 41,458  
                                      

See notes to consolidated financial statements.

 

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PULASKI INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

For the Nine Months Ended September 30, 2006 and September 30, 2005

(dollars in thousands)

 

     2006     2005  

Operating activities:

    

Net income

   $ 2,564     $ 2,640  

Adjustments to reconcile net income to net cash used by operating activities:

    

Provision for loan losses

     287       903  

Depreciation and amortization

     1,999       1,910  

Net change in mortgage loans held for sale

     (12,617 )     (15,547 )

Other operating activities, net

     (5,242 )     945  
                

Net cash used by operating activities

     (13,009 )     (9,149 )

Investing activities:

    

Net increase in loans not held for sale

     (44,377 )     (31,560 )

Purchases of premises and equipment

     (5,412 )     (2,984 )

Proceeds from maturities of held-to-maturity securities

     80       55  

Proceeds from maturities of available-for-sale securities

     21,505       9,327  

Other investing activities, net

     3,248       (1,024 )
                

Net cash used by investing activities

     (24,956 )     (26,186 )

Financing activities:

    

Net increase in deposits

     10,840       73,959  

Net increase (decrease) in federal funds purchased

     4,000       (5,000 )

Cash dividends paid

     (1,128 )     (1,128 )

Principal payments on other borrowed funds

     (61,741 )     (37,920 )

Proceeds from other borrowed funds

     80,500       15,000  
                

Net cash provided by financing activities

     32,471       44,911  
                

Cash and cash equivalents:

    

Net increase (decrease)

     (5,494 )     9,576  

Balance at January 1

     28,117       18,114  
                

Balance at September 30

   $ 22,623     $ 27,690  
                

See notes to consolidated financial statements.

 

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PULASKI INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1: Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. These interim financial statements should be read in conjunction with the audited financial statements and note disclosures for Pulaski Investment Corporation for the years ended December 31, 2005, 2004 and 2003, included herein. The balance sheet at December 31, 2005 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the nine-month period ended September 30, 2006 are not necessarily indicative of the results that may be expected for the year ended December 31, 2006.

The consolidated financial statements include the accounts of Pulaski Investment Corporation, a bank holding company, and its wholly owned subsidiary, Pulaski Bank and Trust Company (the “Bank”) and the following wholly owned subsidiaries of the Bank: Pulaski Mortgage Company and its wholly owned subsidiary, PMC Mortgage Company, Pulaski Building, Inc., Lenders Title Company, Directors Properties, Inc., Pulaski Services, Inc. and Pulaski Insurance Agency, Inc. (collectively, the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation.

All normal, recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial statements, have been included. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Material estimates that are susceptible to significant change in the near term are the allowance for loan losses, valuation of title plants and other intangible assets.

Note 2: Supplemental Cash Flows Information

The Company paid $9,129,000 and $5,544,000 in interest on deposits and other borrowings during the nine-month periods ended September 30, 2006 and 2005, respectively. During the nine-month periods ended September 30, 2006 and 2005, the Company made income tax payments of $2,075,000 and $1,111,000, respectively.

Note 3: Other Borrowed Funds

Other borrowed funds consisted of the following at (dollars in thousands):

 

     September 30, 2006    December 31, 2005

Federal Home Loan Bank advances:

     

Long-term, due monthly through 2010

   $ 17,253    $ 20,494

Short-term

     22,000      -0-

Junior Subordinated Debt Securities due to Pulaski Capital Trust I, 10 7/8%, due in 2030

     6,186      6,186
             
   $ 45,439    $ 26,680
             

 

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PULASKI INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 4: Title Company Operations

Included in other income are the following significant categories of income from title company operations for the nine months ended September 30, 2006 and September 30, 2005:

 

     2006    2005

Title insurance fees

   $ 6,812    $ 7,201

Closing fees

     2,587      2,812

Search fees

     751      693

Other fees

     913      1,130
             
   $ 11,063    $ 11,836
             

Note 5: Recent Accounting Pronouncements

In February 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments, an amendment of SFAS No. 133 and 140. SFAS No. 155 permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133, establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives and amends SFAS No. 140 to eliminate the prohibition on a qualifying special purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. This Statement is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company anticipates that the adoption of SFAS No. 155 will not have a material impact on the Company’s financial position or results of operations.

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, an amendment of SFAS No. 140. SFAS No. 156 requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in selected situations; requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable; permits an entity to choose either the amortization or fair value measurement method for each class of separately recognized servicing assets and servicing liabilities; at its initial adoption, permits a one-time reclassification of available-for-sale securities to trading securities by entities with recognized servicing rights, without calling into question the treatment of other available-for-sale securities under SFAS No. 115, provided that the available-for-sale securities are identified in some manner as offsetting the entity’s exposure to changes in fair value of servicing assets or servicing liabilities that a servicer elects to subsequently measure at fair value; and requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the statement of financial position and additional disclosures for all separately recognized servicing assets and servicing liabilities. This Statement is effective as of the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company anticipates that the adoption of SFAS No. 156 will not have a material impact on the Company’s financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. This Statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. The Company

 

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PULASKI INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

anticipates that the adoption of SFAS No. 157 will not have a material impact on the Company’s financial position or results of operations.

Note 6: Agreement and Plan of Merger

On August 9, 2006, the Company entered into an agreement with IBERIABANK Corporation (“IBERIABANK”), Lafayette, Louisiana, for the sale of all of the Company’s outstanding stock. If the merger agreement is approved and the merger is subsequently completed, each outstanding share of Pulaski Investment Corporation common stock will be converted into (i) cash (without interest) equal to $26.6464 per share (approximately $65,000,000 in the aggregate), (ii) 0.2274 shares of IBERIABANK Corporation common stock for each share of common stock of Pulaski Investment Corporation (approximately $32,500,000 in the aggregate based upon the closing price of IBERIABANK Corporation common stock on August 8, 2006 of $58.60 per shares), and (iii) the number of shares of IBERIABANK Corporation common stock determined by the quotient obtained by dividing $13.323 by the average trading price of the IBERIABANK Corporation common stock on the 15 trading days ending one business day prior to the effective date of the merger (approximately $32,500,000 in aggregate market value). Completion of the transaction is subject to regulatory and shareholders’ approvals.

 

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