Shares of Pulaski Financial Corp. of St. Louis fell 9% Wednesday on news that it lost $4.1 million, or 39 cents a share, in its fiscal fourth quarter because of a spike in troubled loans and hefty loss in its securities portfolio.

The $1.3 billion-asset company blamed the loss largely on a previously announced after-tax loss of $5.2 million related to its investments in Fannie Mae preferred securities.

Most banks and thrifts that hold the preferred shares have retained them and taken impairment charges; Pulaski sold its 350,000 preferred shares in Fannie Mae two days after government-sponsored enterprise and its sister company, Freddie Mac, were put into conservatorship.

In the previous fiscal year's fourth quarter Pulaski earned $2.3 million, or 23 cents a share. It reported its latest results late Tuesday. Its fourth quarter ended Sept. 30.

Adding to the quarterly loss was a $1.6 million charge related to the retirement of William A. Donius, who had been Pulaski's president and chief executive. Because of that charge its noninterest expenses rose 27%, to $7.7 million, from the year-earlier quarter.

Pulaski increased its provision for loan losses by 306% from a year earlier, $2.8 million, as credit quality weakened. Total chargeoffs for the quarter rose 650% from a year earlier, to $2 million, and nonperformers doubled, to $20.6 million.

Pulaski's shares closed at $8.01.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.