NASB Financial, Inc.
NEWS RELEASE
Contact: Rhonda Nyhus
NASB Financial, Inc.
12498 South 71 Highway
Grandview, MO 64030
Phone (816) 765-2200
FOR IMMEDIATE RELEASE:
Grandview, Missouri (May 8, 2006) - NASB Financial, Inc. (NASDAQ: NASB)
announced today that on May 5, 2006, the Audit Committee of the Board of
Directors of NASB Financial, Inc. (the "Company"), upon the recommendation
of management, concluded to amend the Company's 2005 Annual Report on Form
10-K and its Form 10-Q for the quarter ended December 31, 2005, to restate
the financial statements contained therein to appropriately reflect certain
information in conformity with Statement of Financial Accounting Standards
No. 95, "Statement of Cash Flows" ("SFAS 95"). As a result, the Audit
Committee concluded that the Company's previously issued financial
statements for the three years ended September 30, 2005, the independent
registered public accountant's report thereon, and the financial statements
for the quarters ended December 31, 2005 and 2004, should no longer be
relied upon. The change in presentation has no effect on the Company's
previously reported net income, earnings per share, stockholders' equity, or
assets.
The Company has historically classified principal repayments of its
loans held for sale in the investing section of the statement of cash flows.
The SEC has taken exception with this treatment, and informed the Company
that principal repayments of loans held for sale should be classified in the
operating section of the statement of cash flows in accordance with guidance
under SFAS 95. Additionally, as a result of researching this classification
issue, management discovered an error in its calculation of originations and
principal repayments of loans held for sale reported in the statement of
cash flows. A summary of the significant effects of the restatement of the
Company's consolidated statement of cash flows for fiscal years ended
September 30, 2005, 2004, and 2003 are as follows:
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Year ended September 30,
-----------------------------------
2005 2004 2003
-----------------------------------
(in thousands)
Net cash flow from operating
activities, as previously
reported $ (37,404) (37,088) 194,758
Reclassification of principal
repayments of loans receivable
held for sale 35,468 31,834 16,962
Correction of origination and
principal repayments of loans
receivable held for sale (18,998) (50,594) (251,987)
-------- -------- --------
Reported net cash from
operating activities $ (20,934) (55,848) (40,267)
======== ======== ========
Net cash flow from investing
activities, as previously
reported $ (112,655) (204,966) (187,255)
Reclassification of principal
repayments of loans receivable
held for sale (35,468) (31,834) (16,962)
Correction of origination and
principal repayments of loans
receivable held for sale 18,998 50,594 251,987
-------- -------- --------
Reported net cash from
investing activities $ (129,125) (186,206) 47,770
======== ======== ========
As a result of these matters, management is currently evaluating the
impact of this restatement on its internal controls and expects that it will
conclude that it has a material weakness in its internal control over
financial reporting related to the process for the preparation and review of
the consolidated statement of cash flows. Such conclusion would require
management to revise its report on internal control over financial reporting
that is included in the Form 10-K. In addition, management expects that it
will conclude that its disclosure controls and procedures and its internal
control over financial reporting were not effective as of September 30,
2005. Management will disclose its conclusion in the amended annual report
for the year ended September 30, 2005.
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The Company intends to amend, as soon as practicable, the 2005 Annual
Report on Form 10-K and the Form 10-Q for the quarter ended December 31,
2005, to appropriately reflect the aforementioned reclassifications of
principal repayments and originations of loans held for sale. The Form 10-Q
for the quarter ended March 31, 2006, which will be filed on or about May
10, 2006, will reflect such reclassifications within the Company's
consolidated statements of cash flows for the six month periods ended March
31, 2006 and 2005.
NASB Financial, Inc. is a unitary thrift holding company for North
American Savings Bank, F.S.B. ("North American" or the "Bank"). North
American operates five offices in greater Kansas City, Missouri and others
in Harrisonville, St. Joseph, and Excelsior Springs, Missouri. The Bank
also has loan origination offices in Lee's Summit, Springfield and St.
Louis, Missouri as well as Overland Park, and Leawood, Kansas.
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