StateWest Credit Society objected to the tenor of the report in Friday's edition (#596), which reported that the credit union's "proposed merger with Home Building Society must be creating its share of distractions, with the profit tanking in the December 2005 half year." On Friday, The Sheet reported that the credit union's net profit for the half year to December 2005 was just $473,000. StateWest reported a net profit for the year to June 2005 of $7.2 million.The source was the second version of the disclosure statement issued by StateWest in support of the demutualisation proposal and merger with Home Building Society.Geoff Searle, general manager corporate services at StateWest Credit Society, wrote in an email over the weekend that the credit union's normalised net profit after tax for the half year to December 2005 was $3.45 million. Searle normalised the reported net profit by adding back $2.57 million in merger costs (an item reported on Friday), as well as $200,000 in costs relating to the implementation of a new core banking platform, and another $200,000 relating to a prior year tax adjustment.He noted in his email that StateWest assumed that only five per cent of the merger costs were deductible, and that this was the reason for the high effective tax rate of 73 per cent.Searle said that annualised, StateWest's normalised net profit for the half year was approximately $7.0 million compared to the full-year result of $7.2 million for the year to June 2005.He also corrected the reported revenue for the December 2005 half year, which was $18.9 million (and not $18.7 million reported in the article) and which in turn compares with revenue of to $37.4 million in the 2005 financial year. Searle also wrote that, as explained in the independent expert report, "last year's results included $0.5 million in a one-off GST recoupment and the impact of BAD tax recoveries which ended on 30 June 2005. In addition, fee income in the first half was impacted by the discounting of application fees in order to generate loan growth."Searle also wrote that, "the statement is made that 'the financial statements published in the explanatory statement are pro-forma financials and not the actual financials for the half year' was incorrect. The results have been reviewed by our auditors."He also refuted the speculation that there was any evidence of "resistance from customers." Finally, Searle wrote that, "the statement was made that 'the transition to the new accounting standard may muddy comparisons with earlier financial statements…'. This is a true statement and makes comparison difficult not just for StateWest but for most organisations."