Malvern Bancorp, Inc. (NASDAQ:MLVF) Files An 8-K Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim ReviewItem 4.02
(b) On November 21, 2017, Malvern Bancorp, Inc. (the “Company”) was advised by BDO USA, LLP (“BDO”), its independent registered public accounting firm, that the Company should disclose that BDO’s audit report on the Company’s consolidated financial statements as of September 30, 2016 and 2015, and for each of the years in the two year period ended September 30, 2016, and BDO’s completed interim reviews of the Company’s consolidated interim financial statements as of and for the periods ended December 31, 2016, March 31, 2017 and June 30, 2017 (collectively, the “Specified Financial Statements”), should no longer be relied upon. The Company plans to restate the Specified Financial Statements, which will be included in amendments to the Company’s fiscal 2016 10-K and 10-Qs for the first three quarters of fiscal 2017.
BDO also advised the Company that they have concluded that a material weakness in the Company’s internal controls over financial reporting existed, and that BDO’s report on the effectiveness of the Company’s internal control over financial reporting as of September 30, 2016 in Item 9A of the Company’s fiscal 2016 10-K that the Company’ internal control over financial reporting was effective as of September 30, 2016, should no longer be relied upon. The material weakness identified relates to the effectiveness of the Company’s management review controls over the computation and disclosure of income taxes.
The matters described in this filing relate to the Company’s income tax account balances. The effect of these matters is to increase net income for fiscal 2016 by approximately $208,000, fiscal 2015 by approximately $970,000 and fiscal 2014 by approximately $388,000. The effect of these matters as of and for the nine months ended June 30, 2017, is a decrease to net income of approximately $795,000 and a decrease in tax liability account of $795,000. Please refer to the table below for an analysis of the impact on the consolidated balance sheets and income statements for the periods affected.
| As of | |||||||||||||||||||||||||
| (in thousands) | Sep. 30, 2014 Previously Reported | Amount of Mistatement | Restated Amount | Sep. 30, 2015 Previously Reported | Amount of Misstatement | Restated Amount | Sep. 30, 2016 Previously Reported | Amount of Misstatement | Restated Amount | Dec. 31, 2016 Previously Reported | Amount of Misstatement | Restated Amount | Mar. 31, 2017 Previously Reported | Amount of Misstatement | Restated Amount | Jun. 30, 2017 Previously Reported | Amount of Misstatement | Restated Amount | |||||||
| Total Assets | $ | 542,264 | 542,264 | 655,690 | 655,690 | 821,272 | 821,272 | 879,002 | 879,002 | 961,815 | 961,815 | 1,010,908 | 1,010,908 | ||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||||||
| Other liabilities | $ | 2,604 | (388 | ) | 2,216 | 3,575 | (1,358 | ) | 2,217 | 4,549 | (1,566 | ) | 2,983 | 3,662 | (1,369 | ) | 2,293 | 3,206 | (1,130 | ) | 2,076 | 4,697 | (770 | ) | 3,927 |
| Total Liabilities | $ | 465,492 | (388 | ) | 465,104 | 574,299 | (1,358 | ) | 572,941 | 726,681 | (1,566 | ) | 725,115 | 783,267 | (1,369 | ) | 781,898 | 864,351 | (1,130 | ) | 863,221 | 911,245 | (770 | ) | 910,475 |
| Shareholders' Equity | |||||||||||||||||||||||||
| Total Shareholders' Equity | $ | 76,772 | 77,160 | 81,391 | 1,358 | 82,749 | 94,591 | 1,566 | 96,157 | 95,735 | 1,369 | 97,104 | 97,464 | 1,130 | 98,594 | 99,663 | 100,433 | ||||||||
| Total Liabilities and Shareholders' Equity | $ | 542,264 | — | 542,264 | 655,690 | — | 655,690 | 821,272 | — | 821,272 | 879,002 | — | 879,002 | 961,815 | — | 961,815 | 1,010,908 | — | 1,010,908 |
| Fiscal Year Ended | Quarter Ended | ||||||||||||||||||||||||||||||||||||||
| (in thousands, except for per share data) | Sep. 30, 2014 Previously Reported | Amount of Misstatement | Restated Amount | Sep. 30, 2015 Previously Reported | Amount of Misstatement | Restated Amount | Sep. 30, 2016 Previously Reported | Amount of Misstatement | Restated Amount | Dec. 31, 2016 Previously Reported | Amount of Misstatement | Restated Amount | Mar. 31, 2017 Previously Reported | Amount of Misstatement | Restated Amount | Jun. 30, 2017 Previously Reported | Amount of Misstatement | Restated Amount | |||||||||||||||||||||
| Income (Loss) before income tax expense | $ | 3,698 | 3,698 | 5,976 | 5,976 | 1,462 | 1,462 | 1,758 | 1,758 | 2,582 | 2,582 | ||||||||||||||||||||||||||||
| Income tax benefit (expense) | $ | (21 | ) | — | 5,966 | 6,174 | (292 | ) | (197 | ) | (489 | ) | (349 | ) | (239 | ) | (588 | ) | (503 | ) | (360 | ) | (863 | ) | |||||||||||||||
| Net Income (Loss) | $ | 3,698 | 4,668 | 11,942 | 12,150 | 1,170 | (197 | ) | 1,409 | (239 | ) | 1,170 | 2,079 | (360 | ) | 1,719 | |||||||||||||||||||||||
| Basic Earnings (Loss) Per Share | $ | 0.05 | $ | 0.06 | $ | 0.11 | $ | 0.58 | $ | 0.15 | $ | 0.73 | $ | 1.86 | $ | 0.04 | $ | 1.90 | $ | 0.18 | $ | (0.03 | ) | $ | 0.15 | $ | 0.22 | $ | (0.04 | ) | $ | 0.18 | $ | 0.32 | $ | (0.05 | ) | $ | 0.27 |
| Diluted Earnings (Loss) Per Share | n/a | n/a | n/a | n/a | n/a | n/a | $ | 1.86 | $ | 0.04 | $ | 1.90 | $ | 0.18 | $ | (0.03 | ) | $ | 0.15 | $ | 0.22 | $ | (0.04 | ) | $ | 0.18 | $ | 0.32 | $ | (0.05 | ) | $ | 0.27 |
These matters have no effect on the Company’s cash position, net interest margin, pre tax income or the Company’s operating expenses.
The Chair of the Audit Committee of the Company’s Board of Directors and management have discussed the matters disclosed in this filing with BDO.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
The following exhibits are filed with this Current Report on Form 8-K:
MALVERN BANCORP, INC. ExhibitEX-7.1 2 s108281_ex7-1.htm EXHIBIT 7.1 Exhibit 7.1 Tel: 215-564-1900 Ten Penn Center Fax: 215-564-3940 1801 Market Street,…To view the full exhibit click here
