Reports of Bendigo and Adelaide Bank's December half results varied markedly yesterday, with some news outlets reporting a big fall in earnings, while others reported a solid increase. The bank put out a clarification, recommending its preferred measure of performance.Bendigo and Adelaide has to take responsibility for the confusion. For the six months to December 2007 it reported a combination of six month's performance by Bendigo Bank and one month of the newly acquired Adelaide Bank.Most big listed companies would produce pro forma financial statements to cover that period so that like-with-like comparisons could be made in later periods. Bendigo and Adelaide left things as they were, with the result that there is no relevant comparison between the December 2007 and December 2008 results.The bank reported net profit of $60.5 million. After subtracting $58.3 million of significant items, including integration costs of $13.8 million and a $43.7 million movement in the cash flow hedge reserve, the net profit was $118.8 million.The bank's preferred result is cash earnings of $122.2 million, which is calculated by adjusting for the $58.3 million of significant items plus $9.3 million of amortisation on intangibles and dividends paid on preference shares.On a cash basis, the bank made 44.3 cents per share. The stock has been trading around the $9.50 mark this year.The bank's cost to income ratio was 58.3 per cent and its return on equity only eight per cent, annualised.The return on assets was 0.51 per cent in the December 2008 half and down from 0.64 per cent six months earlier (using the bank's preferred cash earnings figure as the numerator).Retail deposits were up 19.9 per cent to $27.2 billion. The loan book was down 6.9 per cent to $40.7 billion, a reflection of the difficulty the bank has had getting funding for its partner advised banking business.While the bank's general and collective provisions remained stable, specific provisions rose from $22.1 million in the June half last year to $41 million for the latest half. Chief financial officer David Hughes said this was mostly due to provisioning on four loans to property developers. Managing director Rob Hunt made a feature of changes to the bank's funding base. Sixty-four per cent of the bank's funding is retail. Excluding off-balance sheet funding, retail funding makes up 83 per cent of funding, up from 50 per cent a year ago.Deposits through branches increased 31 per cent over the past year. The bank is planning to keep the deposits flowing, with 20 new branches to open this year.The bank's net interest margin fell 16 basis points over six months. Hughes said the big item was adverse liability pricing - term deposits taken at eight per cent or more in the early to middle part of last year.Hughes said the margin would improve as those deposits matured and were reinvested at lower prices. The bank has adopted a strategy of improving its margin by not passing on all of the cuts in cash rates. "We have passed on 375 basis