<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
---------------- ----------------
Commission file number 000-24931
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below: Security First Technologies,
Inc. Section 401(k) Plan.
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office: Security First Technologies
Corporation, 3390 Peachtree Road, NE, Suite 1700, Atlanta, Georgia 30326
<PAGE> 2
SECURITY FIRST TECHNOLOGIES, INC. SECTION 401(k) PLAN
Table of Contents
<TABLE>
<CAPTION>
Page(s)
-------
<S> <C>
Independent Auditors' Report 1
Statement of Net Assets Available for Plan Benefits as of
December 31, 1998 and 1997 2
Statement of Changes in Net Assets Available for Plan Benefits
for the year ended December 31, 1998 3
Notes to Financial Statements 4
Schedules
---------
Schedule 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1998 1
Schedule 27d - Schedule of Reportable Transactions for the
year ended December 31, 1998 2
Exhibit 23 - Consent of Independent Auditors
</TABLE>
<PAGE> 3
SECURITY FIRST TECHNOLOGIES, INC. 401(K) SAVINGS PLAN
Financial Statements and Supplementary Schedules
December 31, 1998 and 1997
With Independent Auditors' Report Thereon
<PAGE> 4
INDEPENDENT AUDITORS' REPORT
The Plan Administrator
Security First Technologies, Inc. 401(k) Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of Security First Technologies, Inc. 401(k) Savings Plan (the "Plan")
as of December 31, 1998 and 1997, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1998. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1998 and 1997 and the changes in net assets available for plan
benefits for the year ended December 31, 1998 in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
Schedules 1 and 2 is presented for the purpose of additional analysis and is not
a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplementary schedules are the responsibility of the Plan's
management. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
KPMG LLP
June 11, 1999
<PAGE> 5
SECURITY FIRST TECHNOLOGIES, INC. 401(K) SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
------------------ ----------------
<S> <C> <C>
Assets:
Investments at fair value:
Pooled separate accounts:
Principal Guaranteed Interest Account $ 66,212 39,636
Principal Money Market Separate Account 78,939 94,783
Principal Government Securities Separate Account 2,821 --
Principal Stock Emphasis Balanced Separate Account 99,649 47,775
Principal Bond Emphasis Balanced Separate Account 3,605 --
Principal Stock Index 500 Separate Account 411,301 170,004
Principal U.S. Stock Separate Account 7,094 --
Principal Medium Company Value Separate Account 105,049 61,901
Principal Medium Company Blend Separate Account 2,939 --
Principal Small Company Blend Separate Account 129,297 72,403
Principal International Stock Separate Account 116,936 79,822
Principal International Emerging Markets
Separate Account 136,240 110,995
Shares of registered investment companies:
T. Rowe Price Growth & Income Fund 107,295 81,227
Vanguard Health Care Fund 261,130 104,849
Vanguard U.S. Growth Fund 224,282 99,481
Vanguard/Primecap Fund 359,098 166,249
Security First Technologies Corporation Common Stock Fund 3,374,101 543,432
------------------ ----------------
Total investments 5,485,988 1,672,557
Receivables:
Accrued dividends 44,743 --
Employee contributions 40,656 --
Employer contributions 14,436 --
------------------ ----------------
Total receivables 99,835 --
------------------ ----------------
Net assets available for plan benefits $ 5,585,823 1,672,557
================== ================
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE> 6
SECURITY FIRST TECHNOLOGIES, INC. 401(K) SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Year ended December 31, 1998
<TABLE>
<S> <C>
Additions to net assets attributed to:
Investment income:
Interest income $ 3,120
Dividend income 50,579
Net appreciation in fair value of investments 2,564,307
-------------------
Total investment income 2,618,006
-------------------
Rollover from Solutions By Design, Inc. 401(k) Plan 125,752
-------------------
Contributions:
Employee rollover contributions 178,393
Employee contributions 1,013,847
Employer contributions 298,018
-------------------
Total contributions 1,490,258
-------------------
Total additions 4,234,016
-------------------
Deductions from net assets attributed to:
Benefits paid to participants 298,491
Forfeitures 21,031
Refund of excess contributions 1,228
-------------------
Total deductions 320,750
-------------------
Net increase in net assets available for plan benefits 3,913,266
Net assets available for plan benefits:
Beginning of period 1,672,557
-------------------
End of period $ 5,585,823
===================
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE> 7
SECURITY FIRST TECHNOLOGIES, INC. 401(K) SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(1) DESCRIPTION OF THE PLAN
The following description of the Security First Technologies, Inc.
401(k) Savings Plan (the "Plan") provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
GENERAL
The Plan, which commenced on July 1, 1996, is a defined contribution
plan covering all eligible employees of Security First Technologies
Corporation and its subsidiary (the "Company" or "S1"). Full-time
employees become eligible to participate after three months of
service. Enrollment in the Plan is on the first day of each month. The
Plan is subject to certain provisions of the Employee Retirement
Income Security Act of 1974 (ERISA), as amended.
REORGANIZATION
Security First Technologies Corporation is the successor company to
Security First Network Bank as a result of the reorganization
completed on September 30, 1998. Also on September 30, 1998, the
Company completed the sale of its banking operations to the Royal Bank
of Canada.
CONTRIBUTIONS
Participants may contribute from 1% to 15% of their pretax earnings up
to a maximum of $10,000 in 1998. Rollover contributions from other
qualified plans are permitted. The Company makes matching
contributions of $.25 for every dollar that participants elect to
contribute to investments other than the Security First Technologies
Corporation Common Stock Fund up to a defined limit. The Company makes
matching contributions of $1.00 for every dollar that participants
elect to contribute to the Security First Technologies Corporation
Common Stock Fund up to a defined limit. Employer contributions are
limited to 4% of the employee's eligible compensation.
INVESTMENTS
The Plan assets are invested in investment funds and S1 common stock.
On a quarterly basis, the Plan allocates earnings to participants
based on the ratio of the participant's account balance in each
investment fund to the total of all participants' account balances in
each investment fund. As of December 31, 1998, participants may have
their contributions invested in the following investments:
PRINCIPAL GUARANTEED INTEREST ACCOUNT - Consists of low-risk
investments in private-market bonds, commercial mortgages, and
mortgage-backed securities which earn a guaranteed interest
rate.
PRINCIPAL MONEY MARKET SEPARATE ACCOUNT - Consists of
low-risk investments in money market instruments.
PRINCIPAL GOVERNMENT SECURITIES SEPARATE ACCOUNT - Consists of
investments in various types of government securities such as
Government National Mortgage Association Certificates (GNMA),
Fannie Maes (FNMA Federal National Mortgage Association),
Freddie Macs (FHLMC Federal Home Loan Mortgage Corporation)
and Sallie Maes (SLMA Student Loan Marketing Association).
4 (Continued)
<PAGE> 8
SECURITY FIRST TECHNOLOGIES, INC. 401(K) SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
PRINCIPAL STOCK EMPHASIS BALANCED SEPARATE ACCOUNT - Consists
of investments in other accounts of Principal Mutual Life
Insurance Company such as the Principal International Stock
Account and the Principal U.S. Stock Account with
approximately 50-100% of the assets in dynamic and aggressive
investment accounts and 0-50% in conservative and moderate
investment accounts.
PRINCIPAL BOND EMPHASIS BALANCED SEPARATE ACCOUNT - Consists
of investments in other separate accounts of Principal Life
Insurance Company such as the Principal Bond and Mortgage
Account and the Principal Government Securities Account with
approximately 50-100% of the assets in conservative and
moderate investment accounts and 0-50% in dynamic and
aggressive investment accounts.
PRINCIPAL STOCK INDEX 500 SEPARATE ACCOUNT - Consists of
common stocks of companies listed in the S&P 500 Index.
PRINCIPAL U.S. STOCK SEPARATE ACCOUNT - Consists of
investments in stocks of U.S. companies of all sizes whose
prices are considered good values when compared to their
long-term earnings potential.
PRINCIPAL MEDIUM COMPANY VALUE SEPARATE ACCOUNT - Consists of
investments in medium-sized stocks whose prices relative to
the companies' value are lower than average.
PRINCIPAL MEDIUM COMPANY BLEND SEPARATE ACCOUNT - Consists of
investments in medium-sized stocks that offer a combination of
value and good earnings potential.
PRINCIPAL SMALL COMPANY BLEND SEPARATE ACCOUNT - Consists of
investments in stocks of smaller, seasoned companies where
potential for long-term growth is expected to be above
average.
PRINCIPAL INTERNATIONAL STOCK SEPARATE ACCOUNT - Consists of
investments in common stocks of companies located outside the
U.S., mainly in Western Europe and Asia.
PRINCIPAL INTERNATIONAL EMERGING MARKETS SEPARATE ACCOUNT -
Consists of investments in stocks of companies located in
countries where economic, social, and political factors are
causing rapid economic growth.
T. ROWE PRICE GROWTH & INCOME FUND - Consists of investments
in stocks of large companies that make regular dividend
payments.
VANGUARD HEALTH CARE FUND - Consists of investments in stocks
of companies in the health care industry.
VANGUARD U.S. GROWTH FUND - Consists of investments in stocks
of high quality, seasoned, U.S. companies with records of
exceptional growth.
VANGUARD/PRIMECAP FUND - Consists of investments in stocks of
various sized companies with market values between $1 and $5
billion.
SECURITY FIRST TECHNOLOGIES CORPORATION COMMON STOCK FUND -
Consists of S1 common stock.
5 (Continued)
<PAGE> 9
SECURITY FIRST TECHNOLOGIES, INC. 401(K) SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
VESTING
Participants are immediately vested in their contributions plus
earnings thereon. Company contributions plus earnings thereon become
fully vested after five years of service. Company contributions are
vested at the rate of 33-1/3 % per year starting with the third year
of participation. In prior periods, Company matching contributions
related to the Security First Technologies Corporation Common Stock
Fund were forfeited if the participant did not maintain this
investment for a minimum of 12 quarters. However, effective January 1,
1998, this stipulation was removed through an amendment to the Plan.
Participants immediately become fully vested in Company contributions
upon reaching normal retirement age, total and permanent disability,
or death.
DISTRIBUTION OF BENEFITS
Participants who separate from service for any reason other than
retirement will have the value of their contributions and earnings and
the Company elective contributions and earnings, in which they are
vested, distributed to them in a lump sum. Distribution of benefits to
retired participants can be made in either lump-sum or periodic
payments. If a participant dies before receiving distribution of their
account, the full amount of their account will be paid to the
designated beneficiary.
FORFEITURES
Participants forfeit the nonvested portion of the employer matching
contributions upon the earlier of (i) the distribution of the vested
portion of the participant's accounts, or (ii) the participant incurs
five consecutive breaks in service. Forfeitures are used by the
Company to pay administrative expenses. Forfeitures remaining at the
end of the Plan year are distributed ratably to participants on the
last day of the Plan year.
PLAN TERMINATION
The Company expects the Plan to continue without interruption, but
reserves the right to amend or terminate the Plan at any time. In the
event of Plan termination, the balances in all accounts become fully
and immediately vested. The Company has no present intent to terminate
the Plan.
ADMINISTRATIVE EXPENSES
Administrative expenses of the Plan are paid by the Company.
EXEMPTION FROM INCOME TAXES
The Plan obtained its latest determination letter on April 15, 1998,
in which the Internal Revenue Service stated that the Plan fulfills
the requirements of a qualified plan under the provisions of the
Internal Revenue Code ("IRC") and is not subject to tax. Effective
January 1, 1998, the Plan was amended and restated. The Company has
not yet received a determination letter for the amended and restated
plan. However, the Company and the Plan's tax counsel believe that
the Plan currently is designed and being operated in compliance with
the applicable requirements of the IRC. Accordingly, no provision for
Federal or state income taxes has been made.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION
The accompanying financial statements have been prepared on
the accrual basis.
6 (Continued)
<PAGE> 10
SECURITY FIRST TECHNOLOGIES, INC. 401(K) SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(b) INVESTMENTS
Investments are stated at fair value. Investments in pooled
separate accounts are valued at fair value, which is the net
asset value per unit as reported on the last business day of
the year. Shares of registered investment companies are valued
at quoted market prices which represent the net asset value of
shares held by the Plan at year-end. The Company's stock is
valued at its quoted market price. Purchases and sales of
investments are recorded on a trade-date basis.
Net appreciation in fair value of investments, including
realized gains and losses, represent the change in fair value
during the year and realized gains and losses on investments
sold or distributed during the year.
(c) USE OF ESTIMATES
The preparation of the financial statements in conformity with
generally accepted accounting principles requires the use of
estimates. Actual results could differ from those estimates.
(d) PAYMENT OF BENEFITS
Benefits are recorded when paid.
(3) ROLLOVER FROM SOLUTIONS BY DESIGN, INC. 401(k) PLAN
During 1998, Plan assets totaling $125,752 from the Solutions By
Design, Inc. 401(k) Plan were merged into the Security First
Technologies, Inc. 401(k) Savings Plan as a result of the Company's
acquisition of Solutions By Design, Inc. on November 24, 1997.
7
<PAGE> 11
SECURITY FIRST TECHNOLOGIES, INC. 401(K) SAVINGS PLAN
Notes to Financial Statements
(4) INVESTMENTS
Changes in the net assets available for plan benefits of the Plan by investment
fund for the year ended December 31, 1998 are summarized as follows:
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
PRINCIPAL PRINCIPAL PRINCIPAL BOND STOCK
GUARANTEED MONEY GOVERNMENT EMPHASIS EMPHASIS
INTEREST MARKET SECURITIES BALANCED BALANCED
ACCOUNTS ACCOUNT ACCOUNT ACCOUNT ACCOUNT
--------------- ------------ ---------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attibuted to:
Investment income:
Interest income $ -- 158 -- -- 58
Dividend income -- -- -- -- --
Net appreciation (depreciation)
in fair value of investments 2,833 2,357 34 121 8,089
--------------- ------------ ---------------- ------------- --------------
Total investment income (loss) 2,833 2,515 34 121 8,147
--------------- ------------ ---------------- ------------- --------------
Rollover from Solutions By Design, Inc. 401(k) Plan -- 11,036 -- -- 2,339
Contributions:
Employee rollover contributions 5,912 -- 2,717 2,718 8,801
Employee contributions 19,652 7,392 86 1,073 35,794
Employer contributions 855 1,478 5 73 1,637
--------------- ------------ ---------------- ------------- --------------
Total contributions 26,419 8,870 2,808 3,864 46,232
--------------- ------------ ---------------- ------------- --------------
Total additions 29,252 22,421 2,842 3,985 56,718
--------------- ------------ ---------------- ------------- --------------
Deductions from net assets attributed to:
Benefits paid to participants (2,455) (42,537) -- -- (2,887)
Refund of excess contributions -- -- -- -- --
Forfeitures (364) (13,288) -- -- (120)
--------------- ------------ ---------------- ------------- --------------
Total deductions (2,819) (55,825) -- -- (3,007)
--------------- ------------ ---------------- ------------- --------------
Net increase (decrease) in net assets
available for plan benefits prior to
interfund transfers 26,433 (33,404) 2,842 3,985 53,711
Inferfund transfers 789 18,251 -- -- 131
--------------- ------------ ---------------- ------------- --------------
Net increase (decrease) in net assets
available for plan benefits 27,222 (15,153) 2,842 3,985 53,842
Net assets available for plan benefits:
Beginning of period 39,636 94,783 -- -- 47,775
--------------- ------------ ---------------- ------------- --------------
End of period $ 66,858 79,630 2,842 3,985 101,617
=============== ============ ================ ============= ==============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL PRINCIPAL
PRINCIPAL PRINCIPAL MEDIUM MEDIUM SMALL
STOCK U.S. COMPANY COMPANY COMPANY
INDEX 500 STOCK VALUE BLEND BLEND
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attibuted to:
Investment income:
Interest income 783 32 134 -- 252
Dividend income -- -- -- -- --
Net appreciation (depreciation)
in fair value of investments 70,124 715 3,368 261 (8,355)
----------- ------------ ------------ ------------ ------------
Total investment income (loss) 70,907 747 3,502 261 (8,103)
----------- ------------ ------------ ------------ ------------
Rollover from Solutions By Design, Inc. 401(k) Plan 16,024 2,273 6,834 -- 12,870
Contributions:
Employee rollover contributions 25,437 3,368 9,204 2,038 14,005
Employee contributions 124,182 755 38,815 1,038 47,792
Employer contributions 5,197 110 1,564 17 1,668
----------- ------------ ------------ ------------ ------------
Total contributions 154,816 4,233 49,583 3,093 63,465
----------- ------------ ------------ ------------ ------------
Total additions 241,747 7,253 59,919 3,354 68,232
----------- ------------ ------------ ------------ ------------
Deductions from net assets attributed to:
Benefits paid to participants (27,702) -- (15,808) -- (6,216)
Refund of excess contributions (539) -- (82) -- (68)
Forfeitures (6,333) -- (282) -- (235)
----------- ------------ ------------ ------------ ------------
Total deductions (34,574) -- (16,172) -- (6,519)
----------- ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
available for plan benefits prior to
interfund transfers 207,173 7,253 43,747 3,354 61,713
Inferfund transfers 40,269 -- 1,108 -- (2,886)
----------- ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
available for plan benefits 247,442 7,253 44,855 3,354 58,827
Net assets available for plan benefits:
Beginning of period 170,004 -- 61,901 -- 72,403
----------- ------------ ------------ ------------ ------------
End of period 417,446 7,253 106,756 3,354 131,230
=========== ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL INTERNATIONAL T. ROWE PRICE
INTERNATIONAL EMERGING GROWTH & VANGUARD
STOCK MARKETS INCOME HEALTH CARE
ACCOUNT ACCOUNT FUND FUND
---------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C>
Additions to net assets attibuted to:
Investment income:
Interest income 72 154 19 614
Dividend income -- -- 12,289 9,258
Net appreciation (depreciation)
in fair value of investments 9,443 (23,502) (2,330) 51,715
---------------- --------------- ----------------- ---------------
Total investment income (loss) 9,515 (23,348) 9,978 61,587
---------------- --------------- ----------------- ---------------
Rollover from Solutions By Design, Inc. 401(k) Plan 3,453 6,804 890 26,635
Contributions:
Employee rollover contributions 2,747 7,522 3,996 --
Employee contributions 29,714 40,161 44,139 71,046
Employer contributions 1,352 1,642 2,249 3,395
---------------- --------------- ----------------- ---------------
Total contributions 33,813 49,325 50,384 74,441
---------------- --------------- ----------------- ---------------
Total additions 46,781 32,781 61,252 162,663
---------------- --------------- ----------------- ---------------
Deductions from net assets attributed to:
Benefits paid to participants (3,861) (5,886) (8,232) (17,019)
Refund of excess contributions (442) (44) -- --
Forfeitures (265) (144) -- --
---------------- --------------- ----------------- ---------------
Total deductions (4,568) (6,074) (8,232) (17,019)
---------------- --------------- ----------------- ---------------
Net increase (decrease) in net assets
available for plan benefits prior to
interfund transfers 42,213 26,707 53,020 145,644
Inferfund transfers (4,115) (232) (14,595) 20,795
---------------- --------------- ----------------- ---------------
Net increase (decrease) in net assets
available for plan benefits 38,098 26,475 38,425 166,439
Net assets available for plan benefits:
Beginning of period 79,822 110,995 81,227 104,849
---------------- --------------- ----------------- ---------------
End of period 117,920 137,470 119,652 271,288
================ =============== ================= ===============
</TABLE>
<TABLE>
<CAPTION>
SECURITY FIRST
VANGUARD TECHNOLOGIES
U.S. VANGUARD CORPORATION
GROWTH PRIMECAP STOCK
FUND FUND FUND TOTAL
------------- ------------- ----------------- ------------
<S> <C> <C> <C> <C>
Additions to net assets attibuted to:
Investment income:
Interest income 139 583 121 3,119
Dividend income 15,273 13,765 -- 50,585
Net appreciation (depreciation)
in fair value of investments 39,239 52,967 2,357,228 2,564,307
------------- ------------- ----------------- ------------
Total investment income (loss) 54,651 67,315 2,357,349 2,618,011
------------- ------------- ----------------- ------------
Rollover from Solutions By Design, Inc. 401(k) Plan 7,125 29,469 -- 125,752
Contributions:
Employee rollover contributions 25,424 14,204 50,298 178,391
Employee contributions 58,280 114,362 379,566 1,013,847
Employer contributions 3,193 6,702 266,878 298,015
------------- ------------- ----------------- ------------
Total contributions 86,897 135,268 696,742 1,490,253
------------- ------------- ----------------- ------------
Total additions 148,673 232,052 3,054,091 4,234,016
------------- ------------- ----------------- ------------
Deductions from net assets attributed to:
Benefits paid to participants (28,562) (21,213) (116,113) (298,491)
Refund of excess contributions -- -- (53) (1,228)
Forfeitures -- -- -- (21,031)
------------- ------------- ----------------- ------------
Total deductions (28,562) (21,213) (116,166) (320,750)
------------- ------------- ----------------- ------------
Net increase (decrease) in net assets
available for plan benefits prior to
interfund transfers 120,111 210,839 2,937,925 3,913,266
Inferfund transfers 24,043 (1,291) (82,267) --
------------- ------------- ----------------- ------------
Net increase (decrease) in net assets
available for plan benefits 144,154 209,548 2,855,658 3,913,266
Net assets available for plan benefits:
Beginning of period 99,481 166,249 543,432 1,672,557
------------- ------------- ----------------- ------------
End of period $ 243,635 375,797 3,399,090 5,585,823
============= ============= ================= ============
</TABLE>
8
<PAGE> 12
SCHEDULE 1
SECURITY FIRST TECHNOLOGIES, INC. 401(K) SAVINGS PLAN
Schedule 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
NUMBER OF CURRENT
SECURITY UNITS/SHARES COST VALUE
-------- ------------ ---- -----
<S> <C> <C> <C>
Principal Guaranteed Interest Account* N/A $ 66,212 66,212
Principal Money Market Separate Account* 2,135 77,241 78,939
Principal Government Securities Separate Account* 198 2,787 2,821
Principal Stock Emphasis Balanced Separate Account* 5,072 90,798 99,649
Principal Bond Emphasis Balanced Separate Account* 220 3,484 3,605
Principal Stock Index 500 Separate Account* 9,614 342,786 411,301
Principal U.S. Stock Separate Account* 16 6,379 7,094
Principal Medium Company Value Separate Account* 2,836 99,045 105,049
Principal Medium Company Blend Separate Account* 89 2,679 2,939
Principal Small Company Blend Separate Account* 3,902 138,448 129,297
Principal International Stock Separate Account* 3,482 108,907 116,936
Principal International Emerging Markets Separate Account* 11,155 165,004 136,240
T. Rowe Price Growth and Income Fund 4,087 109,976 107,295
Vanguard Health Care Fund 2,696 213,140 261,130
Vanguard U.S. Growth Fund 5,982 188,743 224,282
Vanguard Primecap Fund 7,535 316,908 359,098
Security First Technologies Corporation Common Stock Fund* 110,626 1,247,669 3,374,101
----------- ---------
$ 3,180,206 5,485,988
=========== =========
</TABLE>
*Party-in-interest to the Plan.
See accompanying independent auditors' report.
9
<PAGE> 13
SCHEDULE 2
SECURITY FIRST TECHNOLOGIES, INC. 401(k) SAVINGS PLAN
Schedule 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
EXPENSES
SHARES/ PURCHASE SELLING INCURRED WITH COST OF
DESCRIPTION OF ASSETS UNITS PRICE PRICE TRANSACTIONS ASSET
--------------------- ----- ------- -------- --------------- ---------
<S> <C> <C> <C> <C> <C>
Series of transactions in excess of 5% of plan assets:
Principal Money Market Separate Account* 5,318 $193,485 -- -- 193,485
Principal Money Market Separate Account* 5,882 -- 213,483 -- 210,334
Principal Stock Index 500 Separate Account* 5,621 214,808 -- -- 214,808
Principal Stock Index 500 Separate Account* 1,099 -- 43,635 -- 38,210
Principal Small Company Blend Separate Account* 2,285 77,816 -- -- 77,816
Principal Small Company Blend Separate Account* 359 -- 12,567 -- 13,386
Vanguard Health Care Fund 1,478 125,983 -- -- 125,983
Vanguard Health Care Fund 240 -- 21,417 -- 18,484
Vanguard U.S. Growth Fund 3,403 117,044 -- -- 117,044
Vanguard U.S. Growth Fund 887 -- 31,482 -- 27,131
Vanguard Primecap Fund 4,013 169,667 -- -- 169,667
Vanguard Primecap Fund 680 -- 29,784 -- 28,521
Security First Technologies Corporation Common
Stock Fund* 60,384 855,436 -- -- 855,436
Security First Technologies Corporation Common
Stock Fund* 24,101 -- 381,996 -- 230,984
</TABLE>
*Party-in-interest to the Plan.
<TABLE>
<CAPTION>
CURRENT
VALUE OF
ASSET ON
TRANSACTION NET GAIN
DESCRIPTION OF ASSETS DATE (LOSS)
--------------------- -------------- --------
<S> <C> <C>
Series of transactions in excess of 5% of plan assets:
Principal Money Market Separate Account* 193,485 --
Principal Money Market Separate Account* 213,483 3,149
Principal Stock Index 500 Separate Account* 214,808 --
Principal Stock Index 500 Separate Account* 43,635 5,425
Principal Small Company Blend Separate Account* 77,816 --
Principal Small Company Blend Separate Account* 12,567 (819)
Vanguard Health Care Fund 125,983 --
Vanguard Health Care Fund 21,417 2,933
Vanguard U.S. Growth Fund 117,044 --
Vanguard U.S. Growth Fund 31,482 4,351
Vanguard Primecap Fund 169,667 --
Vanguard Primecap Fund 29,784 1,263
Security First Technologies Corporation Common
Stock Fund* 855,436 --
Security First Technologies Corporation Common
Stock Fund* 381,996 151,012
</TABLE>
*Party-in-interest to the Plan.
See accompanying independent auditors' report.
10
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Security First Technologies, Inc.
Section 401(k) Plan
Date: July 1, 1999 By: /s/ ROBERT F. STOCKWELL
------------------------------
Name: Robert F. Stockwell
Title: Plan Administrator
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
The Plan Administrator
Security First Technologies, Inc. 401(k) Savings Plan:
We consent to incorporation by reference in the registration statement on Form
S-8 of Security First Technologies Corporation of our report dated June 11,
1999, relating to the statements of net assets available for plan benefits of
Security First Technologies, Inc. 401(k) Savings Plan as of December 31, 1998
and 1997 and the related statement of changes in net assets available for plan
benefits for the year ended December 31, 1998, and supplementary schedules,
which report appears in the December 31, 1998 annual report on Form 11-K of
Security First Technologies, Inc. 401(k) Savings Plan.
KPMG LLP
Atlanta, Georgia
June 29, 1999
