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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 30, 2000 (May 11, 2000)
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COMMUNITY BANCSHARES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 000-16461 63-0868361
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification Number)
MAIN STREET 35031
BLOUNTSVILLE, ALABAMA (Zip Code)
(Address of Principal Executive Offices)
(205) 429-1000
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name or Former Address, If Changed Since Last Report)
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
(a) On May 11, 2000, the Registrant's Board of Directors determined not
to retain the accounting firm of Dudley, Hopton-Jones, Sims and Freeman PLLP
("Dudley") as the Registrant's independent accountant for the year ending
December 31, 2000. Although the Board of Directors expressed its satisfaction
with Dudley's work as the Registrant's independent accountant, the Board
determined that because of the Registrant's growth, it needs access to the
technical support and research services provided by a national accounting firm.
During the past two fiscal years and in the subsequent interim period preceding
the change in accountants there have been no disagreements between the
Registrant and Dudley on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, nor has Dudley in
either of the past two years issued an adverse opinion or disclaimer of opinion
with respect to the Registrant's financial statements or qualified or modified
its opinion as to uncertainty, audit scope or accounting principles. A copy of a
letter from Dudley dated May 30, 2000 addressed to the Securities and Exchange
Commission regarding Registrant's change in independent accountants is filed as
Exhibit 16 hereto.
(b) On May 11, 2000 the Registrant's Board of Directors engaged KPMG LLP
("KPMG") as Registrant's independent accountant for the year ending December 31,
2000. KPMG was consulted by Registrant in August 1999 to determine the proper
accounting treatment of certain loans which were made at the Fort Payne, Alabama
Wal-Mart office of Registrant's subsidiary, Community Bank. KPMG issued a report
on the appropriate application of generally accepted accounting principles dated
October 14, 1999 to the Registrant in connection with the consultation which is
filed as Exhibit 99 hereto. The report addressed three issues identified by the
Registrant: (1) If the loans were individually evaluated for impairment would
the loans be considered impaired under Statement of Financial Accounting
Standards No. 114, Accounting by Creditors for Impairment of a Loan ("Statement
114")? (2) If the loans are impaired loans, should the expected insurance
proceeds under the Registrant's fidelity bond be included in the loans' expected
future cash flows in measuring impairment under Statement 114? (3) If the
insurance proceeds should not be included in measuring impairment, how should
the Registrant record the effect of the expected reimbursement? KPMG's
conclusions, all of which were based on the facts of the transaction provided by
management, were as follows: Issue (1) - The loans should be considered impaired
according to Statement 114; Issue (2) - The expected insurance proceeds should
not be included in the loans' expected future cash flows in measuring
impairment; and Issue (3) - If management expects to receive a full recovery of
the loss from its insurance carrier, the Registrant should recognize an asset
equal to the expected proceeds. The related income statement impact should be
included as a component of non-interest income. The Registrant had consulted
Dudley about these loans earlier in 1999. Dudley's conclusion at that time was
that the loans should be netted against the insurance proceeds and recorded as a
net transaction. After reviewing KPMG's report, Dudley agreed with the
conclusions of KPMG which were substantially the same as Dudley's earlier
conclusions.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) The following exhibits are filed herewith:
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<CAPTION>
Exhibit Number Description
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<S> <C>
16 Letter dated May 30, 2000 from Dudley, Hopton-Jones, Sims and
Freeman PLLP to the Securities and Exchange Commission
99 Letter dated October 14, 1999 from KPMG LLP to the Registrant
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMMUNITY BANCSHARES, INC.
By: /s/ Kennon R. Patterson, Sr.
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Kennon R. Patterson, Sr.
Chairman, Chief Executive Officer and President
Date: May 30, 2000
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EXHIBIT INDEX
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<CAPTION>
Exhibit Number Description
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<S> <C>
16 Letter dated May 30, 2000 from Dudley, Hopton-Jones, Sims
and Freeman PLLP to the Securities and Exchange Commission
99 Letter dated October 14, 1999 from KPMG LLP to the Registrant
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