FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDED CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 20, 1998
Security Federal Corporation
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-16120 57-08580504
- --------------------------- ----------- ------------------
State or other jurisdiction Commission (I.R.S. Employer
of incorporation File Number Identification No.)
1705 Whiskey Road South, Aiken, South Carolina 29803
- ---------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (including area code): (803) 641-3000
Not Applicable
- ------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
<PAGE>
Item 4. Changes in Registrant's Certifying Accountant.
- --------------------------------------------------------
(a) On January 20, 1998, the Registrant's Board of Directors, at the
recommendation of its Audit Committee, terminated the engagement of KPMG Peat
Marwick LLP, Greenville, South Carolina, as the Registrant's certifying
accountants.
The report of KPMG Peat Marwick LLP on the Registrant's financial
statements for either of the last two fiscal years did not contain an adverse
opinion or a disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope, or accounting principles.
During the Registrant's two most recent fiscal years and subsequent
interim periods preceding the date of termination of the engagement of KPMG
Peat Marwick LLP, the Registrant was not in disagreement with KPMG Peat
Marwick LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement, if
not resolved to the satisfaction of KPMG Peat Marwick LLP, would have caused
KPMG Peat Marwick LLP to make reference to the subject matter of the
disagreement in connection with its report.
KPMG Peat Marwick LLP issued a management letter, dated May 9, 1997, to
the Registrant's Board of Directors containing a reportable condition as a
result of their audit of the Registrant's financial statements at and for the
fiscal year ended March 31, 1997. The reportable condition involved certain
unreconciled general ledger accounts due to a data processing conversion to
Jack Henry and staff turnover. The reconciliations involved three different
areas and were addressed by KPMG Peat Marwick LLP as follows:
1. "First, we noted that as a result of the conversion, the loan
and deposit trial balances were not in agreement wit the supporting
documentation as well as the final general ledger as of March 31, 1997.
The accounting department has worked with Jack Henry to improve the loan
and deposit trial balance reconciliation process and finally was able to
reconcile these accounts at the end of May."
2. "We noted that some reconciliations, such as the Flo Thru
Account and the FRB Clearing Account, were not being reconciled in a
timely manner. Delays in reconciling these accounts could result in
errors or misappropriations not being detected. In addition, these
accounts become more difficult and timeconsuming to reconcile as time
passes. Likewise, these accounts had many stale items on the
reconciliation. Once these accounts were reconciled, we determined that
the balances at year end were materially correct."
3. "We also noted the [Security Federal Bank] had not properly
reconciled the Federal National Mortgage Association and Federal Home
Loan Mortgage Corporation custodial accounts which are currently on
deposit with the Federal Home Loan Bank of Atlanta. It is our
understanding that the conversion
2
<PAGE>
<PAGE>
caused both of these accounts to become out of balance. It is also our
understanding that the accounting department reconciled these balances as
of the end of May without significant adjustments."
The letter of KPMG Peat Marwick LLP dated February 18, 1998 with respect
to the above statements made by the Registrant is filed hereto as Exhibit
16(a) and incorporated herein by reference.
(b) On January 20, 1998, the Registrant's Board of Directors, at the
recommendation of its Audit Committee, engaged Elliott, Davis & Company, LLP,
Greenville, South Carolina, as the Registrant's certifying accountants. The
Registrant has not consulted with Elliott, Davis & Company, LLP during its two
most recent fiscal years nor during any subsequent interim period prior to its
engagement regarding the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on the Registrant's financial statements, or regarding the
reportable condition set forth in subsection (a) above.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- ---------------------------------------------------------------------------
Exhibit 16(a) Letter of KPMG Peat Marwick LLP dated February 27, 1998
* * *
3
<PAGE>
<PAGE>
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.
SECURITY FEDERAL CORPORATION
Date: February 27, 1998 By: /s/Timothy W. Simmons
--------------------------------------
Timothy W. Simmons
President and Chief Executive Officer
4
<PAGE>
<PAGE>
Exhibit 16(a)
Letter of KPMG Peat Marwick LLP Dated February 27, 1998
<PAGE>
<PAGE>
KPMG Peat Marwick LLP
One Insignia Financial Plaza Telephone 803 250 2600 Telefax 803 235 7542
Securities and Exchange Commission
Washington, D.C. 20549
February 27, 1998
Ladies and Gentlemen:
We were previously principal accountants for Security Federal Corporation and,
under the date May 9, 1997, we reported on the consolidated financial
statements of Security Federal Corporation and subsidiary as of March 31, 1997
and 1996 and for each of the years in the three year period ended March 31,
1997. On January 23, 1998, we were notified that our appointment as principal
accountants was terminated. We have read Security Financial Corporation's
statements included under Item 4 of its Form 8-K/A dated February 27, 1998 and
we agree with such statements, except we are not in a position to agree or
disagree with Security Federal Corporation's statement that the Board of
Directors, at the recommendation of its Audit Committee, terminated KPMG Peat
Marwick LLP and engaged Elliott, Davis & Company, LLP or whether Security
Federal Corporation consulted with Elliott, Davis & Company on any matters.
Very truly yours,
/s/KPMG Peat Marwick LLP
<PAGE>
