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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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 29, 1998
ALLEGIANT BANCORP, INC.
(Exact name of registrant as specified in its charter)
MISSOURI 0-26350 43-1519382
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
2122 KRATKY ROAD
ST. LOUIS, MISSOURI 63114
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 692-8200
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ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On May 29, 1998, the Board of Directors of Allegiant Bancorp, Inc.
(the "Registrant"), upon recommendation of its Audit Committee, engaged Ernst
& Young LLP ("E&Y") as the Registrant's independent auditors for the year
ending December 31, 1998. The Board of Directors of the Registrant retained
E&Y based upon the Board's determination that the Registrant would benefit
from E&Y's local expertise in financial institutions and in matters involving
the Securities and Exchange Commission.
The engagement of E&Y arose from the Registrant's policy of requesting
proposals for audit services every three years. In each of 1992, 1995 and
1998, the Board of Directors of the Registrant solicited proposals from
selected auditing firms to audit the Registrant's financial statements.
Arthur Andersen LLP served as the Registrant's independent auditors for the
three-year period ended December 31, 1991 and BDO Seidman, LLP ("BDO") served
as the Registrant's independent auditors for the six-year period ended
December 31, 1997.
The BDO audit reports on the consolidated financial statements of
the Registrant as of and for the two years ended December 31, 1997 did not
contain an adverse opinion or disclaimer of opinion, and were not qualified
or modified as to uncertainty, audit scope or accounting principles. During
the two-year period ended December 31, 1997 and through the period ended May
29, 1998, there was no disagreement between the Registrant and BDO 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 BDO, would have caused it to make references to the subject
matter of such disagreement in connection with its report.
As the Registrant previously reported in its Annual Report on Form
10-KSB for the year ended December 31, 1997, operating losses increased $794,000
in 1997 compared to the prior year. During the latter part of 1997, several
events occurred which culminated in increased levels of operating losses. In
September 1997, the Registrant acquired two branch offices. These branches
were integrated into the Registrant's existing computer and operating systems
during September 1997. Substantial difficulties were encountered in this
integration process because of the different operating policies and
procedures between the organizations and because of the large increase in
transactional volumes. Shortly after integrating these branches, the
Registrant upgraded its computer systems to an entirely new operating system
designed to handle the substantially increased size and volumes resulting
from the branches, as well as provide capacity for future growth. The
computer systems conversions compounded the integration process due to
conversion anomalies and the subsequent differences in the computer operating
systems. Because of these events, the Registrant experienced impediments
reconciling accounts and researching and clearing reconciling items. The
differences that resulted totaled $752,000, which was charged to operating
losses in the fourth quarter. The Registrant believes that these losses are
not systemic and were non-recurring.
Over the past few years, the Registrant has experienced substantial
growth which has strained its management, administrative and operating
resources and financial control systems. The Registrant recently has added
various key officers, including Sandra L. Friedman, as Senior Vice President
and Chief Financial Officer, and David Maher as Vice President and
Controller. Ms. Friedman, who joined the Registrant in January 1998, has 20
years experience in banking and accounting and Mr. Maher, who also joined the
Registrant in January 1998, has 15 years experience in banking and
accounting. Following the audit of the Registrant's financial statements as
of and for the two years ended December 31, 1997, on which, as previously
discussed, BDO issued an unqualified audit opinion, the Registrant received a
management letter from BDO. The management letter identified certain
material weaknesses in the design
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and operation of the Registrant's internal controls, which the accountants
indicated adversely affected the Registrant's ability to record, process,
summarize and report financial data. The Registrant believes that it has
implemented steps to correct the deficiencies noted, including the hiring of
Ms. Friedman and Mr. Maher as senior management personnel with substantial
experience in banking, accounting and auditing.
The Registrant has authorized BDO to fully respond to any inquires of
E&Y concerning its audit. During the two years ended December 31, 1997 and
through the date of the appointment, E&Y did not provide any consultations to
the Registrant regarding the application of accounting principles to specific
transactions and the type opinion that they may have rendered on the
financial statements. E&Y, however, was engaged as a consultant by the
Registrant in connection with the organization by a subsidiary of the
Registrant of a real estate investment trust.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired
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Not applicable.
(b) Pro Form Financial Information
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Not applicable.
(c) Exhibits
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Exhibit 16: Letter from BDO Seidman, LLP to the Securities and
Exchange Commission regarding Item 4 disclosure
contained herein, to be filed by amendment.
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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.
Dated: June 3, 1998
ALLEGIANT BANCORP, INC.
By: /s/ Shaun R. Hayes
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Shaun R. Hayes, President
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