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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): April 21, 1997
United Security Bancorporation
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(Exact Name of Registrant as Specified in Charter)
Washington 0-18561 91-1259511
(State or other jurisdiction (Commission (IRS Employer Identi-
of incorporation) File Number) fication Number)
9506 North Newport Highway, Spokane, Washington 99218-1200
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(Address of principal executive offices/Zip Code)
Registrant's telephone number, including area code: (509) 467-6949
Item 4. Changes in Registrant's Certifying Accountant
(a) On April 22, 1997, the Audit Committee of United Security Bancorporation
(the "Company") accepted the decision of the firm of McFarland & Alton, P.S.
("McFarland & Alton") to decline to stand for re-election as the independent
auditor for the Company and its subsidiaries.
(b) McFarland & Alton's Audit Report on the Company's financial statements for
the years ended December 31, 1995, and December 31, 1996, did not contain an
adverse opinion or a disclaimer of opinion nor was it qualified or modified as
to uncertainty, audit scope, or accounting principles.
(c) During McFarland & Alton's audit of the Company's 1996 financial statements,
McFarland & Alton noted matters involving the internal control structure and its
operation that they considered to be reportable conditions under standards
established by the American Institute of Certified Public Accountants.
McFarland & Alton also stated in a communication with the Audit Committee:
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There were disagreements with management regarding the materiality,
accounting treatment, and necessary disclosures related to the Home
Security Bank fraud loss. There was also a disagreement related to the
existence of sufficient competent evidential matter supporting the
insurance recoverability of the fraud loss as of the date of our report.
These disagreements were satisfactorily resolved and management agreed
to record the identified fraud loss and to disclose the uncertainties
surrounding the recovery from insurance and the potential for additional
losses.
All of the foregoing matters have been discussed and noted in communications
with the Company's Audit Committee.
(d) The Audit Committee for the Company is presently in the process of selecting
a new independent auditor. The Company's Audit Committee has authorized
McFarland & Alton to respond fully to inquiries of the successor accountants.
The Company will file a Form 8-K when the selection of the new auditor has been
made.
(e) A letter from McFarland & Alton addressed to the Securities and Exchange
Commission is included as Exhibit 16 to this Form 8-K.
Item 6. Resignations of Registrant's Directors
(a) On April 21, 1997, Stan Horton, a Director of the United Security
Bancorporation (the "Company") tendered his resignation from the Board of
Directors of the United Security Bancorporation and any and all of its
subsidiaries. Director Horton stated the basis for his resignation was his lack
of faith in the internal control structure and the personnel in charge of these
controls.
(b) The Company has and has had in place what it believes to be appropriate
internal control policies and procedures. The fraud loss was the result of
circumvention of these policies and procedures. In response to the fraud loss,
the Company has taken steps to further tighten and improve these polices and
procedures.
(c) A copy of the Director's letter is included as Exhibit 17 to this Form 8-K.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
Number Description
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16 Letter of McFarland & Alton to the Securities & Exchange
Commission included herein pursuant to the requirements of Item
304(a) of Regulation S-K.
17 Resignation letter from Director Horton is included herein
pursuant to the requirements of subsection (c) of Item 6.
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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 thereunto duly authorized.
Dated: April 28, 1997
UNITED SECURITY BANCORPORATION
By: /s/ Chad Galloway
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Name: Chad Galloway
Title: Vice President and
Chief Financial Officer
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