# FIRST COMMAND BROKERAGE SERVICES, INC. X-17A-5 (2022-12-21) — Broker-dealer annual report - Company: FIRST COMMAND BROKERAGE SERVICES, INC. - Form: X-17A-5 - Filed: 2022-12-21 - Period: 2022-09-30 - Accession: 0000101510-22-000012 - CIK: 101510 - File #: 8-07072 - Type: Broker-dealer - Material weakness: No - Auditor: Weaver and Tidwell, LLP - Auditor location: Fort Worth, TX - Contact: Meeghan Hubka - Phone: 817-731-8621 - Email: mlhubka@firstcommand.com - Website: firstcommand.com - Signed by: Meeghan Hubka (VP-Corporate Controller, FinOp) Original filing: https://www.sec.gov/Archives/edgar/data/101510/000010151022000012/docx17a5public.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden ho ### ANNUAL REPORTS FORM X-17A-5 PART III | ours per response:
12 | |--------------------------| | | | SEC FILE NUMBER | | 8-7072 | FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 AND ENDING 09/30/22 filing for the period beginning \_10/01/21 MM/DD/YY MM/DD/YY A. REGISTRANT IDENTIFICATION # NAME OF FIRM: First Command Brokerage Services, Inc. TYPE OF REGISTRANT (check all applicable boxes): Broker-dealer □ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) ### 1 FirstComm Plaza | | | (No. and Street) | | | | |------------------------------------------------------------------------------------------------------|--------------------------------------------|------------------------------------------------------------|-----------------|--------------------------|--| | Fort Worth | | Texas | | 76109 | | | (City) | | (State) | (Zip Code) | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | Meeghan Hubka | | 817-731-8621 | | mlhubka@firstcommand.com | | | (Name) | | (Area Code - Telephone Number) | (Email Address) | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Weaver and Tidwell, LLP | | (Name - if individual, state last, first, and middle name) | | | | | 2821 West Seventh Street, Suite 700 Fort Worth | | | Texas | 76107 | | | (Address) | | (City) | (State) | (Zip Code) | | | 10/14/2003 | | | 410 | | | | (Date of Registration with PCAOB)(if applicable) | (PCAOB Registration Number, if applicable) | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | \* Claims for exemption from the requirement that the annual reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. {1}------------------------------------------------ # PURLIC ### OATH OR AFFIRMATION | Meeghan Hubka | | , swear (or affirm) that, to the best of my knowledge and belief, the | | |---------------|--|-------------------------------------------------------------------------------------|-------| | | | financial report pertaining to the firm of First Command Brokerage Services, Inc. | as of | | 9/30 | | . is true and correct. further swear (or affirm) that neither the company nor any | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. ![](_page_1_Picture_5.jpeg) DocuSianed by: Signature: Meeglan Hubka 2730B40797 Title: vp-Corporate Controller, FinOp Notafy Public 746E. #### This filing\*\* contains (check all applicable boxes): - = (a) Statement of financial condition. - (b) Notes to consolidated statement of financial condition. - (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - = (d) Statement of cash flows. - = (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - \_ (f) Statement of changes in liabilities subordinated to claims of creditors. - (g) Notes to consolidated financial statements. - (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - □ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - □ (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - □ (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - □ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - □ (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - □ (o) Reconciliations, including apropriate explanations, of the FOCUS Report with computation of net capible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - □ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - = (q) Oath or affirmation in accordance with 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - | - (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - = (t) Independent public accountant's report based on an examination of the statement of financial condition. - □ (u) Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - \_ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - = (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - = (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12, as applicable. - \_ (y) Report describing any material inadequacies found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). - □ (z) Other: - \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(2), as applicable. {2}------------------------------------------------ ![](_page_2_Picture_0.jpeg) # First Command Brokerage Services, Inc. **Financial Statements** September 30, 2022 {3}------------------------------------------------ ## **FIRST COMMAND BROKERAGE SERVICES, INC.** (SEC I.D. No. 8-7072) Statement of Financial Condition September 30, 2022 And Independent Registered Public Accounting Firm Report Filed Pursuant to Rule 17 a-5(e)(3) as a PUBLIC DOCUMENT {4}------------------------------------------------ #### **FIRST COMMAND BROKERAGE SERVICES, INC.** #### Table of Contents \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ | | Page | |---------------------------------------------------------|------| | Report of Independent Registered Public Accounting Firm | 1 | | As of September 30, 2022 | | | Statement of Financial Condition | 2 | | Notes to Statement of Financial Condition | 3 | | | | {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) #### **Report of Independent Registered Public Accounting Firm** To the Board of Directors of First Command Brokerage Services, Inc. #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of First Command Brokerage Services, Inc. (the Company) as of September 30, 2022, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of September 30, 2022, in conformity with accounting principles generally accepted in the Unites States of America. #### **Basis for Opinion** This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. WEAVER AND TIDWELL, L.L.P. We have served as the Company's auditor since 2012. Fort Worth, Texas December 9, 2022 {6}------------------------------------------------ #### **FIRST COMMAND BROKERAGE SERVICES, INC. STATEMENT OF FINANCIAL CONDITION SEPTEMBER 30, 2022** | ASSETS | | |-------------------------------------------------|------------------| | Cash and cash equivalents | \$
4,445,365 | | Commissions and fees receivable | 4,619,958 | | Accounts receivable, prepaid expenses and other | 2,719,983 | | Accounts receivable, affiliates | 286,845 | | TOTAL ASSETS | \$
12,072,151 | | LIABILITIES | | | Accrued commissions payable | \$
1,434,506 | | Accounts payable, parent company | 199,753 | | Accounts payable, affiliates | 690,971 | | Other accrued liabilities | 1,028,053 | | Total liabilities | 3,353,283 | | STOCKHOLDER'S EQUITY | | | Common stock | | | Class A - voting | 2,046 | | Class B - non-voting | 927 | | Additional paid-in capital | 116,805 | | Retained earnings | 8,599,209 | | Treasury stock, at cost | (119) | | Total stockholder's equity | 8,718,868 | | TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | \$
12,072,151 | The Notes to Financial Statements are an integral part of this statement. {7}------------------------------------------------ #### **NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** First Command Brokerage Services, Inc. (the Company or FCBS), a wholly owned subsidiary of First Command Financial Services, Inc. (FCFS), was chartered in Texas in 1958, and is engaged in the sale of mutual funds and other variable investments to middle income American families with a concentration to United States military personnel. The Company is a licensed, fully-disclosed broker/dealer registered with the Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). The corporate office is located in Fort Worth, Texas. #### **Use of Estimates** The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. #### **Cash and Cash Equivalents** For purposes of the statement of cash flows, cash and cash equivalents include demand deposits and a money market account. Carrying value approximates fair value. #### **Commissions and Fees Receivable** Commissions receivable represents \$177,418 and \$191,527 due from mutual fund companies and insurance companies for the sale and servicing of investment products by the Company's sales advisors as of September 30, 2022 and October 1, 2021, respectively. Fees receivable represent the accrual of \$4,442,540 and \$6,094,854 of fees for assets under the Company's management and are collected on a quarterly basis as of September 30, 2022 and October 1, 2021 respectively. #### **Accounts Receivable, Prepaid Expenses and Other** Accounts receivable represents \$2,268,717 and \$1,962,761 of fees receivable from investors' individual retirement custodial accounts as of September 30, 2022 and October 1, 2021 respectively. These fees are collected each December. #### **Credit Losses** Included in the scope of ASC Topic 326, Financial Instruments - Credit Losses (ASC 326)are the Company's commissions and fees receivable and accounts receivable. Under the provisions of ASC 326, the allowance for credit losses is based on the Company's expectation of the collectability of financial instruments carried at amortized cost. The Company's expectation is that credit risk is not significant until receivables are more than {8}------------------------------------------------ #### **NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED** #### **Credit Losses - Continued** 90 days past due based on the contractual agreement and expectation of collection in accordance with industry standards. Based on historical losses and the short-term nature of the Company's receivables, management has determined that no allowance is necessary at September 30, 2022. #### **Income Taxes** Since December 1, 1998, the Company has been a Subchapter S corporation for federal income tax purposes. A Subchapter S corporation generally pays no federal income taxes, and its taxable income, if any, is taxed at the stockholder level. FCFS files a consolidated tax return that includes FCBS. Any tax positions are taken at the consolidated level. #### **Concentration of Credit Risk** Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments, commissions and fees receivable, and other receivables. The Company places its temporary cash investments with financial institutions and investment companies. Therefore, the majority of these funds are not insured by the Federal Deposit Insurance Corporation. Concentrations of credit risk with respect to commissions and fees receivable are limited due to the number of investment companies comprising the Company's supplier base. #### **Subsequent Events** The Company evaluated for recognition or disclosure, all events or transactions that occurred after September 30, 2022, through December 9, 2022, the date these financial statements were available to be issued. {9}------------------------------------------------ #### **NOTE 2. RELATED PARTY TRANSACTIONS** The Company shares office facilities, software, employees, and personnel costs with its parent company, FCFS. FCFS charges costs to the Company that are clearly applicable to the operations of FCBS. The Company and its parent share in other operating expenses through an Assigned Fixed Fee. A reasonable allocation method is used to determine the Assigned Fixed Fee, which calculates an estimate of common expenses, or those costs not clearly applicable to any one legal entity, based on the number of new and existing client accounts opened and future economic value of accounts from FCFS, FCBS, or both. The Assigned Fixed Fee included select advisor expenses, rent, equipment usage, general and administrative expenses, advisor service fee income and other income. The Assigned Fixed Fee is for the duration of a year and is re-assessed annually. The Company provides services to First Command Advisory Services, Inc. (FCAS) for all necessary brokerage back office operations of its asset management operations. FCBS manages the relationships with the clearing broker dealer and various fund companies for the asset management operations. First Command Bank (FCB) provides custodial services to FCBS. As of September 30, 2022, the remaining payable of \$637,542 for these services are recorded in accounts payable, affiliates. The Company had the following balances associated with entities at year-end, which were reflected in the accompanying Statement of Financial Condition as 1) accounts receivable, affiliates, 2) accounts payable, parent company or 3) accounts payable, affiliates. | | Balances Due From | | Balances Due To | | |----------------------------------------|-------------------|---------|-----------------|---------| | Parent Company: | | | | | | First Command Financial Services, Inc. | \$ | - | \$ | 199,753 | | | \$ | - | \$ | 199,753 | | Affiliates: | | | | | | First Command Advisory Services, Inc. | \$ | - | \$ | 78,432 | | First Command Bank | | - | | 612,539 | | First Command Europe, Ltd. | | 104,371 | | - | | First Command Insurance Services, Inc. | | 182,474 | | - | | | \$ | 286,845 | \$ | 690,971 | All intercompany balances are due on demand and are settled periodically by the payment of cash between the companies. At September 30, 2022, FCBS had cash balances held at FCB of \$231,267. {10}------------------------------------------------ #### **NOTE 3. COMMON STOCK** At September 30, 2022, the common stock of the Company is as follows: | | Voting
Class A | | Non-voting
Class B | | |----------------------------------------|-------------------|---------|-----------------------|---------| | Par value per share | \$ | 0.02 | \$ | 0.02 | | Number of shares authorized | | 750,000 | | 750,000 | | Number of shares issued | | 102,300 | | 46,368 | | Number of previously issued shares | | | | | | repurchased and held as treasury stock | | 3,100 | | 2,834 | | Number of shares outstanding | | 99,200 | | 43,534 | #### **NOTE 4. NET CAPITAL REQUIREMENTS** The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At September 30, 2022, the Company had net capital of \$2,521,636 which was \$2,298,084 in excess of its required net capital of \$223,552. The Company's aggregate indebtedness to net capital ratio was 1.33. #### **NOTE 5. COMMITMENTS AND CONTINGENCIES** The Company is not currently involved in or aware of any litigation that it believes could have a material adverse effect on its financial condition or results of operations. {11}------------------------------------------------ ![](_page_11_Picture_0.jpeg) December 9, 2022 Dear Sir/Madam: Enclosed you will find the audited Financial Statements and Supplemental Schedules as of and for the year ended September 30, 2022 and Exemption Report for First Command Brokerage Services, Inc. The focus report filing has been amended. The calculation of net capital has changed slightly from the original focus filing due to the revision of preliminary results. Sincerely, Meeghan Hubka FINOP, Director, Financial Accounting 1 FirstComm Plaza Fort Worth, Texas 76109-4999 PO Box 2387 Fort Worth, Texas 76113 **1.833.591.3237** Overseas, Call **1.817.731.8621 www.firstcommand.com** **First Command Financial Services, Inc. is the parent company of First Command Brokerage Services, Inc. (Member SIPC, FINRA), First Command Advisory Services, Inc., First Command Insurance Services, Inc. and First Command Bank. Securities products and brokerage services are provided by First Command Brokerage Services, Inc., a broker-dealer. Financial planning and investment advisory services are provided by First Command Advisory Services, Inc., an investment adviser.** Insurance products and services are provided by First Command Insurance Services, Inc. 06080 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.