# FIRST BANKERS' BANC SECURITIES, INC X-17A-5 (2024-03-25) — Broker-dealer annual report - Company: FIRST BANKERS' BANC SECURITIES, INC - Form: X-17A-5 - Filed: 2024-03-25 - Period: 2023-12-31 - Accession: 0000743231-24-000001 - CIK: 743231 - File #: 8-31584 - Type: Broker-dealer - Material weakness: No - Auditor: Forvis - Auditor location: St. Louis, MO - Contact: Christine Haedike - Phone: 314-835-4969 - Email: awspellmeyer@fbbsinc.com - Website: fbbsinc.com - Signed by: A.W. Spellmeyer (President/CEO) Original filing: https://www.sec.gov/Archives/edgar/data/743231/000074323124000001/2023FBBSAFSFULL.pdf --- {0}------------------------------------------------ FIRST BANKERS' BANC SECURITIES, INC. (SEC I.D. NO. 8-31584) FIRST BANKERS' BANC SECURITIES, INC. (SEC I.D. NO. 8-31584) FINANCIAL STATEMENTS FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION AND SUPPLEMENTAL INFORMATION DECEMBER 31, 2023 CONFIDENTIAL DECEMBER 31, 2023 C O N F I D E N T I A L {1}------------------------------------------------ ### FIRST BANKERS' BANC SECURITIES, INC. (SEC I.D. NO. 8-31584) FINANCIAL STATEMENTS DECEMBER 31, 2023 FIRST BANKERS' BANC SECURITIES, INC. (SEC I.D. NO. 8-31584) FINANCIAL STATEMENTS DECEMBER 31, 2023 This report is deemed CONFIDENTIAL in accordance with Rule 17a-5(e)(3) under the Securities Exchange Act of 1934. A statement of financial condition bound separately has been filed with the Securities and Exchange Commission simultaneously herewith as a public document. This report is deemed CONFIDENTIAL in accordance with Rule 17a-5(e)(3) under the Securities Exchange Act of 1934. A statement of financial condition bound separately has been filed with the Securities and Exchange Commission simultaneously herewith as a public document. {2}------------------------------------------------ ### FIRST BANKERS' BANC SECURITIES, INC. TABLE OF CONTENTS DECEMBER 31, 2023 FIRST BANKERS' BANC SECURITIES, INC. | TABLE OF CONTENTS
TABLE OF CONTENTS
DECEMBER 31, 2023
DECEMBER 31, 2023 | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------| | | | | UNITED STATES SECURITIES AND EXCHANGE COMMISSION'S ANNUAL
UNITED STATES SECURITIES AND EXCHANGE COMMISSION'S ANNUAL
AUDITED REPORT - FORM X-17A-5 - PART III
AUDITED REPORT - FORM X-17A-5 - PART III | | | FACING PAGE | i | | FACING PAGE | i | | OATH OR AFFIRMATION | ii | | OATH OR AFFIRMATION | ii | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 | | FINANCIAL STATEMENTS
FINANCIAL STATEMENTS | | | STATEMENT OF FINANCIAL CONDITION | 2 | | STATEMENT OF FINANCIAL CONDITION | 2 | | STATEMENT OF INCOME | 3 | | STATEMENT OF INCOME | 3 | | STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY | 4 | | STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY | 4 | | STATEMENT OF CASH FLOWS | 5 | | STATEMENT OF CASH FLOWS | 5 | | NOTES TO FINANCIAL STATEMENTS | 6 | | NOTES TO FINANCIAL STATEMENTS | 6 | | SUPPLEMENTAL INFORMATION
SUPPLEMENTAL INFORMATION | | | SCHEDULE I - COMPUTATION OF NET CAPITAL UNDER RULE 15C3-1 | 22 | | SCHEDULE I - COMPUTATION OF NET CAPITAL UNDER RULE 15C3-1 | 22 | | SCHEDULE II - COMPUTATION FOR DETERMINATION OF THE RESERVE
SCHEDULE II - COMPUTATION FOR DETERMINATION OF THE RESERVE
REQUIREMENTS UNDER EXHIBIT A OF RULE 15C3-3 (EXEMPTION)
REQUIREMENTS UNDER EXHIBIT A OF RULE 15C3-3 (EXEMPTION) | 23
23 | | SCHEDULE III - INFORMATION RELATING TO THE POSSESSION OR
SCHEDULE III - INFORMATION RELATING TO THE POSSESSION OR
CONTROL REQUIREMENTS UNDER RULE 15C3-3 (EXEMPTION)
CONTROL REQUIREMENTS UNDER RULE 15C3-3 (EXEMPTION) | 24
24 | {3}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-O123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 ### ANNUAL REPORTS FORM X-17A-5 PART III | SEC FILE NUMBER | | |-----------------|--| | 8-31584 | | FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 FILING FOR THE PERIOD BEGINNING 01/01/2023 AND ENDING 12/31/2023 MM/DD/YY MM/DD/YY A. REGISTRANT IDENTIFICATION ### NAME OF FIRM: First Bankers' Banc Securities, Inc. TYPE OF REGISTRANT (check all applicable boxes): l Broker-dealer CI Security-based swap dealer O Check here if respondent is also an OTC derivatives dealer Cil Major security-based swap participant ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | 1714 Deer Tracks Trail, Suite 110 | | | |------------------------------------------------------------------------------------------|------------------------------------------------------------|--------------------------| | | (No. and Street) | | | St. Louis | MO | 63131 | | (City) | (State) | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | A.W. Spellmeyer | (888) 726-2880 | awspellmeyer@fbbsinc.com | | (Name) | (Area Code —Telephone Number) | (Email Address) | | | B. ACCOUNTANT IDENTIFICATION | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
FORVIS, LLP | | | | | (Name — if individual, state last, first, and middle name) | | | 211 North Broadway, Suite 22 | St. Louis | MO
63102 | | (Address) | (City) | (State)
(Zip Code) | | | | | 10/16/2003 686 (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 be covered by the 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 24O.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. {4}------------------------------------------------ ### OATH OR AFFIRMATION | A.W. Spellmeyer | | , swear (or affirm) that, to the best of my knowledge and belief, the | |---------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------| | financial report pertaining to the firm of First Bankers' Banc Securities, Inc. | | as of | | 12/31 | , 2
023 | , is true and correct. I 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. -D1ANNEEIVIcD0NALD Notary Public - Notary Seal State of Missouri Commissioned for St. Louis County My Commission Expires: April 21, 2025 . ionliumber: 10426594 Signature/ill /3 li. ter Title: President/CEO Notary Public ### This filing\*\* ms (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. g - E (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. - O (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 appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 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-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - ❑ (r) Compliance report in accordance with 17 CFR 240.17a-5 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.** - **O (t) Independent public accountant's report based on an examination of the statement of financial condition.** - **IEI (u) Independent public accountant's report based on an examination of the financial report or 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 240.15c3-le or 17 CFR 240.17a-12, as applicable. - ❑ (y) Report describing any material inadequacies found to exist or 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)(3) or 17 CFR 240.18a-7(d)(2), as applicable. {5}------------------------------------------------ # FORV/S One Metropolitan, 211 N. Broadway, Suite 600 / St. Louis, MO 63102 P 314.231.5544 / F 314.231.9731 ### forvis.com ### Report of Independent Registered Public Accounting Firm **Report of Independent Registered Public Accounting Firm** To the Board of Directors and Stockholder First Bankers' Banc Securities, Inc. To the Board of Directors and Stockholder First Bankers' Banc Securities, Inc. ### Opinion on the Financial Statements *Opinion on the Financial Statements* We have audited the accompanying statement of financial condition of First Bankers' Banc Securities, Inc. (the "Company") as of December 31, 2023, the related statements of income, changes in shareholder's equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. We have audited the accompanying statement of financial condition of First Bankers' Banc Securities, Inc. (the "Company") as of December 31, 2023, the related statements of income, changes in shareholder's equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. ### Basis for Opinion *Basis for Opinion* These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements 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. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements 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 statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, 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 statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 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 statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, 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 statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. ### Supplemental Information *Supplemental Information* Schedule I, Computation of Net Capital Under Rule 15c3-1; Schedule II, Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3 (exemption); Schedule III, Information for Possession or Control Requirements Under Rule 15c3-3 (exemption) ("supplemental information") has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supplemental information is the responsibility of the Company's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 CFR §240.17a-5. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole. Schedule I, Computation of Net Capital Under Rule 15c3-1; Schedule II, Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3 (exemption); Schedule III, Information for Possession or Control Requirements Under Rule 15c3-3 (exemption) ("supplemental information") has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supplemental information is the responsibility of the Company's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 CFR §240.17a-5. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole. ### FOKVI5,LLP We have served as the Company's auditor since 2022. We have served as the Company's auditor since 2022. St Louis, Missouri March 20, 2024 **St Louis, Missouri March 20, 2024** ![](_page_5_Picture_16.jpeg) {6}------------------------------------------------ ### FIRST BANKERS' BANC SECURITIES, INC. STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2023 FIRST BANKERS' BANC SECURITIES, INC. STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2023 #### ASSETS ASSETS | FIRST BANKERS' BANC SECURITIES, INC.
FIRST BANKERS' BANC SECURITIES, INC.
STATEMENT OF FINANCIAL CONDITION
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 2023
DECEMBER 31, 2023 | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------| | ASSETS
ASSETS | | | Cash and Cash Equivalents
Cash and Cash Equivalents | \$
\$ 322,053
322,053 | | Deposit with Clearing Organization | 3,500,000 | | Deposit with Clearing Organization | 3,500,000 | | Receivables | 35,600 | | Receivables | 35,600 | | Securities Owned, at Fair Value | 31,779,709 | | Securities Owned, at Fair Value | 31,779,709 | | Fixed Assets, Net | 72,530 | | Fixed Assets, Net | 72,530 | | Right-Of-Use Assets | 497,375 | | Right-Of-Use Assets | 497,375 | | Goodwill, Net | 5,800,000 | | Goodwill, Net | 5,800,000 | | Prepaid and Other Assets | 264,782 | | Prepaid and Other Assets | 264,782 | | Total Assets
Total Assets | \$ 42,272,049
\$
42,272,049 | | LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES AND STOCKHOLDER'S EQUITY | | | LIABILITIES
LIABILITIES | | | | | #### LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES AND STOCKHOLDER'S EQUITY | LIABILITIES
LIABILITIES | | |----------------------------------------------------------------------------------------|--------------------------------------| | Payable to Clearing Organization
Payable to Clearing Organization | \$
\$
15,937,616
15,937,616 | | Securities Sold, Not Yet Purchased | 6,218,528 | | Securities Sold, Not Yet Purchased | 6,218,528 | | Deferred Tax Liability, Net | 51,968 | | Deferred Tax Liability, Net | 51,968 | | Note Payable - Related Party | 6,000,000 | | Note Payable - Related Party | 6,000,000 | | Lease Liabilities | 500,410 | | Lease Liabilities | 500,410 | | Accounts Payable and Accrued Expenses | 1,576,608 | | Accounts Payable and Accrued Expenses | 1,576,608 | | Total Liabilities | 30,285,130 | | Total Liabilities | 30,285,130 | | STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY | | | Common Stock, \$1 Par Value, 1,000 Shares
Common Stock, \$1 Par Value, 1,000 Shares | | | Authorized, Issued and Outstanding | 1,000 | |-----------------------------------------------------------------------------------------|--------------------------------------| | Authorized, Issued and Outstanding | 1,000 | | Additional Paid-In Capital | 8,785,160 | | Additional Paid-In Capital | 8,785,160 | | Retained Earnings | 3,200,759 | | Retained Earnings | 3,200,759 | | Total Stockholder's Equity | 11,986,919 | | Total Stockholder's Equity | 11,986,919 | | Total Liabilities and Stockholders Equity
Total Liabilities and Stockholder's Equity | \$
\$
42,272,049
42,272,049 | {7}------------------------------------------------ ### FIRST BANKERS' BANC SECURITIES, INC. STATEMENT OF INCOME YEAR ENDED DECEMBER 31, 2023 FIRST BANKERS' BANC SECURITIES, INC. STATEMENT OF INCOME YEAR ENDED DECEMBER 31, 2023 #### REVENUES REVENUES | FIRST BANKERS' BANC SECURITIES, INC.
FIRST BANKERS' BANC SECURITIES, INC.
STATEMENT OF INCOME
STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2023
YEAR ENDED DECEMBER 31, 2023 | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------| | | | | REVENUES
REVENUES | | | Principal Transactions
Principal Transactions | \$
\$
13,097,578
13,097,578 | | Fee Income
Fee Income | 226,143
226,143 | | Interest and Dividends
Interest and Dividends | 1,244,092
1,244,092 | | Other Income
Other Income | 260,863
260,863 | | Total Revenues
Total Revenues | 14,828,676
14,828,676 | | EXPENSES
EXPENSES | | | Employee Compensation and Benefits
Employee Compensation and Benefits | 9,300,910
9,300,910 | | Other Operating Expenses
Other Operating Expenses | 3,433,460
3,433,460 | | Interest
Interest | 1,102,629
1,102,629 | | Occupancy and Equipment
Occupancy and Equipment | 110,847
110,847 | | Rent
Rent | 194,572
194,572 | | Total Expenses
Total Expenses | 14,142,418
14,142,418 | | INCOME BEFORE INCOME TAXES
INCOME BEFORE INCOME TAXES | 686,258
686,258 | | INCOME TAX EXPENSE
INCOME TAX EXPENSE | 216,800
216,800 | | NET INCOME
NET INCOME | \$
\$
469,458
469,458 | {8}------------------------------------------------ ### FIRST BANKERS' BANC SECURITIES, INC. STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY YEAR ENDED DECEMBER 31, 2023 FIRST BANKERS' BANC SECURITIES, INC. STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY YEAR ENDED DECEMBER 31, 2023 | STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY | | | FIRST BANKERS' BANC SECURITIES, INC.
FIRST BANKERS' BANC SECURITIES, INC.
YEAR ENDED DECEMBER 31, 2023
YEAR ENDED DECEMBER 31, 2023 | | | |----------------------------------------------------------------------------------------------|----------|------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|-----------------------------------| | | | | | | | | | | | Additional
Additional | | | | | | Common
Common
Stock
Stock | Paid-In
Paid-In
Capital
Capital | Retained
Retained
Earnings
Earnings | Total
Total | | BALANCE - JANUARY 1, 2023
BALANCE - JANUARY 1, 2023 | \$
\$ | 1,000
1,000 | \$ 8,785,160
\$
8,785,160 | \$ 2,731,301
\$
2,731,301 | \$ 11,517,461
\$
11,517,461 | | Net Income
Net Income | | - | - | 469,458
469,458 | 469,458
469,458 | {9}------------------------------------------------ ### FIRST BANKERS' BANC SECURITIES, INC. STATEMENT OF CASH FLOWS DECEMBER 31, 2023 FIRST BANKERS' BANC SECURITIES, INC. STATEMENT OF CASH FLOWS DECEMBER 31, 2023 #### CASH FLOWS FROM OPERATING ACTIVITIES CASH FLOWS FROM OPERATING ACTIVITIES | CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM OPERATING ACTIVITIES | | |----------------------------------------------------------------------------------------------------|--------------------------------| | Net Income
Net Income | \$
\$
469,458
469,458 | | Adjustments to Reconcile Net Income to Net Cash
Adjustments to Reconcile Net Income to Net Cash | | | Provided by Operating Activities:
Provided by Operating Activities:
Depreciation | 22,904 | | Depreciation
Non Cash Operating Lease Expense
Non Cash Operating Lease Expense | 22,904
85,480 | | Deferred Tax Liability
Deferred Tax Liability | 85,480
7,115
7,115 | | Changes in Assets and Liabilities:
Changes in Assets and Liabilities: | | | Receivables | (26,554) | | Receivables | (26,554) | | Securities Owned, at Fair Value | (22,000,344) | | Securities Owned, at Fair Value | (22,000,344) | | Prepaid and Other Assets | (46,223) | | Prepaid and Other Assets | (46,223) | | Receivables from/Payable to Clearing Organization | 19,848,921 | | Receivables from/Payable to Clearing Organization | 19,848,921 | | Securities Sold, Not Yet Purchased | 4,202,388 | | Securities Sold, Not Yet Purchased | 4,202,388 | | Income Taxes Payable/Receivable - Related Party | 49,401 | | Income Taxes Payable/Receivable - Related Party | 49,401 | | Operating Lease Liability | (82,912) | | Operating Lease Liability | (82,912) | | Accounts Payable and Accrued Expenses | (228,631) | | Accounts Payable and Accrued Expenses | (228,631) | | Net Cash Provided by Operating Activities | 2,301,003 | | Net Cash Provided by Operating Activities | 2,301,003 | | | | | CASH FLOWS FROM FINANCING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES | | | Payments on note payable - related party | (1,002,289) | | Payments on note payable - related party | (1,002,289) | | Proceeds from note payable - related party | 1,002,289 | | Proceeds from note payable - related party | 1,002,289 | | Net Cash Provided by Financing Activities
Net Cash Provided by Financing Activities | - | | | | | CASH FLOWS FROM INVESTING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES | | | Increase in Deposits with Clearing Organizations | (2,250,000) | | Increase in Deposits with Clearing Organizations | (2,250,000) | | Net Cash Used in Investing Activities | (2,250,000) | | Net Cash Used in Investing Activities | (2,250,000) | | | | | NET CHANGE IN CASH AND CASH EQUIVALENTS | 51,003 | | NET CHANGE IN CASH AND CASH EQUIVALENTS | 51,003 | | CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 271,050 | | CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 271,050 | | CASH AND CASH EQUIVALENTS, END OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR | \$
\$
322,053
322,053 | | ADDITIONAL INFORMATION | \$ | | ADDITIONAL INFORMATION | \$ | | Interest Paid | 1,102,629 | | Interest Paid | 1,102,629 | {10}------------------------------------------------ # NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DECEMBER 31, 2023 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations ### Nature of Operations First Bankers' Banc Securities, Inc. (the "Company") is primarily engaged in the business of buying and selling fixed income securities for financial institutions primarily located in the Midwestern United States of America. The Company is subject to competition from other broker-dealers. The Company is registered with the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"), and operates under the exemptive provisions of Rule 15c3-3(k)(2)(i) and (k)(2)(ii) under the Securities and Exchange Act of 1934 and Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. §240.17a-5. First Bankers' Banc Securities, Inc. (the "Company") is primarily engaged in the business of buying and selling fixed income securities for financial institutions primarily located in the Midwestern United States of America. The Company is subject to competition from other broker-dealers. The Company is registered with the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"), and operates under the exemptive provisions of Rule 15c3-3(k)(2)(i) and (k)(2)(ii) under the Securities and Exchange Act of 1934 and Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. §240.17a-5. The Company is a wholly owned subsidiary of Bankers' Banc Investment Services, LLC (the "Parent"), which is majority owned by Midwest Independent Bancshares, Inc. (MIB, Inc.). The Company is a wholly owned subsidiary of Bankers' Banc Investment Services, LLC (the "Parent"), which is majority owned by Midwest Independent Bancshares, Inc. (MIB, Inc.). ### Use of Estimates Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. ### Cash and Cash Equivalents Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. For purposes of the statement of cash flows, the Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. ### Receivables Receivables Receivables are stated at the amounts billed to clients and are ordinarily due when invoiced. The Company's policy is to not accrue interest on accounts receivable. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the client. The Company does not maintain an allowance for uncollectible receivables as management believes the amount required for such an allowance would not be material to the financial statements. Receivables are stated at the amounts billed to clients and are ordinarily due when invoiced. The Company's policy is to not accrue interest on accounts receivable. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the client. The Company does not maintain an allowance for uncollectible receivables as management believes the amount required for such an allowance would not be material to the financial statements. ### Concentration of Risk Concentration of Risk Throughout the year the Company clears trades for a local broker. This is a normal and recurring activity that is reconciled monthly. At year end, approximately 46% of the Company's non-allowable accounts receivable balance was from this broker. Throughout the year the Company clears trades for a local broker. This is a normal and recurring activity that is reconciled monthly. At year end, approximately 46% of the Company's non-allowable accounts receivable balance was from this broker. ### Goodwill Goodwill Goodwill is not amortized since it has an indefinite life. Instead, it is tested annually for impairment and whenever events or changes in circumstances indicates it is more likely than not the fair value of the reporting unit or asset is less than its carrying value. Goodwill is not amortized since it has an indefinite life. Instead, it is tested annually for impairment and whenever events or changes in circumstances indicates it is more likely than not the fair value of the reporting unit or asset is less than its carrying value. {11}------------------------------------------------ ## NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DECEMBER 31, 2023 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ### Goodwill (Continued) Goodwill (Continued) During the fourth quarter of 2023 an internal qualitative evaluation was completed, and management determined that no impairment exists as of the date of these financial statements. The following table details the cumulative impairment losses. During the fourth quarter of 2023 an internal qualitative evaluation was completed, and management determined that no impairment exists as of the date of these financial statements. The following table details the cumulative impairment losses. | FIRST BANKERS' BANC SECURITIES, INC.
FIRST BANKERS' BANC SECURITIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023 | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|--| | | | | | | | | | | | | | During the fourth quarter of 2023 an internal qualitative evaluation was completed, and
During the fourth quarter of 2023 an internal qualitative evaluation was completed, and | | | | management determined that no impairment exists as of the date of these financial
management determined that no impairment exists as of the date of these financial | | | | statements. The following table details the cumulative impairment losses.
statements. The following table details the cumulative impairment losses. | | | | Goodwill, Gross - December 31, 2023
Goodwill, Gross - December 31, 2023 | \$
\$
6,630,768
6,630,768 | | | Cumulative Impairment Losses
Cumulative Impairment Losses
Goodwill, Net - December 31, 2023
Goodwill, Net - December 31, 2023 | (830,768)
(830,768)
\$
\$
5,800,000
5,800,000 | | | | | | | Cumulative Impairment Losses, December 31, 2022
Cumulative Impairment Losses, December 31, 2022
Impairment Loss in 2023
Impairment Loss in 2023 | \$
\$
(830,768)
(830,768)
-
- | | ### Securities Transactions Securities Transactions Proprietary securities transactions in regular-way trades are recorded on the trade dates, as if they had settled. Profit and loss arising from all securities transactions entered into for the account and risk of the Company are recorded on a trade date basis. In certain cases, a broker-dealer or client will fail to deliver securities to the Company and, as a result, the Company will fail to deliver securities to the counterparty to the transaction. The Company promptly forwards securities upon receipt and will settle cash when the security is delivered. Proprietary securities transactions in regular-way trades are recorded on the trade dates, as if they had settled. Profit and loss arising from all securities transactions entered into for the account and risk of the Company are recorded on a trade date basis. In certain cases, a broker-dealer or client will fail to deliver securities to the Company and, as a result, the Company will fail to deliver securities to the counterparty to the transaction. The Company promptly forwards securities upon receipt and will settle cash when the security is delivered. The Company promptly forwards all funds and securities received and does not otherwise hold funds or securities for, or owe money or securities to, clients. The Company promptly forwards all funds and securities received and does not otherwise hold funds or securities for, or owe money or securities to, clients. Marketable securities are valued at fair value, and securities not readily marketable are valued at fair value as determined by management. Securities owned by the Company are considered to be trading securities due to the nature of the Company's business. Any gain or loss is recorded as Principal Transactions on the Statement of Income. Marketable securities are valued at fair value, and securities not readily marketable are valued at fair value as determined by management. Securities owned by the Company are considered to be trading securities due to the nature of the Company's business. Any gain The Company may sell a security that it does not own. When the Company sells a security short, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale. A gain, limited to the price at which the Company sold the security short, or a loss, unlimited in size, will be recognized upon the termination of a short sale. The company is also subject to the risk that it may be unable to reacquire a security to terminate a short position except at a price substantially in excess of the last quoted price. or loss is recorded as Principal Transactions on the Statement of Income. The Company may sell a security that it does not own. When the Company sells a security short, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale. A gain, limited to the price at which the Company sold the security short, or a loss, unlimited in size, will be recognized upon the termination of a short sale. The company is also subject to the risk that it may be unable to reacquire a security to terminate a short position except at a price substantially in excess of the last quoted price. ### Fair Value Measurements Fair Value Measurements The Company categorizes its assets and liabilities measured at fair value into a three-level hierarchy based on the priority of the inputs to the valuation technique used to determine fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Company categorizes its assets and liabilities measured at fair value into a three-level hierarchy based on the priority of the inputs to the valuation technique used to determine fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). {12}------------------------------------------------ ## NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DECEMBER 31, 2023 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) #### Fair Value Measurements (Continued) Fair Value Measurements (Continued) If the inputs used in the determination of the fair value measurement fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement. Assets and liabilities valued at fair value are categorized based on the inputs to the valuation techniques as follows: If the inputs used in the determination of the fair value measurement fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement. Assets and liabilities valued at fair value are categorized based on the inputs to the valuation techniques as follows: Level 1 — Inputs that utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 1 – Inputs that utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 — Inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Fair values for these instruments are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 2 – Inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Fair values for these instruments are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 3 — Inputs that are unobservable for the asset or liability, which are typically based on an entity's own assumptions, as there is little, if any, related market activity. Level 3 – Inputs that are unobservable for the asset or liability, which are typically based on an entity's own assumptions, as there is little, if any, related market activity. Subsequent to initial recognition, the Company may remeasure the carrying value of assets and liabilities measured on a nonrecurring basis to fair value. Adjustments to fair value usually result when certain assets are impaired. Such assets are written down from their carrying amounts to their fair value. Subsequent to initial recognition, the Company may remeasure the carrying value of assets and liabilities measured on a nonrecurring basis to fair value. Adjustments to fair value usually result when certain assets are impaired. Such assets are written down from their carrying amounts to their fair value. The Company has also applied the above measurement principles for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed in the financial statements on a nonrecurring basis. The Company has no assets or liabilities measured on a nonrecurring basis as of December 31, 2023. The Company has also applied the above measurement principles for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed in the financial statements on a nonrecurring basis. The Company has no assets or liabilities measured on a nonrecurring basis as of December 31, 2023. Professional standards allow entities the irrevocable option to elect to measure certain financial instruments and other items at fair value for the initial and subsequent measurement on an instrument-by-instrument basis. The Company has not elected to measure any existing financial instruments at fair value; however, it may elect to measure newly acquired financial instruments at fair value in the future. Professional standards allow entities the irrevocable option to elect to measure certain financial instruments and other items at fair value for the initial and subsequent measurement on an instrument-by-instrument basis. The Company has not elected to measure any existing financial instruments at fair value; however, it may elect to measure newly acquired financial The valuation methods used for financial assets and liabilities recorded at fair value are as follows: instruments at fair value in the future. The valuation methods used for financial assets and liabilities recorded at fair value are as follows: #### Trading Securities Trading Securities Trading securities are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security's credit rating, prepayment assumptions and other factors such as credit loss assumptions. The Company does not have any securities that are valued with Level 3 inputs. Trading securities are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security's credit rating, prepayment assumptions and other factors such as credit loss assumptions. The Company does not have any securities that are valued with Level 3 inputs. {13}------------------------------------------------ ## NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DECEMBER 31, 2023 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) #### Fixed Assets Fixed Assets Fixed assets are recorded at cost and are depreciated on the straight-line method. Depreciation is provided over the estimated useful lives of the respective assets, which range from five to fifteen years for building improvements, from one to ten years for furniture and fixtures, and from one to five years for computer equipment and software. Fixed assets are recorded at cost and are depreciated on the straight-line method. Depreciation is provided over the estimated useful lives of the respective assets, which range from five to fifteen years for building improvements, from one to ten years for furniture and fixtures, and from one to five years for computer equipment and software. ### Leases Leases The Company follows the guidance for lease accounting in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 842, Leases. The Company is a lessee in several noncancelable operating leases for office space and office equipment. The Company determines if an arrangement is a lease, or contains a lease, at inception of a contract and when the terms of an existing contract are changed. The Company recognizes a lease liability and a right-of-use ("ROU") asset at the commencement date of the lease. The Company follows the guidance for lease accounting in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 842, Leases. The Company is a lessee in several noncancelable operating leases for office space and office equipment. The Company determines if an arrangement is a lease, or contains a lease, at inception of a contract and when the terms of an existing contract are changed. The Company recognizes a lease liability and a right-of-use ("ROU") asset at the commencement date of the lease. Lease Liabilities. A lease liability is initially and subsequently measured based on the present value of its future lease payments. Variable payments are included in the future lease payments when those variable payments depend on an index or a rate, and are measured using the index or rate at the commencement date. The discount rate is the implicit rate if it is readily determinable; otherwise the Company uses its incremental borrowing rate. The implicit rates of the Company's leases are not readily determinable; accordingly, the Company uses its incremental borrowing rate based on the information available at the commencement date for each lease. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment. The Company determines its incremental borrowing rates by starting with the interest rates on its recent borrowings and other observable market rates and adjusting those rates to reflect differences in the amount of collateral and the payment terms of the leases. Lease Liabilities. A lease liability is initially and subsequently measured based on the present value of its future lease payments. Variable payments are included in the future lease payments when those variable payments depend on an index or a rate, and are measured using the index or rate at the commencement date. The discount rate is the implicit rate if it is readily determinable; otherwise the Company uses its incremental borrowing rate. The implicit rates of the Company's leases are not readily determinable; accordingly, the Company uses its incremental borrowing rate based on the information available at the commencement date for each lease. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment. The Company determines its incremental borrowing rates by starting with the interest rates on its recent borrowings and other observable market rates and adjusting those rates to reflect differences in the amount of collateral and the payment terms of the leases. ROU Assets. A lessee's ROU asset is measured at the commencement date at the amount of the initially-measured lease liability plus any lease payments made to the lessor before or at the commencement date, minus any lease incentives received, plus any initial direct costs. Unless impaired, the ROU asset is subsequently measured throughout the lease term at the amount of the re-measured lease liability (i.e., present value of the remaining lease payments), plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received, and any impairment recognized. Lease cost for lease payments is recognized on a straight-line basis over the lease term. ROU Assets. A lessee's ROU asset is measured at the commencement date at the amount of the initially-measured lease liability plus any lease payments made to the lessor before or at the commencement date, minus any lease incentives received, plus any initial direct costs. Unless impaired, the ROU asset is subsequently measured throughout the lease term at the amount of the re-measured lease liability (i.e., present value of the remaining lease payments), plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received, and any impairment recognized. Lease cost for lease payments is recognized on a straight-line basis over the lease term. {14}------------------------------------------------ ## NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DECEMBER 31, 2023 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) #### Leases (Continued) Leases (Continued) Accounting Policy Election for Short-Term Leases. The Company has elected, for all underlying classes of assets, to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes lease cost associated with its short-term leases on a straight-line basis over the lease term. Accounting Policy Election for Short-Term Leases. The Company has elected, for all underlying classes of assets, to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes lease cost associated with its short-term leases on a Right-Of-Use Assets 497,375 \$ Lease Liabilities 500,410 The balances in the lease asset and liability accounts at December 31, 2023 are as follows: straight-line basis over the lease term. The balances in the lease asset and liability accounts at December 31, 2023 are as follows: | Right-Of-Use Assets | \$
497,375 | |---------------------|---------------| | Lease Liabilities | 500,410 | #### Revenue Recognition Revenue Recognition Revenue from contracts with customers generally includes commission income and fees from investment banking and asset management services. The recognition and measurement of revenue is based on the assessment of individual contract terms, either written or verbal. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraints on variable considerations should be applied due to uncertain future events. Revenue from contracts with customers generally includes commission income and fees from investment banking and asset management services. The recognition and measurement of revenue is based on the assessment of individual contract terms, either written or verbal. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraints on variable considerations should be applied due to uncertain future events. {15}------------------------------------------------ ## NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DECEMBER 31, 2023 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The primary types of revenue earned from customers are identified as follows: The primary types of revenue earned from customers are identified as follows: ### Underwriting Revenue Underwriting Revenue - **Municipal Securities The Company engages in underwriting municipal securities bidding to secure the deal based upon a competitive bidding process against other broker dealers. The winning bid will provide the lowest total interest cost to the issuing entity.** Municipal Securities - The Company engages in underwriting municipal securities bidding to secure the deal based upon a competitive bidding process against other broker dealers. The winning bid will provide the lowest total interest cost to the issuing entity. - **o Upon notification from the issuing entity, the Company sends a good faith deposit which acts as an escrow payment and signifies the contractual obligation to purchase the security/securities as structured on the winning bid form.** o Upon notification from the issuing entity, the Company sends a good faith deposit which acts as an escrow payment and signifies the contractual obligation to purchase the security/securities as structured on the winning bid form. - **o Commissions and related clearing expenses are recorded on the trade date as that is when the underlying financial instrument or purchaser is identified, the final pricing is agreed upon, and the risks and rewards of ownership have been transferred to/from the two entities. There are no performance obligations to allocate transaction pricing.** o Commissions and related clearing expenses are recorded on the trade date as that is when the underlying financial instrument or purchaser is identified, the final pricing is agreed upon, and the risks and rewards of ownership have been transferred to/from the two entities. There are no performance obligations to allocate transaction pricing. - **o The commission reflects a mark up in price from dealer cost of securities marketed to the client.** o The commission reflects a mark up in price from dealer cost of securities marketed to the client. - **o The commission on a buy/sell transaction is only a reflection of the singular transaction and is independent of any other transaction.** o The commission on a buy/sell transaction is only a reflection of the singular transaction and is independent of any other transaction. - **o Revenue recognition occurs on the trade date and records the amount of transaction profit or loss, net of the good faith deposit.** o Revenue recognition occurs on the trade date and records the amount of transaction profit or loss, net of the good faith deposit. - **Brokered CDs The Company engages in underwriting brokered certificates of deposit.** Brokered CDs - The Company engages in underwriting brokered certificates of deposit. - **o Upon notification from a customer, the Company initiates a brokerage agreement and terms agreement, which identify the timing, final pricing and agreed upon fees.** o Upon notification from a customer, the Company initiates a brokerage agreement and terms agreement, which identify the timing, final pricing and agreed upon fees. - **o Underwriting fees are recorded on the settlement date of the certificate as that is when the underlying financial instrument is finalized and the risks and rewards of ownership have been transferred to/from the two entities.** o Underwriting fees are recorded on the settlement date of the certificate as that is when the underlying financial instrument is finalized and the risks and rewards of ownership have been transferred to/from the two entities. - **o The underwriting fee reflects a percentage of the total principal amount of the certificate of deposit and is related to the type (best efforts or firm takedown) and maturity structure.** o The underwriting fee reflects a percentage of the total principal amount of the certificate of deposit and is related to the type (best efforts or firm takedown) and maturity structure. - **o The underwriting fee on the transaction is only a reflection of the singular transaction and is independent of any other transaction.** o The underwriting fee on the transaction is only a reflection of the singular transaction and is independent of any other transaction. - **o Revenue recognition occurs on the certificate settlement date and records the amount of total fees collected.** o Revenue recognition occurs on the certificate settlement date and records the amount of total fees collected. {16}------------------------------------------------ ## NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DECEMBER 31, 2023 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ### Revenue Recognition (Continued) Revenue Recognition (Continued) Portfolio Fees — The Company provides fee-related services for investment portfolio accounting and provides due diligence reports via a third party. Portfolio Fees – The Company provides fee-related services for investment portfolio accounting and provides due diligence reports via a third party. - **The Company enters into an agreement with the customer to provide a suite of reports based upon customer investment holdings and can provide additional municipal reviews upon request.** The Company enters into an agreement with the customer to provide a suite of reports based upon customer investment holdings and can provide additional municipal reviews upon request. - **The performance obligations are for the Company to provide a suite of reports on a monthly basis for the investment holdings of the customer, or as requested for municipal reviews.** The performance obligations are for the Company to provide a suite of reports on a monthly basis for the investment holdings of the customer, or as requested for municipal reviews. - **Portfolio pricing is determined based upon the number of securities in the investment holdings, as well as number of additional (requested) municipal reviews.** Portfolio pricing is determined based upon the number of securities in the investment holdings, as well as number of additional (requested) municipal reviews. - **There is only one performance obligation per service agreement, which is delivery of reports to the customer.** There is only one performance obligation per service agreement, which is delivery of reports to the customer. - **The Company recognizes revenue at the time the performance obligation is satisfied.** The Company recognizes revenue at the time the performance obligation is satisfied. **Mutual Fund 12b-1 Fees — The Company may purchase shares of open/closed-end funds ("mutual funds"). These mutual funds pay the Company a stipulated 12b-1 fee for having funds allocated within their fund family.** Mutual Fund 12b-1 Fees – The Company may purchase shares of open/closed-end funds ("mutual funds"). These mutual funds pay the Company a stipulated 12b-1 fee for having funds allocated within their fund family. - **The Company facilitates transactions between customers and mutual fund companies. For this facilitation, the Company is paid a 12b-1 fee directly from the mutual fund family. The fee is paid based upon a set schedule determined by the mutual fund family for retention of money in the fund family.** The Company facilitates transactions between customers and mutual fund companies. For this facilitation, the Company is paid a 12b-1 fee directly from the mutual fund family. The fee is paid based upon a set schedule determined by the mutual fund family for retention of money in the fund family. - **The performance obligation is to purchase mutual fund shares on behalf of the customer.** The performance obligation is to purchase mutual fund shares on behalf of the customer. - **The transaction price is dictated by the mutual fund company and paid directly to the Company.** The transaction price is dictated by the mutual fund company and paid directly to the Company. - **The fee is based upon a singular service and is not split between separate performance obligations.** The fee is based upon a singular service and is not split between separate performance obligations. - **The Company recognizes the revenue when the transaction occurs.** The Company recognizes the revenue when the transaction occurs. {17}------------------------------------------------ ## NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DECEMBER 31, 2023 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ### Revenue Recognition (Continued) Revenue Recognition (Continued) Brokered Loan Fee Income — The Company will act as introducing broker to facilitate the sale of a loan, or group of loans, from one institution to another. The company takes no principal risk and simply acts as an intermediary to help the selling institution transact the sale of the loan, or group of loans, to a purchasing institution. Brokered Loan Fee Income – The Company will act as introducing broker to facilitate the sale of a loan, or group of loans, from one institution to another. The company takes no principal risk and simply acts as an intermediary to help the selling institution transact the sale of the loan, or group of loans, to a purchasing institution. - **The Company facilitates transactions between a selling institution and a purchasing institution. For this facilitation, the Company is paid a brokerage fee directly from the selling institution. The fee is paid based upon a set schedule determined by the selling institution.** The Company facilitates transactions between a selling institution and a purchasing institution. For this facilitation, the Company is paid a brokerage fee directly from the selling institution. The fee is paid based upon a set schedule determined by the selling institution. - **The performance obligation is to find a purchasing institution on a singular loan or group of low-income housing tax credit loans (LIHTC) on behalf of the selling institution.** The performance obligation is to find a purchasing institution on a singular loan or group of low-income housing tax credit loans (LIHTC) on behalf of the selling institution. - **The transaction price is dictated by the selling institution and paid directly to the Company upon closing the sale.** The transaction price is dictated by the selling institution and paid directly to the Company upon closing the sale. - **The fee is based upon a singular service and is not split between separate performance obligations.** The fee is based upon a singular service and is not split between separate performance obligations. - **The Company recognizes the revenue when the transaction is complete.** The Company recognizes the revenue when the transaction is complete. **Federal Funds Brokered Fee Income — The Company engages in brokering excess bank liquidity and/or sourcing funds for banks in the Federal Funds overnight marketplace.** Federal Funds Brokered Fee Income – The Company engages in brokering excess bank liquidity and/or sourcing funds for banks in the Federal Funds overnight marketplace. - **The Company brokers an agreement with a customer to sell and/or buy Federal Funds to satisfy the customer's liquidity needs on a daily basis. The agreement identifies the pricing and agreed upon fees.** The Company brokers an agreement with a customer to sell and/or buy Federal Funds to satisfy the customer's liquidity needs on a daily basis. The agreement identifies the pricing and agreed upon fees. - **Fed Funds Brokerage Fees are recorded on the day of the transaction as that is when the underlying financial instrument is finalized, and the risks and rewards of ownership have been transferred to/from the two entities.** Fed Funds Brokerage Fees are recorded on the day of the transaction as that is when the underlying financial instrument is finalized, and the risks and rewards of ownership have been transferred to/from the two entities. - **The brokerage fee is a standardized amount and based on volume of the total Federal Funds sold or purchased.** The brokerage fee is a standardized amount and based on volume of the total Federal Funds sold or purchased. - **The brokerage fee on the transaction is only a reflection of the singular transaction and is independent of any other transaction.** The brokerage fee on the transaction is only a reflection of the singular transaction and is independent of any other transaction. - **Revenue recognition occurs on the transaction date and invoiced to clients monthly for prior month aggregate activity.** Revenue recognition occurs on the transaction date and invoiced to clients monthly for prior month aggregate activity. {18}------------------------------------------------ ## NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DECEMBER 31, 2023 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) #### Revenue Recognition (Continued) Revenue Recognition (Continued) The following table presents disaggregated revenue from contracts with Customers: The following table presents disaggregated revenue from contracts with Customers: | FIRST BANKERS' BANC SECURITIES, INC.
FIRST BANKERS' BANC SECURITIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023 | | | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|--|--|--| | | | | | | | The following table presents disaggregated revenue from contracts with Customers:
The following table presents disaggregated revenue from contracts with Customers: | | | | | | Underwriting Revenue
Underwriting Revenue | \$776,565
\$776,565 | | | | | Portfolio Fees
Portfolio Fees | 103,705
103,705 | | | | | Mutual Fund 12b-1 Fees
Mutual Fund 12b-1 Fees | 29,759
29,759 | | | | | Federal Funds Brokered Fee Income
Federal Funds Brokered Fee Income | 49,904
49,904 | | | | | Total Revenue From Contracts With Customers
Total Revenue From Contracts With Customers | | | | | | (in-scope of Topic 606)
(in-scope of Topic 606) | 959,933
959,933 | | | | | | | | | | | Gains on Principal Trades
Gains on Principal Trades | 12,297,125
12,297,125 | | | | | Interest, Dividends, and Other Income
Interest, Dividends, and Other Income | 1,571,618
1,571,618 | | | | | (out-of-scope of Topic 606)
(out-of-scope of Topic 606) | 13,868,743
13,868,743 | | | | #### Income Taxes Income Taxes Income taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxes currently due plus deferred taxes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets and liabilities are reflected at income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Company is not subject to federal or state income tax examinations for taxable years prior to 2020. Income taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxes currently due plus deferred taxes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets and liabilities are reflected at income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Company is not subject to federal or state income tax examinations for taxable years prior to 2020. The Company follows the provision of the accounting standards for uncertainty in income taxes. These rules establish a standard for tax benefits to meet before they can be recognized in a company's financial statements. The Company can recognize in financial statements the impact of a tax position taken, or expected to be taken, if it is more likely than not that the position will be sustained on an audit based on the technical merit of the position. The Company had no material tax positions at December 31, 2023 for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. The Company had no accruals for interest or penalties at December 31, 2023. The Company follows the provision of the accounting standards for uncertainty in income taxes. These rules establish a standard for tax benefits to meet before they can be recognized in a company's financial statements. The Company can recognize in financial statements the impact of a tax position taken, or expected to be taken, if it is more likely than not that the position will be sustained on an audit based on the technical merit of the position. The Company had no material tax positions at December 31, 2023 for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. The Company had no accruals for interest or penalties at December 31, 2023. ### Advertising Costs Advertising Costs Advertising costs are expensed in the year incurred. There was \$7,200 in advertising costs for the year ended December 31, 2023. Advertising costs are expensed in the year incurred. There was \$7,200 in advertising costs for the year ended December 31, 2023. {19}------------------------------------------------ ### NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DECEMBER 31, 2023 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Subsequent Events In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through March 20, 2024, the date the financial statements were issued. Subsequent Events In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through March 20, 2024, the date the financial statements were issued. ### NOTE 2 DEPOSIT WITH CLEARING ORGANIZATION NOTE 2 DEPOSIT WITH CLEARING ORGANIZATION ### NOTE 3 SECURITIES NOTE 3 SECURITIES | events and transactions for potential recognition or disclosure through March 20, 2024, the
events and transactions for potential recognition or disclosure through March 20, 2024, the
date the financial statements were issued.
date the financial statements were issued. | | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|----------------------------------------------------------| | | | | | The Company has an agreement with a national broker-dealer to clear customer transactions
The Company has an agreement with a national broker-dealer to clear customer transactions
on a fully disclosed basis. This deposit was increased from \$1,250,000 to \$2,000,000 on
on a fully disclosed basis. This deposit was increased from \$1,250,000 to \$2,000,000 on
May 1, 2023 and was subsequently increased to \$3,500,000 on December 6, 2023 which
May 1, 2023 and was subsequently increased to \$3,500,000 on December 6, 2023 which
was maintained in cash with the broker-dealer throughout the remainder of 2023.
was maintained in cash with the broker-dealer throughout the remainder of 2023. | | | | | | | | Marketable securities owned and securities sold, not yet purchased consist primarily of
Marketable securities owned and securities sold, not yet purchased consist primarily of
corporate debt instruments carried at fair value, as follows at December 31, 2023:
corporate debt instruments carried at fair value, as follows at December 31, 2023: | | | | | | | | | Owned
Owned | Sold, Not
Sold, Not
Yet Purchased
Yet Purchased | | U.S. Treasury Securities
U.S. Treasury Securities
State and Political Subdivisions Debt Instruments
State and Political Subdivisions Debt Instruments
Mortgage-Backed Securities
Mortgage-Backed Securities | \$
\$
1,000,000
1,000,000
9,251,212
9,251,212
108
108 | \$
\$
6,218,528
6,218,528
-
- | | Corporate Bonds
Corporate Bonds | 21,528,389
21,528,389
\$ 31,779,709
\$
31,779,709 | -
\$
6,218,528
\$
6,218,528 | | Components of Securities Sold, Not Yet Purchased:
Components of Securities Sold, Not Yet Purchased: | | | | U.S. Treasury Securities
U.S. Treasury Securities | | |----------------------------------------------------------------|-----------------| | United States Treasury Note @ 4.5%, maturity date of 11/15/33 | \$
4,231,856 | | United States Treasury Note @ 3.75%, maturity date of 12/31/30 | 1,986,672 | | | \$
6,218,528 | Accrued interest of \$45,794 and \$24,148 is included in the fair value of owned and sold, not yet purchased securities, respectively, at December 31, 2023. Accrued interest of \$45,794 and \$24,148 is included in the fair value of owned and sold, not yet purchased securities, respectively, at December 31, 2023. {20}------------------------------------------------ ### FIRST BANKERS' BANC SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023 FIRST BANKERS' BANC SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 4 FIXED ASSETS ### NOTE 4 FIXED ASSETS Fixed assets consist of the following at December 31, 2023: Fixed assets consist of the following at December 31, 2023: | FIRST BANKERS' BANC SECURITIES, INC.
FIRST BANKERS' BANC SECURITIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023 | | | | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|----------------------|--| | | | | | | Fixed assets consist of the following at December 31, 2023:
Fixed assets consist of the following at December 31, 2023: | | | | | Computer Equipment and Software
Computer Equipment and Software | \$
\$ | 114,521
114,521 | | | Less - Accumulated Depreciation
Less - Accumulated Depreciation | | (41,991)
(41,991) | | | Fixed Assets, Net
Fixed Assets, Net | \$
\$ | 72,530
72,530 | | Depreciation charged to expense was \$22,904 for the year ended December 31, 2023. Depreciation charged to expense was \$22,904 for the year ended December 31, 2023. ### NOTE 5 PAYABLE TO CLEARING ORGANIZATION NOTE 5 PAYABLE TO CLEARING ORGANIZATION The Company clears proprietary and customer transactions through another broker-dealer on a fully disclosed basis. The amount, if payable, to the clearing broker represents shortterm borrowings at fluctuating rates, principally 50 basis points over the clearing broker's cost of funds rate at December 31, 2023, which was 6.361%, and is collateralized by securities owned by the Company. The amount payable to the clearing organization at December 31, 2023 was \$15,937,616. The Company clears proprietary and customer transactions through another broker-dealer on a fully disclosed basis. The amount, if payable, to the clearing broker represents shortterm borrowings at fluctuating rates, principally 50 basis points over the clearing broker's cost of funds rate at December 31, 2023, which was 6.361%, and is collateralized by securities owned by the Company. The amount payable to the clearing organization at December 31, 2023 was \$15,937,616. Current Income Tax Expense 209,685 \$ Deferred Income Tax Expense 7,115 Total 216,800 \$ ### NOTE 6 INCOME TAXES NOTE 6 INCOME TAXES The provision for income taxes for the year ended December 31, 2023 consists of the following: The provision for income taxes for the year ended December 31, 2023 consists of the following: | Current Income Tax Expense | \$
209,685 | |-----------------------------|---------------| | Deferred Income Tax Expense | 7,115 | | Total | \$
216,800 | {21}------------------------------------------------ ## NOTE 6 INCOME TAXES (CONTINUED) DECEMBER 31, 2023 NOTE 6 INCOME TAXES (CONTINUED) | FIRST BANKERS' BANC SECURITIES, INC.
FIRST BANKERS' BANC SECURITIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS | | | | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|--------------------|--| | DECEMBER 31, 2023
DECEMBER 31, 2023 | | | | | INCOME TAXES (CONTINUED) | | | | | The provision for income taxes differs from that computed by applying federal statutory rates
The provision for income taxes differs from that computed by applying federal statutory rates
to income before income taxes, as indicated in the following analysis:
to income before income taxes, as indicated in the following analysis: | | | | | Expected Tax Provision at a 21% Rate
Expected Tax Provision at a 21% Rate | \$
\$ | 144,114
144,114 | | | State and Local Taxes - Net
State and Local Taxes - Net | | 33,281
33,281 | | | Life Insurance
Life Insurance | | 5,072
5,072 | | | Nondeductible Meals & Entertainment
Nondeductible Meals & Entertainment | | 35,706
35,706 | | | Nondeductible Club Dues
Nondeductible Club Dues | | 3,115
3,115 | | | Nondeductible Travel
Nondeductible Travel | | 132
132 | | | Other
Other | | (4,620)
(4,620) | | | Total
Total | \$
\$ | 216,800
216,800 | | | | | | | | The components of the deferred tax liability at December 31, 2023 are as follows:
The components of the deferred tax liability at December 31, 2023 are as follows: | | | | | Components of Deferred Taxes:
Components of Deferred Taxes: | | | | | Deferred Tax Asset
Deferred Tax Asset | | | | | Lease Liability
Lease Liability | \$
\$ | 123,317
123,317 | | | Deferred Tax Liabilities
Deferred Tax Liabilities | | | | | ROU Asset | | (122,569) | | | Depreciation | | (17,874) | | | Life Insurance | 5,072 | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|--| | Nondeductible Meals & Entertainment | 35,706 | | | Nondeductible Club Dues | 3,115 | | | Nondeductible Travel | 132 | | | Other | (4,620) | | | Total | \$
216,800 | | | The components of the deferred tax liability at December 31, 2023 are as follows:
The components of the deferred tax liability at December 31, 2023 are as follows: | | | | Components of Deferred Taxes:
Components of Deferred Taxes: | | | | Deferred Tax Asset
Deferred Tax Asset | | | | Lease Liability
Lease Liability | \$
\$
123,317
123,317 | | | Deferred Tax Liabilities
Deferred Tax Liabilities | | | | ROU Asset
ROU Asset | (122,569)
(122,569) | | | Depreciation
Depreciation | (17,874)
(17,874) | | | Prepaid Expenses
Prepaid Expenses | (34,842)
(34,842) | | | | (175,285)
(175,285) | | | Deferred Tax Liability, Net
Deferred Tax Liability, Net | \$
\$
(51,968)
(51,968) | | | | | | | | | | ### NOTE 7 EMPLOYEE BENEFITS NOTE 7 EMPLOYEE BENEFITS The Company has a qualified, contributory profit-sharing plan covering full-time employees which qualifies under section 401(k) of the Internal Revenue Code. The plan provides for discretionary contributions by the Company in such amounts as the Board of Directors may annually determine. Employer contributions charged to expense were \$195,855 for the year ended December 31, 2023. The Company has a qualified, contributory profit-sharing plan covering full-time employees which qualifies under section 401(k) of the Internal Revenue Code. The plan provides for discretionary contributions by the Company in such amounts as the Board of Directors may annually determine. Employer contributions charged to expense were \$195,855 for the year ended December 31, 2023. {22}------------------------------------------------ ### NOTE 8 NET CAPITAL REQUIREMENTS NOTE 8 NET CAPITAL REQUIREMENTS The Company is required to maintain minimum net capital as defined by Rule 15c3-1 under the Securities Exchange Act of 1934. Rule 15c3-1 requires minimum net capital to be the greater of \$100,000 or 6 2/3% (\$541,933 at December 31, 2023) of aggregate indebtedness. As of December 31, 2023, the Company had net capital, as defined, of \$2,077,493, which exceeded the minimum requirements of \$541,933. Also, as defined by Rule 15c3-1, the percentage of aggregate indebtedness to net capital for the Company may not exceed 1500 percent. As of December 31, 2023, the percentage of aggregate indebtedness to net capital for the Company was 391.29 percent. The Company is required to maintain minimum net capital as defined by Rule 15c3-1 under the Securities Exchange Act of 1934. Rule 15c3-1 requires minimum net capital to be the greater of \$100,000 or 6 2/3% (\$541,933 at December 31, 2023) of aggregate indebtedness. As of December 31, 2023, the Company had net capital, as defined, of \$2,077,493, which exceeded the minimum requirements of \$541,933. Also, as defined by Rule 15c3-1, the percentage of aggregate indebtedness to net capital for the Company may not exceed 1500 percent. As of December 31, 2023, the percentage of aggregate indebtedness to net capital for the Company was 391.29 percent. ### NOTE 9 RELATED PARTY TRANSACTIONS NOTE 9 RELATED PARTY TRANSACTIONS MIB, Inc. and wholly owned subsidiaries have formal operating and services agreements whereby the parties share employees and technology services. The costs reimbursed to MIB Inc. and Subsidiaries under these agreements are calculated based on actual employeespecific costs for those employees of MIB, Inc. and Subsidiaries that perform services for the Company, and a pro-rata portion of actual non-employee specific costs based on the portion of full-time equivalents performing services for the Company and/or specific costs paid for by MIB, Inc. and Subsidiaries for the sole use by the Company. The Company reimburses MIB, Inc. and Subsidiaries for these expenses on a quarterly basis, and total reimbursements for 2023 were \$309,684. MIB, Inc. and wholly owned subsidiaries have formal operating and services agreements whereby the parties share employees and technology services. The costs reimbursed to MIB Inc. and Subsidiaries under these agreements are calculated based on actual employeespecific costs for those employees of MIB, Inc. and Subsidiaries that perform services for the Company, and a pro-rata portion of actual non-employee specific costs based on the portion of full-time equivalents performing services for the Company and/or specific costs paid for by MIB, Inc. and Subsidiaries for the sole use by the Company. The Company reimburses MIB, Inc. and Subsidiaries for these expenses on a quarterly basis, and total reimbursements for 2023 were \$309,684. An unsecured revolving line of credit agreement has been established between MIB, Inc. and the Company for \$6,750,000. Interest is calculated at 0.25% over the daily target range for the Federal Funds Rate as set by the Federal Reserve Open Market Committee. The interest rate on this loan may change daily and will change the same day the index changes. Interest is payable monthly by the 25th calendar day of each month. Principal is due at maturity. The total amount of interest paid on this revolving line of credit agreement for the year ended December 31, 2023, was \$330,354. An unsecured revolving line of credit agreement has been established between MIB, Inc. and the Company for \$6,750,000. Interest is calculated at 0.25% over the daily target range for the Federal Funds Rate as set by the Federal Reserve Open Market Committee. The interest rate on this loan may change daily and will change the same day the index changes. Interest is payable monthly by the 25th calendar day of each month. Principal is due at maturity. The total amount of interest paid on this revolving line of credit agreement for the year ended December 31, 2023, was \$330,354. This line of credit was renewed during 2022 for an eighteen-month extension, with a maturity date of February 1, 2024, and again renewed with a maturity date of February 1, 2025. On December 31, 2023, the loan amount outstanding was \$6,000,000. This line of credit was renewed during 2022 for an eighteen-month extension, with a maturity date of February 1, 2024, and again renewed with a maturity date of February 1, 2025. On December 31, 2023, the loan amount outstanding was \$6,000,000. ### NOTE 10 OFF-BALANCE SHEET AND CREDIT RISKS NOTE 10 OFF-BALANCE SHEET AND CREDIT RISKS In the normal course of business, the Company's actions involve the execution and settlement of securities transactions. Credit risk results from the possibility that a loss may occur from the failure of another party to perform according to the terms of settlement. The Company has control procedures regarding securities transactions with counterparties and the manner in which they are settled. The settlement of open transactions as of December 31, 2023, is not expected to have a material adverse effect on the financial statements of the Company. In the normal course of business, the Company's actions involve the execution and settlement of securities transactions. Credit risk results from the possibility that a loss may occur from the failure of another party to perform according to the terms of settlement. The Company has control procedures regarding securities transactions with counterparties and the manner in which they are settled. The settlement of open transactions as of December 31, 2023, is not expected to have a material adverse effect on the financial statements of the Company. {23}------------------------------------------------ ## NOTE 11 FAIR VALUE MEASUREMENTS DECEMBER 31, 2023 NOTE 11 FAIR VALUE MEASUREMENTS | | FIRST BANKERS' BANC SECURITIES, INC.
FIRST BANKERS' BANC SECURITIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
DECEMBER 31, 2023 | | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|--------------------|----------------------------------------| | FAIR VALUE MEASUREMENTS | | | | | | assets and to determine fair value disclosures. For additional information on how the
assets and to determine fair value disclosures. For additional information on how the
Company measures fair value, refer to Note 1 - Summary of Significant Accounting Policies
Company measures fair value, refer to Note 1 – Summary of Significant Accounting Policies
to the Financial Statements. The following table presents the balances, by category, of the
to the Financial Statements. The following table presents the balances, by category, of the | | | | | | financial assets and liabilities measured at fair value on a recurring basis as of December 31,
financial assets and liabilities measured at fair value on a recurring basis as of December 31,
2023:
2023: | | | | | | | Level 1
Level 1 | Level 2
Level 2 | Level 3
Level 3 | Total
Total | | Assets:
Assets:
U.S. Treasury Securities
U.S. Treasury Securities
State and Political Subdivisions
State and Political Subdivisions | \$ 1,000,000
\$
1,000,000 | \$
-
\$ | \$
-
\$ | \$ 1,000,000
\$
1,000,000 | | Debt Instruments
Debt Instruments | - | 9,251,212
9,251,212 | - | 9,251,212
9,251,212 | | Mortgage-Backed Securities
Mortgage-Backed Securities
Corporate Bonds
Corporate Bonds | -
21,528,389
21,528,389 | 108
108
- | -
- | 108
108
21,528,389
21,528,389 | | | \$ 22,528,389
\$
22,528,389 | \$ 9,251,320
\$
9,251,320 | -
\$
\$
- | \$ 31,779,709
\$
31,779,709 | | Liabilities:
Liabilities: | | | | | | Securities Sold, Not Yet Purchased:
Securities Sold, Not Yet Purchased: | | | | | ### NOTE 12 OPERATING LEASES NOTE 12 OPERATING LEASES The Company has obligations as a lessee for office space and office equipment with initial noncancelable terms in excess of one year. The Company classifies these leases as operating leases. These leases may contain renewal options for periods ranging up to five years. Because the Company is not reasonably certain to exercise any renewal options, the optional periods are not included in determining the lease term, and associated payments under these renewal options are excluded from lease payments as used to determine the lease liability. The Company's leases do not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease contracts include fixed payments plus, for many of the Company's leases, variable payments. The Company's office space leases require it to make variable payments for the Company's proportionate share of the building's real estate taxes and operating costs, including common area maintenance. These variable lease payments are not included in lease payments used to determine lease liability and are recognized as variable costs when incurred. The Company has obligations as a lessee for office space and office equipment with initial noncancelable terms in excess of one year. The Company classifies these leases as operating leases. These leases may contain renewal options for periods ranging up to five years. Because the Company is not reasonably certain to exercise any renewal options, the optional periods are not included in determining the lease term, and associated payments under these renewal options are excluded from lease payments as used to determine the lease liability. The Company's leases do not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease contracts include fixed payments plus, for many of the Company's leases, variable payments. The Company's office space leases require it to make variable payments for the Company's proportionate share of the building's real estate taxes and operating costs, including common area maintenance. These variable lease payments are not included in lease payments used to determine lease liability and are recognized as variable costs when incurred. Total operating lease cost of \$200,532 is included in the Company's Statement of Income and split between two line items based on the type of lease: Occupancy and Equipment; and Rent. Total operating lease cost of \$200,532 is included in the Company's Statement of Income and split between two line items based on the type of lease: Occupancy and Equipment; and Rent. {24}------------------------------------------------ ## NOTE 12 OPERATING LEASES (CONTINUED) DECEMBER 31, 2023 NOTE 12 OPERATING LEASES (CONTINUED) Other information related to leases as of December 31, 2023 is as follows: Other information related to leases as of December 31, 2023 is as follows: | FIRST BANKERS' BANC SECURITIES, INC.
FIRST BANKERS' BANC SECURITIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023 | | | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|--| | | | | | Other information related to leases as of December 31, 2023 is as follows:
Other information related to leases as of December 31, 2023 is as follows: | | | | Weighted-average remaining lease term:
Weighted-average remaining lease term:
Operating Leases
Operating Leases | 3.8
3.8 | | | Weighted-average discount rate:
Weighted-average discount rate:
Operating Leases
Operating Leases | 4.8%
4.8% | | | Amounts disclosed for ROU assets obtained in exchange for lease liabilities and reductions
Amounts disclosed for ROU assets obtained in exchange for lease liabilities and reductions
to ROU assets resulting from reductions to lease liabilities include amounts added to or
to ROU assets resulting from reductions to lease liabilities include amounts added to or | | | Amounts disclosed for ROU assets obtained in exchange for lease liabilities and reductions to ROU assets resulting from reductions to lease liabilities include amounts added to or reduced from the carrying amount of ROU assets resulting from new leases, lease modifications or reassessments. Amounts disclosed for ROU assets obtained in exchange for lease liabilities and reductions to ROU assets resulting from reductions to lease liabilities include amounts added to or reduced from the carrying amount of ROU assets resulting from new leases, lease modifications or reassessments. Lease liabilities under operating leases as of December 31, 2023 were as follows: Lease liabilities under operating leases as of December 31, 2023 were as follows: | Other information related to leases as of December 31, 2023 is as follows:
Other information related to leases as of December 31, 2023 is as follows: | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Weighted-average remaining lease term:
Weighted-average remaining lease term: | | | Operating Leases | 3.8 | | Weighted-average discount rate:
Weighted-average discount rate: | | | Operating Leases | 4.8% | | Amounts disclosed for ROU assets obtained in exchange for lease liabilities and reductions
Amounts disclosed for ROU assets obtained in exchange for lease liabilities and reductions | | | | to ROU assets resulting from reductions to lease liabilities include amounts added to or
to ROU assets resulting from reductions to lease liabilities include amounts added to or
reduced from the carrying amount of ROU assets resulting from new leases, lease
reduced from the carrying amount of ROU assets resulting from new leases, lease | | Year
Year | | | 2024
2024 | \$
140,547
140,547
\$ | | 2025
2025 | 141,948
141,948 | | Lease liabilities under operating leases as of December 31, 2023 were as follows:
Lease liabilities under operating leases as of December 31, 2023 were as follows:
2026
2026 | 143,349
143,349 | | 2027
2027 | 122,104
122,104 | | 2028
2028 | 6,471
6,471 | | 2029
2029 | 342
342 | | Total Undiscounted Lease Payments
Total Undiscounted Lease Payments
Less Interest
Less Interest | 554,761
554,761
(54,351)
(54,351) | {25}------------------------------------------------ ### SUPPLEMENTAL SUPPLEMENTAL INFORMATION INFORMATION {26}------------------------------------------------ ### FIRST BANKERS' BANC SECURITIES, INC. COMPUTATION OF NET CAPITAL UNDER RULE 15C3-1 DECEMBER 31, 2023 FIRST BANKERS' BANC SECURITIES, INC. COMPUTATION OF NET CAPITAL UNDER RULE 15C3-1 DECEMBER 31, 2023 | | SCHEDULE I
SCHEDULE I | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------| | FIRST BANKERS' BANC SECURITIES, INC.
FIRST BANKERS' BANC SECURITIES, INC.
COMPUTATION OF NET CAPITAL UNDER RULE 15C3-1
COMPUTATION OF NET CAPITAL UNDER RULE 15C3-1
DECEMBER 31, 2023
DECEMBER 31, 2023 | | | TOTAL STOCKHOLDER'S EQUITY
TOTAL STOCKHOLDER'S EQUITY | \$
\$
11,986,919
11,986,919 | | NON-ALLOWABLE ASSETS
NON-ALLOWABLE ASSETS | | | Fixed Assets, Net
Fixed Assets, Net | 72,530
72,530 | | Goodwill, Net
Goodwill, Net | 5,800,000
5,800,000 | | Prepaid and Other Assets
Prepaid and Other Assets | 264,782
264,782 | | Total Non-Allowable Assets
Total Non-Allowable Assets | 6,137,312
6,137,312 | | NET CAPITAL BEFORE HAIRCUTS ON SECURITIES POSITIONS
NET CAPITAL BEFORE HAIRCUTS ON SECURITIES POSITIONS | 5,849,607
5,849,607 | | HAIRCUTS ON SECURITIES
HAIRCUTS ON SECURITIES | | | Exempted Securities
Exempted Securities | 247,771
247,771 | | Debt Securities
Debt Securities | 2,028,765
2,028,765 | | Other Securities
Other Securities | - | | Undue Concentration
Undue Concentration | 1,495,578
1,495,578 | | Total Haircut on Securities
Total Haircut on Securities | 3,772,114
3,772,114 | | NET CAPITAL
NET CAPITAL | \$
\$
2,077,493
2,077,493 | | AGGREGATE INDEBTEDNESS
AGGREGATE INDEBTEDNESS | \$
\$
8,128,986
8,128,986 | | COMPUTATION OF BASIC NET CAPITAL REQUIREMENT
COMPUTATION OF BASIC NET CAPITAL REQUIREMENT | | | Minimum Net Capital Required
Minimum Net Capital Required | \$
\$
541,933
541,933 | | Minimum Dollar Net Capital Requirement
Minimum Dollar Net Capital Requirement | \$
\$
100,000
100,000 | | Net Capital Requirement (greater of above)
Net Capital Requirement (greater of above) | \$
\$
541,933
541,933 | | Excess Net Capital
Excess Net Capital | \$
\$
1,535,560
1,535,560 | | Net Capital Less 10% of Aggregate Indebtedness
Net Capital Less 10% of Aggregate Indebtedness | \$
\$
1,264,594
1,264,594 | | Percentage of Aggregate Indebtedness to Net Capital
Percentage of Aggregate Indebtedness to Net Capital | 391.29%
391.29% | {27}------------------------------------------------ ### FIRST BANKERS' BANC SECURITIES, INC. COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS UNDER EXHIBIT A OF RULE 15C3-3 (EXEMPTION) AND INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15C3-3 (EXEMPTION) DECEMBER 31, 2023 FIRST BANKERS' BANC SECURITIES, INC. COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS UNDER EXHIBIT A OF RULE 15C3-3 (EXEMPTION) AND INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15C3-3 (EXEMPTION) ### SCHEDULE II - Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3 (exemption) DECEMBER 31, 2023 SCHEDULE II - Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3 (exemption) The Company is an introducing broker/dealer who clears all transactions with and for customers on a fully disclosed basis with a clearing broker. The Company promptly transmits all customer funds and securities to the clearing broker and claims exemption from Rule 15c3-3 under provisions of Paragraph (k)(2)(i) and (k)(2)(ii). The Company is an introducing broker/dealer who clears all transactions with and for customers on a fully disclosed basis with a clearing broker. The Company promptly transmits all customer funds and securities to the clearing broker and claims exemption from Rule 15c3-3 under provisions of Paragraph (k)(2)(i) and (k)(2)(ii). The Computation for Determination of Reserve Requirements for Brokers and Dealers Pursuant to Rule 15c3-3 under the Securities Exchange Act of 1934 is not included therein as the Company claims exemption from such computation under Section (k)(2)(i) and (k)(2)(ii), as the Company introduces all customer activity to another regulated financial institution. The Computation for Determination of Reserve Requirements for Brokers and Dealers Pursuant to Rule 15c3-3 under the Securities Exchange Act of 1934 is not included therein as the Company claims exemption from such computation under Section (k)(2)(i) and (k)(2)(ii), as the Company introduces all customer activity to another regulated financial institution. The Company is also claiming exemption from such computation because the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. §240.17a-5 to include, but are not limited to, other forms of revenue generated by the Company, such as: Federal Funds Brokered Fee Income; Municipal Bond Portfolio Reviews; Brokered Certificates of Deposit Underwriting Fees; Brokered Loan Fee Income; and Asset / Liability Management Reviews; and the Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. The Company is also claiming exemption from such computation because the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. §240.17a-5 to include, but are not limited to, other forms of revenue generated by the Company, such as: Federal Funds Brokered Fee Income; Municipal Bond Portfolio Reviews; Brokered Certificates of Deposit Underwriting Fees; Brokered Loan Fee Income; and Asset / Liability Management Reviews; and the Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. ### SCHEDULE III - Information Relating to the Possession or Control Requirements Under Rule 15c3- 3 (exemption) SCHEDULE III - Information Relating to the Possession or Control Requirements Under Rule 15c3- 3 (exemption) Information relating to possession or control requirements is not included therein as the Company claims exemption pursuant to Section (k)(2)(i) and (k)(2)(ii), since all customer transactions are cleared through another broker-dealer on a fully disclosed basis. Information relating to possession or control requirements is not included therein as the Company claims exemption pursuant to Section (k)(2)(i) and (k)(2)(ii), since all customer transactions are cleared through another broker-dealer on a fully disclosed basis. Also, information relating to possession or control requirements is not included therein as the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. §240.17a-5 to include, but are not limited to, other forms of revenue generated by the Company, such as: Federal Funds Brokered Fee Income; Municipal Bond Portfolio Reviews; Brokered Certificates of Deposit Underwriting Fees; Brokered Loan Fee Income; and Asset / Liability Management Reviews; and the Company (1) did not directly or indirectly receive, hold, or otherwise owe Also, information relating to possession or control requirements is not included therein as the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. §240.17a-5 to include, but are not limited to, other forms of revenue generated by the Company, such as: Federal Funds Brokered Fee Income; Municipal Bond Portfolio Reviews; Brokered Certificates of Deposit Underwriting Fees; Brokered Loan Fee Income; and Asset / Liability Management Reviews; and the Company (1) did not directly or indirectly receive, hold, or otherwise owe {28}------------------------------------------------ ### FIRST BANKERS' BANC SECURITIES, INC. COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS UNDER EXHIBIT A OF RULE 15C3-3 (EXEMPTION) AND INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15C3-3 (EXEMPTION) DECEMBER 31, 2023 FIRST BANKERS' BANC SECURITIES, INC. COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS UNDER EXHIBIT A OF RULE 15C3-3 (EXEMPTION) AND INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15C3-3 (EXEMPTION) ### SCHEDULE III - Information Relating to the Possession or Control Requirements Under Rule 15c3- 3 (exemption) (Continued) DECEMBER 31, 2023 SCHEDULE III - Information Relating to the Possession or Control Requirements Under Rule 15c3- 3 (exemption) (Continued) funds or securities for or to customers, (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. funds or securities for or to customers, (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.