# VALLEY NATIONAL INVESTMENTS, INC. X-17A-5 (2021-03-31) โ€” Broker-dealer annual report - Company: VALLEY NATIONAL INVESTMENTS, INC. - Form: X-17A-5 - Filed: 2021-03-31 - Period: 2020-12-31 - Accession: 0000773373-21-000003 - CIK: 773373 - File #: 8-34427 - Material weakness: No - Auditor: Morey, Nee, Buck & Oswald LLC - Auditor location: Bethlehem, PA - Contact: Elizabeth Wilson - Phone: 610-868-9000 - Signed by: Matthew Petrozelli (President & CEO) Original filing: https://www.sec.gov/Archives/edgar/data/773373/000077337321000003/vnipublicb.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 # ANNUAL AUDITED REPORT FORM X-17A-5 PART III OMB APPROVAL OMB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response .. . . . . 12.00 | SEC FILE NUMBER | | |-----------------|--| | 8-34427 | | FACING PAGE Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder | REPORT FOR THE PERIOD BEGINNING 01/01/2020 | | AND ENDING 12/31/2020 | | | |-------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|-----------------------|--------------------------------|--| | | MM/DD/YY | | MM/DD/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF BROKER-DEALER: Valley National Investments, Inc. | OFFICIAL USE ONLY | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM I.D. NO. | | | 1655 Valley Center Parkway, Suite 100 | | | | | | | (No. and Street) | | | | | Bethlehem | PA | | 18017 | | | (City) | (State) | | (Zip Code) | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Matthew E. Petrozelli, President & CEO | | | (610) 868-9000 | | | | | | (Area Code - Telephone Number) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | | | Morey, Nee, Buck & Oswald, LLC | | | | | | | (Name - if individual, state last, first, middle name) | | | | | 2571 Baglyos Circle, Ste B20 | Bethlehem | PA | 18020 | | | (Address) | (City) | (State) | (Zip Code) | | | CHECK ONE: | | | | | | Certified Public Accountant | | | | | | Public Accountant | | | | | | Accountant not resident in United States or any of its possessions. | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | \*Clains for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2) > Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. {1}------------------------------------------------ # OATH OR AFFIRMATION | J. Matthew E. Petrozelli | the best of the swear (or affirm) that, to the best of | |---------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------| | Valley National Investments, Inc. | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
, as | | of December 31 | 20 20 20 are true and correct. I further swear (or affirm) that | | | neither the company nor any partner, principal officer or director has any proprietary interest in any account | | classified solely as that of a customer, except as follows: | | | | | | | | | | | | | | | | | | | | | Commonwealth of Pennsylvania - Notary Seal
Donna M. Young, Notary Public | Signature | | Northampton County | | | My commission expires December 17, 2021
Commission number 1183869 | President & CEO | | Member, Pennsylvania Association of Notaries | Title | | | | | | | | Notary Public | | | This report ** contains (check all applicable boxes): | | | (a) Facing Page. | | | > (b) 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 ยง210.1-02 of Regulation S-X). | | | (d) Statement of Changes in Financial Condition. | | | (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. | | | (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. | | | (g) Computation of Net Capital. | | | (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. | | | (i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3. | | | | (i) A Reconciliation, including appropriate explanation of Net Capital Under Rule 15c3-1 and the | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. | | | | (k) A Reconciliation between the audited Statements of Financial Condition with respect to methods of | | consolidation. | | | (I) An Oath or Affirmation. | | | (m) A copy of the SIPC Supplemental Report. | | | | (n) A report describing any material inadequacies found to have existed since the date of the previous audit. | \*\* For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e){3). {2}------------------------------------------------ **VALLEY NATIONAL INVESTMENTS, INC.** **FINANCIAL STATEMENTS** **DECEMBER 31, 2020** {3}------------------------------------------------ # **TABLE OF CONTENTS** | | Page No. | |---------------------------------------------------------|----------| | Report of Independent Registered Public Accounting Firm | 1 | | Financial Statements: | | | Statement of Financial Condition | 2 | | Notes to Financial Statements | 3 - 5 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Valley National Investments, Inc. # **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Valley National Investments, Inc. as of December 31, 2020, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of Valley National Investments, Inc. as of December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. # **Basis for Opinion** This financial statement is the responsibility of Valley National Investments, Inc.'s management. Our responsibility is to express an opinion on Valley National Investments, Inc.'s financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Valley National Investments, Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Morey, Nee, Buck & Oswald, LLC We have served as Valley National Investments, Inc.'s auditor since 2009. Bethlehem, Pennsylvania March 23, 2021 {5}------------------------------------------------ #### **VALLEY NATIONAL INVESTMENTS, INC. STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2020** | Cash and cash equivalents
\$
Clearing deposits
Receivable from brokers and dealers
Securities owned:
Marketable, at market value
Other assets
TOTAL ASSETS
\$
Payable to brokers and dealers
\$
Commissions payable
4,335
Other liabilities
63,200
TOTAL LIABILITIES
Common stock โ€“ Par value \$1.00 per share, 500,000 shares authorized,
1,771 shares issued of which 771 shares are held in treasury
Treasury stock, at cost
Additional paid in capital
64,017
Retained earnings
386,072
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY
\$ | ASSETS | | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------| | LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
STOCKHOLDER'S EQUITY | | 15,115 | | | | 30,000 | | | | 5,781 | | | | | | | | 277,932 | | | | 8,614 | | | | 337,442 | | | | | | | | | | | | 225 | | | | | | | | | | | | 67,760 | | | | | | | | | | | | 1,771 | | | | (182,178) | | | | | | | | | | | | 269,682 | | | | 337,442 | The accompanying notes are an integral part of this statement. {6}------------------------------------------------ # **NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** # **NATURE OF BUSINESS** Valley National Investments, Inc. (the "Company") is a registered broker-dealer in securities under the Securities Act of 1934 and is a member of the Financial Industry Regulatory Authority. The Company is a member of a controlled group of corporations. The Company does most of its business activity within Pennsylvania and New Jersey. # **SECURITIES TRANSACTIONS** Securities transactions and the related revenues and expenses are recorded in the financial statements on a trade date basis. Marketable securities are carried at fair value, with changes in value included in the statement of income in the period of change. Fair value is generally determined by quoted market prices. Non-marketable securities are valued at fair value as determined by management. # **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 the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. # **ADVERTISING** Advertising costs are expensed as incurred and are included in management fees. # **RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS** In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13 โ€“ Current Expected Credit Losses ("CECL") which replaces the current incurred loss model used to measure impairment loss with an expected loss model for trade and other receivables. The Company adopted the standard during 2020, under the modified retrospective approach to the earliest period presented. The adoption of ASU 2016-13 did not have a material effect on the Company's financial statements. # **DATE OF MANAGEMENT'S REVIEW** Management has evaluated events through March 23, 2021, the date on which the financial statements were available to be issued. {7}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020** #### **NOTE 2: CREDIT AND MARKET RISK** A clearing broker-dealer carries all of the accounts of the Company and is responsible for the execution, collection of and payments of funds and, receipt and delivery of securities relative to customer transactions. Off-balance sheet credit risk exists with respect to these transactions due to the possibility that customers may be unable to fulfill their contractual commitments wherein the clearing broker-dealer may charge any losses it incurs to the Company. The Company seeks to minimize this risk through procedures designed to monitor the credit worthiness of its customers and that customer transactions are executed properly by the clearing broker-dealer. At December 31, 2020, cash and cash equivalents were held on deposit at diversified U.S. financial institutions. Receivable from brokers and dealers represent amounts due from its clearing broker relating to customer securities transactions introduced by the Company. Management has determined that no allowance for credit losses is necessary at December 31, 2020. #### **NOTE 3: RELATED PARTY TRANSACTIONS** Valley National Group, Inc., a related entity, assesses management fees to the Company. The assessments are based on the Company's profitability and utilization of resources. For the year ended December 31, 2020, the management fee amounted to \$404,319. Included in other liabilities as of December 31, 2020 is \$17,459 and \$44,743 payable to VNA and VNG, respectively, in respect to this agreement. #### **NOTE 4: NET CAPITAL REQUIREMENTS** The Company is subject to the SEC's Uniform Net Capital Rule (rule 15c3-1) under the Securities Exchange Act of 1934, which requires the maintenance of minimum net capital, as defined and requires that the ratio of aggregate indebtedness, as defined, to net capital, shall not exceed 15 to 1. At December 31, 2020, the Company had net capital of \$252,404 which was \$202,404 in excess of its required net capital of \$50,000. The Company's ratio of aggregate indebtedness to net capital was 0.27 to 1. Capital withdrawals are subject to certain notification and other provisions of the net capital rules of the SEC. #### **NOTE 5: INCOME TAXES** In 2016, the Company elected to be treated as an "S Corporation" for income tax purposes as provided in Section 1362 of the Internal Revenue Code. An "S Corporation" is generally not subject to federal income tax and as such does not have deferred income tax balances as of December 31, 2020. The Company is no longer subject to federal, state, or local tax examinations by taxing authorities for years before 2017. {8}------------------------------------------------ # **VALLEY NATIONAL INVESTMENTS, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020** #### **NOTE 6: FAIR VALUE** FASB ASC 820 defines fair value, established a framework for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transactions to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by FASB ASC 820, are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: - x Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities the Company has the ability to access. - x Level 2 inputs are inputs (other than quoted prices included in level 1) that are observable for the asset or liability, either directly or indirectly. - x Level 3 are unobservable inputs for the asset or liability and rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. (The unobservable inputs should be developed based on the best information available in the circumstances and may include the Company's own data.) The following tables present the Company's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2020. # **Fair Value Measurements on a Recurring Basis As of December 31, 2020** | | Level 1 | Level 2 | Level 3 | Netting and Collateral | Total | |----------|-----------|---------|---------|------------------------|-----------| | ASSETS | | | | | | | Equities | \$277,932 | - | - | - | \$277,932 | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.