# VALLEY NATIONAL INVESTMENTS, INC. X-17A-5 (2022-03-11) — Broker-dealer annual report
- Company: VALLEY NATIONAL INVESTMENTS, INC.
- Form: X-17A-5
- Filed: 2022-03-11
- Period: 2021-12-31
- Accession: 0000773373-22-000001
- CIK: 773373
- File #: 8-34427
- Type: Broker-dealer
- Material weakness: No
- Auditor: Morey, Nee, Buck & Oswald, LLC
- Auditor location: Bethlehem, PA
- Contact: Matthew Petrozelli
- Phone: (610) 868-9000
- Email: mpetrozelli@valleynationalgroup.com
- Website: valleynationalgroup.com
- Signed by: Matthew Petrozelli (President & CEO)
Original filing: https://www.sec.gov/Archives/edgar/data/773373/000077337322000001/vnipublic.pdf
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
# ANNUAL REPORTS FORM X-17A-5 PART III
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SEC FILE NUMBER
8-34427
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 | 01/01/2021 | | AND ENDING 12/31/2021 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|---------------|--------------------------------------------------------|
| | MM/DD/YY | | MM/DD/YY |
| | A. REGISTRANT IDENTIFICATION | | |
| NAME OF FIRM: Valley National Investments, Inc. | | | |
| TYPE OF REGISTRANT (check all applicable boxes):
12 Broker-dealer - L Security-based swap dealer - L Major security-based swap participant
Check here if respondent is also an OTC derivatives dealer | | | |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | |
| 1655 Valley Center Parkway, Suite 100 | | | |
| | (No. and Street) | | |
| Bethlehem | PA | | 18017 |
| (City) | (State) | | (Zip Code) |
| PERSON TO CONTACT WITH REGARD TO THIS FILING | | | |
| Matthew E. Petrozelli, President & CEO (610) 868-9000
(Name) | (Area Code - Telephone Number) | | mpetrozelli@valleynationalgroup.com
(Email Address) |
| | B. ACCOUNTANT IDENTIFICATION | | |
| INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Morey, Nee, Buck & Oswald, LLC | (Name - if individual, state last, first, and middle name) | | |
| | | | |
| 2571 Baglyos Circle, Suite B20
(Address) | Bethlehem
(City) | PA
(State) | 18020
(Zip Code) |
| | | | |
| (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, if applicable) |
| | FOR OFFICIAL USE ONLY | | |
| | | | |
| * Claims for exemption from the requirement that the annual reports of an independent public | | | |
accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable.
Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
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## OATH OR AFFIRMATION
| Matthew E. Petrozelli |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| financial report pertaining to the firm of Valley National Investments, Inc. |
| December 31 |
| 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. |
| Commonwealth of Pennsylvania - Notary Seal |
| Donna M. Young, Notary Public
Signature:
Northampton County |
| My commission expires December 17, 2025 |
| Title:
Commission number 1183869 |
| President & CEO
Member, Pennsylvania Association of Notaries |
| |
| Notary Public |
| |
| This filing ** contains (checkall applicable boxes): |
| 2 (a) Statement of financial condition. |
| 2 (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. |
| ا (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. |
| L (i) Computation of tangible net worth under 17 CFR 240.18a-2. |
| [] Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.
{ 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. |
| (1) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. |
| 1 (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 capible net |
| worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-2, 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-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. |
| |
| (t) Independent public accountant's report based on an examination of the statement of financial condition. |
| [] (u) Independent public accountant's report based on an examination of the financial statements under 17
CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. |
| [] {v] Independent public accountant's report based on an examination of certain statements in the compliance report under 17
CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. |
| {w} Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17
CFR 240.18a-7, as applicable. |
| [ {x} Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12,
as applicable. |
| (y) Report describing any material inadequacies found to have existed since the date of the previous audit, or
a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). |
| (z) Other: |
\*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable.
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**VALLEY NATIONAL INVESTMENTS, INC.**
**FINANCIAL STATEMENTS**
**DECEMBER 31, 2021**
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## **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 |
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## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholder 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, 2021, 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, 2021 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 10, 2022
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#### **VALLEY NATIONAL INVESTMENTS, INC. STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2021**
| ASSETS | |
|-----------------------------------------------------------------------|---------------|
| Cash and cash equivalents | \$
8,108 |
| Clearing deposits | 30,000 |
| Receivable from brokers and dealers | 26,120 |
| Securities owned: | |
| Marketable, at market value | 275,904 |
| Other assets | 11,612 |
| TOTAL ASSETS | \$
351,744 |
| LIABILITIES AND STOCKHOLDER'S EQUITY | |
| LIABILITIES | |
| Payable to brokers and dealers | \$
273 |
| Commissions payable | 8,872 |
| Other liabilities | 103,578 |
| TOTAL LIABILITIES | 112,723 |
| STOCKHOLDER'S EQUITY | |
| Common stock – Par value \$1.00 per share, 500,000 shares authorized, | |
| 1,771 shares issued of which 771 shares are held in treasury | 1,771 |
| Treasury stock, at cost | (182,178) |
| Additional paid in capital | 64,017 |
| Retained earnings | 355,411 |
| | 239,021 |
| TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | \$
351,744 |
The accompanying notes are an integral part of this statement.
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# **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 operations in the period of change. Fair value is generally determined by quoted market prices. Nonmarketable 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. Advertising costs of \$563 for the year ended December 31, 2021 were incurred.
## **DATE OF MANAGEMENT'S REVIEW**
Management has evaluated events through March 10, 2022, the date on which the financial statements were available to be issued.
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## **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, 2021, 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, 2021.
# **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, 2021, the management fee amounted to \$407,287. Included in other liabilities as of December 31, 2021 is \$92,599 and \$10,979 payable to VNA and VNG, respectively, in respect to this agreement. For the year ended December 31, 2021, \$2,426 of interest expense was incurred related to these balances.
## **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, 2021, the Company had net capital of \$202,764 which was \$152,764 in excess of its required net capital of \$50,000. The Company's ratio of aggregate indebtedness to net capital was 0.56 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, 2021.
The Company is no longer subject to federal, state, or local tax examinations by taxing authorities for years before 2018.
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## **VALLEY NATIONAL INVESTMENTS, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021**
#### **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, 2021.
# **Fair Value Measurements on a Recurring Basis As of December 31, 2021**
| | Level 1 | Level 2 | Level 3 | Netting and Collateral | Total |
|----------|-----------|---------|---------|------------------------|-----------|
| ASSETS | | | | | |
| Equities | \$275,904 | - | - | - | \$275,904 |
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.