# TRUIST INVESTMENT SERVICES, INC. X-17A-5 (2025-02-27) — Broker-dealer annual report - Company: TRUIST INVESTMENT SERVICES, INC. - Form: X-17A-5 - Filed: 2025-02-27 - Period: 2024-12-31 - Accession: 0000786397-25-000003 - CIK: 786397 - File #: 8-35355 - Type: Broker-dealer - Material weakness: No - Auditor: PRICEWATERHOUSECOOPERS LLP - Auditor location: CHARLOTTE, NC - Contact: EVELYN CALLENDER - Phone: 8042813722 - Email: evelyn.callender@truist.com - Website: truist.com - Signed by: EVELYN CALLENDER (CHIEF FINANCIAL OFFICER) Original filing: https://www.sec.gov/Archives/edgar/data/786397/000078639725000003/tisafs123124.pdf --- {0}------------------------------------------------ # FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION Truist Investment Services, Inc. (A Wholly Owned Subsidiary of Truist Financial Corporation) Year Ended December 31, 2024 With Report of Independent Registered Public Accounting Firm (Confidential Pursuant to SEC Rule 17a-5(e)(3)) {1}------------------------------------------------ | | ANNUAL KEPUKIS | | SEC FILE NUMBER | | | | | |------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|------------|-----------------------------|--|--|--|--| | | 8-35355 | | | | | | | | | | | | | | | | | | | | | | | | | | FACING PAGE | | | | | | | | | | on Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | | | | | | | | the period beginning 01/01/2024 | | AND ENDING | 12/31/2024 | | | | | | MM/DD/YY | | | MM/DD/YY | | | | | | | A. REGISTRANT IDENTIFICATION | | | | | | | | | TRUIST INVESTMENT SERVICES, INC | | | | | | | | GISTRANT (check all applicable boxes):
here if respondent is also an OTC derivatives dealer | dealer
F PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)
EACHTREE CENTER AVE, SUITE 140 | | | | | | | | | (No. and Street) | | | | | | | | ITA | GEORGIA | | 30303 | | | | | | (City) | (State) | | (Zip Code) | | | | | | CONTACT WITH REGARD TO THIS FILING | | | | | | | | | N CALLENDER (804)281-3722 | | | evelyn.callender@truist.com | | | | | | | (Area Code - Telephone Number) | | (Email Address) | | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | otarbound Connoroll D | ENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | | {2}------------------------------------------------ | | Evelyn Callender | |--|------------------| | | | - - - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ # Truist Investment Services, Inc. (A Wholly Owned Subsidiary of Truist Financial Corporation) # Financial Statements and Supplemental Information Year Ended December 31, 2024 # Contents | Report of Independent Registered Public Accounting Firm 3 | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--| | Financial Statements | | | Statement of Financial Condition 5 | | | Statement of Operations 6 | | | Statement of Changes in Shareholder's Equity 7 | | | Statement of Cash Flows 8 | | | Notes to Financial Statements9 | | | Supplemental Information | | | Schedule I – Computation of Net Capital Pursuant to Rule 15c3-1 of the Securities and Exchange | | | Commission 24 | | | Schedule II– Computation of Determination of Reserve Requirements & Information Relating to Possession
or Control Requirements Pursuant to Rule 15c3-3 of the Securities and Exchange Commission 25 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholder of Truist Investment Services, Inc. # Opinion on the Financial Statements We have audited the accompanying statement of financial condition of Truist Investment Services, Inc. as of December 31, 2024, and the related statements of operations, changes in for the year then ended, including the related notes (collectively , in all material respects, the financial position of the Company as of December 31, 2024, 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 These financial statements are the responsibili Our responsibility is to express an opinion on 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 of these financial statements 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. # Supplemental Information The accompanying Schedule I Computation of net capital pursuant to Rule 15c3-1 of the Securities and Exchange Commission, Schedule II Computation of Determination of Reserve Requirements Pursuant to Rule 15c3-3 of the Securities and Exchange Commission & Information Relating to Possession or Control Requirements Pursuant to Rule 15c3-3 of the Securities and Exchange Commission as of December 31, 2024 (collectively, the ) has been subjected to audit procedures The supplemental information is the responsibilit 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 Rule 17a-5 under the Securities Exchange Act of PricewaterhouseCoopers LLP, 214 N. Tryon Street, Suite 4200, Charlotte, NC 28202 T: (704) 344 7500, www.pwc.com/us {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) 1934. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as the Company's auditor since 2019 February 27, 2025 {6}------------------------------------------------ # Statement of Financial Condition # Assets | Truist Investment Services, Inc.
(A Wholly Owned Subsidiary of Truist Financial Corporation) | | |-------------------------------------------------------------------------------------------------|-------------------| | | | | Statement of Financial Condition | | | December 31, 2024 | | | | | | Assets | | | Cash and cash equivalents | \$
328,414,852 | | Cash segregated under federal regulations | 10,468,952 | | Securities owned, at fair value | 5,990,818 | | Commissions receivable | 8,890,034 | | Goodwill | 56,628,410 | | Intangible assets, net | 10,993,566 | | Employee loans and prepaid incentive bonuses | 77,457,888 | | Receivables from related parties | 11,988,492 | | Deferred taxes, net | 13,935,530 | | Right of use assets | 3,780,636 | | Other assets | 23,798,098 | | Total assets | \$
552,347,276 | | | | | Liabilities and shareholder's equity | | | Liabilities: | | | Accrued compensation and benefits | \$
41,324,970 | | Operating lease liabilities | 3,942,422 | | Accrued expenses and other liabilities | 25,703,302 | | Total liabilities | 70,970,694 | | | | | Shareholder's equity: | | | Common stock and additional paid-in capital | 430,214,637 | | Retained earnings | 51,161,945 | | Total shareholder's equity | 481,376,582 | | Total liabilities and shareholder's equity | \$
552,347,276 | The accompanying notes are an integral part of these financial statements. {7}------------------------------------------------ # Revenues | Truist Investment Services, Inc.
(A Wholly Owned Subsidiary of Truist Financial Corporation) | | |-------------------------------------------------------------------------------------------------|-------------------| | Statement of Operations | | | Year Ended December 31, 2024 | | | Revenues | | | Commissions | | | Annuity | \$
212,716,125 | | Mutual fund | 44,348,364 | | Insurance | 6,241,008 | | Trade execution fees | 59,360,258 | | Administrative service fees | 32,226,396 | | Income from related parties | 506,735,322 | | Interest income | 17,377,793 | | Other income | 1,724,957 | | Total revenue | 880,730,223 | | Expenses | | | Compensation and benefits | 581,453,494 | | Expenses to affiliates | 193,043,913 | | Legal, consulting, and examination fees | 23,024,371 | | Clearing expenses | 19,450,113 | | Depreciation and amortization | 5,444,223 | | Dues, subscriptions, and office supplies | 5,145,422 | | Data processing and software | 4,425,313 | | Occupancy and equipment | 2,089,579 | | Other expense | 10,497,921 | | Total expenses | 844,574,349 | | Income before taxes | 36,155,874 | | Income tax provision | 7,554,576 | | Net income | \$
28,601,298 | {8}------------------------------------------------ (A Wholly Owned Subsidiary of Truist Financial Corporation) # Statement of Changes in Shareholder's Equity | | Common Stock and
Additional
Paid-in Capital | Retained
Earnings | Total | |-------------------------------------|---------------------------------------------------|----------------------|----------------| | Balance, December 31, 2023 | \$
429,474,723 | \$
72,560,647 | \$ 502,035,370 | | Net income | | 28,601,298 | 28,601,298 | | Dividends to Parent | | (50,000,000) | (50,000,000) | | Equity based compensation expense | 940,575 | | 940,575 | | Restricted stock award cancellation | (200,661) | | (200,661) | | Balance, December 31, 2024 | \$
430,214,637 | \$
51,161,945 | \$ 481,376,582 | | | | | | The accompanying notes are an integral part of these financial statements. {9}------------------------------------------------ | Truist Investment Services, Inc. | | | |-----------------------------------------------------------------------------------|-------------------|--| | (A Wholly Owned Subsidiary of Truist Financial Corporation) | | | | Statement of Cash Flows | | | | Year Ended December 31, 2024 | | | | | | | | Cash flows from operating activities
Net income | \$
28,601,298 | | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | Depreciation and amortization | 5,444,223 | | | Equity-based compensation expense | 940,574 | | | Restricted stock award cancellations | (200,661) | | | Deferred tax benefit | (2,100,785) | | | (Increase) decrease in assets: | | | | Securities segregated | 10,414,937 | | | Securities owned, at fair value | (1,737,153) | | | Commissions receivable | (616,082) | | | Employee loans and prepaid incentive bonuses | 20,531,668 | | | Receivables from related parties and other | (1,389,008) | | | (Decrease) increase in operating liabilities: | | | | Accrued compensation and benefits | 549,898 | | | Accrued other expenses | (8,579,265) | | | Net cash provided by operating activities | 51,859,644 | | | Cash flows used in financing activities | | | | Dividends to Parent | (50,000,000) | | | Net cash used in financing activities | (50,000,000) | | | Net increase in cash, cash equivalents, and restricted cash | 1,859,644 | | | Cash, cash equivalents, and restricted cash, beginning of year | 337,024,160 | | | Cash, cash equivalents, and restricted cash, end of year | \$
338,883,804 | | | Supplemental cash flow information | | | | Cash paid to Parent for federal income tax payments | | | | | \$
5,440,488 | | | The accompanying notes are an integral part of these financial statements. | | | {10}------------------------------------------------ 1. Organization and Description of Business Truist Investment Services, Inc. (the "Company" or "TIS") is a broker-dealer registered with the Securities and Exchange Commission (the "SEC") and the Financial Industry Regulatory Authority, Inc. ("FINRA"). The Company acts as an introducing broker-dealer offering full-service and discount brokerage services in various equity and debt securities, mutual funds, unit investment trusts, insurance and annuity products, and individual retirement accounts primarily to retail customers of Truist Financial Corporation (the "Parent" or "TFC"). TIS personnel provide sales, support and operational services to affiliates of TFC which TIS records as revenue for fees charged to affiliates for these services. 2. Summary of Significant Accounting Policies # Basis of Presentation The Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and include the accounts of the Company. In the opinion of management, all adjustments, consisting only of normal recurring adjustments that are necessary for a fair presentation of the results of operations in these financial statements, have been made. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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 vary from those estimates. Material estimates include the determination of fair value for financial instruments, goodwill, accrued expenses, and tax related accounts. # Cash and Cash Equivalents The Company has defined cash and cash equivalents as highly liquid investments with original maturities of less than three months that are not held for sale in the ordinary course of business. Included in cash and cash equivalents at December 31, 2024, is cash of \$61,689,612 at Truist Bank and \$266,725,240 of money market funds. # Cash Segregated Under Federal and Other Regulations At December 31, 2024, the company held restricted cash of \$10,468,952 which has been segregated in a special reserve account at CIBC Bank for the exclusive benefit of customers of the Company. # Securities owned Proprietary securities transactions in regular-way trades were recorded on the trade date, as if they had settled. Proprietary securities transactions in non-regular-way trades were recorded on the settlement date. Profit and loss arising from all securities transactions entered into for the account and risk of the Company were recorded on a trade date basis in the Statement of Operations as if they had settled. # Commissions Receivable The clearing broker maintains customers' accounts, receives cash on purchases, and distributes cash on {11}------------------------------------------------ sales. The Company records commissions receivable for its share of commissions charged to customers. # Goodwill and Other Intangible Assets Goodwill represents the cost in excess of the fair value of net assets acquired (including identifiable intangibles) in transactions accounted for as business combinations. Goodwill is tested at least annually for impairment as of October 1st of each year and more frequently if circumstances exist that indicate a possible reduction in the fair value below its carrying value. If, after assessing all relevant events or circumstances, the Company concludes that it is more-likely-than-not that the fair value is below its carrying value, then a quantitative impairment test is required. The Company may also elect to bypass the qualitative assessment and proceed directly to the quantitative impairment test. The Company measures impairment using the present value of estimated future cash flows. Discount rates are based upon the cost of capital specific to the Company's industry. If the carrying value of the Company exceeds its fair value, the Company would recognize impairment for the excess of carrying value over fair value. A qualitative impairment test was performed in 2024, and no triggering events were noted. There was no goodwill impairment recorded during the year. Intangible assets which consist of customer relationships are determined to have finite lives and are amortized over their useful lives, based upon the estimated economic benefits received. The weighted average useful life of the Company's customer relationships are 4.3 years. # Employee loans and Prepaid Incentive Bonuses The Company provides certain financial advisors with incentive bonuses or employee loans as part of the Company's recruiting and retention strategy for key revenue producing employees. Incentive bonuses are paid to advisors upon hire and amortized over the required employment term. Employee loans are generally forgiven over a two-to-ten-year period based upon continued employment with the Company. In both cases, if the employee leaves before the term of the loan expires, the balance becomes immediately due and payable. Interest earned on employee loans are included in interest income in the Statement of Operations. The Company has evaluated the impact of ASC 326 and no allowance for credit losses was established as management does not expect to incur any material credit losses on these assets. # Leases The Company has operating leases for corporate offices, branches, retail centers, and certain equipment. The Company determines if an arrangement is a lease at inception. Operating leases with an original lease term in excess of one year are included in Right of use assets and Operating lease liabilities in the Statement of Financial Condition. Right-of-use ("ROU") assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses an implicit interest rate in determining the present value of lease payments when readily determinable, and a collateralized incremental borrowing rate when an implicit rate is not available. Lease terms consider options to extend or terminate based on the determination of whether such renewal or termination options are deemed reasonably certain. Lease expense and rental income on operating leases is generally recorded using the straight-line method over the appropriate lease terms. Lease agreements that contain non-lease components are generally accounted for as a single lease component. Variable costs, such as {12}------------------------------------------------ maintenance expenses, property and sales taxes, association dues and index-based rate increases, are expensed as they are incurred. # Revenue Recognition # Commission revenue The Company places trades through an unaffiliated clearing broker. The clearing broker collects the gross brokerage commissions from customers and remits the net brokerage commissions to the Company based on agreed-upon terms. Revenues are recorded at a point in time on the trade date and included in Commissions in the accompanying Statement of Operations. Certain contracts within commission revenue have fees that are comprised of variable consideration. Insurance and annuity contracts include variable consideration for elements, such as a claw back of commission revenue when customers terminate their insurance or annuity policies early, or trailing commissions for years two through ten if customers continue paying the premium for their policies. The Company did not accrue claw backs at December 31, 2024 as management deemed them to be immaterial, which is consistent with prior periods. Management's consideration for each significant commission revenue source identified is as follows: # Annuity commissions The Company offers fixed and variable annuity products to its customers through collaboration with insurance carriers. For fixed annuities, customers pay a single premium, and the Company receives a commission based on the age of the client and the number of years of guaranteed income for the client. For variable annuities, the Company receives a commission from the insurance carriers based on the premium the customer pays to the carriers. The majority of the commissions are paid in the first year and a trailing commission is paid monthly after the first 12 months based on the net asset value of the clients' accounts. The Company acts as an agent in these transactions and recognizes revenue from the upfront commissions at a point in time when and recognized in the period they are earned. The Company's execution of these services represents its related performance obligations. For the year ended December 31, 2024, the Company recognized revenue for trailing commissions of \$46,168,195 and upfront commissions of \$166,547,930. Mutual fund commissions commissions (12b-1 fees). The Company receives an upfront commission from the mutual fund carrier for the sale of mutual fund shares. The commission payment typically settles two days {13}------------------------------------------------ after the trade date. The Company acts as an agent in these transactions and recognizes revenue at recognized in the period they are earned. For the year ended December 31, 2024, the Company recognized revenue for trailing 12b-1 fees of \$38,557,899, and upfront commissions of \$5,790,465. Insurance commissions The Company sells various types of insurance products. The two major types of insurance products include periodic premium insurance policies and single premium insurance policies. The Company receives a commission from the insurance carrier based off the premium the customer pays to the carrier. A majority of the commissions are paid in the first year and a renewal commission is paid monthly after the first 12 months based on the renewal premium paid by the customer. The Company acts as an agent in these transactions and recognizes revenue at a point in time when the customer enters into an agreement with the product carrier. The Company's execution of these services represents its related performance obligations. For the year ended December 31, 2024, the Company recognized revenue of \$6,241,008. # Commissions on trade execution Commissions on agency and riskless principal transactions arise from execution of trades in listed and over-the-counter ("OTC") equity and fixed income securities and unit investment trust trades. The company's execution of these services represents its related performance obligation, and on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. For the year ended December 31, 2024, the Company recognized commission revenue related to commissions on trade execution of \$59,360,258. The additional sources of revenue identified by management are as follows: # Administrative Service Fees The administrative service fees income consists of the bank deposit sweep program and service charges. The Company receives compensation from the clearing broker, less customer interest paid, for the bank deposit sweep program. The compensation is calculated based on average program daily assets on deposit at the depository institution. The Company pays the clearing broker a program fee of 7bps. The fee is based on average daily program assets on deposit at the depository institution. Other service fees income consists of service charges including recordkeeping, reporting, processing {14}------------------------------------------------ services, and other miscellaneous account charges. # Income from related parties The Company recognizes income upon providing certain services to other affiliates of TFC. These services mainly include sales force, administrative support, and operational oversight services incurred by TIS. The Company's execution of these services represents its related performance obligations, and revenue is recognized at a point in time. This revenue is recognized as Income from related parties in the accompanying Statement of Operations. For additional information on income from related parties, see Note 6, "Related Party Transactions". # Interest and Dividend Income The Company earns interest and dividend income on its special reserve account and money market funds. Interest and Dividends on the Company's special reserve account and money market funds are earned based on short-term interest rates. At December 31, 2024, the interest rates on the Company's special reserve account funds were 4.50% and the money market funds were 5.51% and 4.89%. For the year ended December 31, 2024, the Company recognized interest and dividend income related to its special reserve account and money market funds of \$14,551,064. The Company also earns interest income on employee loans. Interest is earned on employee loans based on variable rates included in the employees' loan agreement. For the year ended December 31, 2024, the Company recognized interest income related to its employee loans of \$2,826,728.85. # Compensation and benefits Compensation and benefits consist of salaries, payroll taxes, benefits, and incentives. Incentives represent compensation earned on commissionable revenue and other key performance indicators. # Expenses to affiliate Affiliates of the Parent provide services to TIS in accordance with various agreements. These services include finance, human resources, facilities management, etc. The Company pays these affiliates for the services it receives. For additional information on expenses to affiliate, see Note 6, "Related Party Transactions". # Income Taxes The provision for income taxes is based on income and expense reported for financial statement purposes after adjustment for permanent differences. Deferred income tax assets and liabilities result from differences between the timing of the recognition of assets and liabilities for financial reporting purposes and for income tax purposes. These deferred assets and liabilities are measured using the enacted tax rates and laws that are expected to apply in the periods in which the deferred tax assets or liabilities are expected to be realized. Subsequent changes in the tax laws require adjustment to these assets and liabilities with the cumulative effect included in the provision for income taxes for the period in which the change is enacted. A valuation allowance is recognized for a deferred tax asset if, based on the weight of {15}------------------------------------------------ available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. In computing the income tax provision, the Company evaluates the technical merits of its income tax positions based on current legislative, judicial and regulatory guidance. Interest and penalties related to the Company's tax positions are recognized as a component of the income tax provision. The Company's operating results are included in the consolidated federal income tax return and various consolidated or combined state income tax returns filed by the Parent. Payments to tax authorities are generally made by the Parent. The method of allocating federal income tax expense is determined under tax allocation agreements between the Company and the Parent. The allocation agreements specify that the Company's income taxes are calculated as if the Company filed separate income tax returns with appropriate adjustments to properly reflect the impact of a consolidated filing. Payments to tax authorities are made by the Parent. Additionally, the Company files its own separate state income tax returns in certain jurisdictions. For additional information on the Company's activities related to income taxes, see Note 10, "Income Taxes". 3. Accounting Policies Recently Adopted and Pending Accounting Pronouncements 4. Fair Value of Financial Instruments In November 2023, the FASB issued ASU 2023-07, Segment Reporting. This ASU amends ASC Topic 280 and requires incremental disclosures related to a public business entity's reportable segment. The Company adopted this ASU in 2024 as the required date of adoption is January 1,2024. The adoption of this ASU did not have a material impact on the financial statements or other significant matters. Accounting standards define fair value as the price that would be received on the measurement date to sell an asset or the price paid to transfer a liability in the principal or most advantageous market available to the entity in an orderly transaction between market participants, with a three-level measurement hierarchy: - Level 1: Quoted prices for identical instruments in active markets - Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. - Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable. The following table presents fair value information for assets and liabilities measured at fair value on a recurring basis: {16}------------------------------------------------ | | Fair Value Measurements for Assets and
Liabilities Measured on a Recurring Basis | | | | |--------------------------------|-------------------------------------------------------------------------------------|-----------|---------|----------------------| | | | | | Total as of | | | Level 1 | Level 2 | Level 3 | December 31, 2024 | | Assets:
Cash equivalents | | | | | | Money market fund | \$ 266,742,081 | \$
- | \$
- | \$
266,742,081 | | | | | | | | Securities Owned | | | | | | States and political | | | | | | subdivisions
Corporate debt | - | 356,783 | - | | | securities | - | 5,577,707 | - | 356,783
5,577,707 | | Other trading assets | 39,486 | - | - | 39,486 | # Fair Value Measurements for Assets and Liabilities Measured on a Recurring Basis The following discussion focuses on the valuation techniques and significant inputs for Level 2 assets and liabilities that are measured at fair value on a recurring basis. States and political subdivisions: Obligations of county and municipal authorities and agency bonds, which are general obligations of the municipality or are supported by a specified revenue source. Holdings are geographically dispersed, with no significant concentrations in any one state or municipality. Additionally, all municipal obligations are highly rated or are otherwise collateralized by securities backed by the full faith and credit of the federal government. These securities are valued using market-based pricing matrices that reference observable inputs including Municipal Securities Rulemaking Board ("MSRB") reported trades, issuer spreads, material event notices and benchmark yield curves. 5. Goodwill and Other Intangible Assets Corporate debt securities: These securities include brokered CD's and are valued using market-based pricing matrices that are based on observable inputs including Trade Reporting and Compliance Engine ("TRACE") reported trades, issuer spreads, material event notices and benchmark yield curves. There were no transfers between Level 1 and Level 2 or between Level 2 and Level 3 during the year ended December 31, 2024. The Company's goodwill balance at December 31, 2024 was \$56,628,410 The net carrying amount of other intangible assets are presented in the following table: {17}------------------------------------------------ | Customer Relationships, gross carrying value, December 31, 2024 | \$
44,905,500 | | |-----------------------------------------------------------------|------------------|--| | Accumulated amortization | (33,911,934) | | | Customer Relationships, net carrying value, December 31, 2024 | \$
10,993,566 | | | Accumulated amortization | (33,911,934) | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------| | Customer Relationships, net carrying value, December 31, 2024 | \$
10,993,566 | | Amortization expense of \$5,221,223 is included in Depreciation and amortization in the Statements of
Operations. The Company's estimated future amortization of intangible assets is presented in the following
table: | | | | December 31, 2024 | | 2025 | 4,174,255 | | 2026 | 3,089,766 | | 2027 | 2,106,093 | | 2028 | 1,339,886 | | 2029 | 283,566 | | Total | \$
10,993,566 | | 6.
Related-Party Transactions | | | During the year ended December 31, 2024, the Company engaged in various transactions with the Parent
and its affiliates. Balances with respect to related parties are as follows: | | | | | | \$
61,689,612 | | |-------------------|--| | 11,988,492 | | | 4,873,816 | | | | | | | | | | | | \$
506,735,322 | | | 1,762,945 | | | 193,043,913 | | | 581,453,494 | | | | | The Company recognizes Income from related parties upon providing certain services to other affiliates of TFC, primarily Truist Advisory Services, Inc. ("TAS"). TIS advisors provide investment advisory services offered by TAS. Thus, the salaries and related costs for these personnel and administrative services are charged to TAS based on determined allocation methodologies. Expenses to affiliates arise from the use of TFC's internal services and corporate real estate based on an {18}------------------------------------------------ agreed expense sharing agreement. Allocation methodologies vary for these services but are generally based on revenue, headcount, or utilization. Expense attributable to compensation and benefits are further discussed in Note 9, "Employee Benefits". TIS guarantees loans made by Truist Bank to certain key TIS employees. While ordinarily payable to Truist Bank on demand, generally TIS would not be called upon to make a payment on the loan unless the loan becomes past due or the employee ceases to be employed by TIS. In the event TIS is called upon to reimburse Truist Bank, the payment made to Truist Bank will be for any outstanding principal and interest. TIS will then have the ability to pursue reimbursement through other standard channels. During 2024, the Company was not called upon by TFC to make a payment nor has it recorded a liability for future payments as they were neither estimable nor probable at December 31, 2024. The total amount of loans off-balance sheet are \$62,158,687 at December 31, 2024. 7. Commitments and Contingencies # Legal Proceedings and Other Matters The Company is routinely named as a defendant in or a party to numerous actual or threatened legal proceedings and other matters and is or may be subject to potential liability in connection with them. The legal proceedings and other matters may be formal or informal and include litigation and arbitration with one or more identified claimants, certified or purported class actions with yet-to-be-identified claimants, and regulatory or other governmental information-gathering requests, examinations, investigations, and enforcement proceedings. Claims may be based in law or equity—such as those arising under contracts or in tort and those involving banking, consumer-protection, securities, antitrust, tax, employment, and other laws—and some present novel legal theories, allegations of substantial or indeterminate damages, demands for injunctive or similar relief, and requests for fines, penalties, restitution, or alterations in the Company's business practices. Our legal proceedings and other matters exist in varying stages of adjudication, arbitration, negotiation, or investigation. The course and outcome of legal proceedings and other matters are inherently unpredictable. This is especially so when a matter is still in its early stages, the damages sought are indeterminate or unsupported, significant facts are unclear or disputed, novel questions of law or other meaningful legal uncertainties exist, a request to certify a proceeding as a class action is outstanding or granted, multiple parties are named, or regulatory or other governmental entities are involved. As a result, we often are unable to determine how or when actual or threatened legal proceedings and other matters will be resolved and what losses may be incrementally and ultimately incurred. It is possible that the ultimate resolution of these matters, including those described below, if unfavorable, may be material to the financial position, results of operations, or cash flows of the Company, or cause significant reputational consequences. The Company establishes accruals for legal proceedings and other matters when potential losses become probable, and the amount of loss can be reasonably estimated. Accruals are evaluated each quarter and may be adjusted, upward or downward, based on our best judgment after consultation with counsel and others. No assurance exists that our accruals will not need to be adjusted in the future. Actual losses may be higher or lower than any amounts accrued, possibly to a significant degree. The Company estimates reasonably possible losses, in excess of amounts accrued, will not be material to its financial position, results of operations, or cash flows. This estimate does not represent the Company's maximum loss exposure, and actual losses may vary significantly. Also, the outcome of a particular matter {19}------------------------------------------------ may be one that the Company did not take into account in its estimate because the Company judged the likelihood of that outcome to be remote. In addition, the matters underlying this estimate may change from time to time. Estimated losses, like accruals, are based upon currently available information and involve considerable uncertainties and judgment. For certain matters, the Company may be unable to estimate the loss or range of loss, even if it believes that a loss is probable or reasonably possible, until developments in the matter provide additional information sufficient to support such an estimate. These matters are not accrued for and are not reflected in the estimate of reasonably possible losses. 8. Guarantees to Third Parties The following is a description of a certain matter in which the Company is involved: # Recordkeeping Matter The SEC requested information from the Company regarding compliance with applicable recordkeeping requirements for business-related electronic communications. In August 2024, the Company resolved this matter with the SEC paying a settlement of \$2,500,000. The Company uses a third-party clearing broker to clear and execute customers' securities transactions and maintain customer accounts. Under the agreement with the clearing broker, the Company agrees to indemnify the clearing broker for losses that result from a customer's failure to fulfill its contractual obligations. As the clearing broker's rights to charge the Company have no maximum amount, the Company believes that the maximum potential obligation cannot be estimated. However, to mitigate exposure, the Company may seek recourse from the customer through cash or securities held in the defaulting customer's account. The Company believes it is unlikely it will have to make material payments under this arrangement and has not recorded any contingent liability in the financial statements for this indemnity. For the year ended December 31, 2024, the Company experienced no losses as a result of the indemnity. The clearing agreement expires in February 2026. 9. Employee Benefits The Parent offers a 401(k) Savings Plan that permits employees to contribute from 1% to 50% of their cash compensation. For full-time employees who are 21 years of age or older with one year or more of service, the Company makes matching contributions of up to 4% of the employee's compensation. Total employer contributions to the 401(k) Savings Plan related to the Company amounted to \$14,378,198 in 2024. The Parent has a non-qualified defined benefit plan that only covers certain inactive Company employees. The costs are charged to current operations and consist of net pension cost based on various actuarial assumptions regarding future expectations under the plan. The Company was allocated a net pension cost under this plan of \$151,204 for the year ended December 31, 2024. The Parent has a qualified defined benefit plan that only covers certain Company employees. The Company was allocated a net pension service cost of \$5,363,174 for the year ended December 31, 2024, included in Employee compensation and benefits. The Parent also allocated to the Company other net benefit costs related to the defined benefit pension plan of \$ 12,173,578 that are included in Employee compensation and benefits for the year ended December 31, 2024. The Parent provides equity-based compensation plans that have been approved by its shareholders which {20}------------------------------------------------ grant restricted stock and restricted stock units, some of which may have performance features, to key employees of the Company. 10. Income Taxes The components of the Provision for income taxes included in the Statement of Operations as determined in accordance with ASC 740, Income Taxes, for the year ended December 31, 2024, are presented in the following table: | Current | | | |----------------------|-----------------|--| | Federal | \$
7,203,610 | | | State | 2,451,751 | | | | 9,655,361 | | | Deferred | | | | Federal | 556,172 | | | State | (2,656,957) | | | | (2,100,785) | | | Income tax provision | \$
7,554,576 | | A reconciliation of the provision for income taxes at the statutory federal income tax rate to the Company's actual provision for income taxes is presented in the following table: | Income tax provision at federal statutory rate | \$
7,592,734 | |----------------------------------------------------------|-----------------| | Increase in income tax provision as a result of: | | | State and Local Income Taxes, net of federal tax benefit | (162,113) | | Other, net | 123,955 | | Total income tax provision | \$
7,554,576 | | | | Deferred income tax assets and liabilities result from differences between the timing of the recognition of assets and liabilities for financial reporting purposes and for income tax purposes. These assets and liabilities are measured using the enacted federal and state tax rates expected to apply in the periods in which the deferred tax assets or liabilities are expected to be realized. The net deferred income tax asset is recorded in the Statement of Financial Position. The significant deferred tax assets and liabilities at December 31, 2024, net of the federal impact for state taxes, are presented in the following table: | Deferred Tax Assets: | | |------------------------------------|------------------| | Employee compensation and benefits | \$
10,818,396 | | Litigation accrual | 2,248,760 | | | 20 | | | CONFIDENTIAL | {21}------------------------------------------------ | Other accrued expenses/reserves | 2,807,555 | |---------------------------------|------------------| | Operating lease liability | 1,006,426 | | Depreciation | 883,973 | | State NOL carryforward | 353,744 | | Total gross deferred tax assets | 18,118,854 | | Valuation allowance | (513,151) | | Total deferred tax assets | 17,605,703 | | Deferred Tax Liabilities: | | | Intangibles | 2,730,996 | | ROU assets | 939,177 | | Total deferred tax liabilities | 3,670,173 | | Net deferred tax assets | \$
13,935,530 | | | | The deferred tax assets include state tax net operating losses of \$2.8 million as of December 31, 2024, of which \$2.1 million have an unlimited carryforward period and will not expire while the remaining \$0.7 million will expire in 2037 if not utilized. At December 31, 2024, the Company had a valuation allowance recorded against its state carryforwards of \$513,151. The change in the valuation allowance for the year ending December 31, 2024, was a decrease of \$1,619,699 The Company determined that a valuation allowance is not required for the federal deferred tax assets because it is more-likely-than-not these assets will be realized. 11. Cash Flow Information No unrecognized tax benefits have been recorded under ASC 740-10, Income Taxes, and no corresponding interest or penalties have been accrued. The Company continually evaluates the unrecognized tax benefits associated with its uncertain tax positions. The Company does not expect a significant change in its unrecognized tax benefits within 12 months of this reporting date. The Parent's federal income tax returns, in which the Company is included, are no longer subject to assessment by the Internal Revenue Service for taxable years prior to 2021. With limited exceptions, the various consolidated or combined state income tax returns filed by the Parent, in which the company is included, along with the Company's separate income tax returns, are no longer subject to assessment by state and local taxing authorities for taxable years prior to 2018. The following table reconciles certain line items in the Consolidated Statements of Financial Condition to the cash, cash equivalents and restricted cash balance in the Consolidated Statements of Cash Flows for the years ended December 31: {22}------------------------------------------------ | Cash and cash equivalents | 2024 | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------| | | \$
328,414,852 | | Cash and cash equivalents segregated under federal regulations | 10,468,952 | | Total cash, cash equivalents and restricted cash | \$
338,883,804 | | 12.
Segments | | | The Company operates as one reportable segment as an introducing broker-dealer, which is comprised of
several classes of services, including buying, and selling securities for its customers and its own account,
administrative service fees, and as an introducing broker dealer TIS does not custody client assets. TIS's
chief operating decision maker (CODM) is the chief executive officer (CEO). The CODM manages the | | The Company operates as one reportable segment as an introducing broker-dealer, which is comprised of several classes of services, including buying, and selling securities for its customers and its own account, administrative service fees, and as an introducing broker dealer TIS does not custody client assets. TIS's chief operating decision maker (CODM) is the chief executive officer (CEO). The CODM manages the Company, assesses performance, and decides how to allocate resources based on net income of the Company as a whole, as constructed and presented on the statement of comprehensive income. The significant expenses for the segment represent Compensation and Benefits and Expenses to affiliates as reflected in the Statement of Operations. The Company manages its business activities on a consolidated basis with the various product lines sharing a common economic environment with similar services, processes, and customers. The accounting policies used to measure the profit and loss of the segment are the same as those described in Note 2, Summary of Significant Accounting Policies. 13. Net Capital Requirements 14. Subsequent Events Rule 15c3-1 of the Securities Exchange Act of 1934 (the Rule) requires the Company to maintain minimum net capital, as defined. The Company has elected to use the alternative method to calculate net capital. At December 31, 2024, the Company was in compliance with the net capital requirements of the Rule. At December 31, 2024, the Company, on a standalone basis, had net capital, as defined, of \$269,679,387 which was \$269,429,387 in excess of the required net capital of \$250,000. The Company has evaluated subsequent events from December 31, 2024 through February 27, 2025, the date that these financial statements were available to be issued. The Company has determined that it does not have any material subsequent events to disclose in the notes to the financial statements. {23}------------------------------------------------ # Supplemental Information {24}------------------------------------------------ # Truist Investment Services, Inc. (A Wholly Owned Subsidiary of Truist Financial Corporation) # Schedule I – Computation of Net Capital Pursuant to Rule 15c3-1 of the Securities and Exchange Commission December 31, 2024 # Net Capital: | Stockholder's equity, as reported on the Statement of Financial Condition | \$
481,376,582 | |---------------------------------------------------------------------------|-------------------| | Less - Nonallowable assets: | | | Commissions receivable | 8,890,034 | | Goodwill | 56,628,410 | | Intangibles | 10,993,566 | | Non-marketable securities | 637,787 | | Employee loans and prepaid incentive bonuses | 77,457,888 | | Receivables from related parties | 11,988,492 | | Deferred taxes, net | 13,935,530 | | Right of use assets | 109,472 | | Other assets | 23,773,034 | | Total nonallowable assets | 204,414,213 | | Other deductions or charges | 175,662 | | Net capital before haircuts on securities positions | 276,786,707 | | Less - adjustments: | | | Haircuts on securities | | | Trading and investment securities: | | | Bankers' acceptances, certificates of deposit, and commercial paper | 740,988 | | State and municipal government obligations | 18,867 | | Other securities | 5,340,765 | | Undue concentration | 1,006,701 | | Net capital | \$
269,679,386 | | Net capital requirement | \$
250,000 | | Excess net capital | \$
269,429,386 | | | | There were no material differences between the audited computation of net capital included in this report and the corresponding schedule included in the Company's unaudited Part IIA FOCUS filing as of December 31, 2024. {25}------------------------------------------------ # Truist Investment Services, Inc. (A Wholly Owned Subsidiary of Truist Financial Corporation) Schedule II– Computation of Determination of Reserve Requirements & Information Relating to Possession or Control Requirements Pursuant to Rule 15c3-3 of the Securities and Exchange Commission December 31, 2024 The Company claims exemption from SEC Rule 15c3-3 based upon paragraph (k)(2)(ii) of the Rule and Footnote 74 of the SEC Release No. 34-70073. As a result, the Company has not included the Computation for Determination of Reserve Requirements or Information Relating to Possession or Control Requirements Pursuant to Rule 15c3-3 of the Securities and Exchange Commission. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.