# LOMBARD SECURITIES INCORPORATED X-17A-5 (2024-03-28) — Broker-dealer annual report - Company: LOMBARD SECURITIES INCORPORATED - Form: X-17A-5 - Filed: 2024-03-28 - Period: 2023-12-31 - Accession: 0000870584-24-000003 - CIK: 870584 - File #: 8-43340 - Type: Broker-dealer - Material weakness: No - Auditor: RW Group - Auditor location: kennet square, PA - Contact: William Socha - Phone: 410-342-1300 - Email: wsocha@golombard.com - Website: golombard.com - Signed by: William Socha (Co-CEO: CFO) Original filing: https://www.sec.gov/Archives/edgar/data/870584/000087058424000003/public_lsiandsubs2023.pdf --- {0}------------------------------------------------ ## PUBLIC LoMBARD sECURrrrEs rNcoRpoRATED AND srJBsrDrARrEs NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,2023 ## NOTE 9 - ADVERTISING Advertising costs are expensed as incurred. For the year ended December 3 l, 2023 costs were \$0. # NOTE 10 - Credit Losses J A broker dealer, however, is not required to measure exp€cted credit losses on a financial asset (or group of financial assets) in which historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is remote. For financial assets measured at amortized cost (i.e. cash), the Company has concluded that there are no expected credit losses based on the nature or expected life ofthe financial assets and immaterial historic or expected losses. # NOTE lr -SUBSEQUENT EVENTS Management has evaluated subsequent events through March 28, 2024, lhe date on which the financial statements were available to be issued. No events have occurred since the balance sheet date that would have material impact on financial statements. {1}------------------------------------------------ ## LOMBARD SECURITIES INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 ### NOTE 5 - OFF-BALANCE-SHEET RISK A clearing broker/dealer carries all of the accounts of the Company and is responsible for execution, collection and payment of funds, and receipt and delivery of securities related to client transactions. Off-balance-sheet risk exists with respect to these transactions due to the possibility that clients may be unable to fulfill their contractual commitments wherein the clearing the 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 clients and verify that client transactions are executed properly by the clearing broker/dealer. ## NOTE 6 - NET CAPITAL REQUIREMENTS The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. The rule also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio exceeds 10 to 1. At December 31, 2023, the Company is in compliance with this rule. Lombard Advisers Incorporated, a wholly-owned subsidiary of the Company, is required to compute net capital pursuant to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1) on a stand-alone basis. At December 31, 2023, Lombard Advisers Incorporated had net capital of \$654,039. ## NOTE 7 - LEASE COMMITMENTS The Company has entered into a lease for office facilities which expires on March 31, 2027. In addition to the base rent specified in the lease, it is subject to escalation based on increases in real estate tax and operating expenses. As of December 31, 2023 the operating lease asset was equal to \$445,631 and the operating lease liability was \$445,631. Future minimum lease payments required under this operating lease exclusive of those escalations are as follows: | 2024 | | 136,065 | |-------|---|---------| | 2025 | | 139,872 | | 2026 | | 143,793 | | 2027 | | 36,195 | | Total | S | 455,925 | Rent expense for the year ended December 31, 2023 was \$141,097. ## NOTE 8 - EMPLOYEE RETIREMENT PLAN The Company has an employee retirement plan whereby the Company matches a portion of the contributions made by the employees. All employees meeting certain age and service requirements are eligible to participate in the Company matched amount as of December 31, 2023 was \$13,750. Pg 5 {2}------------------------------------------------ ## LOMBARD SECURITIES INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 ## NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued) Securities Owned - Securities owned at their fair market value, determined from quoted market prices. Property and Equipment - Furniture and equipment are stated at cost net of \$275,139 accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, usually 3 to 5 years. Depreciation expense for the year ended December 31, 2023 was \$0. 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 amount 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. Income Taxes - Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred income taxes are provided for temporary differences arising between the tax basis of assets and liabilities and their respective book basis as reported in the financial statements. No deferred tax assets have been recorded in the accompanying balance sheet due to the uncertainty of realization. In general the prior three years tax returns filed with various taxing agencies are open to examination. Supplemental Cash Flow Disclosure - \$223,125 cash was paid for income taxes and \$19,053 interest was paid during the year ended December 31, 2023. Operating Leases - On January 1, 2019, the Company adopted the provisions of ASU 2016-02, Leases (Topic 842). Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will either be classified as finance or operating, with classification affecting the pattern of expense recognition in the income statement. #### NOTE 3 - COMMISSIONS RECEIVABLE Commissions receivable represent amounts due to the Company from its clearing broker relating to client securities transactions introduced by the Company and amounts due from mutual funds and insurance companies. #### NOTE 4 - CLAIMS AND ASSESSMENTS The Company is generally engaged in ongoing legal matters. Pg 4 {3}------------------------------------------------ ## LOMBARD SECURITIES INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 ## NOTE 1-ORGANIZATION Lombard Securities Incorporated (the "Company") was incorporated in the State of Maryland in July, 1990 and is a securities broker-dealer located in Baltimore, Maryland. The Corporation is registered with the Securities and Exchange Commission (SEC), is a member of Financial Industry Regulatory Authority (FINRA), Securities Investors Protection Corporation (SIPC) and the Municipal Securities Rulemaking Board (MSRB). Lombard Agency, Inc., a wholly-owned subsidiary, was incorporated in the State of Maryland in January, 1991 as an insurance brokerage agency. Lombard Advisers Incorporated, a wholly-owned subsidiary, was incorporated in the State of Maryland in August, 1994 as an investment adviser. The Company is subject to the provisions of Rule 15c3-3 of the Securities and Exchange Commission. However, the Company operates pursuant to the exemptive provision of Paragraph (k)(2)(i) of Rule 15c3-3. This prohibits the Company from carrying customer margin or ranglapt (x)(2)(1) VI time customer funds or securities, or performing custodial duties with respect to customers' securities. It also requires the Company to promptly deliver all customer funds and securities related to mutual fund transactions and to transact all customer securities transactions through a special reserve bank that the exclusive benefit of its customers. The requirements of Paragraph (k)(2)(i) provide that the Company clear all transactions on behalf of customers on a fully disclosed basis with a clearing broker/dealer. The clearing broker/dealer carries all of the accounts of the customers and maintains and preserves all related books and records as are customarily kept by a hroker/dealer. ## NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation - The consolidated statements of financial condition, income, changes in stockholders' equity, and cash flows include the accounts of the Company and its wholly owned subsidiaries, Lombard Agency, Inc. and Lombard Advisers Incorporated. All significant intercompany balances and transactions between the Company and its subsidiaries have been eliminated in the consolidation. Revenue Recognition - The Company recognizes revenue on a trade date basis. The Company's business consists of trade commissions, gross credits on riskless principal trades, prospectus dictated mutual funds, annuity credits, trails paid on mutual funds and annuity contracts. Each of the revenue recognitions on these sources is recorded on a trade date basis. The Company also receives investment advisory fees recorded on a quarterly basis. Revenue is recognized in the month that fees are charged to clients. The Company does not receive performance fees in an investment advisory capacity. The Company does not engage in investment banking, mergers and acquisition activities or private placements. Cash and Cash Equivalents - The Company considers highly liquid investments with original maturities of one year or less to be cash equivalents. {4}------------------------------------------------ #### LOMBARD SECURITIES INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL CONDITION . DECEMBER 31, 2023 | ASSIS | | | |---------------------------------------------------------|----|-----------| | | | 2023 | | Cash and Cash Equivalents | S | 3,581,504 | | Cash Held for the Exclusive Benefit of Customers | | 150 | | Receivable from Clearing Firm | | 235,696 | | Commissions and Fees Receivable | | 109,145 | | Investment Securities | | | | Prepaid Expenses | | 49,859 | | Furniture and Equipment - Net | | | | Clearing Deposit | | 100,000 | | Other Assets | | 772,578 | | | | | | Total Assets | | 4,848,932 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | LIABILITIES | | | | Compensation Payable | S | 315,319 | | Accounts Payable and Accrued Liabilities | | 1,577,475 | | | | | | Total Liabilities | S | 1,892,794 | | | | | | STOCKHOLDERS' EQUITY | | | | Common Stock (S.01 Par Value 100,000 Shares Authorized, | | 268 | | 26,819 Issued and 24,789 Outstanding) | | | | Additional Paid-in Capital | | 1,554,833 | | Retained Earnings | | 1,509,757 | | Treasury Stock | | (108,720) | | Total Stockholders' Equity | S | 2,956,138 | | Total Liabilities and Stockholders' Equity | ટે | 4,848,932 | See accompanying Notes to Financial Statements 100 {5}------------------------------------------------ ![](_page_5_Picture_1.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors of Lombard Securities, lnc ### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Lombard Securities, lnc. as of December 3f, 2023, and the related notes (collectively referred to as the financial statement). ln our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of Lombard Securities, lnc. as of December 37,2023 in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion This financial statement is the responsibility of Lombard Securities, lnc.'s management. Our responsibility is to express an opinion on Lombard Securities, lnc.'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 Lombard Securities, lnc. in accordance with the U.S. federal securities law 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. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reportinB as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of financial position, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement of financial position presentation. We believe that our audit provides a reasonable basis for our opinion. w ary /'\ /^t,', dgI/ We have served as Lombard Securities, lnc.'s auditor since 2015. Kennett Square, Pennsylvania March 28, 2024 Phone: 610-713-8208 Fax: 610-807{370 www.rwgroupllc.com 4m Old Forge Lane Suite 401 Kennett Square, PA 19348-1914 {6}------------------------------------------------ ## LOMBARD SECURITIES INCORPORATED AI\D STJBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL COI{DITION AIID INDEPENDENT AUDITORS' REPORT ## DECEMBER3I,2023 #### CONTENTS | | PAGE | |-----------------------------------------------|------| | INDEPENDENT AUDITORS' REPORT | I | | FINANCIAL STATEMENTS | | | Consolidated Statement of Financial Condition | 2 | | Notes to Consolidated Financial Statements | 3-6 | {7}------------------------------------------------ ## LOMBARD SECURITIES INCORPORATED AI{D SUBSIDIARIES ## CONSOLIDATED STATEMENT OF FINANCIAL CONDITION AND INDEPENDENT AUDITORS' REPORT ### DECEMBER3I,2023 {8}------------------------------------------------ #### OATH OR AFFIRMATION | l, wllhm sodla | , swear (or affirm) that, to the best of my knowledge and belief, the | |---------------------------------------------------------------------------|-------------------------------------------------------------------------------------------| | financial report pertaining to the firm of Lombsrd s€orritles hcorpor.tod | as of | | 12131 | 2 023 . is true and correct. I further swear (or affirm) that neither the company nor any | partner, officer, director, or equivatent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. ![](_page_8_Picture_4.jpeg) | ture:'
si | | |--------------|--| | Tit e: | | Chief Financial Oflicer ary Public ### This filing" contains (check all applicable boxesl: - E (a) Statement of financial condition. - E (b) Notes to consolidated statement of financial condition. - D (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 5 210.1{2 of Regulation s-x). - ! (dl statement of cash flows. - E (e) Statement of changes in stockholderJ or partners' or sole proprieto/s equity. - [] (fl Statement of changes in liabilities subordinated to claims of creditors. - [ (g) Notes to consolidated financial statements. - ! (h) Computation of net crpital under 17 CFR 240.15c3-l or 17 CFR 240.18a-1, as applicable. - n (i) Computation oftangible n€t worth under 17 CFR 240.18a-2. - ! 0) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - E (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 240.18a4. as applicable. - ! (l) Computation for Determination of PAB Requirements under ExhibitAto 0 240.15c3-3. - ! (m) tnformation relating to possession or control requirements for customers under 17 cFR 240.15c3-3. - E (n) lnformation relating to possession or control requirements for security-based swap customers under 17 CFR 2a0.r5c3-3(pX2) or 17 CFR 240.18a4, as applicable. - D (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 24O.L5c3-!, 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{, as appliczble, if material differences exist, ora statement that no material differences exist. - tr (p) 5ummary of financial data for subsidiaries not consolidated in the statement of financial condition. - E (q) Oath or atfirmation in accordance with 17 CFR 24o.l7a-5,17 CFR240-l7a-12, ot 17 CFR 24O.18a-7, as applicable. - E (r)Compliance report in accordance with 17 cFR 240.17a-5 or 17 CFR 240'18a-7, as applicable. - fl (s) Exemption report in accordance with 17 CFR 240.ua-5 or 17 CFR 240.18a-7, as applicable. - E (t) lndependent public accountanfs report based on an examination of the statement of financial condition. - ! (u) lndependent public accountanfs report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, o( L7 CFR24O.l7a-Lz, as applicable. - E (v) lndependent public accountan(s report based on an examination of certain statements in the compliance report under 17 CFR24O.L7a-5 ot L7 CFR 240.18a-7, as applicable. - [ (w] lndependent public accountanfs 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 proceduret in accordance with 17 CFR 240.15c3-Le ot l7 CFR24O.l7a-Lz' 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 rcquest confidentiol treotment ol ceftoin portions ol this filing, see 77 CFR 24o.77d-5(e)(3) ot 77 CFR 24o.18o-7(d)(2), os opplkoble. {9}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ## OMB APPROVAL OMB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 ## ANNUAL REPORTS FORM X-17A-5 PART III | SEC FILE NUMBER | |-----------------| |-----------------| FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 AND ENDING 12/31/2023 FILING FOR THE PERIOD BEGINNING 01/01/2023 MM/DD/YY MM/DD/YY A. REGISTRANT IDENTIFICATION NAME OF FIRM: Lombard Securities Incorporated TYPE OF REGISTRANT (check all applicable boxes): @ Broker-dealer | | Security-based swap dealer | | 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.) 1820 Lancaster Street (No. and Street) Baltimore 21231 MD (Zip Code) (City) (State) PERSON TO CONTACT WITH REGARD TO THIS FILING William Socha 410-342-1300 wsocha@golombard.com (Name) (Area Code - Telephone Number) (Email Address) B. ACCOUNTANT IDENTIFICATION INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\* RW Group LLC (Name - if individual, state last, first, and middle name) 19348 400 Old Forge Lane Suite 401 Kennett Square PA (Address) (State) (Zip Code) (City) 5020 02/23/2010 (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. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.