# ANICO FINANCIAL SERVICES, INC. X-17A-5 (2019-03-01) — Broker-dealer annual report - Company: ANICO FINANCIAL SERVICES, INC. - Form: X-17A-5 - Filed: 2019-03-01 - Accession: 0001193125-19-059812 - CIK: 1527877 - File #: 8-68938 Original filing: https://www.sec.gov/Archives/edgar/data/1527877/000119312519059812/d699936dfull.pdf --- {0}------------------------------------------------ # **ANICO Financial Services, Inc.** Report of Independent Registered Public Accounting Firm Statement of Financial Condition December 31 , 2018 and 2017 {1}------------------------------------------------ # ANICO Financial Services, Inc. December 31,2018 and 2017 ## Contents | Report of Independent Registered Public Accounting Firm 1 | | | |------------------------------------------------------------|--|--| | Financial Statements | | | | Statements ofFinancial Condition 2 | | | | Notes to Financial Statements 3 | | | {2}------------------------------------------------ ![](_page_2_Picture_0.jpeg) #### **Report of Independent Registered Public Accounting Firm** Board of Directors ANICO Financial Services, Inc. League City, Texas #### *Opinion on the Financial Statements* We have audited the accompanying statements of financial condition of ANICO Financial Services, Inc. (the Company) as of December 31, 2018 and 2017, including the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20 l8 and 2017, in conformity with accounting principles generally accepted in the United States of America. #### *Basis f or Opinion* These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's fmancial statements based on our audits. 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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtai.n reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits 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 supporting the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. **BKD,** LLP We have served as the Company's Auditor since 2012. Houston, Texas February 28, 2019 ![](_page_2_Picture_13.jpeg) {3}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WasbingtonJ D.C. 20549 #### **ANNUAL AUDITED REPORT FORM X-17A-5 PAR.T Ill** OMS APPROVAL OMB Number: 3235..()123 Expires: August 31, 2020 Estimated average burden hours per response ...... 12.00 | SEC FILE NUMBE~ | |-----------------| | 8- 68938 | FACING PAGE Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder | ----~----------------
A. REGISTRANT IDENTIFICATION
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)
One Moody Plaza, Suite 1423
(No. and Street)
NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
B. ACCOUNTANT IDENTIFICATION
INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report• | MMIDD/YY
OFFICIAL USE ONLY
FIRM 1.0. NO.
77550-7999
(Zip Code)
(Area Cod<: - Telephone Number) | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (Name- ifindivlduaJ, state la.st, first, middle name) | | | | 77056 | | (State) | (Zip Code) | | | | | | | | | | | | | | | | | | | | | Texas
Accountant not resident in United States or any of its po~sessions.
FOR OFFICIAL USE ONLY | *•claims for exemption from tile requirement t!Jot tile annual report be covered by tile opiniD'Il of on independe.nl 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. SEC 1410 (11-05) {4}------------------------------------------------ #### OATH OR AFFIRMATION | I,
Suzanne Saunders | , swear (or affmn) that, to the best of | | | | | |---------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--| | my knowledgo and belioftl!o accompanying financial statement and supporting schedules pertaining to the finn of
ANICO Financial Services, Inc. | | | | | | | of
December 31 | ----------------~~~~~----------------~---------------------------------------• as
:.re true and correct. I further awenr (or affirm) that
, 20 18 | | | | | | ci3\$Sified solely 11s that of a customer, except ns follows: | neither the company nor any partner, proprietor, principal officer or d ireetor bas any propriet&ry intcre&t in any account | | | | | | | | | | | | | | | | | | | | | ~~s~
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[2] (o) Facing Pogo.
b2} (b) Statement ofFiuaocial Condition. | .;~ comm. Exp11es 02·28·2020
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Notory 10 483836
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[J (c) Statement oflncome (Loss) or, if there is other comprehensive income in the poriod(s) prc.1onted, o Statement | | | | | | | ofComprehensl ve Income (as defined in §21 0.1·02 of Regulation S-X). | | | | | | § (d) Statement of Changes in Finaocial Condition.
(g) Computation of Net Olpitnl. | {e) Statement of Changes in Stockholders' Equity or Partners' or Sole ProprictoiS' Capital.
(f) St11tement of Changes in Liabilities Subordillllicd to Claims ofCredi!ors. | | | | | | | (h) Computation for Determination of Reserve Requirement5 Pursuant to Rule 1Sc3-3.
(i) Jnfonnation Relnting to the Possession or Control Requirements Under Rule 15e3-3- | | | | | | | (j) A Rcconcilintion, including appropriate explnnntion ofthc ComputAtion ofNct Capital Under Rule I ~c3- J and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule I ScJ-3. | | | | | | 0 (k) A Reconoilintion bclwcco the audited and unaudited Stntcmcu | ts of Financial Conditiort with respect to methods or | | | | | - consolidation. - § 0) An Oath or Affirmation. · - (m) A copy of the SlPC Supp)emcntnl Report. - (n) A report describing nny material inadequacies found to exist or found to have existed since the date oft he previous audit. I j j ! •• *For condfllons of co11jldenllnl treatment of certain portions of* tf1ls *filing, see sec/ion 240.17a-S(c)(3).* I {5}------------------------------------------------ # **ANICO Financial Services, Inc. Statements of Financial Condition Dec ember 31 , 2018 and 2017** | | | 2018 | | 2017 | | |-------------------------------------------------------|----|----------|----|----------|--| | Assets | | | | | | | Cash | \$ | 222,675 | \$ | 224,132 | | | Receivables due from parent for: | | | | | | | Variable commissions | | 209 | | 2,023 | | | Expenses reimbursement | | 29,987 | | 29,509 | | | Prepaid and other assets | | 5,714 | | 6,239 | | | Receivable from parent in lieu of income taxes | | 34,785 | | 34,785 | | | Tota I assets | \$ | 293,370 | \$ | 296,688 | | | Liabilities and Stockholder's Equity | | | | | | | Liabilities | | | | | | | Due to dealers for commissions | \$ | 209 | \$ | 2,023 | | | Due to parent for: | | | | | | | Service fees | | 13,840 | | 14,795 | | | Trade payables and accrued expenses | | 29,255 | | 29,804 | | | Total liabilities | | 43,304 | | 46,622 | | | Stockholder's equity | | | | | | | Common stock, par value \$0.01 per share; authorized, | | | | | | | issued and outstanding, 100,000 shares | | 1,000 | | 1,000 | | | Additional paid-in-capital | | 319,000 | | 319,000 | | | Retained deficit | | (69,934) | | (69,934) | | | Total stockholder's equity | | 250,066 | | 250,066 | | | Total liabilities and stockholder's equity | \$ | 293,370 | \$ | 296,688 | | {6}------------------------------------------------ # **ANICO Financial Services, Inc. Notes to Financial Statements December 31 , 2018 and 2017** ## **Note 1: Nature of Operations and Summary of Significant Accounting Policies** #### **Nature of Operations** ANICO Financial Services, Inc. ("ANFS" or "the Company"), is a wholly owned subsidiary of American National Insurance Company ("American National"). ANFS was organized on December 2 J, 20 l 0, and its sole purpose is to operate as a wholesale broker-dealer and distributor of American National's variable products. ANFS is registered as a wholesale broker-dealer under the *Securities Exchange Act of 1934* and received approval from the Financial Industry Regulatory Authority, Inc. (FINRA), as a registered wholesale broker-dealer on July 18, 2 012. ANFS does not receive cash from customers and, therefore, is not required to maintain a "Special Reserve Account for the Exclusive Benefit of Customers." ANFS operates pursuant to the (k){l) limited business (mutual funds and/or variable annuities only) exemptive provision of the Securities and Exchange Commission's (SEC) Rule 15c3-3. The Securities Investor Protection Corporation (SIPC) was created by *the Securities Investor Protection Act of 1970,* (SIP A), a Federal statute which became effective December 30, 1970. Membership with SIPC is required by all brokers and dealers registered under Section I 5(b) of the *Securities Exchange Act of 19 34* unless otherwise exempted. For the years ending December 31, 2018 and 2017, ANFS filed a Certificate of Exclusion of Membership under Section 78ccc(a)(2)(A)(ii) of SIP A. The exclusion is determined by ANFS' exclusive business consisting of: (1) the sale of variable annuities and (2) the business of insurance. #### **Use of Estimates** The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. #### **Cash** At December 31, 2018 and 2017, the Company's cash accounts did not exceed federally insured limits. {7}------------------------------------------------ # **ANICO Financial Services, Inc. Notes to Financial Statements December 31 , 2018 and 2017** #### **Income Taxes** ANFS accounts for income taxes in accordance with income tax accounting guidance (Accounting Standards Codification 740, *income Taxes).* The income tax accounting guidance results in rtwo components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. ANFS determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized. As of December 31, 2018 and 2017, ANFS did not have any transactions t!hat resulted in deferred taxes. ANFS files consolidated income tax returns with American National. #### **Note 2: Transactions With Affiliates** ANFS and American National are parties to a service and expense-sharing agreement and a distribution and administrative services agreement. Pursuant to such agreements, ANFS has agreed to act as wholesale distributor of certain variable life insurance and annuity products issued by American National. #### **Note 3: Net Capital Requirement** In accordance with the regulations of the SEC, ANFS must maintain minimum net capital and a ratio of aggregate indebtedness to net capital, both as defined, that does not exceed 8 to I. At December 31, 2018, ANFS bad net capital of\$179,580, which was \$174,580 in excess of its required net capital of \$5,000. ANFS 's ratio of aggregate indebtedness to net capital was 0.2411 to 1. At December 31, 2017, ANFS had net capital of \$179,533, which was \$ 174,533 in excess of its required net capital of \$5,000. ANFS 's ratio of aggregate indebtedness to net capital was 0.2597 to I. #### **Note 4: Subsequent Events** Subsequent events have been evaluated through February 28, 2019, which is the date the financial statements were issued. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.