# MILLER BUCKFIRE & CO., LLC X-17A-5 (2021-02-26) — Broker-dealer annual report - Company: MILLER BUCKFIRE & CO., LLC - Form: X-17A-5 - Filed: 2021-02-26 - Accession: 0001193125-21-060684 - CIK: 1116109 - File #: 8-52631 Original filing: https://www.sec.gov/Archives/edgar/data/1116109/000119312521060684/d149346dfull.pdf --- {0}------------------------------------------------ Statement of Financial Condition December 31 , 2020 (With Report oflndependent Registered Public Accounting Firm) (This Statement of Financial Condition was filed pursuant to Rule 17a-5(e)(3) as a public document.) {1}------------------------------------------------ ### Statement of Financial Condition ### December 31 , 2020 #### **Page** | Report oflndependent Registered Public Accounting Firm | 2 | |--------------------------------------------------------|---| | Statement of Financial Condition
| 3 | | Notes to Statement of Financial Condition
| 4 | {2}------------------------------------------------ ![](_page_2_Picture_0.jpeg) Ernst & Young LLP 300 First Stamford Place Stamford, CT 06902 Tel: +I 203 674 3000 ey.com ## Report of Independent Registered Public Accounting Firm To the Member and Management of Miller Buckfire & Co., LLC ## Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Miller Buckfire & Co., LLC (the "Company") as of December 31, 2020 and the related notes (the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company at December 31, 2020, in conformity with U.S. generally accepted accounting principles. ## Basis for Opinion This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company'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 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 in accordance with the standards ofthe 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 statement. Our audit 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 audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2013. February 26, 2021 {3}------------------------------------------------ ### **Statement of Financial Condition December 31, 2020** | (\$ in thousands) | | |----------------------------------------------------------------------|--------------| | Assets | | | Cash and cash equivalents | \$
33,401 | | Accounts receivable, net of allowance for doubtful accounts of \$686 | 13,265 | | Operating lease right-of-use assets, net | 7,543 | | Fixed assets, net | 647 | | Other assets | 1,873 | | Total assets | \$
56,729 | | Liabilities and member's capital | | | Accrued compensation | \$
15,114 | | Accounts payable and accrued expenses | 9,936 | | Due to Parent and affiliates, net | 4,611 | | Total liabilities | 29,661 | | Member's capital | 27,068 | | Total liabilities and member's capital | \$
56,729 | *See accompanying Notes to Statement of Financial Condition.* {4}------------------------------------------------ ### Notes to Statement of Financial Condition December 31, 2020 # NOTE 1- Nature of Operations and Basis of Presentation ## *Nature of Operations* Miller Buckfire & Co., LLC (the "Company") is an investment banking firm that provides strategic and advisory services, focusing on restructuring transactions, mergers and acquisitions, and financings. The Company is a whollyowned subsidiary of MB Advisory Group, LLC ("MB Advisory"), who is a wholly-owned subsidiary of Stifel Financial Corp (the "Parent"). The Company is a registered broker-dealer under the Securities Exchange Act of 1934, as amended, a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). ## *Basis of Presentation* The accompanying statement of financial condition has been prepared in conformity with U.S. generally accepted accounting principles, which require management to make certain estimates and assumptions that affect the reported amounts. Actual results could differ from those estimates. ### NOTE 2 - Summary of Significant Accounting Policies #### *Cash and Cash Equivalents* Cash equivalents include highly liquid investments, including money market funds, with original maturities of three months or less. Due to the short term nature of these instruments, carrying value approximates their fair value. #### *Accounts Receivable, Net* Receivables are stated net of an allowance for doubtful accounts. The estimate for the allowance for doubtful accounts is derived by the Company by utilizing past client transaction history and an assessment of the client's creditworthiness. #### *Fixed Assets, Net* Furniture and other equipment and computer equipment and software are carried at cost and depreciated on a straight line basis using estimated useful lives of the related assets, generally two to five years. Leasehold improvements are amortized on a straight line basis over the lesser of the economic useful life of the improvement or the term of the respective leases. #### *Stock-Based Compensation* Associates of the Company are eligible to participate in an incentive stock plan sponsored by Parent that provides for the granting of stock units and debentures. See Note 4 for a further discussion of stock-based compensation. #### *Operating Leases* The Company enters into operating leases for real estate and office equipment, substantially all of which are used in connection with its operations. The determination of whether an arrangement qualifies as a lease occurs at the inception of the arrangement. The Company recognizes, for leases longer than one year, a right-of-use asset representing the right to use the underlying asset for the lease term, and a lease liability representing the obligation to make payments. The lease term is generally determined based on the contractual maturity of the lease. For leases where the Company has the option to terminate or extend the lease, an assessment of the likelihood of exercising the option is incorporated into the determination of the lease term. Such assessment is initially performed at the inception of the lease and is updated if events occur that impact the original assessment. An operating lease right-of-use asset is initially determined based on the operating lease liability, adjusted for initial direct costs, lease incentives and amounts paid at or prior to lease commencement. This amount is then amortized over the lease term. The Company accounts for lease and nonlease components separately. At December 31 , 2020, the rightof-use assets are included in operating lease right-of-use assets, net with the corresponding lease liabilities included in accounts payable and accrued expenses in the accompanying statement of financial condition. See Note 6 for information about operating leases. {5}------------------------------------------------ ### Notes to Statement of Financial Condition December 31, 2020 #### *Income Taxes* As a single member limited liability company, the Company is not directly liable for income taxes. The Company's income was, however, reportable by the Parent during the year ended December 31 , 2020. Accordingly, the federal and state income taxes payable by the Parent have not been reflected in the accompanying statement of financial condition. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. # NOTE 3- Fixed Assets, Net The following is a summary of fixed assets, net as of December 31 , 2020 *(in thousands):* | Leasehold improvements | \$
876 | |-------------------------------------------|-----------| | Furniture and other equipment | 421 | | Computer equipment and software | 259 | | | 1,556 | | Accumulated depreciation and amortization | (909) | | Fixed assets, net | \$
647 | # NOTE 4- Employee Incentive, Stock-Based Compensation, and Retirement Plans The Parent maintains an incentive stock plan and a wealth accumulation plan ("the Plan") that provides for the granting of stock options, stock appreciation rights, restricted stock, performance awards, stock units, and debentures (collectively, "deferred awards") to the Company's associates. Stock awards issued under the Parent's incentive stock plan are granted at market value at the date of grant. The deferred awards generally vest ratably over a one- to ten-year vesting period. All stock -based compensation plans are administered by the Compensation Committee of the Board of Directors of the Parent, which has the authority to interpret the plans, determine to whom awards may be granted under the plans, and determine the terms of each award. #### *Deferred Compensation Plan* The Plan is provided to certain revenue producers, officers, and key administrative associates, whereby a certain percentage of their incentive compensation is deferred as defined by the Plan into stock units and debentures of the Parent. Participants may elect to defer a portion of their incentive compensation. Deferred awards generally vest over a three-to eight year period and are distributable upon vesting or at future specified dates. Deferred compensation costs are amortized on a straight-line basis over the vesting period. Elective deferrals are 100% vested. #### *Employee Profit Sharing Plan* Eligible associates of the Company who have met certain service requirements may participate in the Stifel Financial Profit Sharing 401(k) Plan (the "Profit Sharing Plan"). Associates are permitted within limitations imposed by tax law to make contributions to the Profit Sharing Plan. The Company may match certain associate contributions or make additional contributions to the Profit Sharing Plan at the discretion of the Parent. {6}------------------------------------------------ ### **Notes to Statement of Financial Condition December 31, 2020** #### **NOTE 5 -Related Party Transactions** At December 31 , 2020, due to Parent and affiliates in the accompanying statement of financial condition primarily consists of amounts due to the Parent for reimbursement of stock unit conversions. The amount due to Parent at December 31 , 2020 was \$3.5 million. Due to affiliates of \$1.1 million at December 31 , 2020 consists primarily of operating expenses that were paid on the Company's behalf by certain affiliates. During the year ended December 31, 2020, the Company authorized and paid \$5.7 million in dividends toMB Advisory. ## **NOTE 6- Commitments, Guarantees, and Contingencies** *Leases* The Company's operating leases primarily relate to office space with a remaining lease term of 6 years. At December 31 , 2020, operating lease right-of-use assets were \$7.5 million and lease liabilities, included in accounts payable and accrued expenses in the accompanying statement of financial condition, were \$8.5 million. The table below summarizes other information related to the Company's operating leases as of and for the year ended December 31 , 2020 *(in thousands, except percentages):* | Operating lease cash flows | \$
996 | |---------------------------------------|------------| | Weighted-average remaining lease term | 10.9 years | | Weighted-average discount rate | 4.69% | The weighted-average discount rate represents the Company's incremental borrowing rate at the lease inception date. The table below presents information about operating lease liabilities as of December 31 , 2020 *(in thousands):* | 2021 | \$
920 | |-----------------------------------|-------------| | 2022 | 920 | | 2023 | 920 | | 2024 | 953 | | 2025 | 991 | | Thereafter | 6,153 | | Total undiscounted lease payments | 10,857 | | Imputed interest | (2,401) | | Total operating lease liabilities | \$
8,456 | | | | ## *Concentration of Credit Risk* At December 31 , 2020, \$12.0 million was due from the Company's four largest customers and is included in accounts receivable, net in the accompanying statement of financial condition. At December 31, 2020, two customers each exceeded 10% of the receivable amount. #### *Litigation* In the ordinary course of business, the Company may be a defendant or codefendant in legal proceedings. At December 31 , 2020, the Company believes, based on currently available information, that the results of such proceedings, in the aggregate, will not have a material adverse effect on the Company's financial condition. The results of such proceedings could be material to the Company's financial condition for any particular period, depending, in part, upon additional developments affecting such matters and the operating results for such period. Legal reserves have been established for potential losses that are probable and reasonably estimable. Once established, reserves are adjusted when there is more information available or when an event occurs requiring a change. {7}------------------------------------------------ ### Notes to Statement of Financial Condition December 31, 2020 ## NOTE 7- Regulatory Capital Requirements The Company operates in a highly regulated environment and is subject to net capital requirements. A brokerdealer that fails to comply with the SEC's Uniform Net Capital Rule (Rule 15c3-1) may be subject to disciplinary actions by the SEC and self-regulatory organizations, such as FINRA, including censures, fines, suspension, or expulsion. The Company calculates its net capital under the aggregate indebtedness method whereby it is required to maintain minimum net capital (as defined), equal to the greater of one hundred thousand dollars or 6 2/3% of aggregate indebtedness (as defined). The Company is not allowed to distribute equity capital or pay cash dividends to the Parent if resulting net capital would be less than 120% of its minimum net capital (as defined). At December 31, 2020, the Company had net capital of \$11.3 million, which was \$9.8 million in excess of the Company's minimum required net capital of \$1.5 million, and aggregate indebtedness was 196.0% of net capital. # NOTE 8- Recent Accounting Developments #### *Recently Adopted Accounting Guidance* #### *Financial Instruments- Credit Losses* On January 1, 2020, the Company adopted ASU 2016-13 that requires the measurement of the allowance for credit losses to be based on management's best estimate of lifetime expected credit losses inherent in the Company's relevant financial assets. The adoption of the accounting update did not have a material impact on the Company's statement of financial condition. # NOTE 9- Subsequent Events The Company evaluates subsequent events that have occurred after the statement of financial condition date but before the financial statements are available to be issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence about conditions that existed at the date of the statement of financial condition, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence about conditions that did not exist at the date of the statement of financial condition but arose after that date. The Company has evaluated subsequent events through February 26, 2021 , the date the accompanying statement of financial condition was available to be issued. Based on the evaluation, the Company did not identify any recognized subsequent events that required adjustment to the statement of financial condition. \*\*\*\*\*\* Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.