# EDGAR Filing Document

**Accession Number:** 0001647978
**File Stem:** 0001647978-23-000004
**Filing Date:** 2023-2
**Character Count:** 42581
**Document Hash:** ad2b9bacba4bc73faf6d0ced34b3ec9b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001647978-23-000004.hdr.sgml**: 20230224

**ACCESSION NUMBER**: 0001647978-23-000004

**CONFORMED SUBMISSION TYPE**: X-17A-5

**PUBLIC DOCUMENT COUNT**: 4

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230224

**DATE AS OF CHANGE**: 20230224

**EFFECTIVENESS DATE**: 20230224

**PERIOD START**: 20220101

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CITIZENS CAPITAL MARKETS, INC.
- **CENTRAL INDEX KEY:** 0001647978
- **IRS NUMBER:** 043338220
- **STATE OF INCORPORATION:** MA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** X-17A-5
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 008-69651
- **FILM NUMBER:** 23668575

**BUSINESS ADDRESS:**
- **STREET 1:** 28 STATE STREET
- **STREET 2:** MS1240
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02118
- **BUSINESS PHONE:** 203 900-6912

**MAIL ADDRESS:**
- **STREET 1:** 600 WASHINGTON BLVD
- **STREET 2:** 11TH FLOOR
- **CITY:** STAMFORD
- **STATE:** CT
- **ZIP:** 06091

### Attached PDF Documents

**Attachment 1:** `ccmi_financialstatementshort.pdf`

CITIZENS CAPITAL MARKETS, INC.

(SEC I.D. No. 8-69651)

# STATEMENT OF FINANCIAL CONDITION  
AS OF DECEMBER 31, 2022  
AND  
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

\*\*\*\*\*

Filed pursuant to Rule 17a-5(e)(3) under the Securities Exchange Act of 1934 as a **PUBLIC DOCUMENT**

| OMB APPROVAL |  |
| --- | --- |
| OMB Number | 3235-0123 |
| Expires | October 31, 2023 |
| Estimated avg burden hours per response | 12.00 |
|  | SEC FILE NUMBER |
|  | 8-69651 |

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

ANNUAL AUDITED REPORT

FORM X-17A-5

PART III

FACING PAGE

Information Required of Brokers and Dealers Pursuant to Rule 17a-5 under the Securities Exchange Act of 1934

REPORT FOR THE PERIOD BEGINNING 01/01/22 AND ENDING 12/31/22

A. REGISTRANT IDENTIFICATION

NAME OF BROKER - DEALER: Citizens Capital Markets, Inc.

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 P.O. Box No.)

28 State Street, MS1240

Boston, Massachusetts 02118

NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT:

Raymond Jackson (415) 835-3979

B. ACCOUNTANT IDENTIFICATION

INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*

Deloitte & Touche LLP

200 Berkeley Street

Boston, Massachusetts 02116

PCAOB Registration Date and Number: 10/20/03 #34

FOR OFFICIAL USE ONLY

*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See section 240.17a-5(e)(1)(ii).

CITIZENS CAPITAL MARKETS, INC.

(A Wholly-Owned Subsidiary of Citizens Financial Group, Inc.)

OATH OR AFFIRMATION

I, Raymond Jackson, Chief Financial Officer, swear (or affirm) that, to the best of my knowledge and belief the accompanying statement of financial condition pertaining to the firm of Citizens Capital Markets, Inc. as of December 31, 2022, is true and correct. I further swear (or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer.

STATE OF Texas
COUNTY OF DEWATER

The foregoing instrument was acknowledged before me this 24th day of Feb. 2023, by Raymond Jackson

Notary Public & Signature
My Commission Exp. 02/09/2023

![img-0.jpeg](img-0.jpeg)

Signature
CHIEF FINANCIAL OFFICER.
Title

This filing** contains (check all applicable boxes):

☑ (a) Statement of financial condition.
☑ (b) Notes to consolidated statement of financial condition.
☐ (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X).
☐ (d) Statement of cash flows.
☐ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity.
☐ (f) Statement of changes in liabilities subordinated to claims of creditors.
☐ (g) Notes to consolidated financial statements.
☐ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable.
☐ (i) Computation of tangible net worth under 17 CFR 240.18a-2.
☐ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.
☐ (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 240.18a-4, as applicable.
☐ (l) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3.
☐ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3.
☐ (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable.
☐ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 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-4, as applicable, if material differences exist, or a statement that no material differences exist.
☐ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition.
☑ (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable.
☐ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
☐ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
☐ (t) Independent public accountant's report based on an examination of the statement of financial condition.
☑ (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
☐ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
☐ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
☐ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, 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 request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable.

# **CITIZENS CAPITAL MARKETS, INC.**
**(A Wholly-Owned Subsidiary of Citizens Financial Group, Inc.)**

# **TABLE OF CONTENTS**

|  | Page No. |
| --- | --- |
| Oath or affirmation | 3 |
| Independent public accountant's report | 5 |
| Statement of Financial Condition | 6 |
| Notes to Statement of Financial Condition | 7 |

![img-1.jpeg](img-1.jpeg)

Deloitte & Touche LLP  
200 Berkeley Street  
Boston, MA 02116  
USA

Tel: +1 617 437 2000  
Fax: +1 617 437 2111  
www.deloitte.com

## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of Citizens Capital Markets, Inc.

### Opinion on the Financial Statement

We have audited the accompanying statement of financial condition of Citizens Capital Markets, Inc., (the 'Company'), a wholly owned subsidiary of Citizens Financial Group, Inc., as of December 31, 2022, and the related notes (collectively referred to as the 'financial statement'). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

### Basis for Opinion

The financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this 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 of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. 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 statement. We believe that our audit of the financial statement provides a reasonable basis for our opinion.

*Deloitte & Touche LLP*

February 24, 2023

We have served as the Company's auditor since 2016.

# **CITIZENS CAPITAL MARKETS, INC.**  
 **(A Wholly-Owned Subsidiary of Citizens Financial Group, Inc.)**

# **STATEMENT OF FINANCIAL CONDITION**  
 **AS OF DECEMBER 31, 2022**  
 **(IN THOUSANDS, EXCEPT SHARE FIGURES)**

# **ASSETS**

| Cash, cash equivalents and restricted cash | $ | 132,903 |
| --- | --- | --- |
| Goodwill |  | 94,084 |
| Investment securities owned, at fair value |  | 13,410 |
| Operating lease right-of-use asset |  | 7,136 |
| Fees receivable |  | 7,090 |
| Intangible assets - net of accumulated amortization of $7,591 |  | 6,367 |
| Deferred taxes, net |  | 930 |
| Income taxes receivable |  | 656 |
| Premises and equipment - net of accumulated depreciation of $605 |  | 495 |
| Prepaid and other assets |  | 1,183 |
| TOTAL ASSETS | $ | 264,254 |

# **LIABILITIES AND STOCKHOLDER'S EQUITY**

# **LIABILITIES:**

| Subordinated debt with Parent | $ | 125,000 |
| --- | --- | --- |
| Accrued incentive compensation |  | 18,990 |
| Payable to clearing organization |  | 8,186 |
| Operating lease liability |  | 7,719 |
| Investment securities sold but not yet purchased, at fair value |  | 3,432 |
| Income taxes payable to Affiliates |  | 2,946 |
| Interest payable on subordinated debt with Parent |  | 35 |
| Accrued expenses and other liabilities |  | 26,242 |
| TOTAL LIABILITIES |  | 192,550 |

# **STOCKHOLDER'S EQUITY:**

| Common stock, $1 par value, 10 shares authorized, issued and outstanding |  | - |
| --- | --- | --- |
| Additional paid-in capital |  | 40,000 |
| Retained earnings |  | 31,704 |
| TOTAL STOCKHOLDER'S EQUITY |  | 71,704 |
| TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | $ | 264,254 |

See accompanying notes to Statement of Financial Condition.

6

CITIZENS CAPITAL MARKETS, INC.  
(A Wholly-Owned Subsidiary of Citizens Financial Group, Inc.)

# NOTES TO STATEMENT OF FINANCIAL CONDITION  
AS OF DECEMBER 31, 2022  
(Amounts in thousands except share data)---

# 1. NATURE OF OPERATIONS

Citizens Capital Markets, Inc. (the 'Company' or 'CCMI'), is a Massachusetts corporation incorporated on September 21, 1995, a registered broker-dealer with the United States Securities and Exchange Commission ('SEC') and a member of the Financial Industry Regulatory Authority ('FINRA'). The Company is registered with FINRA as an introducing broker-dealer and does not hold customer funds or customer securities. CCMI is a wholly-owned subsidiary of Citizens Financial Group, Inc. ('CFG', or 'Parent'), and provides investment banking and advisory services related to merger & acquisitions ('M&A'), capital raises, and financial & strategic advisory, as well as business valuation services. The Company is also engaged in underwriting, dealing and trading corporate debt obligations for institutional clients. CCMI clears all securities transactions on a fully disclosed basis through third-party clearing brokers.

# 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

# **Basis of Presentation and Use of Estimates**

The financial statement includes the accounts of the Company and is prepared in accordance with accounting principles generally accepted in the United States of America ('GAAP'). The U.S. dollar is the functional currency of the Company.

The preparation of the financial statement in accordance with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

# **Cash, Cash Equivalents and Restricted Cash**

For the purposes of reporting cash flows, balances include highly liquid investments with an original maturity date of less than 90 days. At December 31, 2022, cash, cash equivalents and restricted cash was $132,903, which included $49,854 of U.S. Treasury securities, $79,706 of cash at a clearing organization, $2,843 of operating cash and $500 of restricted cash. Restricted cash represents cash kept on deposit with the clearing organization. This balance is subject to withdrawal restrictions such that the Company would be prohibited from doing business with the clearing organization if the minimum cash deposit is not maintained.

# **Securities Transactions**

Securities owned and securities sold, but not yet purchased are are recorded on a trade date basis and marked at fair value.

# **Goodwill and Other Intangible Assets**

Goodwill is the purchase premium associated with the acquisition of a business and is assigned to reporting units at the acquisition date. A reporting unit is a business operating segment or a component of a business operating segment. Once goodwill has been assigned to reporting units, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or organically grown, are available to support the value of the goodwill. The entire goodwill balance is allocated to one reporting unit, M&A and Financial Advisory.

Goodwill is not amortized, but is subject to an annual impairment test. The goodwill impairment analysis involves comparing each reporting unit's fair value to its carrying value including goodwill. If the fair value of a reporting unit exceeds its carrying value, applicable goodwill is deemed not impaired. If the carrying value exceeds fair value, goodwill is deemed impaired by the amount the carrying value exceeds the fair value of the reporting unit. The goodwill impairment recognized cannot not exceed the carrying value of goodwill.

7

CITIZENS CAPITAL MARKETS, INC.  
(A Wholly-Owned Subsidiary of Citizens Financial Group, Inc.)

# **NOTES TO STATEMENT OF FINANCIAL CONDITION  
AS OF DECEMBER 31, 2022  
(Amounts in thousands except share data)**---

The Company reviews goodwill for impairment annually as of October 31, or more often if events or circumstances indicate that it is more likely than not that the fair value of one or more reporting unit is below its carrying value. The fair values of the Company's reporting units are determined using a combination of income and market-based approaches. The Company relies on the income approach (discounted cash flow method) for determining fair value. Market and transaction approaches are used as benchmarks to corroborate the value determined by the discounted cash flow method. The Company relies on several assumptions when estimating the fair value of its reporting unit using the discounted cash flow method. These assumptions include the discount rate, as well as income tax and capital retention rates.

Other intangible assets represent purchased long-lived intangible assets, primarily a client referral network, trade name, and customer list which can be distinguished from goodwill. Other intangible assets, which are also subject to annual evaluation for impairment, are amortized on a straight-line basis over periods ranging from two to five years.

# **Premises and Equipment**

Premises and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets.

Additions to premises and equipment are recorded at cost. The cost of major additions, improvements and betterments is capitalized. Normal repairs and maintenance and other costs that do not improve the property, extend the useful life or otherwise do not meet capitalization criteria are charged to expense as incurred. The Company evaluates premises and equipment for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Refer to Note 6 for further details.

# **Incentive Compensation**

The Company maintains an annual bonus plan which involves the award of cash and CFG restricted stock units to certain individuals of the Company. A restricted stock unit is the right to receive shares of CFG stock on a future date, which may be subject to time-based vesting conditions. Time-based restricted stock units granted generally become vested ratably over a three-year period.

The Company measures compensation expense related to restricted stock units based upon the fair value of the awards on the grant date, adjusted for forfeitures as they occur.

# **Leases**

The Company determines if an arrangement is a lease at inception. At commencement, the Company recognizes a right-of-use asset and a corresponding lease liability based on the present value of the lease payments over the non-cancelable lease term. A right-of-use asset represents the value of the Company's contractual right to use an underlying leased asset and a lease liability represents the Company's contractual obligation to make payments on the same underlying leased asset. As the Company's lease does not specify an implicit rate, the Company uses the incremental borrowing rate based on information available at the lease commencement date to determine the present value of the lease payments.

In its normal course of business, the Company may lease equipment and office space. Lease terms predominantly range from one year to ten years and may include options to extend the lease, terminate the lease, or purchase the underlying asset at the end of the lease. Certain lease agreements may include rental payments based on an index or are adjusted periodically for inflation. When the Company has lease agreements that contain lease and non-lease components, these components are accounted for as a single lease component. Leases with an initial term of 12 months or less are recognized in occupancy expense in the Statement of Operations on a straight-line basis over the remaining lease term. Refer to Note 7 for further details.

The Company evaluates right-of-use assets for impairment when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

8

CITIZENS CAPITAL MARKETS, INC.
(A Wholly-Owned Subsidiary of Citizens Financial Group, Inc.)

# NOTES TO STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 2022
(Amounts in thousands except share data)

Fair Value

The Company categorizes assets and liabilities carried at fair value on its Statement of Financial Condition based on a three-level hierarchy. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.

The aforementioned three-level hierarchy is defined as follows:

- Level 1 - Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities;
- Level 2 - Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets; quoted prices in markets that are not active; and other inputs that are observable or can be corroborated by market data for substantially the full term of the asset or liability; and
- Level 3 - Unobservable inputs to the valuation methodology that are supported by little or no market information and are significant to the fair value measurement.

Asset and liability categorizations within the valuation hierarchy are based upon the lowest level of input that is significant to the fair value measurement. Refer to Note 12 for further details.

3. ACQUISITIONS

On June 8, 2022, CCMI acquired DH Capital, Inc. ("DH Capital") for $47,398. DH Capital is a New York-based advisory firm that delivers a range of financial services to commercial clients nationwide. The acquisition strengthens CCMI's ability to serve clients by further accelerating the build-out of its M&A and financial advisory capabilities.

The DH Capital transaction was accounted for as a business combination. Accordingly, the assets acquired and liabilities assumed from DH Capital were recorded at fair value as of the transaction date. The determination of fair value requires management to make estimates about, among other things, discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature and are subject to change. The fair value of the assets acquired and liabilities assumed from DH Capital were deemed final as of December 31, 2022.

The following summarizes the fair value of the consideration transferred to acquire DH Capital and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:

The total fair value of cash consideration, as of the acquisition date, was $47,398, of which $21,527 represents contingent consideration payable in 2025. The contingent consideration amount was calculated using a discounted cash flows method based on expected revenue during the measurement window. The contingent payment can range anywhere from zero to $29,100.

9

CITIZENS CAPITAL MARKETS, INC.  
 (A Wholly-Owned Subsidiary of Citizens Financial Group, Inc.)

# NOTES TO STATEMENT OF FINANCIAL CONDITION  
 AS OF DECEMBER 31, 2022  
 (Amounts in thousands except share data)

# Recognized amounts of identifiable assets acquired and liabilities assumed:

| Goodwill | $ | 42,165 |
| --- | --- | --- |
| Referral network |  | 4,938 |
| Accounts receivable |  | 208 |
| Prepaid expenses |  | 162 |
| Fixed assets |  | 13 |
| Gross assets acquired |  | 47,486 |
| Accounts expenses |  | (17) |
| Accounts payable |  | (8) |
| Other liabilities |  | (63) |
| Gross liabilities assumed |  | (88) |
| Total identifiable net assets | $ | 47,398 |

# **4. RELATED PARTY TRANSACTIONS**

The Company has entered into service agreements with its affiliates Citizens Bank, National Association ('CBNA') and CFG (collectively, the 'Affiliates'). The Affiliates provides support services to the Company and allocate direct and indirect costs attributable to the Company. Such costs include, but are not limited to, costs of the bank personnel providing services to the Company, including finance, human resources, technology, risk, audit, and facilities. The Company had outstanding payables of $2,981 due to Affiliates as of December 31, 2022.

The Company has a subordinated credit facility with CFG. The facility was refinanced on September 15, 2022 increasing the borrowing limit to $210,000. The subordinated loan drawn on this credit facility matures on September 15, 2025 and bears interest at 5.03% per annum.

The Company maintains four checking accounts with CBNA and cash held was $2,843 as of December 31, 2022.

# **5. GOODWILL AND INTANGIBLE ASSETS**

On June 8, 2022, the Company acquired the assets of DH Capital and recorded goodwill of $42,165; all of which is deductible for tax purposes and amortized over 15 years. The initial purchase price for the acquisition was $47,398, of which the remaining amount of $21,527 will be paid in 2025. The goodwill recorded in connection with the acquisition resulted from the expected synergies, operational efficiencies and expertise of the retained DH Capital employees.

Through the Company's acquisition activity since inception, referral networks and a customer list have been acquired and recorded as intangible assets.

10

CITIZENS CAPITAL MARKETS, INC.  
 (A Wholly-Owned Subsidiary of Citizens Financial Group, Inc.)

# NOTES TO STATEMENT OF FINANCIAL CONDITION  
 AS OF DECEMBER 31, 2022  
 (Amounts in thousands except share data)

The following table summarizes the intangible assets as of December 31, 2022:

| (dollars in thousands) |  | December 31, 2022 |  |  |
| --- | --- | --- | --- | --- |
| Acquisitions: | Original Expected Useful Life | Gross carrying value | Accumulated amortization | Net |
| Referral networks | 5 years | $8,249 | $3,349 | $4,900 |
| Customer list | 5 years | 5,455 | 4,182 | 1,273 |
| Other: |  |  |  |  |
| Software | 5 years | 254 | 60 | 194 |
| Total: |  | $13,958 | $7,591 | $6,367 |

No impairments of goodwill or intangible assets were recorded for the year ended December 31, 2022.

## 6. PREMISES AND EQUIPMENT

Premises and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the assets, typically five to ten years.

|  | December 31, 2022 |
| --- | --- |
| Premises | $489 |
| Equipment | 611 |
| Total premises and equipment | 1,100 |
| Less: accumulated depreciation | (605) |
| Premises and equipment, net | $495 |

## 7. LEASES

The Company has four operating leases for office space with a weighted average remaining lease term of five years and a weighted average discount rate of 2.03%. Three of the four leases have options that if exercised, would extend the terms to between 2030 and 2038. Operating lease cost is recognized on a straight-line basis over the lease term in the Statement of Operations.

At December 31, 2022, lease liabilities maturing under non-cancelable operating leases are presented below for the years ended December 31:

| 2023 | $1,789 |
| --- | --- |
| 2024 | 1,964 |
| 2025 | 1,530 |
| 2026 | 1,132 |
| 2027 | 911 |
| Thereafter | 764 |
| Total lease payments | 8,090 |
| Less: interest | (371) |
| Total lease liability | $7,719 |

11

CITIZENS CAPITAL MARKETS, INC.  
 (A Wholly-Owned Subsidiary of Citizens Financial Group, Inc.)

# NOTES TO STATEMENT OF FINANCIAL CONDITION  
 AS OF DECEMBER 31, 2022  
 (Amounts in thousands except share data)

# **8. ACCRUED INCENTIVE COMPENSATION**

As of December 31, 2022, the total accrued amounts under each of the incentive compensation plans are as follows:

| Annual bonus plan | $ | 14,790 |
| --- | --- | --- |
| Accrued incentive plan |  | 4,200 |
| Total | $ | 18,990 |

The amounts are included in the Statement of Financial Condition, in the accrued incentive compensation line.

# **9. SHARE-BASED COMPENSATION**

The following table presents the activity related to the Company’s incentive compensation from CFG share-based awards for the year ended December 31, 2022:

|  | CFG Share Awards | Weighted Average - Grant Price |
| --- | --- | --- |
| Outstanding, January 1, 2022 | 157,325 | $41.57 |
| Granted | 264,443 | 48.46 |
| Vested and distributed | (68,748) | 40.17 |
| Forfeitures | (19,078) | 47.62 |
| Outstanding, December 31, 2022 | 333,942 | $46.97 |

# **10. NET CAPITAL REQUIREMENTS**

The Company is a registered broker-dealer and, therefore, subject to the SEC’s Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum net capital. The Company has elected to use the alternative method, permitted by the rule, which requires the Company maintain minimum net capital, as defined, equal to $250. As of December 31, 2022, the Company had net capital of $77,691, which was in excess of the required net capital of $250 by $77,441.

# **11. INCOME TAXES**

The Company, along with other Affiliates, is included in the consolidated federal tax return filed by CFG and in certain combined and unitary state returns. The Company also files in a number of state jurisdictions on a stand alone basis. For federal taxes and for taxes in states in which the Company is included in a combined or unitary return, the Company computes its current and deferred tax provision using the applicable consolidated, combined or unitary tax rate. The Company settles its income tax provision (benefit) with the Affiliates by agreement through intercompany accounts. At December 31, 2022, the Company’s income taxes payable of $2,290 included a payable to the Affiliates of approximately $2,946 and a receivable related to state stand alone filings of approximately $656.

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

CITIZENS CAPITAL MARKETS, INC.  
 (A Wholly-Owned Subsidiary of Citizens Financial Group, Inc.)

# **NOTES TO STATEMENT OF FINANCIAL CONDITION  
 AS OF DECEMBER 31, 2022  
 (Amounts in thousands except share data)**---

The tax effects of temporary differences that give rise to significant portions of deferred taxes for the year ended December 31, 2022, are as follows:

| Deferred tax assets: |  |  |
| --- | --- | --- |
| Deferred compensation | $ | 1,167 |
| Accrued Expenses |  | 515 |
| Total deferred tax assets |  | 1,682 |
| Deferred tax liabilities: |  |  |
| Amortization of intangibles |  | 592 |
| Depreciation |  | 160 |
| Total deferred tax liabilities |  | 752 |
| Deferred taxes, net | $ | 930 |

There was no change in valuation allowance from December 31, 2021 to December 31, 2022.

The Company, as part of certain consolidated or combined returns, is subject to examination by the Internal Revenue Service ('IRS') and various state and local tax jurisdictions. With few exceptions, the Company is no longer subject to income tax examinations for years prior to 2018. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense in the Statement of Operations.

There were no uncertain tax positions relating to the Company as of and during the year ended December 31, 2022.

## 12. FAIR VALUE MEASUREMENTS

The valuation techniques used to measure the Company's assets and liabilities at fair value depend upon the specific nature of the asset and liability. The following is a description of the valuation methodologies and summary of assets and liabilities measured at fair value on the Statement of Financial Condition on a recurring basis at December 31, 2022:

Level 1: *U.S. Treasury obligations*: U.S Treasury obligations are measured based on quoted prices for identical instruments in active markets.

Level 2: *Corporate Bonds*: Debt obligations of domestic corporations are valued using quoted prices for similar assets and liabilities in active markets.

Level 3: *Business acquisitions consideration payable*: The carrying amount of the future amount payable relating to business acquisitions approximates fair value. Payables are valued using a discounted cash flows method using a market-based discount rate that includes a risk-free rate plus an equity risk premium.

13

CITIZENS CAPITAL MARKETS, INC.  
 (A Wholly-Owned Subsidiary of Citizens Financial Group, Inc.)

# **NOTES TO STATEMENT OF FINANCIAL CONDITION  
 AS OF DECEMBER 31, 2022  
 (Amounts in thousands except share data)**

The following table presents the estimated fair value for assets and liabilities recorded at fair value on a recurring basis in the Statement of Financial Condition under the caption indicated:

|  | Level 1 | Level 2 | Level 3 | Total |
| --- | --- | --- | --- | --- |
| Assets: |  |  |  |  |
| Cash equivalents, at fair value: |  |  |  |  |
| U.S. treasury obligations | $49,854 | $ - | $ - | $49,854 |
| Investment securities, at fair value: |  |  |  |  |
| Corporate Bonds | - | 13,410 | - | 13,410 |
| Total assets | $49,854 | $13,410 | $ - | $63,264 |
| Liabilities: |  |  |  |  |
| Accrued expenses and other liabilities: |  |  |  |  |
| Business acquisitions payable | - | - | 23,619 | 23,619 |
| Investment securities sold but not yet purchased, at fair value: |  |  |  |  |
| Corporate Bonds | - | 3,432 | - | 3,432 |
| Total liabilities | $ - | $3,432 | $23,619 | $27,051 |

For the Company's financial assets and liabilities not measured at fair value, the carrying values reported in the Statement of Financial Condition approximate fair value.

# **13. GUARANTEES, COMMITMENTS AND CONTINGENT LIABILITIES**

The Company, from time to time, is involved in litigation or other proceedings related to various claims. The aggregate liabilities, if any, arising from such proceedings are not expected to have a material adverse effect on the Company's financial position, results of operations, or cash flows. Legal reserves are established when it is probable that a liability has been incurred at the date of the financial statement and the amount of the loss can be reasonably estimated. Once established, reserves are adjusted when there is additional information available or when an event occurs requiring a change.

In the normal course of business, the Company may enter into contracts that contain a variety of representations and warranties, which provide general indemnifications. The Company's maximum exposure under these arrangements is unknown, as this would involve future claims against the Company. The Company expects the risk of loss to be remote.

# **14. SUBSEQUENT EVENTS**

Based on the Company's evaluation, there are no further events that have occurred subsequent to December 31, 2022 through February 24, 2023 that would require disclosure or adjustment in the financial statements.

14

**Attachment 2:** `ccmi_err.pdf`

Deloitte.

Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116
USA

Tel: +1 617 437 2000
Fax: +1 617 437 2111
www.deloitte.com

# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholder and Board of Directors of
Citizens Capital Markets, Inc.
Boston, Massachusetts

We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) Citizens Capital Markets, Inc. (the "Company") identified the following provisions of 17 C.F.R. § 240.15c3-3(k) under which the Company claimed exemptions from 17 C.F.R. § 240.15c3-3: paragraphs (k)(2)(i) and (k)(2)(ii), (the "exemption provisions") and (2) the Company stated that the Company met the identified exemption provisions throughout the year ended December 31, 2022 without exception. The Company's management is responsible for compliance with the exemption provisions and its statements.

We have also reviewed management's statements, included in the Exemption Report, in which the Company stated that it is also filing the Exemption Report because the Company's other business activities met the requirements specified in Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 ("Footnote 74") throughout the year ended December 31, 2022, without exception. The Company's management is responsible for compliance with the provisions of Footnote 74 and its statements.

Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about the Company's compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraphs (k)(2)(i) and (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934 and Footnote 74.

February 24, 2023

Citizens Capital Markets®

## Exemption Report

Citizens Capital Markets, Inc. (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17C.F.R. § 240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following:

(1) The Company claimed exemptions from 17 C.F.R. §240.15c3-3 under the following provisions of 17 C.F.R. §240.15c3-3 (k)(2)(i) and §240.15c3-3 (k)(2)(ii);

(2) The Company met the identified exemption provisions in 17 C.F.R. §240.15c3-3(k)(2) (i) and (ii) throughout the most recent fiscal year without exception.

(3) The Company is also filing this Exemption Report because the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 are limited to proprietary trading, certain firm commitment underwritings and receiving transaction-based compensation for identifying potential merger and acquisition opportunities for clients.

**Citizens Capital Markets, Inc.**

I, Raymond Jackson, swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true and correct.

A handwritten signature in black ink, appearing to read 'R. Jackson'.

By: _________________

Title: CFO

**February 24, 2023**

See accompanying report of independent registered public accounting firm.

**Attachment 3:** `ccmi_sipcaup.pdf`

Deloitte.

Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116
USA
Tel: +1 617 437 2000
Fax: +1 617 437 2111
www.deloitte.com

# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED UPON PROCEDURES

To the Stockholder and Board of Directors of
Citizens Capital Markets, Inc.
Boston, Massachusetts

We have performed the procedures enumerated below, which were agreed to by Citizens Capital Markets, Inc., (the "Company") and the Securities Investor Protection Corporation (SIPC) (the "specified parties"), solely to assist the specified parties with respect to evaluating the Company's compliance with the applicable SIPC instructions as it relates to the accompanying General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2021, and in accordance with Rule 17a-5(e)(4) of the Securities Exchange Act of 1934 and the SIPC Series 600 Rules. Management is responsible for the Company's compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

The procedures we performed and our findings are as follows:

1. Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries noting no differences;
2. Compared the total revenue amounts reported on the audited Form X-17A-5 for the year ended December 31, 2022, with the amounts reported in Form SIPC-7 for the year ended December 31, 2022, noting no differences;
3. Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences; and
4. Proved the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments, noting no differences.

We were not engaged to and did not conduct an examination or a review, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's compliance with the applicable SIPC instructions as it relates to the General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2022. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the information and use of the specified parties and is not intended to be, and should not be, used by anyone other than the specified parties.

February 24, 2023

### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM X-17A-5

### ANNUAL AUDITED REPORT

### Filer Information

**Filer CIK:** 0001647978

**Filer CCC:** XXXXXXXX

**Is this a LIVE or TEST filing?:** LIVE

**Would you like a Return Copy?:** No

### Submission Information

**Report Period Begin Date:** 01-01-2022

**Report Period End Date:** 12-31-2022

**Type of Registrant:** Broker-dealer

**Any material weaknesses identified?:** No

### Registrant Identification

**Name of Broker-Dealer:** CITIZENS CAPITAL MARKETS, INC.

**Business Address:** 28 STATE STREET, MS1240, BOSTON, MA, 02118

**Contact Person:** Thomas Kosinski

**Contact Phone:** 617-725-5906

### Independent Public Accountant Identification

**Accountant Name:** Deloitte & Touche LLP

**Accountant Address:** 200 Berkeley Street, Boston, MA, 02116

**Accountant Type:** Certified Public Accountant

### OATH OR AFFIRMATION

I, **Raymond Jackson**, swear (or affirm) that, to the best of my knowledge and belief, the accompanying financial statements and supporting schedules pertaining to the firm of **CITIZENS CAPITAL MARKETS, INC.**, as of **12-31-2022**, are true and correct.

**Signature:** Raymond Jackson

**Title:** Chief Financial Officer

**Notarized:** Yes