Quarterly report pursuant to sections 13 or 15(d)

Notes Payable

Notes Payable

3 Months Ended

Mar. 31, 2014

Notes payable consisted of the following:



	March 31, 2014		December 31, 2013
Note payable under revolving credit agreement with principal shareholder	$	—	$	—
Notes payable to clearing firm under forgivable loans	14,286		14,285
Note payable to a subsidiary of Premier Trust’s former shareholder	388		450
Notes payable to finance Securities America acquisition, net of $1,180 and $1,618 of unamortized discount in 2014 and 2013, respectively	38,671		48,232
Note payable under term loan with bank	1,512		1,681
Total	$	54,857	$	64,648

The Company estimates that the fair value of notes payable was $59,670 at March 31, 2014 and $68,908 at December 31, 2013 based on then current interest rates at which similar amounts of debt could then be borrowed (Level 2 inputs). As of March 31, 2014, the Company was in compliance with all covenants in its debt agreements.

The lenders under the notes payable to finance the Securities America acquisition (the "November 2011 Loan") included Frost Nevada Investments Trust ("Frost-Nevada"), an affiliate of the Company's Chairman of the Board and principal shareholder, Vector Group, Ltd. ("Vector Group"), a principal shareholder of the Company, and the Company's President and Chief Executive Officer and a director. The principal amounts loaned by Frost Nevada, Vector Group and the Company's President and Chief Executive Officer were $135,000, $15,000 and $200, respectively.

The Company used the net proceeds from the sale of Series A Preferred Stock during the three months ended March 31, 2014 (see Note 8) and working capital to prepay $10,000 principal amount of the $160,700 aggregate principal amount of the November 2011 Loan. In connection with the prepayment, the Company recorded a loss on extinguishment of debt for the three months ended March 31, 2014 of $314, which included unamortized discounts and the write-off of debt issuance costs.