Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

Notes Payable

6 Months Ended

Jun. 30, 2014

Notes payable consisted of the following:



	June 30, 2014		December 31, 2013
Notes payable to clearing firm under forgivable loans	$	14,286	$	14,285
Note payable to a subsidiary of Premier Trust’s former shareholder	326		450
Notes payable to finance Securities America acquisition, net of $1,065 and $1,618 of unamortized discount in 2014 and 2013, respectively	38,785		48,232
Note payable under term loan with bank	1,819		1,681
Total	$	55,216	$	64,648

The Company estimates that the fair value of notes payable was $59,587 at June 30, 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 June 30, 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. At June 30, 2014, outstanding principal amounts loaned by Frost Nevada, Vector Group and the Company's President and Chief Executive Officer were $33,477, $3,720 and $43, respectively.

The Company used the net proceeds from the sale of Series A Preferred Stock during the six months ended June 30, 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 six months ended June 30, 2014 of $314, which included unamortized discounts and the write-off of debt issuance costs.

At June 30, 2014, the Company had $40,000 available under its $40,000 revolving credit agreement with an affiliate of its principal shareholder.