Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

Notes Payable

9 Months Ended

Sep. 30, 2015

Notes payable consisted of the following:



	September 30, 2015		December 31, 2014
Notes payable to clearing firm under forgivable loans	$	10,356	$	10,356
Note payable to a subsidiary of Premier Trust’s former shareholder	—		200
Notes payable to finance Securities America acquisition, net of $223 and $627 of unamortized discount in 2015 and 2014, respectively	17,753		29,201
Note payable under subsidiary's term loan with bank	1,049		1,406
Notes payable by subsidiary to certain former Highland shareholders	6,737		6,737
Notes payable to KMS' former shareholders, net of $374 and $466 of unamortized discount in 2015 and 2014, respectively	6,171		7,534
Notes payable to SSN's former shareholders, net of $1,058 of unamortized discount	16,518		—
Other	600		600
Total	$	59,184	$	56,034

The Company estimates that the fair value of notes payable was $55,439 at September 30, 2015 and $53,102 at December 31, 2014 based on then current interest rates at which similar amounts of debt could then be borrowed (Level 2 inputs). As of September 30, 2015, 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, and Vector Group, Ltd. (“Vector Group”), a principal shareholder of the Company. At September 30, 2015, outstanding principal amounts loaned by Frost Nevada and Vector Group were $15,120 and $1,680, respectively.

The Company used the net proceeds from the sale of Series A Preferred Stock during the nine months ended September 30, 2015 (see Note 11) and working capital to prepay $11,852 principal amount of the remaining aggregate principal amount of the November 2011 Loan.

In connection with the prepayment, the Company recorded a loss on extinguishment of debt for the nine months ended September 30, 2015 of $252, which included unamortized discounts and the write-off of debt issuance costs.

At September 30, 2015, the Company had $40,000 available under its $40,000 revolving credit agreement with an affiliate of its principal shareholder.

On October 15, 2014, as part of the consideration paid for the acquisition of KMS, the Company issued four-year promissory notes to the former shareholders of KMS in the aggregate principal amount of $8,000, bearing interest at 1.84% per annum and payable in equal quarterly installments of principal and interest, which were valued at $7,508 based on an imputed interest rate of 5.5%. The carrying value of promissory notes at September 30, 2015, net of $374 unamortized discount, amounts to $6,171.

On January 2, 2015, as part of the consideration paid for the acquisition of SSN, the Company issued four-year promissory notes to the former shareholders of SSN in the aggregate principal amount of $20,000, bearing interest at 1.74% per annum and payable in equal quarterly installments of principal and interest, which were valued at $18,697 based on an imputed interest rate of 5.1%. The carrying value of these promissory notes at September 30, 2015, net of $1,058 of unamortized discount, was $16,517.