Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

v3.5.0.2
Notes Payable
 9 Months Ended
Sep. 30, 2016
Debt Disclosure [Abstract]  
Notes Payable
Notes Payable

Notes payable consisted of the following:
 
September 30,
2016
 
December 31,
2015
Notes payable to clearing firm under forgivable loans
$
6,429

 
$
6,429

Notes payable to finance Securities America acquisition, net of $17 and $172 of unamortized discount in 2016 and 2015, respectively (see Note 15)
17,958

 
17,804

Note payable under subsidiary's term loan with bank
259

 
564

Note payable under subsidiary's revolver with bank
731

 
950

Notes payable by subsidiary to certain former shareholders of Highland
6,738

 
6,738

Notes payable to KMS' former shareholders, net of $251 and $343 of unamortized discount in 2016 and 2015, respectively
4,321

 
5,711

Notes payable to SSN's former shareholders, net of $733 and $977 of unamortized discount in 2016 and 2015, respectively
11,929

 
15,378

Other
—

 
600

Less: Unamortized debt issuance costs
(1
)
 
(253
)
Total
$
48,364

 
$
53,921



The Company estimates that the fair value of notes payable was $46,185 at September 30, 2016 and $50,416 at December 31, 2015 based on then current interest rates at which similar amounts of debt could then be borrowed (Level 2 inputs). As of September 30, 2016, 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, 2016, outstanding principal amounts loaned by Frost Nevada and Vector Group were $15,120 and $1,680, respectively. See Note 15 for information regarding cancellation of the November 2011 Loan in October 2016.

At September 30, 2016, the Company had $40,000 available under its $40,000 revolving credit agreement with an affiliate of its principal shareholder. On March 9, 2016, the Company entered into an amendment to the revolving credit agreement to extend the maturity date thereunder for a period of five years to August 25, 2021.

KMS had a subordinated note payable to a current officer of KMS, in the amount of $600 payable in August 2016, plus monthly interest with an applicable rate of prime plus one percent. The note was repaid in full on August 1, 2016.