Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

v3.2.0.727
Notes Payable
6 Months Ended
Jun. 30, 2015
Debt Disclosure [Abstract]  
Notes Payable
Notes Payable

Notes payable consisted of the following:
 
June 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
68

 
200

Notes payable to finance Securities America acquisition, net of $274 and $627 of unamortized discount in 2015 and 2014, respectively
17,702

 
29,201

Note payable under subsidiary's term loan with bank
1,170

 
1,406

Notes payable by subsidiary to certain former Highland shareholders
6,737

 
6,737

Notes payable to KMS' former shareholders, net of $405 and $466 of unamortized discount in 2015 and 2014, respectively
6,627

 
7,534

Notes payable to SSN's former shareholders, net of $1,140 of unamortized discount
17,651

 

Other
600

 
600

Total
$
60,911

 
$
56,034



The Company estimates that the fair value of notes payable was $56,705 at June 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 June 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 June 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 six months ended June 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 six months ended June 30, 2015 of $252, which included unamortized discounts and the write-off of debt issuance costs.

At June 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. The carrying value of promissory notes at June 30, 2015, net of $405 unamortized discount, amounts to $6,627.

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. The carrying value of promissory notes at June 30, 2015, net of $1,140 of unamortized discount, amounts to $17,651.