Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

v3.8.0.1
Notes Payable
9 Months Ended
Sep. 30, 2017
Debt Disclosure [Abstract]  
Notes Payable
Notes Payable

Notes payable consisted of the following:
 
September 30,
2017
 
December 31,
2016
Notes payable to clearing firm under forgivable loans
$
4,285

 
$
4,285

Note payable under subsidiary's term loan with bank
7,192

 
153

Note payable under subsidiary's revolver with bank
276

 
620

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

 
6,738

Notes payable to KMS' former shareholders, net of $128 and $221 of unamortized discount in 2017 and 2016, respectively
2,435

 
3,852

Notes payable to SSN's former shareholders, net of $407 and $651 of unamortized discount in 2017 and 2016, respectively
7,256

 
10,769

Total
$
28,182

 
$
26,417



The Company estimates that the fair value of notes payable was $26,425 at September 30, 2017 and $24,494 at December 31, 2016 based on then current interest rates at which similar amounts of debt could then be borrowed (Level 2 inputs). As of September 30, 2017, the Company was in compliance with all covenants in its debt agreements.

At September 30, 2017, 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.

On April 21, 2017, Securities America Financial Corporation ("SAFC") entered into an amended and restated loan agreement with a financial institution. The loan agreement modified the interest rate for new loans under SAFC's revolving credit facility to prime plus 2.25%. As of September 30, 2017, SAFC had $1,000 of availability under the revolving credit facility. This loan agreement also provides for an additional term loan in the aggregate principal amount of $8,000 subject to certain conditions. This second term loan bears interest at 5.75%, with a maturity date of May 1, 2020. The loans are collateralized by the assets of SAFC and Securities America Advisors, Inc.

In November 2017, the Company amended its 2011 forgivable loan agreement with the primary clearing firm of the Company's subsidiaries, National Financial Services, Inc., to confirm the annual clearing revenue target for 2017 had been satisfied and to permit the incurrence of certain additional indebtedness. Accordingly, the Company will recognize income in the fourth quarter of 2017 of $2,143 and $295 from the forgiveness of principal and interest, respectively, and the outstanding balance under the loan was reduced to $2,143.