8. Investment In and Advances to Affiliates:

3 Months Ended

Mar. 31, 2014

Notes to Financial Statements

8. Investment In and Advances to Affiliates:

Siebert, Brandford, Shank & Co., L.L.C. (“SBS”)

Siebert holds a 49% ownership interest in SBS which is engaged in municipal bond underwritings. Income or loss from SBS is considered to be integral to Siebert’s operations and material to the results of operations.

Summarized financial data of SBS is set forth below.

	March 31, 2014		March 31, 2013
Total assets, including secured demand note of $1,200,000 due from Siebert	$	31,634,000
Total liabilities, including subordinated liabilities of $1,200,000 due to Siebert		14,246,000
Total members’ capital		17,388,000
Regulatory minimum net capital requirement		250,000
Total revenues		7,735,000		3,995,000
Net Income		1,481,000		(1,229,000	)

Siebert charged SBS $25,000 during the three months ended March 31, 2014 and 2013, for general and administrative services, which Siebert believes approximates the cost of furnishing such services.

Siebert’s share of net income for the three months ended March 31, 2014 and net loss in 2013 amounted to $726,000 and $602,000, respectively.

Siebert did not receive a distribution from SBS during the three months ended March 31, 2014 and Siebert’s share of undistributed earnings from SBS amounted to $8.1 million at March 31, 2014. Such amount may not be immediately available for distribution to Siebert for various reasons including the amount of SBS’s available cash, the provisions of the agreement between Siebert and the principals and SBS’s continued compliance with its regulatory net capital requirements.

SBS Financial Products Company, LLC (“SBSFPC”)

The Company has a 33.33% ownership interest in, and the two individual principals of SBS have an aggregate 66.66% ownership interest in, SBSFPC which engages in derivatives transactions related to the municipal underwriting business. As of March 31, 2014, SBSFPC’s operations were being phased out.

Summarized financial data of SBSFPC is set forth below.

	March 31, 2014			March 31, 2013
Total assets	$	568,000
Total liabilities		—
Total members’ capital		568,000
Total revenues		—			(222,000	)*
Net loss		(1,000	)		(275,000	)

*Negative balance was attributable to unrealized loss on derivative contracts.

The Company’s share of net loss for the three months ended March 31, 2014 and 2013 amounted to $0 and $92,000, respectively.

During the quarter ended March 31, 2013, SBSFPC incurred a loss of $241,000 on the write down in value of the derivative contracts with the City of Detroit to adjust their carrying value to the carrying value of the derivative contracts with the financial institution. In July 2013, as a result of the filing of a bankruptcy petition by the City of Detroit, SBSFPC unwound certain derivative contracts with a financial institution pursuant to the terms of the contracts. The contracts were recorded as liabilities with a carrying value of $123,063,000. In connection therewith, SBSFPC assigned certain derivative contracts with the City of Detroit to the financial institution, which were recorded as assets with a carrying value of $123,063,000. No gain or loss was recognized by SBSFPC as a result of the unwinding and assignment of these derivative contracts and SBSFPC has no continuing obligations or rights with respect to the derivative contracts.

At March 31, 2014, SBSFPC had accumulated distributions in excess of cumulative earnings in the amount of $632,000 of which the Company’s share was $211,000. The Company received no distribution from SBSFPC during the three months ended March 31, 2014.