Specialty Finance Industry Insights

Transcription

1 March 2015 Specialty Finance Industry Insights A review of M&A activity and public market valuation in the consumer and commercial specialty finance sectors

2 Table of Contents Introduction...1 Consumer Specialty Finance...2 M&A Trends...2 Select M&A Transactions...3 Public Valuation Update...4 Commercial Specialty Finance...7 M&A Trends...7 Select M&A Transactions...8 Public Valuation Update...9 Capital Markets Transactions Recent Equity Offerings Recent Debt Offerings Recent Preferred Equity Offerings Financial Services & Technology Analysts and Coverage Investment Banking Team Biographies Select William Blair Transactions Notes Disclosures Table of Contents

3 Introduction Specialty finance can be broadly defined as any financing activity that takes place outside the traditional banking system. Typically, specialty finance firms are thought of as non-bank lenders that make loans to consumers and small to midsize businesses that cannot otherwise obtain financing. This report covers trends in M&A activity, transaction multiples, and public company valuations in the consumer and commercial specialty finance sectors. Specifically, consumer specialty finance includes auto finance, collection, alternative financial services, credit card, and mortgage companies. Commercial specialty finance includes business development companies (BDCs), commercial finance, commercial real estate lending, and leasing companies. We hope you enjoy this report, and we welcome any feedback. Summary of M&A Activity Both the M&A and equity markets performed strongly in the first quarter. Total global year-to-date M&A volume is over $400 billion, up more than 5% from the corresponding period last year, and over the same period the total disclosed dollar volume of new equity issuances (both initial public offerings and follow-on offerings) is up more than 17%. While some industry veterans believe valuations are ahead of themselves, deal activity suggests otherwise. This theme persists within the specialty finance sector and we believe 2015 M&A activity will remain strong for high quality companies in this sector. Large strategic acquirers with healthy war chests will likely continue to pursue companies with differentiated solutions, go-to-market strategies, and proven strong growth and profitability. In addition, private-equity firms remain highly active in the specialty finance sector. Aging portfolio companies of private-equity firms in particular, specialty finance businesses purchased before or during the downturn may create liquidity opportunities in the near to midterm and will continue to fuel middle-market M&A activity. Specialty finance companies generate high margins and recurring cash flows. In addition, these companies have meaningful operating leverage. As a result, M&A transactions in the sector are generally completed at attractive multiples. Since 2002, approximately 53% of the aggregate deals in the consumer specialty finance sector have been completed at above 10.0 times LTM net income, and approximately 18% have been completed at more than 3.00 times LTM book value. In the commercial specialty finance sector, approximately 46% of the aggregate deals since 2002 have been completed at above 10.0 times LTM net income, and approximately 22% have been completed between 1.50 and 3.00 times LTM book value. Acquirers in the sector are most often strategic parties that are able to pay more because of the significant revenue synergies generated by pushing new or stronger finance products through an established distribution platform. In addition, many private-equity funds have developed a differentiated level of industry knowledge and expertise, and as a result have established strong reputations in the sector. In 2015 thus far, M&A activity in the sector has been strong, driven primarily by strategic acquirers looking for new products and segments, differentiated platforms, and additional avenues for growth. Examples include New Residential Investment Corporations' acquisition of Home Loan Servicing Solutions and Huntington Bancshares acquisition of Macquarie Equipment Finance. While global economic uncertainty may cause the broad universe of buyers and sellers to proceed more cautiously in 2015, we remain optimistic that both M&A and capital markets activity will remain strong for solidly performing businesses. Robert Metzger [email protected] J.P. Young [email protected] Kegan Greene [email protected] Introduction 1

4 Consumer Specialty Finance Sector

5 Consumer Specialty Finance M&A Trends Year-to-date aggregate M&A transaction volume is running slightly ahead of the comparable period in 2014, though disclosed dollar volume is meaningfully lower over the same period. Approximately 53% of the aggregate deals since 2002 have been completed at above 10.0 times LTM net income, and approximately 18% have been completed at more than 3.00 times LTM book value. Transactions less than $50 million were completed at an average of 5.9 times LTM net income, meaningfully lower than LTM net income multiples on deals above $50 million. Historical Transaction Volume Average: % YTD YTD Historical Transaction Dollar Volume ($ in millions) ($ in millions) Average: $16,322 (27.4%) $60,000 $51,379 $43,055 $40,000 $26,075 $17,055 $8,866 $16,926 $12,024 $10,519 $20,000 $6,009 $2,090 $3,299 $2,754 $1,828 $1,817 $1, YTD 2015 YTD LTM Net Income Multiple Breakdown LTM Book Value Multiple Breakdown 14.5% 32.3% 53.2% Greater than 10.0x 5.0x to 10.0x Less than 5.0x 54.5% 18.2% 27.3% Greater than 3.00x 1.50x to 3.00x Less than 1.50x LTM Net Income Multiple by Transaction Size LTM Book Value Multiple by Transaction Size 15.0x 10.0x 5.0x 0.0x 13.4x 5.9x 7.5x <$50mm $50mm - $100mm >$100mm 1.50x 1.40x 1.30x 1.20x 1.10x 1.00x 0.90x 1.36x 1.34x 1.12x <$50mm $50mm - $100mm >$100mm Source: SNL Financial and William Blair s market analysis. Note: Year-to-date as of February 28, Consumer Specialty Finance

6 Select M&A Transactions Announced Date Sub-Sector Buyer Name / Target Name Transaction Value Transaction Value / LTM Net Income LTM Book Value 03/10/15 Mortgage The J.G. Wentworth Company/ Weststar Mortgage, Inc. $ /03/15 AFS Springleaf Holdings, LLC/ OneMain Financial Holdings, Inc. $4, x 1.30x 02/23/15 Mortgage Investor group/ FBC Mortgage, LLC /22/15 Collection New Residential Investment Corp./ Home Loan Servicing Solutions, Ltd. $1, x 1.02x 02/18/15 Collection Cerberus Capital Management, L.P./ Gescobro Collection Services /10/15 Mortgage Cherry Hill Mortgage Investment Corporation/ Aurora Financial Group, Inc. $ /09/15 Mortgage Legal & General Group/ New Life Mortgages Ltd. $ /09/15 Mortgage Wilshire Bancorp, Inc./ Bank of Manhattan's mortgage lending division /28/15 Mortgage Skipton Building Society/ Topaz Finance Limited /28/15 Mortgage Paragon Financial Resources/ Houston Capital Mortgage, Inc /27/15 AFS EZCORP, Inc./ Twelve pawn store operations $ /12/15 Mortgage Citizens Financial Corp./ Reliance Mortgage Company /08/15 Mortgage Impac Mortgage Holdings, Inc./ Mortgage operations of CashCall, Inc /18/14 AFS BNP Paribas/ JD Group's consumer finance business $ /15/14 Mortgage Aquiline Holdings LLC/ LenderLive Network, Inc /10/14 Mortgage Academy Mortgage Corporation/ Republic Mortgage Home Loans, LLC /10/14 Mortgage Open Mortgage, LLC/ 360 Mortgage Group's reverse mortgage origination business /01/14 Mortgage MidAmerica Mortgage, Inc./ Affinity Lending Soultions. LLC /24/14 AFS Tiptree Financial Inc./ Reliance First Capital, LLC $ /13/14 Mortgage loandepot.com LLC/ Mortgage Master, Inc /10/14 AFS Nishi-Nippon City Bank, Ltd./ Nishi-Nippon Credit Guarantee Co., Ltd. $ x 0.70x 11/07/14 Mortgage Bankers Bancorp of Oklahoma, Inc./ Advance Mortgage Corporation /21/14 Auto Fortress Investment Group LLC/ Omnisure Group, LLC /08/14 Mortgage Morrison Grove Capital Advisors/ MMA Financial TC LLC $ /24/14 Collection Arrow Global Group PLC/ Capquest Group Limited $ /23/14 Auto Mint Leasing, Inc./ Investment Capital Fund Group, LLC /16/14 Auto Banco Santander SA/ Carfinco Financial Group Inc. $ x 4.08x 09/11/14 Mortgage Home Point Capital/ Maverick Funding Corp /09/14 AFS GoldenTree Asset Management LP/ Origen Financial, Inc. $ x 08/25/14 AFS First Cash Financial Services, Inc./ CAMex Holding, LLC /06/14 Mortgage ZAIS Financial Corp./ GMFS, LLC $ x - 08/01/14 Collection Encore Capital Group, Inc./ Atlantic Credit & Finance, Inc. $ /07/14 Auto Milestone Partners/ PayLink Payment Plans, LLC /02/14 Mortgage MutualFirst Financial, Inc./ Summit Mortgage, Inc /05/14 Mortgage Strategic Growth Bank Inc./ Guardian Mortgage Company, Inc. $ /05/14 Mortgage Freedom Mortgage Corporation/ BluFi Lending Corporation /17/14 AFS LendingClub Corporation/ Springstone Financial LLC $ x - 04/16/14 AFS Nelnet, Inc./ Education Lending Services, Inc. $ /15/14 AFS Aaron's/ Progressive Finance Holdings $ /02/14 AFS Lone Star Funds/ DFC Global $1, x 03/27/14 Auto Sunset Brands, Inc./ MotorMax /26/14 Mortgage Investor group/ Southern Trust Mortgage LLC /03/14 Mortgage InterLinc Mortgage Services, LLC/ Hometown Mortgage Services, Inc /01/14 Mortgage First Bells Bankshares, Inc./ Cendera Funding, Inc Note: Dollar amount in millions. Source: SNL Financial and Capital IQ. Consumer Specialty Finance 3

7 Public Valuation Update Auto Finance Indexed Price / LTM Earnings Ratios as of 2/28/ Feb 2010 Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015 Public Company Valuations Current: 13.5x Stock Price / Net Income Stock Equity Price Market Debt / EPS BVPS Asset CAGR ROAA ROAE 3-Yr CAGR Margin Company Ticker 2/28/15 Cap. Equity LTM FY2015 LTM LTM LTM LTM LTM Ally Financial Inc. ALLY $20.78 $10, x 15.3x 10.6x 0.71x (2.5%) 0.6% 6.2% NMF 17.6% America's Car-Mart Inc. CRMT $53.21 $ x 16.9x 16.2x 2.02x 10.6% 7.6% 13.1% (3.4%) 5.5% Consumer Portfolio Services, Inc. CPSS $6.96 $178.2 NMF 7.6x 6.6x 1.40x 11.4% 1.8% 26.6% NA 20.9% Credit Acceptance Corp. CACC $ $3, x 15.4x 13.6x 5.45x 18.8% 10.2% 36.7% 12.3% 40.7% Nicholas Financial Inc. NICK $14.89 $ x 11.6x NA 1.18x 7.5% 5.5% 10.8% (8.9%) 26.4% Santander Consumer USA Holdings Inc. SC $22.53 $7,862.6 NMF 10.5x 9.3x 2.29x NA 2.6% 24.5% 6.6% 26.3% Mean $3, x 12.9x 11.3x 2.17x 9.2% 4.7% 19.6% 1.6% 22.9% Median $2, x 13.5x 10.6x 1.71x 10.6% 4.1% 18.8% 1.6% 23.6% Collection Indexed Price / LTM Earnings Ratios as of 2/28/ x 22.0x Current: 12.4x 18.0x 14.0x 10.0x 6.0x 2.0x Feb 2010 Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015 Public Company Valuations Stock Price / Net Income Asset Stock Equity EPS BVPS CAGR ROAA ROAE 3-Yr CAGR Margin Price Market Debt / Company Ticker 2/28/15 Cap. Equity LTM FY2015 LTM LTM LTM LTM LTM Asta Funding Inc. ASFI $8.47 $ x 10.0x NMF 0.62x NA (2.1%) 6.9% 47.5% 28.5% Encore Capital Group, Inc. ECPG $39.97 $1, x 10.4x 7.9x 1.78x 44.5% 7.8% 15.9% 19.4% 9.7% Performant Financial Corporation PFMT $5.25 $ x 27.6x 22.4x 3.04x NA 6.6% 11.4% (8.8%) 4.8% PRA Group, Inc. PRAA $50.09 $2, x 14.3x 10.6x 3.81x 28.5% 10.3% 19.9% 20.5% 20.0% Mean $ x 15.6x 13.6x 2.31x 36.5% 5.6% 13.5% 19.7% 15.7% Median $ x 12.4x 10.6x 2.41x 36.5% 7.2% 13.6% 20.0% 14.9% Note: Dollar amount in millions. Source: SNL Financial and Capital IQ. 4 Consumer Specialty Finance

8 Alternative Financial Services Indexed Price / LTM Earnings Ratios as of 2/28/ x 15.0x Current: 11.2x 12.0x 9.0x 6.0x Feb 2010 Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015 Public Company Valuations Stock Price / Net Income Asset Stock Equity EPS BVPS CAGR ROAA ROAE 3-Yr CAGR Margin Price Market Debt / Company Ticker 2/28/15 Cap. Equity LTM FY2015 LTM LTM LTM LTM LTM Cash America International, Inc. CSH $21.58 $ x NMF 22.1x 1.16x 3.7% 1.4% (0.9%) (10.1%) 9.0% Enova International, Inc. ENVA $23.09 $ x 6.8x 6.5x 4.89x 15.1% 9.9% 57.2% 44.5% 14.5% EZCORP, Inc. EZPW $10.44 $ x 15.8x 8.9x 1.16x 23.3% 4.4% 4.0% NA (5.4%) First Cash Financial Services Inc. FCFS $48.14 $1, x 16.4x 16.8x 7.99x 22.8% 11.8% 19.8% 6.5% 11.9% QC Holdings, Inc. QCCO $1.72 $ x NMF NA 0.43x (5.4%) 7.1% 7.5% NA 3.5% Regional Management Corp. RM $15.60 $ x 13.7x 8.6x 1.13x NA 5.2% 8.7% % Springleaf Holdings, Inc. LEAF $38.45 $4, x 8.8x 16.3x 2.18x (10.3%) 4.6% 32.6% (22.9%) 29.9% World Acceptance Corp. WRLD $82.11 $ x 8.3x 8.0x 2.46x 10.1% 12.3% 31.6% 1.3% 16.4% Mean $1, x 11.6x 12.4x 2.67x 8.5% 7.1% 20.1% 3.5% 10.9% Median $ x 11.2x 8.9x 1.67x 10.1% 6.2% 14.3% 1.7% 10.5% Credit Card Indexed Price / LTM Earnings Ratios as of 2/28/ x 30.0x 24.0x 18.0x 12.0x 6.0x Feb 2010 Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015 Public Company Valuations Company Alliance Data Systems Corporation Ticker Stock Price 2/28/15 Equity Market Cap. Debt / Equity Current: 21.9x Stock Price / Net Income Asset EPS BVPS CAGR ROAA ROAE 3-Yr CAGR Margin LTM FY2015 LTM LTM LTM LTM LTM ADS $ $17, x 35.4x 18.7x NMF 31.1% 4.5% 29.6% 17.1% 9.5% American Express Company AXP $81.59 $83, x 14.7x 14.9x 4.95x 4.9% 3.8% 29.3% 6.0% 18.2% Discover Financial Services DFS $60.98 $27, x 12.4x 11.4x 2.75x 12.6% 2.9% 21.2% NA 33.0% MasterCard Incorporated MA $90.13 $103, x 29.1x 25.9x NMF 15.5% 21.6% NMF 23.8% 38.2% Synchrony Financial SYF $31.95 $26, x 11.5x 12.4x 2.96x NA 3.1% 30.4% 3.7% 33.4% Visa Inc. V $ $166,557.4 NMF 30.3x 26.2x 5.86x 3.6% 13.8% 20.4% 13.8% 43.3% Mean $70, x 22.2x 18.3x 4.13x 13.5% 8.3% 26.2% 12.9% 29.3% Median $55, x 21.9x 16.8x 3.96x 12.6% 4.1% 29.3% 13.8% 33.2% Note: Dollar amount in millions. Source: SNL Financial and Capital IQ. Consumer Specialty Finance 5

9 Mortgage Indexed Price / LTM Earnings Ratios as of 2/28/ x 20.0x 15.0x 10.0x 5.0x 0.0x Feb 2010 Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015 Public Company Valuations Company Ticker Stock Price 2/28/15 Equity Market Cap. Debt / Equity Stock Price / Net Income EPS BVPS Asset CAGR ROAA ROAE 3-Yr CAGR Margin LTM FY2015 LTM LTM LTM LTM LTM Ellington Financial LLC EFC $20.48 $ x 9.8x 8.3x 0.88x 20.8% 1.7% 8.5% 78.9% (9.3%) Heritage Financial Group, Inc. Nationstar Mortgage Holdings Inc. HBOS $25.89 $ x 27.3x 23.4x 1.61x 24.4% 0.5% 5.3% 25.5% 8.6% NSM $26.65 $2,424.7 NMF 10.9x 7.3x 2.07x 54.1% 1.8% 20.0% NMF 15.2% Ocwen Financial Corp. OCN $8.14 $1, x 6.1x 4.4x 0.71x 28.8% 6.1% 11.0% 33.6% 8.6% PennyMac Mortgage Investment Trust PMT $21.44 $1, x 8.7x 8.4x 1.01x NA 4.2% 12.8% 44.5% 47.7% PHH Corporation PHH $24.28 $1, x NA NMF 0.80x 1.4% (2.8%) (11.3%) 57.1% 8.4% Stonegate Mortgage Corporation Walter Investment Management Corp. SGM $10.02 $ x 12.5x 6.7x 0.95x NA (2.4%) (10.4%) NA (12.9%) WAC $16.67 $628.8 NMF 8.7x 8.4x 2.12x 58.7% (0.6%) (9.8%) NA (9.3%) Mean $1, x 12.5x 9.8x 1.15x 25.9% 1.3% 5.1% 47.9% 9.5% Median $1, x 10.3x 7.8x 0.95x 24.4% 1.7% 8.5% 44.5% 8.6% Note: Dollar amount in millions. Source: SNL Financial and Capital IQ. Current: 10.3x 6 Consumer Specialty Finance

10 Commercial Specialty Finance Sector

11 Commercial Specialty Finance M&A Trends Year-to-date aggregate M&A transaction volume and disclosed dollar volume are running significantly above those of the comparable period in Approximately 46% of the aggregate deals since 2002 have been completed at above 10.0 times LTM net income, and approximately 22% have been completed between 1.50 and 3.00 times LTM book value. Transactions less than $50 million were completed at an average of 5.6 times LTM net income, slightly lower than LTM net income multiples on deals above $50 million. Historical Transaction Volume Average: % YTD YTD Historical Transaction Dollar Volume ($ in millions) Average: $6,237 NMF $15,423 $16,000 $11,162 $12,000 $7,885 $9,126 $6,484 $7,802 $8,000 $5,702 $7,314 $4,159 $4,000 $1,551 $2,453 $1,780 $240 $229 $1,123 $ YTD 2015 YTD LTM Net Income Multiple Breakdown LTM Book Value Multiple Breakdown 6.5% 23.1% Greater than 10.0x 46.2% 5.0x to 10.0x 30.8% Less than 5.0x 71.7% 21.7% Greater than 3.00x 1.50x to 3.00x Less than 1.50x LTM Net Income Multiple by Transaction Size LTM Book Value Multiple by Transaction Size 15.0x 10.0x 5.0x 5.6x 8.1x 10.0x 1.50x 1.00x 0.50x 1.00x 1.40x 1.01x 0.0x <$50mm $50mm - $100mm >$100mm 0.00x <$50mm $50mm - $100mm >$100mm Source: SNL Financial and William Blair s market analysis. Note: Year-to-date as of February 28, Commercial Specialty Finance

12 Select M&A Transactions Announced Date Sub-Sector Buyer Name / Target Name Transaction Value Transaction Value / LTM Net Income LTM Book Value 03/09/15 Commercial Finance BankUnited/ CertusHolding's small business finance unit /03/15 Leasing Wood Creek Capital Management/ Milestone Equipment Holdings /03/15 Commercial Finance Triumph Capital Advisors/ Doral Money Inc. $ /24/15 Leasing Huntington Bancshares Incorporated/ Macquarie Equipment Finance, Inc. $ /20/15 Commercial Finance Wesleyan Assurance Society/ Syscap Holdings Limited /11/15 Commercial Finance Fortress Investment Group/ UniCredit Credit Management Bank $ /10/15 Commercial Finance Aquiline Holdings LLC/ Engs Commercial Finance Co /06/15 Leasing Beacon Credit Union/ Midwest Ag Finance, Inc /23/15 Commercial Finance Prosper Marketplace, Inc./ American HealthCare Lending, LLC $ /20/15 Commercial Finance UniCredit Bank Austria/ Transfinance /15/15 Commercial Finance Temasek Holdings Limited/ SVB India Finance Private Limited $ /09/15 Leasing General Finance Corporation/ Bristlecone Ventures, LLC $ /30/14 Commercial Finance AgTexas Farm Credit Services/ Great Plains Ag Credit /15/14 Leasing Fortress Investment Group LLC/ MicroFinancial Incorporated $ x 1.58x 11/26/14 Leasing General Finance Corporation/ YS Container Services Limited /31/14 Commercial Finance Blackrock Kelso Capital Corporation/ GB Credit Partners LLC $ /31/14 Leasing General Electric Capital Corporation/ VB Leasing CZ /14/14 Commercial Finance Meta Financial Group, Inc./ AFS/IBEX Financial Services, Inc /13/14 Leasing General Electric Capital Corporation/ Milestone Aviation Group Limited $1, /10/14 Leasing FIMBank/ First Factors $ /09/14 Commercial Finance Heritage Commerce Corp/ BVF/CSNK Acquisition Corp. $ x 0.14x 09/29/14 Commercial Real Estate Walker & Dunlop, Inc./ Johnson Capital Group, Inc /26/14 Leasing First Midwest Bancorp, Inc./ National Machine Tool Financial Corporation /04/14 Commercial Finance National Commerce Corporation/ CBI Holding Company, LLC /26/14 Commercial Finance Funding Circle Limited/ LeapPay, Inc /11/14 Leasing Signature Bancshares, Inc./ Lease Finance Group, Inc /05/14 Commercial Finance Cargills Bank Ltd./ Capital Alliance Finance PLC $ /04/14 Leasing Carolina Alliance Bank/ Dave McBride Leasing, LLC /11/14 Commercial Finance Pine Tree Equity Management, LP/ Celtic Capital Corporation /28/14 Commercial Real Estate Sutherland Asset Management Corp./ CIT Small Business Lending Corporation /10/14 Commercial Finance Minnwest Corporation/ HiLine Credit Corporation /05/14 Commercial Finance Ares Management, L.P./ Keltic Financial Services, LLC /02/14 Leasing Element Financial Corporation/ PHH Vehicle Management Services Group LLC $1, x 3.80x 06/02/14 Commercial Finance Omega Commercial Finance Corp./ AmericaVest CRE Mortgage Funding Trust, Inc. $ /15/14 Commercial Finance National Bancshares, Inc./ Doral Healthcare Finance /05/14 Commercial Finance United Community Banks, Inc./ Business Carolina Inc /22/14 Commercial Real Estate Wood Creek Capital Management, LLC/ Genesis Funding Limited /08/14 Commercial Real Estate Northwest Federal Credit Union/ Park Place Equity, LLC /28/14 Commercial Finance FBR & Co./ Securities Lending Business /14/14 Commercial Finance Tiger Global Management/ OnDeck $ Note: Dollar amount in millions. Source: SNL Financial and Capital IQ. Commercial Specialty Finance 8

13 Public Valuation Update Business Development Companies (BDCs) Indexed Price / LTM Earnings Ratios as of 2/28/ x 20.0x 15.0x Current: 11.4x 10.0x 5.0x Feb 2010 Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015 Public Company Valuations Stock Price / Net Income Stock Equity Price Market Debt / EPS BVPS Asset CAGR ROAA ROAE 3-Yr CAGR Margin Company Ticker 2/28/15 Cap. Equity LTM FY2015 LTM LTM LTM LTM LTM Dividend Yield Apollo Investment Corporation AINV $7.79 $1, x 11.8x 8.1x 0.89x 7.4% 5.3% 8.0% NA 36.7% 10.3% Ares Capital Corporation ARCC $17.30 $5, x 8.9x 10.8x 1.04x 32.6% 4.8% 11.6% 22.8% 59.8% 9.1% BlackRock Kelso Capital Corporation BKCC $8.78 $ x 5.2x 10.0x 0.88x 8.2% 4.1% 15.8% 21.3% NMF 9.6% Capitala Finance Corp. CPTA $18.81 $ x NA 9.8x 0.95x NA 4.1% 5.6% NA (6.9%) 10.0% CM Finance Inc. CMFN $13.73 $ x 8.1x NA 0.94x NA 4.8% 13.5% NA 79.7% 10.1% Fidus Investment Corporation FDUS $16.60 $ x 12.2x 10.0x 1.09x NA 4.9% 7.2% (1.7%) 38.2% 9.2% Fifth Street Finance Corp. FSC $7.08 $1, x 21.4x 8.0x 0.73x 45.0% 4.6% 3.5% 28.0% 16.1% 12.4% Full Circle Capital Corporation FULL $3.88 $ x NMF 5.9x 0.62x NA 5.5% 4.6% NA NMF 10.8% Garrison Capital Inc. GARS $15.03 $ x 8.3x 9.9x 0.96x NA 3.6% 12.2% (8.1%) 60.4% 9.3% Golub Capital BDC, Inc. GBDC $17.76 $ x 12.5x 13.6x 1.14x 28.7% 3.7% 9.4% 45.0% 58.9% 7.2% Harvest Capital Credit Corporation HCAP $12.55 $ x 8.3x 8.1x 0.87x NA 7.2% 8.0% NA 57.2% 10.8% Hercules Technology Growth Capital, Inc. HTGC $15.55 $ x 14.1x 11.7x 1.52x 20.6% 5.3% 10.9% 14.9% 49.6% 8.0% Horizon Technology Finance Corporation HRZN $14.13 $ x 8.8x 10.2x 0.98x NA 5.0% 5.5% (19.1%) 23.9% 9.8% KCAP Financial, Inc. KCAP $7.50 $ x 10.0x 7.8x 0.96x (0.4%) 5.9% 9.7% NMF 47.9% 13.3% Main Street Capital Corporation MAIN $30.95 $1, x 13.4x 13.6x 1.47x 53.9% 4.9% 11.6% 17.0% 71.6% 6.8% Medallion Financial Corp. TAXI $10.45 $ x 9.2x 9.8x 0.95x 2.6% 2.4% 10.5% 14.4% 69.9% 9.2% Medley Capital Corporation MCC $9.46 $ x 25.2x 7.0x 0.75x NA 5.7% 3.3% 11.7% 13.2% 12.7% Monroe Capital Corporation MRCC $14.91 $ x 10.3x 9.4x 1.07x NA 4.9% 10.1% NA 44.2% 9.1% OFS Capital Corporation OFS $12.13 $ x 11.8x 10.6x 0.87x NA 3.0% 5.5% 29.6% 37.5% 11.2% PennantPark Floating Rate Capital Ltd. PFLT $13.97 $ x 14.0x 11.1x 0.97x NA 3.9% 7.0% NA 48.1% 7.7% PennantPark Investment Corporation PNNT $9.51 $ x 13.8x 8.6x 0.86x 22.5% 4.8% 6.3% NA 31.2% 11.8% Prospect Capital Corporation PSEC $8.63 $3, x 9.0x 8.1x 0.82x 57.6% 5.5% 9.3% 25.2% 41.8% 11.6% Saratoga Investment Corp. SAR $15.76 $ x 7.0x 8.9x 0.71x 10.9% 4.1% 10.3% (5.9%) 47.2% 5.6% Solar Capital Ltd. SLRC $20.12 $ x 17.8x 12.5x 0.90x 13.8% 3.0% 5.0% (7.5%) 39.7% 8.0% Solar Senior Capital Ltd. SUNS $16.17 $ x 16.0x 11.7x 0.92x NA 3.2% 5.7% NA 52.9% 8.7% TCP Capital Corp. TCPC $16.60 $ x NMF 10.3x 1.07x 16.9% 5.3% 10.8% 33.3% 74.9% 9.3% THL Credit, Inc. TCRD $12.09 $ x 11.1x 8.8x 0.91x NA 5.2% 9.5% 26.5% 49.6% 11.2% TICC Capital Corp. TICC $7.29 $ x NA 6.9x 0.78x 35.8% 5.4% (0.6%) 6.9% (2.9%) 14.8% TPG Specialty Lending, Inc. TSLX $18.54 $1, x 11.0x 11.1x 1.18x NA 6.4% 12.1% NA 52.1% 8.4% Triangle Capital Corporation TCAP $23.67 $ x 24.8x 10.7x 1.42x 30.4% 5.8% 5.8% (20.7%) 27.1% 9.3% Mean $ x 12.5x 9.8x 0.97x 24.2% 4.7% 8.3% 12.3% 43.6% 9.8% Median $ x 11.4x 9.9x 0.94x 21.5% 4.9% 8.7% 14.9% 47.5% 9.5% Note: Dollar amount in millions. Source: SNL Financial and Capital IQ. 9 Commercial Specialty Finance

14 Commercial Finance Indexed Price / LTM Earnings Ratios as of 2/28/ x 30.0x 25.0x 20.0x 15.0x 10.0x Feb 2010 Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015 Public Company Valuations Company Ticker Stock Price 2/28/15 Equity Market Cap. Debt / Equity Stock Price / Net Income EPS BVPS Asset CAGR ROAA ROAE 3-Yr CAGR Margin LTM FY2015 LTM LTM LTM LTM LTM Current: 23.1x Dividend Yield CIT Group Inc. CIT $46.28 $8, x 8.1x 13.7x 0.99x (4.4%) 2.3% 12.0% NMF 44.5% 1.3% NewStar Financial, Inc. NEWS $9.98 $ x NMF NMF 0.73x 5.0% 0.4% 1.7% (9.2%) 16.6% NA PacWest Bancorp PACW $45.84 $4, x 23.6x 16.0x 2.64x 25.0% 1.5% 7.9% 49.3% 24.6% 4.4% SVB Financial Group SIVB $ $6, x 23.1x 21.2x 2.22x 25.1% 1.4% 13.4% 15.4% 19.3% NA Mean $4, x 18.3x 17.0x 1.64x 12.7% 1.4% 8.8% 18.5% 26.2% 2.8% Median $5, x 23.1x 16.0x 1.60x 15.0% 1.4% 10.0% 15.4% 21.9% 2.8% Commercial Real Estate Lending Indexed Price / LTM Earnings Ratios as of 2/28/ x 15.0x Current: 15.7x 10.0x 5.0x Feb 2010 Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015 Public Company Valuations Company Ticker Stock Price 2/28/15 Equity Market Cap. Debt / Equity Stock Price / Net Income EPS BVPS Asset CAGR ROAA ROAE 3-Yr CAGR Margin LTM FY2015 LTM LTM LTM LTM LTM Ladder Capital Corp LADR $18.40 $ x 21.3x 8.7x 1.38x NA 3.5% 8.9% 27.8% 21.2% NA Resource America, Inc. REXI $9.30 $ x NMF 18.4x 1.33x 50.5% 1.4% 5.7% NA 3.5% 2.6% Walker & Dunlop, Inc. WD $16.03 $ x 10.1x 8.8x 1.47x 52.6% 3.3% 12.3% 13.8% 14.4% NA Mean $ x 15.7x 12.0x 1.39x 51.5% 2.7% 9.0% 20.8% 13.1% 2.6% Dividend Yield Median $ x 15.7x 8.8x 1.38x 51.5% 3.3% 8.9% 20.8% 14.4% 2.6% Note: Dollar amount in millions. Source: SNL Financial and Capital IQ. Commercial Specialty Finance 10

15 Leasing Indexed Price / LTM Earnings Ratios as of 2/28/ x Current: 13.2x 16.0x 11.0x 6.0x Feb 2010 Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015 Public Company Valuations Company Ticker Stock Price 2/28/15 Equity Market Cap. Debt / Equity Stock Price / Net Income EPS BVPS Asset CAGR ROAA ROAE 3-Yr CAGR Margin LTM FY2015 LTM LTM LTM LTM LTM Dividend Yield AerCap Holdings N.V. AER $44.50 $9, x 9.8x 8.7x 2.75x 45.3% 4.4% 15.6% 67.6% 22.3% NA AeroCentury Corp. ACY $10.07 $ x NA 10.3x 0.45x 4.5% NMF 5.9% NA 8.4% NA Air Lease Corporation AL $38.24 $3, x 16.1x 12.9x 1.41x NA 3.8% 9.7% 68.8% 24.4% 0.4% Aircastle LTD AYR $23.07 $1, x 18.5x 11.5x 1.09x 6.9% 4.6% 6.0% 26.9% 12.5% 3.8% CAI International Inc. CAP $24.28 $ x 8.5x 8.3x 1.14x 36.9% 3.7% 14.1% 6.3% 26.5% NA Element Financial Corporation EFN $12.80 $3, x NMF 15.6x 2.11x NA 0.7% 2.5% NA 16.0% NA GATX Corp. GMT $62.25 $2, x 13.9x 11.8x 2.24x 5.9% 2.9% 15.1% 22.8% 14.1% 2.4% Marlin Business Services Corp. MRLN $18.71 $239.9 NA 12.6x 11.8x 1.34x 6.0% 2.6% 11.5% 46.3% 25.9% 2.7% Mobile Mini, Inc. MINI $41.49 $1, x NMF 11.6x 2.09x 3.7% 3.6% 5.2% 13.2% 10.0% 1.8% Ryder System, Inc. R $93.99 $4, x 22.7x 14.8x 3.67x 9.1% 3.9% 11.9% 8.8% 3.3% 1.6% TAL International Group, Inc. TAL $41.73 $1, x 11.3x 11.4x 2.31x 18.9% 4.6% 18.3% 4.2% 19.1% 6.9% Textainer Group Holdings Limited TGH $32.26 $1, x 9.7x 10.8x 1.57x 26.2% 4.1% 16.3% 7.8% 33.6% 5.8% Willis Lease Finance Corp. WLFC $21.34 $ x 24.0x 17.3x 0.81x 4.1% 3.4% 6.6% (1.8%) 8.0% NA Mean $2, x 14.7x 12.1x 1.77x 15.2% 3.5% 10.7% 24.6% 17.2% 3.2% Median $1, x 13.2x 11.6x 1.57x 6.9% 3.8% 11.5% 13.2% 16.0% 2.6% Note: Dollar amount in millions. Source: SNL Financial and Capital IQ. 11 Commercial Specialty Finance

16 Capital Markets Transactions

17 Capital Markets Transactions Recent Equity Offerings Initial Public Offerings Pricing Date Company Price Shares Amount Market Cap. at Pricing / LTM EPS LTM Book Value 02/13/15 Great Ajax Corp. $ $ x 12/16/14 On Deck Capital, Inc. $ $ /11/14 Avolon Holdings Limited $ $ x 1.05x 12/10/14 LendingClub Corporation $ $ /20/14 Neff Corporation $ $ x 1.11x 10/08/14 Eagle Point Credit Company Inc. $ $ /30/14 Synchrony Financial $ $2, /08/14 Alcentra Capital Corporation $ $ x 0.90x 04/09/14 Ally Financial Inc. $ $2, x 03/20/14 TPG Specialty Lending, Inc. $ $ x 1.03x 03/05/14 TriplePoint Venture Growth BDC Corp. $ $ /05/14 CM Finance Inc. $ $ x 1.47x 02/05/14 Ladder Capital Corp $ $ x 01/22/14 Santander Consumer USA Holdings Inc. $ $1, x 3.10x 01/15/14 American Capital Senior Floating, Ltd. $ $ /08/13 JGWPT Holdings Inc. $ $ /06/13 StoneCastle Financial Corp. $ $ /15/13 Springleaf Holdings, Inc. $ $ x 10/09/13 Stonegate Mortgage Corporation $ $ x 2.48x 10/03/13 Cherry Hill Mortgage Investment Corporation $ $ /24/13 Capitala Finance Corp. $ $ /11/13 Fifth Street Senior Floating Rate Corp. $ $ /08/13 PennyMac Financial Services, Inc. $ $ /02/13 Harvest Capital Credit Corporation $ $ /01/13 Ellington Residential Mortgage REIT $ $ x 03/26/13 Garrison Capital Inc. $ $ /21/13 Five Oaks Investment Corp. $ $ x 3.32x 02/14/13 Orchid Island Capital, Inc. $ $ /07/13 ZAIS Financial Corp. $ $ /04/12 WhiteHorse Finance, Inc. $ $ /07/12 OFS Capital Corporation $ $ x 11/07/12 Stellus Capital Investment Corporation $ $ /24/12 Monroe Capital Corporation $ $ Note: Dollar amount and shares amount are in millions and exclude overallotment. Source: SNL Financial and William Blair s market analysis. 12 Capital Markets Transactions

18 Recent Equity Offerings (cont d) Follow-On Offerings Pricing Date Company Price Shares Amount Market Cap. at Pricing / LTM EPS LTM Book Value 03/05/15 Apollo Commercial Real Estate Finance, Inc. $ $ x 0.92x 12/19/14 Ally Financial Inc. $ $1, x 0.74x 12/01/14 AerCap Holdings N.V. $ $ x 1.18x 11/21/14 New York Mortgage Trust, Inc. $ $ x 1.01x 11/21/14 TCP Capital Corp. $ $ x 1.03x 11/20/14 Walker & Dunlop, Inc. $ $ x 1.25x 11/12/14 Newtek Business Services Corp. $ $ x 1.55x 11/04/14 StoneCastle Financial Corp. $ $ x 10/27/14 Hannon Armstrong Sustainable Infrastructure Capital, Inc. $ $ x 10/23/14 New Mountain Finance Corporation $ $ x 1.08x 10/07/14 KCAP Financial, Inc. $ $ x 1.12x 09/30/14 Fidus Investment Corporation $ $ x 1.29x 09/18/14 Blackstone Mortgage Trust, Inc. $ $ x 1.05x 09/05/14 AerCap Holdings N.V. $ $ x 1.38x 09/05/14 PennantPark Investment Corporation $ $ x 1.14x 09/04/14 Arlington Asset Investment Corp. $ $ x 0.87x 09/04/14 NorthStar Realty Finance Corp. $ $ x 09/03/14 Ellington Financial LLC $ $ x 1.24x 09/02/14 Santander Consumer USA Holdings Inc. $ $ x 2.14x 08/20/14 Medley Capital Corporation $ $ x 1.14x 08/14/14 Fifth Street Senior Floating Rate Corp. $ $ x 08/12/14 Newcastle Investment Corp. $ $ x 1.95x 08/12/14 Triangle Capital Corporation $ $ x 1.95x 08/05/14 TPG Specialty Lending, Inc. $ $ x 1.13x 07/29/14 TCP Capital Corp. $ $ x 1.04x 07/17/14 Garrison Capital Inc. $ $ x 0.94x 07/16/14 Ares Capital Corporation $ $ x 1.07x 07/16/14 Colony Financial, Inc. $ $ x 0.85x 07/11/14 Fifth Street Finance Corp. $ $ x 1.09x 06/19/14 Five Oaks Investment Corp. $ $ x 05/13/14 NorthStar Realty Finance Corp. $ $ x 04/30/14 Apollo Commercial Real Estate Finance, Inc. $ $ x 0.88x 04/29/14 eplus Inc. $ $ x 1.51x 04/25/14 New Residential Investment Corp. $ $ x 1.00x 04/23/14 Hannon Armstrong Sustainable Infrastructure Capital, Inc. $ $ x 04/23/14 Medley Capital Corporation $ $ x 1.17x 04/09/14 New Mountain Finance Corporation $ $ x 1.05x 04/08/14 Main Street Capital Corporation $ $ x 1.75x 04/08/14 Starwood Property Trust, Inc. $ $ x 1.38x 04/03/14 Western Asset Mortgage Capital Corporation $ $ x 04/02/14 New York Mortgage Trust, Inc. $ $ x 1.19x 04/01/14 Blackstone Mortgage Trust, Inc. $ $ x 03/26/14 PennyMac Financial Services, Inc. $ $ x 0.55x 03/19/14 Orchid Island Capital, Inc. $ $ x 03/11/14 Oxford Lane Capital Corp. $ $ x 2.37x 02/27/14 Colony Financial, Inc. $ $ x 1.26x 02/20/14 Kayne Anderson MLP Investment Company $ $ x - 01/29/14 New Mountain Finance Corporation $ $ x 2.15x 01/16/14 Orchid Island Capital, Inc. $ $ /14/14 Full Circle Capital Corporation $ $ x Note: Dollar amount and shares amount are in millions and exclude overallotment. Source: SNL Financial and William Blair s market analysis. Capital Markets Transactions 13

19 Recent Debt Offerings Date Company Offering Description Amount Maturity Date 03/05/15 John Deere Capital Corporation 2.050% Series F medium-term unsecured notes, due Mar 10, 2020 $ /10/20 03/03/15 PACCAR Financial Corp % Series N medium-term notes, due Mar 9, 2018 $ /09/18 03/02/15 Discover Financial Services 3.750% Senior unsecured notes, due Mar 4, 2025 $ /04/25 02/24/15 Apollo Investment Corporation 5.250% Senior unsecured notes, due Mar 3, 2025 $ /03/25 02/17/15 Ryder System, Inc % Unsecured medium-term notes, due Mar 2, 2020 $ /02/20 02/03/15 GATX Corporation 3.250% Senior unsecured notes, due Mar 30, 2025 $ /30/25 02/03/15 Triangle Capital Corporation 6.375% Senior unsecured notes, due Mar 15, 2022 $ /15/22 01/26/15 Synchrony Financial 2.700% Senior unsecured notes, due Feb 3, 2020 $ /03/20 01/22/15 Harvest Capital Credit Corporation 7.000% Senior unsecured notes, due Jan 16, 2020 $ /16/20 01/20/15 National Rural Utilities Cooperative Finance Corporation 2.850% Collateral trust bonds, due Jan 27, 2025 $ /27/25 01/15/15 Freddie Mac 0.500% Reference Notes, due Jan 27, 2017 $4, /27/17 01/13/15 John Deere Capital Corporation 1.350% Series F medium-term notes, due Jan 16, 2018 $ /16/18 01/12/15 Aircastle Limited 5.500% Senior unsecured notes, due Feb 15, 2022 $ /15/22 01/07/15 Air Lease Corporation 3.750% Senior unsecured notes, due Feb 1, 2022 $ /01/22 01/07/15 General Motors Financial Company, Inc % Senior unsecured notes, due Jan 15, 2020 $1, /15/20 01/07/15 Resource Capital Corp % Convertible senior unsecured notes, due Jan 15, 2020 $ /15/20 01/06/15 Ford Motor Credit Company LLC 2.145% Senior unsecured notes, due Jan 9, 2018 $ /09/18 12/08/14 American Honda Finance Corporation 1.550% Series A unsecured medium-term notes, due Dec 11, 2017 $1, /11/17 12/08/14 General Electric Capital Corporation Floating rate series A senior unsecured global medium-term notes, due Dec 15, 2054 $ /15/54 12/02/14 American Express Company 3.625% Subordinated unsecured notes, due Dec 5, 2024 $ /05/24 11/25/14 FS Investment Corporation 4.250% Senior unsecured notes, due Jan 15, 2020 $ /15/20 11/25/14 Springleaf Finance Corporation 5.250% Senior unsecured notes, due Dec 15, 2019 $ /15/19 11/19/14 Caterpillar Financial Services Corporation 3.400% Series 84 senior notes, due Nov 25, 2017 $1, /25/17 11/18/14 Ares Capital Corporation 3.875% Senior unsecured notes, due Jan 15, 2020 $ /15/20 11/18/14 RWT Holdings, Inc % Senior convertible unsecured notes, due Nov 15, 2019 $ /15/19 11/12/14 PACCAR Financial Corp % Series N medium-term notes, due Nov 17, 2017 $ /17/17 11/03/14 Navient Corporation 5.875% Senior unsecured notes, due Oct 25, 2024 $ /25/24 10/31/14 Main Street Capital Corporation 4.500% Senior unsecured notes, due Dec 1, 2019 $ /01/19 10/28/14 Ford Motor Credit Company LLC 2.597% Senior unsecured notes, due Nov 4, 2019 $1, /04/19 10/23/14 Toyota Motor Credit Corporation Floating rate series B medium term notes, due Oct 29, 2015 $1, /29/15 10/02/14 Starwood Property Trust, Inc % Convertible senior unsecured notes, due Oct 15, 2017 $ /15/17 10/01/14 Freddie Mac 1.000% Reference Notes, due July 28, 2017 $ /28/17 09/25/14 National Rural Utilities Cooperative Finance Corporation Floating rate series C senior unsecured medium-term notes, due May 12, 2017 $ /12/17 09/24/14 AerCap Ireland Capial Limited 5.000% Senior unsecured notes, due Oct 1, 2021 $ /01/21 09/24/14 Ally Financial Inc % Senior unsecured notes, due Sept 30, 2024 $ /30/24 09/22/14 General Motors Financial Company, Inc % Senior unsecured notes, due Sept 25, 2021 $1, /25/21 09/16/14 PennantPark Investment Corporation 4.500% Senior unsecured notes, due Oct 1, 2019 $ /01/19 09/10/14 John Deere Capital Corporation 2.300% Series F senior medium term notes, due Sept 16, 2019 $ /16/19 09/09/14 Air Lease Corporation 4.250% Senior unsecured notes, due Sept 15, 2024 $ /15/24 09/04/14 American Honda Finance Corporation 2.250% Series A unsecured medium-term notes, due Aug 15, 2019 $1, /15/19 09/04/14 Fannie Mae 2.625% Benchmark notes, due Sept 6, 2024 $4, /06/24 Note: Dollar amount in millions and excludes overallotment. Source: SNL Financial and William Blair s market analysis. 14 Capital Markets Transactions

20 Recent Preferred Equity Offerings Date Company Amount Call Date Dividend Rate (%) 02/25/15 American Express Company $ /15/20 4.9% 12/04/14 Wells Fargo Real Estate Investment Corp. $ /11/19 6.4% 11/20/14 Oxford Lane Capital Corp. $ /30/17 8.1% 11/05/14 American Express Company $ /15/19 5.2% 11/05/14 Gladstone Investment Corporation $ /31/17 6.8% 10/13/14 Kayne Anderson MLP Investment Company $ /09/17 3.9% 09/04/14 Invesco Mortgage Capital Inc. $ /27/24 7.8% 06/17/14 Federal Agricultural Mortgage Corporation $ /18/24 6.0% 06/12/14 Colony Financial, Inc. $ /19/19 7.5% 06/03/14 Resource Capital Corp. $ /30/24 8.6% 05/29/14 Oxford Lane Capital Corp. $ /30/17 8.1% 05/21/14 Five Oaks Investment Corp. $ /23/18 8.8% 05/13/14 Gladstone Capital Corporation $ /30/17 6.8% 05/12/14 NorthStar Realty Finance Corp. $ /15/19 8.8% 05/05/14 American Capital Agency Corp. $ /08/19 7.8% 03/20/14 Federal Agricultural Mortgage Corporation $ /17/19 6.9% 02/26/14 Element Financial Corporation $ /30/19 6.5% 12/18/13 Five Oaks Investment Corp. $ /23/18 8.8% 12/10/13 Element Financial Corporation $ /31/18 6.6% 11/13/13 Oxford Lane Capital Corp. $ /30/16 7.5% 07/16/13 Farm Credit Bank of Texas $ /15/23 6.8% 06/13/13 Oxford Lane Capital Corp. $ /30/16 7.5% 05/29/13 General Electric Capital Corporation $1, /15/23 5.3% 05/28/13 New York Mortgage Trust, Inc. $ /04/18 7.8% 05/08/13 Capstead Mortgage Corporation $ /13/18 7.5% 05/06/13 Arbor Realty Trust, Inc. $ /09/18 7.8% 04/23/13 CYS Investments, Inc. $ /30/18 7.5% 04/15/13 CoBank, ACB $ /01/18 6.1% 04/11/13 Dynex Capital, Inc. $ /30/18 7.6% 04/08/13 MFA Financial, Inc. $ /15/18 7.5% 04/03/13 NorthStar Realty Finance Corp. $ /10/18 8.5% 03/12/13 istar Financial Inc. $ /15/18 4.5% 02/07/13 ARMOUR Residential REIT, Inc. $ /12/18 7.9% 01/29/13 Arbor Realty Trust, Inc. $ /01/18 8.3% 01/29/13 MuniMae TE Bond Subsidiary, LLC $ /30/28 5.0% 01/14/13 Federal Agricultural Mortgage Corporation $ /17/18 5.9% 01/10/13 KKR Financial Holdings LLC $ /15/18 7.4% 11/19/12 Oxford Lane Capital Corp. $ /31/14 8.5% 10/09/12 Discover Financial Services $ /01/17 6.5% 10/03/12 NorthStar Realty Finance Corp. $ /11/17 8.9% 09/25/12 Resource Capital Corp. $ /02/17 8.3% 09/20/12 AG Mortgage Investment Trust, Inc. $ /27/17 8.0% 09/13/12 Apollo Residential Mortgage, Inc. $ /20/17 8.0% 09/06/12 Annaly Capital Management, Inc. $ /13/17 7.5% 08/16/12 Hatteras Financial Corp. $ /27/17 7.6% 07/27/12 CYS Investments, Inc. $ /03/17 7.8% 07/27/12 AG Mortgage Investment Trust, Inc. $ /03/17 8.3% 07/25/12 Dynex Capital, Inc. $ /31/17 8.5% 07/25/12 Apollo Commercial Real Estate Finance, Inc. $ /01/17 8.6% 07/24/12 General Electric Capital Corporation $1, /15/22 6.3% 07/19/12 Invesco Mortgage Capital Inc. $ /26/17 7.8% 07/10/12 Colony Financial, Inc. $ /20/17 8.5% 07/09/12 NorthStar Realty Finance Corp. $ /07/12 8.3% Note: Dollar amount in millions and excludes overallotment. Source: SNL Financial and William Blair s market analysis. Capital Markets Transactions 15

21 Financial Services & Technology Analysts and Coverage Insurance Brokers and Property and Casualty Insurance Adam Klauber, CFA Allstate Corporation (The) (ALL) American International Group, Inc. (AIG) AmTrust Financial Services, Inc. (AFSI) Aon plc (AON) Argo Group International Holdings. Ltd. (AGII) Arthur J. Gallagher & Co. (AJG) Benefitfocus, Inc. (BNFT) Brown & Brown, Inc. (BRO) Chubb Corporation (The) (CB) CNA Financial Corporation (CNA) Connecture, Inc. (CNXR) Crawford & Company (CRD.A) Crawford & Company (CRD.B) ehealth, Inc. (EHTH) Erie Indemnity Company (ERIE) Federated National Holding Company (FNHC) HCC Insurance Holdings, Inc. (HCC) Kemper Corporation (KMPR) Markel Corporation (MKL) Marsh & McLennan Companies, Inc. (MMC) National General Holdings Corp. (NGHC) National Interstate Corporation (NATL) Navigators Group, Inc. (The) (NAVG) Patriot National, Inc. (PN) Progressive Corporation (The) (PGR) RLI Corp. (RLI) Travelers Companies, Inc. (The) (TRV) WebMD Health Corp. (WBMD) Willis Group Holdings Public Limited Company (WSH) Financial Technology and Specialty Finance Robert Napoli Alliance Data Systems Corporation (ADS) American Express Company (AXP) Bottomline Technologies, Inc. (EPAY) CAI International, Inc. (CAP) Capital One Financial Corporation (COF) Cardtronics, Inc. (CATM) Discover Financial Services (DFS) Encore Capital Group, Inc. (ECPG) EVERTEC, Inc. (EVTC) Financial Engines, Inc. (FNGN) Garrison Capital Inc. (GARS) Green Dot Corporation (GDOT) Harvest Capital Credit Corporation (HCAP) Independence Realty Trust, Inc. (IRT) Marlin Business Services Corp. (MRLN) MasterCard Incorporated (MA) MoneyGram International, Inc. (MGI) Monroe Capital Corporation (MRCC) Performant Financial Corporation (PFMT) PRA Group (PRAA) QIWI plc (QIWI) Visa Inc. (V) WageWorks, Inc. (WAGE) Western Union Company (The) (WU) WEX Inc. (WEX) Asset Management and Financial Technology Chris Shutler, CFA Affiliated Managers Group, Inc. (AMG) Artisan Partners Asset Management Inc. (APAM) Charles Schwab Corporation (The) (SCHW) Eaton Vance Corp. (EV) Envestnet, Inc. (ENV) Euronet Worldwide, Inc. (EEFT) Fiserv, Inc. (FISV) Global Payments, Inc. (GPN) Heartland Payment Systems, Inc. (HPY) Invesco Ltd. (IVZ) LPL Financial Holdings Inc. (LPLA) MSCI Inc. (MSCI) SEI Investments Company (SEIC) SS&C Technologies Holdings, Inc. (SSNC) T. Rowe Price Group, Inc. (TROW) TD Ameritrade Holding Corporation (AMTD) Vantiv, Inc. (VNTV) Waddell & Reed Financial, Inc. (WDR) WisdomTree Investments, Inc. (WETF) 16 Financial Services & Technology Analysts and Coverage

22 Investment Banking Team Biographies William Blair & Company Financial Services Investment Banking Robert Metzger, Managing Director and Head of Financial Services Investment Banking, joined William Blair in While at William Blair and in his prior position at ABN AMRO, he focused on the corporate finance needs of insurance, financial technology, and specialty finance companies. Mr. Metzger graduated in 1989 with highest honors from the University of Illinois, receiving a B.S. in accountancy. In 1995, he graduated with distinction from Northwestern University s J.L. Kellogg Graduate School of Management, receiving an M.B.A. in finance and strategy. He is a Certified Public Accountant. [email protected] J.P. Young, Managing Director, is a member of the financial services industry group, where he focuses on the corporate finance needs of banks, broker-dealers, and specialty finance companies. Mr. Young joined William Blair s investment banking group in 2009 from Macquarie Capital and began his investment banking career in 2000 at Piper Jaffray. He has extensive experience providing M&A advisory services and raising public and private-equity capital for clients. Mr. Young received a B.S. from Lehigh University and an M.S. from the University of Chicago. [email protected] Kegan Greene, Vice President, joined William Blair in Before joining William Blair, Mr. Greene worked at Babcock & Brown, Goldman Sachs, and Deloitte s transaction services department. He holds an M.B.A. in finance and entrepreneurship from the University of Chicago, a J.D. from DePaul University, and a B.A. in English from DePauw University. [email protected] Investment Banking Team Biographies 17

23 INNOVATION COMPLIANCE INTEGRITY William Blair Select William Blair Transactions $27,500, ,000,000 $70,000,000 $100,000,000 $29,000,000 $76,475,000 has been acquired by Direct Unsecured Notes Arrow Global Senior Notes Senior Unsecured Notes Follow-on Offering Follow-on Offering $1,285,000,000 Not Disclosed $60,000,000 $151,800,000 $161,000,000 $66,815,000 has been acquired by has been acquired by Portfolio Recovery Associates Milestone Partners Debt Placement Follow-on Offering Convertible Bond Offering Follow-on Offering Not Disclosed $100,000,000 Not Disclosed $50,000,000 Not Disclosed $34,000,000 NORTH STATE ACCEPTANCE has been recapitalized by has acquired has acquired Pine Tree Equity Management Senior Credit Facility Debt Placement Persian Acceptance Corporation Follow-on Offering Initial Public Offering $287,500,000 $75,000,000 $18,750,000 $438,600,000 $51,000, ,000,000 has been acquired by has been acquired by Convertible Senior, Unsecured Notes Follow-on Offering Junior Unsecured Notes Initial Public Offering $42,000,000 $78,000,000 $92,000,010 $97,980,000 $35,000,000 $75,000,000 Baby Bond Offering Follow-on Offering Initial Public Offering Follow-on Offering Senior Subordinated Notes Preferred Equity Initial Public Offering $125,000,000 $230,000,000 $74,000,000 Not Disclosed $30,000,000 $102,212,920 Senior Secured Credit Facility Convertible Offering Senior Credit Facility & Subordinated Notes has been acquired by Manheim Second Lien Loan Initial Public Offering $75,469, ,893,000 $228,433,000 $15,000,000 28,000,000 $271,860,000 Follow-on Offering Follow-on Offering Follow-on Offering CFSI COLLINS FINANCIAL SERVICES, INC. Second Lien Term Loan has sold a minority stake to Investcorp Follow-on Offering 18 Select William Blair Transactions

24 Notes Notes 19

25 Disclosures William Blair is a trade name for William Blair & Company, L.L.C. and William Blair International, Limited. William Blair & Company, L.L.C., is a Delaware company and is regulated by the Securities and Exchange Commission, The Financial Industry Regulatory Authority, and other principal exchanges. William Blair International Limited is authorised and regulated by the Financial Conduct Authority ("FCA") in the United Kingdom. William Blair & Company only offers products and services where it is permitted to do so. Some of these products and services are only offered to persons or institutions situated within the United States and are not offered to persons or institutions outside of the United States. This material has been approved for distribution in the United Kingdom by William Blair International Limited, Regulated by the Financial Conduct Authority (FCA), and is directed only at, and is only made available to, persons falling within COB 3.5 and 3.6 of the FCA Handbook (being Eligible Counterparties and Professional Clients). This Document is not to be distributed or passed on to any Retail Clients. No persons other than persons to whom this document is directed should rely on it or its contents or use it as the basis to make an investment decision. William Blair & Company 222 West Adams Street Chicago, Illinois williamblair.com 20 Disclosures March 18, 2014

26 About William Blair Investment Banking William Blair s investment banking group combines significant transaction experience, rich industry knowledge, and deep relationships to deliver successful advisory and financing solutions to our global base of corporate clients. We serve both publicly traded and privately held companies, executing mergers and acquisitions, growth financing, financial restructuring, and general advisory projects. This comprehensive suite of services allows us to be a long-term partner to our clients as they grow and evolve. From , the investment banking group completed more than 330 merger-andacquisition transactions worth $73 billion in value, involving parties in 36 countries and five continents, was an underwriter on more than 20% of all U.S. initial public offerings, and raised nearly $100 billion in public and private financing.