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Federal Home Loan Bank of Seattle Announces 2014 Unaudited Preliminary Financial Highlights

SEATTLE–(BUSINESS WIRE)–

Today, the Federal Home Loan Bank of Seattle (Seattle Bank) announced preliminary financial highlights for the year ended December 31, 2014, reporting $60.2 million of net income, compared to $61.4 million in 2013, and an increase in its retained earnings balance to $346.4 million as of December 31, 2014, from $287.1 million as of December 31, 2013.

Based on the bank’s fourth quarter 2014 financial results, the Seattle Bank’s Board of Directors declared a $0.025 per share cash dividend, to be paid on February 23, 2015. Dividends will be paid based on average Class A and Class B stock outstanding during fourth quarter 2014. In addition, the bank announced that it will repurchase up to $100 million of excess capital stock during first quarter 2015. The Seattle Bank repurchased $396.9 million of excess capital stock during the year ended December 31, 2014.

Based on its 2014 net income, the bank will contribute $6.9 million to its Affordable Housing Program (AHP) for awards in 2015.

“Our 2014 results build on our significant progress in returning the Seattle Bank to financial health. We are pleased to have strengthened our capital position, continued to repurchase and pay dividends on our stock, and as a result of our 2014 earnings, contributed nearly $7 million to our Affordable Housing Program,” said Seattle Bank President and CEO Michael L. Wilson. “Although we have grown our advances with certain segments of our membership, changes in our industry and membership continue to constrain our ability to prosper as a stand-alone Federal Home Loan Bank without relying on investments as a source of income. Our proposed merger with the Federal Home Loan Bank of Des Moines offers an opportunity to create a Federal Home Loan Bank cooperative with a more diverse membership and greater economies of scale—and well-positioned to meet member needs now and for years to come.”

Key features of the Seattle Bank’s operating results for the year ended December 31, 2014, included:

Higher net interest income. Net interest income after provision (benefit) for credit losses for the year ended December 31, 2014, increased to $146.3 million from $138.5 million for 2013, primarily due to increased interest income on investments and lower cost of funding, partially offset by lower interest income on mortgage loans held for portfolio and advances. The changes in interest income on investments and advances were primarily yield driven. In addition, lower prepayment fees on advances contributed to a decrease in interest income. The change in interest income on mortgage loans held for portfolio was primarily driven by the continued decline in the average balances outstanding during the year ended December 31, 2014, as the remaining mortgage loans in the portfolio continued to pay down. Lower non-interest income (loss). Non-interest income decreased by $8.7 million for the year ended December 31, 2014, compared to the previous year. Non-interest income (loss) was negatively impacted by higher credit-related losses on other-than-temporarily impaired private-label mortgage-backed securities and lower gains on early debt extinguishments during the year ended December 31, 2014, compared to the previous year. Higher other non-interest expense. The Seattle Bank’s other non-interest expense increased by $374,000 for the year ended December 31, 2014, compared to 2013, primarily due to an increase in operating expenses from $5.7 million of merger-related costs for the year ended December 31, 2014, partially offset by a decrease in other expenses, including the impact of a one-time $4.0 million write-off of software in 2013 without similar activity in 2014.

Other Financial Information

Total assets decreased to $35.1 billion as of December 31, 2014, from $35.9 billion as of December 31, 2013, primarily due to a decrease in advances and mortgage loans outstanding. Advances outstanding decreased to $10.3 billion as of December 31, 2014, from $10.9 billion as of December 31, 2013, primarily due to the maturity of advances with Bank of America, N.A., in the first quarter of 2014, partially offset by an increase in advances with various members during the remainder of 2014. Mandatorily redeemable capital stock decreased by $293.2 million as of December 31, 2014, compared to December 31, 2013, primarily due to the Seattle Bank’s quarterly repurchases of excess capital stock during 2014, partially offset by a redemption request resulting from a merger between two member banks. Accumulated other comprehensive income (loss) improved to a gain of $1.6 million as of December 31, 2014, from a loss of $71.8 million as of December 31, 2013, primarily due to improvements in the market values of the bank’s available-for-sale securities including those previously determined to be other-than-temporarily-impaired. Total capital increased to $1.2 billion as of December 31, 2014, from $1.1 billion as of December 31, 2013. The Seattle Bank paid cash dividends (including interest on mandatorily redeemable capital stock) totaling $2.6 million during the year ended December 31, 2014. During the six months ended December 31, 2013, the Seattle Bank paid cash dividends of $1.4 million. No cash dividends were paid during the first half of 2013.

Unaudited Selected Financial Data ($ in thousands)

Selected Statements of Condition Data As of December 31, 2014 As of December 31, 2013 Advances $ 10,313,691 $ 10,935,294 Investments (1) 24,046,403 22,545,976 Mortgage loans held for portfolio, net 647,179 797,620 Total assets 35,129,197 35,870,314 Consolidated obligations 31,790,607 32,402,896 Mandatorily redeemable capital stock 1,454,473 1,747,690 Total capital stock 858,083 922,977 Retained earnings 346,375 287,090 Accumulated other comprehensive income (loss) 1,552 (71,768 ) Total capital (2) 1,206,010 1,138,299 For the Years Ended December 31, Selected Statements of Income Data 2014 2013 Net interest income $ 146,860 $ 137,334 Provision (benefit) for credit losses 584 (1,149 ) Net interest income after provision (benefit) for credit losses 146,276 138,483 Non-interest income (loss): Other-than-temporary impairment credit loss (4,840 ) (1,837 ) Derivatives and hedging activities 4,211 4,774 Other non-interest income (3) 1,707 6,867 Other non-interest expense 80,288 79,914 Total assessments 6,877 6,927 Net income $ 60,189 $ 61,446 Selected Performance Measures As of December 31, 2014 As of December 31, 2013 Regulatory capital (4) $ 2,658,931 $ 2,957,757 Risk-based capital surplus (5) $ 1,375,172 $ 1,483,070 Regulatory capital-to-assets ratio 7.57 % 8.25 % Leverage capital-to-assets ratio 11.24 % 12.21 % Market value of equity (MVE) to par value of capital stock (PVCS) ratio 114.29 % 107.67 % Return on PVCS vs. one-month London Interbank Offered Rate (LIBOR): Return on PVCS (6) 2.38 % 2.26 % Average annual one-month LIBOR 0.16 % 0.19 % Core mission activity (CMA) assets to consolidated obligations (7) 40.90 % 41.51 % (1) Consists of securities purchased under agreements to resell, federal funds sold, available-for-sale securities, and held-to-maturity securities. (2) Excludes mandatorily redeemable capital stock, which totaled $1.5 billion and $1.7 billion as of December 31, 2014 and 2013. (3) Depending upon activity within the period, may include the following: gain (loss) on sale of available-for-sale or held-to-maturity securities, gain (loss) on financial instruments held under fair value option, gain (loss) on early extinguishments of consolidated obligations, service fees, and other non-interest income. (4) Includes total capital stock, retained earnings, and mandatorily redeemable capital stock. (5) Defined as the excess of the bank’s permanent capital (which consists of Class B capital stock, including Class B capital stock classified as mandatorily redeemable, and retained earnings) over its risk-based capital requirement. (6) Return on PVCS is computed as net income divided by average PVCS, for the year. (7) Defined as advances, acquired member assets (such as mortgage loans), and certain housing finance agency obligations as a percentage of consolidated obligations.

The Seattle Bank expects to file its 2014 annual report on Form 10-K with the Securities and Exchange Commission (SEC) on or around March 16, 2015.

Proposed Merger with the Des Moines Bank

On September 25, 2014, the Seattle Bank and the Federal Home Loan Bank of Des Moines (Des Moines Bank) entered into a definitive agreement to merge the two banks (the Merger Agreement). Further, by letter dated December 19, 2014, the banks received approval of their merger application submitted to the Federal Housing Finance Agency (FHFA). Following receipt of the FHFA’s approval, on January 12, 2015, the banks distributed the Joint Merger Disclosure Statement and voting materials to their members seeking ratification of the Merger Agreement by the members of both banks through a voting process that is expected to be completed by February 23, 2015. Material details of the Merger Agreement and the Joint Merger Disclosure Statement are included in the banks’ related Form 8-K filings with the SEC and should be reviewed in connection with consideration of the proposed merger. If a majority of the votes cast by members of each of the banks are cast for ratification of the Merger Agreement and all other conditions set out in the Merger Agreement are satisfied, the merger is expected to become effective on May 31, 2015.

The proposed merger between the Seattle Bank and the Des Moines Bank will not impact the Seattle Bank’s 2015 offering of AHP. In the event that the proposed merger is finalized during 2015, the Seattle Bank’s allocation of AHP funding and the program’s requirements will continue to be governed by the Seattle Bank’s 2015 AHP Implementation Plan.

Consent Arrangement

The Seattle Bank continues to address the requirements of the Consent Order issued by the FHFA, effective November 22, 2013 (collectively, with related understandings with the FHFA, the Amended Consent Arrangement), which superseded the previous Consent Order and related understandings put in place in October 2010 (2010 Consent Arrangement). In addition to continued compliance with the terms of the plans and policies adopted and implemented to address the 2010 Consent Arrangement, the Amended Consent Arrangement requires Board of Directors’ monitoring for compliance with the terms of such plans and policies, development and implementation of a plan acceptable to the FHFA to increase advances and other CMA assets as a percentage of the bank’s consolidated obligations, and securing non-objection from the FHFA prior to repurchasing or redeeming any excess capital stock or paying dividends on the bank’s capital stock. With FHFA non-objection, the Seattle Bank has repurchased up to $25 million of excess capital stock on a quarterly basis since the third quarter of 2012 and paid modest quarterly dividends to its shareholders based on the bank’s quarterly net income since July 2013. In addition to the four quarterly repurchases of up to $25 million of excess capital stock, with FHFA non-objection, during 2014, the Seattle Bank redeemed an additional $299.6 million of excess capital stock on which the redemption waiting periods had been satisfied and repurchased $2.3 million of excess Class B stock that had been purchased by members on or after October 27, 2010, for activity purposes. The FHFA reviews the bank’s requests to repurchase and pay dividends on its capital stock on a quarterly basis.

About the Seattle Bank

The Seattle Bank is a financial cooperative that provides liquidity, funding, and services to enhance the success of its members and support the availability of affordable homes and economic development in the communities they serve. The Seattle Bank’s funding and financial services enable our member institutions to provide their customers with greater access to mortgages, commercial loans, and funding for affordable housing and economic development.

The Seattle Bank is one of 12 Federal Home Loan Banks in the United States. The Seattle Bank serves Alaska, Hawaii, Idaho, Montana, Oregon, Utah, Washington, and Wyoming, the U.S. territories of American Samoa and Guam, and the Commonwealth of the Northern Mariana Islands. Members include commercial banks, credit unions, thrifts, industrial loan corporations, insurance companies, and non-depository community development financial institutions.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including preliminary highlights of financial statements and information as of and for the year ended December 31, 2014, and on which the Seattle Bank’s external auditor has not completed its audit, and information regarding a proposed merger with the Des Moines Bank. Forward-looking statements are subject to known and unknown risks and uncertainties. Actual financial performance and condition for the year ended December 31, 2014, and other actions or transactions, including those relating to the ability of the Seattle Bank and the Des Moines Bank to obtain member approvals relating to the proposed merger, the completion of the proposed merger, the Amended Consent Arrangement, and payments of dividends and repurchases of capital stock, may differ materially from those expected or implied in forward-looking statements because of many factors. Such factors may include, but are not limited to, finalization of the financial statements, regulatory and legislative actions and approvals (including those of the FHFA relating to the stock repurchases and dividends and acceptance of final merger documentation), changes in general economic and market conditions (including effects on, among other things, U.S. debt obligations and mortgage-related securities), demand for advances, changes in the bank’s membership profile or the withdrawal of one or more large members, shifts in demand for the bank’s products and consolidated obligations, business and capital plan and policy adjustments and amendments, competitive pressure from other Federal Home Loan Banks and alternative funding sources, the Seattle Bank’s ability to meet adequate capital levels, accounting adjustments or requirements (including changes in assumptions and estimates used in the bank’s financial models), interest-rate volatility, changes in projected business volumes, the bank’s ability to appropriately manage its cost of funds, changes in the bank’s management and Board of Directors, and hedging and asset-liability management activities. Additional factors are discussed in the Seattle Bank’s most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q, and other filings made with the SEC. The Seattle Bank does not undertake to update any forward-looking statements made in this announcement.

Members of the Seattle Bank have been provided the Joint Merger Disclosure Statement in connection with the merger. Members are urged to read the disclosures therein.

FinanceInvestment & Company Informationcapital stockinterest incomeSeattleFederal Home Loan Bank Contact:

Federal Home Loan Bank of Seattle

Connie Waks, 206-340-2305

cwaks@fhlbsea.com […]

Teranga Gold Announces Record Free Cash Flow for 2014

TORONTO, ONTARIO–(Marketwired – Feb 18, 2015) – Teranga Gold Corporation (“Teranga” or the “Company”) (TGZ.TO)(TGZ.AX) is pleased to report its financial results for the fourth quarter and full year ended December 31, 2014. All financial information is in US dollars unless otherwise noted.

“During 2014 we made significant progress in executing against our key objectives, namely to maximize free cash flow and profitability, to strengthen our balance sheet and to grow organically,” stated Richard Young, President and Chief Executive Officer of Teranga. “With the significant improvement in our costs and efficiencies, we generated free cash flow of $189 per ounce, which is in line with the top senior gold companies.”

“Just as importantly, our balance sheet strengthened significantly over the last 12 months,” stated Navin Dyal, Vice President and Chief Financial Officer of Teranga. “As of today we are now debt-free, a stand-out achievement in our sector particularly given the declining gold price environment.”

Added Mr. Young, “Last year was a successful one for Teranga and 2015 is starting off on an equally positive note. Roadwork has begun on our new high-grade Gora deposit and we are focused on having this new mine up and running by the fourth quarter. With 6.1 million ounces of measured and indicated gold resources, together with the growth opportunities we see from our large mine license and regional land package, we believe we are just scratching the surface of our potential.”

Key Highlights

Three months ended December 31 Year ended December 31 2014 2013 Change 2014 2013 Change Revenue 76,553 58,302 31 % 260,588 297,927 (13 %) Profit (loss) attributable to shareholders of Teranga 27,693 (2,420 ) n/a 17,776 50,280 (65 %) Per share 0.08 (0.01 ) n/a 0.05 0.19 (72 %) Operating cash flow 30,677 13,137 134 % 49,009 74,307 (34 %) Free cash flow1 26,572 20,412 30 % 39,096 16,251 141 % Gold production (ounces)2 71,278 52,368 36 % 211,823 207,204 2 % Total cash costs per ounce sold3 598 711 (16 %) 710 641 11 % All-in sustaining costs per ounce sold3 711 850 (16 %) 865 1,033 (16 %)

For a full explanation of Financial, Operating, Exploration and Development results please see the Audited Consolidated Financial Statements and Management’s Discussion & Analysis for 2014 at www.terangagold.com.

Consolidated profit attributable to shareholders increased to $27.7 million ($0.08 per share) for the fourth quarter, while full year profit attributable to shareholders totaled $17.8 million ($0.05 per share) Free cash flow increased to $26.6 million for the fourth quarter and $39.1 million for the full year The Company is now debt free having retired the outstanding balance of its loan facility on December 31, 2014 and fully repaid the outstanding balance of its finance facility subsequent to year-end Construction began on the high-grade Gora satellite deposit on February 14th – production expected in the fourth quarter The Company expects to generate positive free cash flow in 2015 based on 2015 production in the range of 200,000 to 230,000 ounces(2) at total cash costs of $650 to $700 per ounce3 and all-in sustaining costs (including all new project development costs) of $900 to $975 per ounce3

1Free cash flow is defined as operating cash flow (excluding one-time transaction costs related to the acquisition of the OJVG) less capital expenditures.

2This production guidance is based on existing proven and probable reserves only from both the Sabodala mining licence and OJVG mining license as disclosed in Table 2 on page 8 of this Report. The estimated ore reserves underpinning this production guidance have been prepared by a competent person in accordance with the requirements of the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Please refer to the Competent Persons Statement on pages 22-23 of this Report.

3Total cash costs per ounce and all-in sustaining costs per ounce of gold sold are non-IFRS measures which do not have standard meanings under IFRS. Please refer to Non-IFRS Performance Measures at the end of this Report.

Review of Financial Results

(US$000’s, except where indicated) Three months ended December 31 Year ended December 31 Financial Data 2014 2013 2014 2013 2012 Revenue 76,553 58,302 260,588 297,927 350,520 Profit (loss) attributable to shareholders of Teranga1 27,693 (2,420 ) 17,776 50,280 93,655 Per share1 0.08 (0.01 ) 0.05 0.19 0.38 Operating cash flow 30,677 13,137 49,009 74,307 104,982 Capital expenditures 4,105 3,725 18,913 69,056 115,785 Free cash flow2 26,572 20,412 39,096 16,251 (10,803 ) Cash and cash equivalents (including bullion receivables and restricted cash) 35,810 42,301 44,974 Net cash (debt)3 31,864 (32,068 ) (75,182 ) Total assets1 726,323 628,643 565,715 Total non-current liabilities 128,112 29,241 68,505 Note: Results include the consolidation of 100% of the OJVG’s operating results, cash flows and net assets from January 15, 2014. 1 The Company has reassessed the accounting for deferred stripping assets to include amortization of equipment directly related to deferred stripping activity. The impact of this adjustment has been applied retrospectively from January 1, 2012. 2 Free cash flow is defined as operating cash flow (excluding one-time transaction costs related to the acquisition of the OJVG) less capital expenditures. 3 Net cash (debt) is defined as total borrowings and financial derivative liabilities less cash and cash equivalents, bullion receivables and restricted cash.

Review of Operating Results

Three months ended December 31 Year ended December 31 Operating Results 2014 2013 2014 2013 Ore mined (‘000t ) 2,666 1,993 6,174 4,540 Waste mined – operating (‘000t ) 5,594 6,655 21,178 15,172 Waste mined – capitalized (‘000t ) 490 420 1,969 15,066 Total mined (‘000t ) 8,750 9,068 29,321 34,778 Grade mined (g/t ) 1.47 1.61 1.54 1.62 Ounces mined (oz ) 126,334 103,340 305,192 236,718 Strip ratio waste/ore 2.3 3.6 3.7 6.7 Ore milled (‘000t ) 1,009 860 3,622 3,152 Head grade (g/t ) 2.44 2.11 2.03 2.24 Recovery rate % 90.1 89.7 89.7 91.4 Gold produced1 (oz ) 71,278 52,368 211,823 207,204 Gold sold (oz ) 63,711 46,561 206,336 208,406 Average realized price $/oz 1,199 1,249 1,259 1,246 Total cash cost (incl. royalties)2 $/oz sold 598 711 710 641 All-in sustaining costs2 $/oz sold 711 850 865 1,033 Mining ($/t mined ) 2.58 2.65 2.83 2.59 Milling ($/t milled ) 13.91 17.96 17.15 20.15 G&A ($/t milled ) 4.27 4.84 4.61 5.38 1 Gold produced represents change in gold in circuit inventory plus gold recovered during the period. 2 Total cash costs per ounce and all-in sustaining costs per ounce are prior to non-cash inventory write-downs to net realizable value and are non-IFRS financial measures that do not have a standard meaning under IFRS. Please refer to Non-IFRS Performance Measures at the end of this report. Three months ended December 31, 2014 Masato Sabodala Total Ore mined (‘000t) 1,788 878 2,666 Waste mined – operating (‘000t) 3,789 1,805 5,594 Waste mined – capitalized (‘000t) 490 – 490 Total mined (‘000t) 6,067 2,683 8,750 Grade mined (g/t) 1.28 1.86 1.47 Ounces mined (oz) 73,875 52,459 126,334 Year ended December 31, 2014 Masato Sabodala Total Ore mined (‘000t) 2,003 4,171 6,174 Waste mined – operating (‘000t) 4,392 16,786 21,178 Waste mined – capitalized (‘000t) 490 1,479 1,969 Total mined (‘000t) 6,885 22,436 29,321 Grade mined (g/t) 1.27 1.66 1.54 Ounces mined (oz) 82,017 223,175 305,192

Review of Cost of Sales

(US$000’s) Three months ended December 31 Year ended December 31 Cost of Sales 2014 2013 2014 2013 Mine production costs – gross 41,123 43,555 162,410 170,752 Capitalized deferred stripping (1,266 ) (1,444 ) (5,976 ) (43,264 ) Capitalized deferred stripping – non-cash1 189 137 (658 ) (4,124 ) 40,046 42,248 155,776 123,364 Depreciation and amortization – deferred stripping assets1 7,205 12,639 28,911 17,850 Depreciation and amortization – property, plant & equipment and mine development expenditures 11,988 15,263 40,605 60,683 Royalties 3,843 2,890 12,486 14,755 Advanced royalty payment 391 – 440 – Rehabilitation – – – 6 Inventory movements (5,802 ) (11,945 ) (22,145 ) (8,552 ) Inventory movements – non-cash1 (3,907 ) (12,569 ) (8,089 ) (14,672 ) (9,709 ) (24,514 ) (30,234 ) (23,224 ) Total cost of sales before adjustments to net realizable value 53,764 48,526 207,984 193,434 Adjustments to net realizable value1 (10,865 ) – – – Adjustments to net realizable value – depreciation1 (5,161 ) – – – (16,026 ) – – – Total cost of sales 37,738 48,526 207,984 193,434 1 The Company has reassessed the accounting for deferred stripping assets to include amortization of equipment directly related to deferred stripping activity. The impact of this adjustment has been applied retrospectively from January 1, 2012.

DECEMBER QUARTER FINANCIAL HIGHLIGHTS

Gold revenue for the three months ended December 31, 2014 was $76.6 million compared to gold revenue of $58.3 million for the same prior year period. The increase in gold revenue was due to 37 percent higher gold sales volume, partially offset by 4 percent lower realized gold prices during the fourth quarter of 2014. During the fourth quarter of 2014, 63,711 ounces were sold at an average realized gold price of $1,199 per ounce. During the fourth quarter of 2013, 46,561 ounces were sold at an average realized price of $1,249 per ounce. Consolidated profit for the three months ended December 31, 2014 was $27.7 million ($0.08 per share), compared to a loss of $2.4 million ($0.01 loss per share) in the same prior year period. The increases in profit and earnings per share over the prior year quarter were primarily due to higher revenues in the current year quarter, and a reversal of non-cash inventory write-down to net realizable value (“NRV”) totaling $16.0 million recorded in the second and third quarters of 2014. During the three months ended December 31, 2014, the Company recorded a $16.0 million reversal of the non-cash write-down on long-term low-grade ore stockpile inventory that had been previously recorded during the second and third quarters of 2014. The non-cash write down was adjusted for the impact of a change in the accounting for deferred stripping costs made during the fourth quarter. Higher ore grades and ounces mined during the fourth quarter resulted in a decrease in the per ounce ending cost of low-grade ore stockpiles (including applicable overhead, depreciation and amortization). Operating cash flow for the three months ended December 31, 2014 provided cash of $30.7 million compared to $13.1 million cash provided in the prior year. The increase in cash flow provided by operations compared to the prior year quarter was primarily due to higher gold sales. Capital expenditures of $4.1 million for the three months ended December 31, 2014 were similar to capital expenditures recorded in the same prior year period.

DECEMBER QUARTER OPERATIONAL HIGHLIGHTS

Gold production during the fourth quarter of 2014 of 71,278 ounces increased by 47 percent and 36 percent versus the third quarter of 2014 and the fourth quarter of 2013, respectively. Production was higher in the last three months of 2014 due to higher processed grade and improved mill throughput. Production was slightly lower than fourth quarter guidance primarily due to marginally lower recovery rates than planned. Total cash costs for the three months ended December 31, 2014 totalled $598 per ounce sold, 16 percent lower than the same prior year period. Lower total cash costs per ounce in the current year, excluding the reversal of non-cash inventory write-downs to NRV, were mainly due to lower mining and processing costs and higher gold production in the current year quarter. All-in sustaining costs for the three months ended December 31, 2014 were $711 per ounce sold compared to $850 per ounce sold in the same prior year period. All-in sustaining costs for the current year, excluding the reversal of non-cash inventory write-downs to NRV, were lower due to a decline in total cash costs and lower capital expenditures. Total tonnes mined for the three months ended December 31, 2014 were 4 percent lower year-over-year. Mining activities in the current period were mainly focused on the upper benches of Masato and the lower benches of phase 3 of the Sabodala pit, while in the same prior year period, mining was focused on the upper benches of phase 3 of the Sabodala pit which resulted in shorter ore and waste haul distances. Access to the lowest benches of phase 3 of the Sabodala pit, which was originally scheduled for mining during the fourth quarter 2014, have been deferred into 2015 due to bench access constraints. In total, approximately 10,300 high-grade ounces (91,000 tonnes at over 3.5 gpt) originally part of the 2014 mine plan are expected to be mined and processed during first and second quarters of 2015. As a result of this deferral, gold production in 2014 was impacted by about an approximately net 8,000 ounces for the year as this high-grade material was displaced by low-grade feed to the mill. Total mining costs for the three months ended December 31, 2014 were 6 percent lower than the same prior year period mainly due to lower material movement and higher productivity at Masato due to mining softer material. Unit mining costs for the three months ended December 31, 2014 were $2.58 per tonne, a decrease of 3 percent compared to the same prior year period. Ore tonnes milled for the three months ended December 31, 2014 were 17 percent higher than the same prior year period. The Company set a quarterly record for total tonnes milled during the fourth quarter of 2014. As anticipated, the introduction of softer oxide ore from Masato has had a positive impact on crushing and milling rates. In the same prior year period, mill feed was sourced from phase 3 of the Sabodala pit containing harder ore. Processed grade for the three months ended December 31, 2014 was 16 percent higher than the same prior year period. Mill feed during the fourth quarter 2014 included significant high grade ore that was sourced from the upper benches of Masato and the lower benches of the Sabodala pit. In the prior year period, mill feed was sourced from phase 3 of the Sabodala pit at grades closer to average reserve grade. Total processing costs for the three months ended December 31, 2014 were 9 percent lower than the same prior year period, mainly due to timing of maintenance activities and lower consumption of grinding media with the softer ore from Masato. Unit processing costs for the three months ended December 31, 2014 were 23 percent lower than the prior year period due to lower total processing costs and higher tonnes milled. Total mine site general and administrative costs for the three months ended December 31, 2014 were 1 percent lower than the prior year period mainly due to lower insurance premiums. Unit general and administration costs for the three months ended December 31, 2014 were 12 percent lower than the prior year period due to lower general and administrative costs and higher tonnes milled.

FULL YEAR FINANCIAL HIGHLIGHTS

Gold revenue for the twelve months ended December 31, 2014 was $260.6 million compared to gold revenue of $297.9 million for the same prior year period. The decrease in gold revenue was mainly due to lower spot gold prices in the current year. Consolidated profit for the twelve months ended December 31, 2014 was $17.8 million ($0.05 per share), compared to profit of $50.3 million ($0.19 per share) in the same prior year period. The decrease in profit in the current year was primarily due to lower revenue, higher cost of sales, partially offset by lower transaction costs related to the acquisition of the OJVG. For the year ended December 31, 2014, operating cash provided $49.0 million compared to $74.3 million in the prior year. The decrease was primarily due to lower revenues, including the impact of delivering a portion of current period production to Franco-Nevada at 20 percent of gold spot prices. For the year ended December 31, 2013, operating cash flow included a use of cash to buy-back-back the remaining “out of the money” gold forward sales contracts and the delivery of 45,289 ounces into the hedge book at $806 per ounce. Capital expenditures were $18.9 million for the twelve months ended December 31, 2014, compared to $69.1 million in the same prior year period. The decrease was due to lower sustaining and development capital expenditures and lower capitalized deferred stripping costs in the current year.

FULL YEAR OPERATIONAL HIGHLIGHTS

Gold production for the year increased marginally from the year earlier to 211,823 ounces and was the second highest production total in Company history. However, production fell short of the revised guidance estimate of 215,000 ounces primarily due to lower than planned recovery rates in the fourth quarter. Total cash costs per ounce for the year ended December 31, 2014 of $710 per ounce were marginally above the higher end of guidance of $650 to $700 per ounce. This compares to $641 per ounce in 2013. The increase in total cash costs was mainly due to lower capitalized deferred stripping, partly offset by lower mining and processing costs compared to the prior year. All-in sustaining costs per ounce for the year ended December 31, 2014 were $865 per ounce, within the original guidance range of $800 to $875 per ounce and 16 percent lower than the prior year. Lower all-in sustaining costs were mainly due to lower capital expenditures in the current year period. Total tonnes mined for the year ended December 31, 2014 were 16 percent lower compared to the same prior year period. Mining activities in the current year were initially focused on the lower benches of phase 3 of the Sabodala pit. Commencing in September, mining began on schedule at Masato, the first of the OJVG deposits to be developed. Total tonnes mined in 2014 were about 4 million tonnes higher than the original plan, mainly due to a redesign of phase 3 of the Sabodala pit as a result of mining in a peripheral area to the ore body which added 1.3 million waste tonnes that was originally scheduled for mining in phase 4 of the Sabodala pit in 2016; combined with higher tonnes mined at Masato due to better grade and ore tonnes than originally expected. In the prior year, mining activities were mainly focused on the upper benches of phase 3 of the Sabodala pit. Total mining costs for the year ended December 31, 2014 were 8 percent lower than the same prior year period due to decreased material movement. However, unit mining costs for the year ended December 31, 2014 were 9 percent higher than the same prior year period due to fewer tonnes mined. In 2014, mining was mainly concentrated on the lower benches of phase 3 of the Sabodala mine pit with limited space resulting in lower productivity and higher costs, which was partially offset by higher productivity at Masato from mining softer material. Ore tonnes milled for the twelve months ended December 31, 2014 were 15 percent higher than the same prior year period. As anticipated, the introduction of softer oxide ore from Masato has had a positive impact on crushing and milling rates. In the same prior year period, mill feed was sourced from phase 3 of the Sabodala pit containing harder ore. Processed grade for the year ended December 31, 2014 was 9 percent lower than the same prior year period, as mill feed for the first nine months of 2014 was sourced from ore from phase 3 of the Sabodala pit at grades closer to average reserve grade. In the prior year, mill feed was primarily sourced from phase 3 of the Sabodala pit at higher grades. Total processing costs for the twelve months ended December 31, 2014 were 2 percent lower than the same prior year period, mainly due to timing of maintenance activities and lower consumption of grinding media with the softer ore from Masato. Unit processing costs for the twelve months ended December 31, 2014 were 15 percent lower than the prior year period due to lower total processing costs and higher tonnes milled. Total mine site general and administrative costs for the twelve months ended December 31, 2014 were 5 percent lower than the prior year period mainly due to lower insurance premiums. Unit general and administration costs for the twelve months ended December 31, 2014 were 14 percent lower than the prior year period due to lower general and administrative costs and higher tonnes milled.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s cash position at December 31, 2014 was $35.8 million. For 2014, the Company had identified approximately $80.0 million in one-time payments, including the retirement of $42.8 million of $47.0 million combined balance outstanding under the Loan Facility and the Equipment Facility, $8.0 million in advance dividends, $9.0 million in remaining legal and office closure costs related to the acquisition of the OJVG, $7.5 million to acquire Badr’s share of the OJVG and $15.0 million in government payments. For the year ended December 31, 2014, the Company has made a total of $63.0 million in one-time payments. This includes $42.8 million in debt repayments (including the final payment for the $60.0 million Macquarie Loan Facility), $3.7 million in payments to the Republic of Senegal and one-time payments related to the acquisition of the OJVG, including $9.0 million for transaction, legal and office closure costs and $7.5 million to acquire Badr’s share of the OJVG. Approximately $23.0 million in one-time payments to the Republic of Senegal, are now expected to be paid over 2015 and 2016. The one-time payments described herein, excludes $30.0 million in debt retired in the first quarter 2014 as part of the Franco-Nevada transaction. Subsequent to the year ended December 31, 2014, the Company fully repaid the outstanding balance of its finance facility with Macquarie Bank Limited (“Equipment Facility”), resulting in the Company being debt free. Notwithstanding, the Company is working to put a standby facility in place to provide additional financial flexibility to ensure sufficient liquidity is maintained by the Company.

ADDITIONAL MATTERS

In order to allow non-executive directors and employees to participate in the long-term success of the Company and to promote alignment of interests between directors/employees and shareholders, the Company introduced a new Deferred Share Unit Plan (“DSU Plan”) for non-executive directors and a new Restricted Share Unit Plan (“RSU Plan”) for employees during the second quarter 2014. DSUs represent a right for a non-executive director to receive an amount of cash (subject to withholdings), on ceasing to be a director of the Company, equal to the product of (i) the number of DSUs held, and (ii) the volume weighted average trading price of the Company’s shares for the five trading days prior to such date. For employees, RSUs are not convertible into Company stock and simply represent a right to receive an amount of cash (subject to withholdings), on vesting, equal to the product of i) the number of RSUs held, and ii) the volume weighted average trading price of the Company’s shares for the five trading days prior to such date. RSUs will generally vest as to 50 percent in thirds over a three year period and as to the other 50 percent, in thirds based on the Company’s achievement of performance-based criteria. During the twelve months ended December 31, 2014, the Company granted 2,343,487 RSUs at a price of C$0.72 per unit. At December 31, 2014 there were no units vested, 436,532 units were forfeited and 298,884 units were cancelled. The Company granted 545,000 DSUs during the twelve months ended December 31, 2014 at a price of C$0.72 per unit. At December 31, 2014 there were no units vested and no units were cancelled. In January 2015, SGO received a tax assessment from the Senegalese tax authorities claiming withholding tax on interest paid to an offshore bank of approximately $3.0 million. The Company believes that the amount in dispute is without merit and that the issue will be resolved with no or an immaterial amount of tax due. Approximately $18.0 million of the SGO 2011 tax assessment of approximately $24.0 million has been resolved and approximately $6.0 million remains in dispute. We believe that the remaining amount in dispute is without merit and that these issues will be resolved with no or an immaterial amount of tax due. OUTLOOK 2015 Year ended December 31 2014 Actuals 2015 Guidance Range Operating Results Ore mined (‘000t ) 6,174 6,500 – 7,500 Waste mined – operating (‘000t ) 21,178 ~19,500 Waste mined – capitalized (‘000t ) 1,969 2,500 – 3,500 Total mined (‘000t ) 29,321 28,500 – 30,500 Grade mined (g/t ) 1.54 1.40 – 1.60 Strip ratio (waste/ore ) 3.7 3.00 – 3.50 Ore milled (‘000t ) 3,622 3,600 – 3,800 Head grade (g/t ) 2.03 2.00 – 2.20 Recovery rate % 89.7 90.0 – 91.0 Gold produced1 (oz ) 211,823 200,000 – 230,000 Total cash cost (incl. royalties)2 $/oz sold 710 650 – 700 All-in sustaining costs2,3 $/oz sold 865 900 – 975 Total depreciation and amortization2 $/oz sold 298 260 – 275 Mining ($/t mined ) 2.83 2.75 – 2.90 Mining long haul (cost/t hauled) ($/t milled ) – 5.00 – 6.00 Milling ($/t milled ) 17.15 15.50 – 17.50 G&A ($/t milled ) 4.61 5.25 – 5.75 Gold sold to Franco-Nevada1 (oz ) 20,625 24,375 Exploration and evaluation expense (Regional Land Package) ($ millions ) 2.8 1.0 – 2.0 Administration expenses and Social community costs (excluding depreciation) ($ millions ) 14.8 15.0 – 16.0 Mine production costs ($ millions ) 162.4 155.0 – 165.0 Capitalized deferred stripping ($ millions ) 6.0 8.0 – 10.0 Net mine production costs ($ millions ) 156.4 147.0 – 155.0 Capital expenditures Mine site sustaining ($ millions ) 5.0 6.0 – 8.0 Capitalized reserve development (Mine License) ($ millions ) 4.0 6.0 – 8.0 Project development costs (Gora/Kerekounda) Mill optimization ($ millions ) – 5.0 – 6.0 Development ($ millions ) 3.9 16.5 – 17.5 Mobile equipment and other ($ millions ) – 7.5 – 8.5 Total project development costs ($ millions ) 3.9 29.0 – 32.0 Capitalized deferred stripping ($ millions ) 6.0 8.0 – 10.0 Total capital expenditures ($ millions ) 18.9 49.0 – 58.0 1 22,500 ounces of production are to be sold to Franco Nevada at 20% of the spot gold price. Due to the timing of shipment schedules near year end, the delivery of 1,875 ounces of gold for the month of December was not received by Franco-Nevada until early January 2015. The transaction with Franco-Nevada permits for the delivery of payable gold for up to five business days following a month end. 2 Total cash costs per ounce, all-in sustaining costs per ounce and total depreciation and amortization per ounce are non-IFRS financial measures and do not have a standard meaning under IFRS. Please refer to Non-IFRS Performance Measures at the end of this report. 3 All-in sustaining costs per ounce sold include total cash costs per ounce, administration expenses (excluding Corporate depreciation expense and social community costs not related to current operations), capitalized deferred stripping, capitalized reserve development and mine site & development capital expenditures as defined by the World Gold Council. Key assumptions: Gold spot price/ounce – US$1,200, Light fuel oil – US$0.95/litre, Heavy fuel oil – US$0.76/litre, US/Euro exchange rate – $1.20, USD/CAD exchange rate – $0.85. Other important assumptions include: any political events are not expected to impact operations, including movement of people, supplies and gold shipments; grades and recoveries will remain consistent with the life-of-mine plan to achieve the forecast gold production; and no unplanned delays in or interruption of scheduled production. The Company’s mine plans are designed to maximize free cash flow. In 2015, the Company expects to generate free cash flow at $1,200 per ounce gold after funding its organic growth initiatives. Mining activity in 2015 will continue in the Masato pit, as well as completing phase 3 of the Sabodala pit. Development of Gora is expected to be complete during the third quarter, with mining expected by late in the third quarter and production from Gora commencing in the fourth quarter of the year. The Company expects to produce between 200,000 and 230,000 ounces of gold in 2015. The quarterly production profile in 2015 is expected to look similar to the 2014 quarterly production profile with higher production in the fourth quarter once Gora ore is processed through the mill. In total, the second half of 2015 is expected to account for approximately 55 percent of total gold production as Gora comes into production. The Gora development schedule is aggressive but Management believes it is achievable. The delay in the Gora permitting process has delayed road construction which was to start at the beginning of the year but began on February 14th. The delay in the start date of road construction may negatively impact the timing of commencement of mining at Gora resulting in production at the lower end of our 2015 production guidance range. The final phase in the ESIA process, a public hearing to announce the outcome of the technical and public enquiry processes occurred on February 18th. Environmental approval and the occupational haul road permit are now expected in the ordinary course and are not expected to impact a fourth quarter production commencement for the Gora deposit. The Company’s tax exempt status ends on May 2, 2015. From this point forward, the Company will be subject to a 25 percent income tax rate as well as customs duties and non-refundable value-added tax on certain expenditures. Any income tax incurred in 2015 will not be paid until 2016 and the other taxes are built into our unit cost guidance. Total mine production costs for 2015 are expected to fall in the range of $147.0 to $155.0 million, similar to 2014 (net of capitalized deferred stripping). The increase in taxes and duties for consumables of about $5.5 million is expected to be offset by the decline in costs for light fuel oil (“LFO”), heavy fuel oil (“HFO”) and weaker local and Euro denominated costs relative to the US dollar. A $0.10 variance from the current HFO/LFO assumptions would result in approximately a $5.0 million change to mine production costs or about $20 per ounce. A 10 percent variance from the current Euro/USD exchange rate assumption would result in approximately a $9.0 million change to mine production costs or about $40 per ounce. The Government of Senegal sets the price of petroleum products monthly. In late December 2014, these prices were reduced on average 15 percent, the first reduction in 2014. The Company’s 2015 assumptions for LFO and HFO reflect these most recent price reductions and do not reflect any potential further reductions that the Government of Senegal may choose to enact. Administrative and corporate social responsibility (“CSR”) costs relate to the corporate office, the Dakar and regional office and the Company’s corporate social responsibility initiatives, and exclude corporate depreciation, transaction costs and other non-recurring costs. For 2015, these costs are estimated to be between $15.0 million and $16.0 million, including approximately $3.5 million for CSR activities. Sustaining capital expenditures for the mine site are expected to be between $6.0 and $8.0 million, capitalized deferred stripping costs are expected to total $8.0 to $10.0 million and reserve development expenditures are expected to total $6.0 to $8.0 million. Project development expenditures for growth initiatives including the cost to develop the Gora and Kerekounda deposits and costs to optimize the mill are expected to total $29.0 to $32.0 million. Of the total $49.0 to $58.0 million in total capital expenditures for 2015, $5.0 to $6.0 million relating to the mill optimization may be deferred pending the Company’s upcoming exploration and heap leach results to ensure the best allocation of capital for the Company. Total cash costs per ounce for 2015 are expected to be between $650 and $700 per ounce, in line with 2014. All-in sustaining costs are expected to be between $900 and $975 per ounce, higher than 2014 due to an increase in development spending on new deposits and expansion of the mill of approximately $125 per ounce. Total depreciation and amortization for the year is expected to be between $260 and $275 per ounce sold, $215 to $225 per ounce sold of which is related to depreciation on plant, equipment and mine development assets, and $45 to $50 per ounce of which is for depreciation of deferred stripping assets. In 2015, the majority of the capital to be spent on the Company’s exploration program will be focused on organic growth through (i) the conversion of resources to reserves; and (ii) extensions of existing deposits along strike on the Sabodala and OJVG mine licenses. As well, a modest amount of capital has been budgeted for the continuation of a systematic regional exploration program designed to identify high-grade satellite and standalone deposits. The Company identified a number of risk factors to which it is subject in its revised Annual Information Form filed for the year ended December 31, 2013. These various financial and operational risks and uncertainties continue to be relevant to an understanding of our business, and could have a significant impact on profitability and levels of operating cash flow. Refer to Risks and Uncertainties at the end of this report for additional risks.

MANAGEMENT CHANGE

Kathy Sipos, Vice President, Investor and Stakeholder Relations has left the Company to pursue a career change. As an integral part of the Teranga team since the initial public offering, Ms. Sipos was instrumental in the development of the investor relations program and established the Company’s CSR platform including the development of the Teranga development strategy (“TDS”). The TDS sets out Teranga’s plan to ensure our actions and investments are oriented towards the long-term, sustainable development of the region surrounding our Sabodala Gold Operation. It further underscores our commitment to a company-wide culture of CSR. Under Ms. Sipos’ leadership, the TDS has provided the foundation for a number of innovative partnerships with government agencies and several international and local non-government organizations to provide a range of programs in education, skills training, agriculture, health and education for the benefit of the communities and region in which we operate. Richard Young, President and CEO and Trish Moran, Investor Relations will be assuming Ms. Sipos’ investor relations responsibilities, while the CSR team will oversee our programs until a replacement is found.

BUSINESS AND PROJECT DEVELOPMENT

Reserves and Resources

Mineral Resources at December 31, 2014 are presented in Table 1. Total open pit Proven and Probable Mineral Reserves at December 31, 2014 are set forth in Table 2. The reported Mineral Resources are inclusive of the Mineral Reserves. The Proven and Probable Mineral Reserves were based on the Measured and Indicated Resources that fall within the designed open pits. The basis for the resources and reserves is consistent with the Canadian Securities Administrators National Instrument 43-101 Standards for Disclosure for Mineral Projects (“NI 43-101”) regulations. The Sabodala pit design, which remains unchanged and is consistent with the Mineral Reserves reported previously, is based on a $1,000 per ounce gold price pit shell for Phase 4. A re-evaluation of the final pit limits of Sabodala Phase 4 will be completed prior to mining and will use updated economic parameters at that time. Currently, the plan to mine Phase 4 in Sabodala is estimated to begin in 2016. The Niakafiri and Gora pit designs remain unchanged from December 2012. The Masato pit design has been updated and is based on an updated resource model, using a $1,200 gold price with mine operating costs reflecting current conditions. The Golouma and Kerekounda pit designs remain unchanged from December 2013. Resource models are expected to be updated based on drill programs recently completed, with subsequent pit designs and revised reserves estimates expected later in 2015. These have been based on a $1,250 per ounce pit shell, however, when comparing to adjusted cut-off grades to match current operating costs, minimal adjustments were required to match a $1,200 per ounce pit shell.

Masato Resource Model Update

Drill hole assays and surface trenching results from the 2014 advanced exploration program were incorporated into an updated Masato mineral resource model during the fourth quarter 2014. A total of 2,900 metres in 22 diamond drill holes (“DDH”) and 6,000 metres in 98 reverse circulation (“RC”) holes were completed in 2014. DDH drilling confirmed the interpretation of mineralized zones and infilled gaps to upgrade resource classification of Inferred Resources. RC holes were drilled at 10 metre spacing in 2 separate test block areas in oxide ore to test the continuity of portions of the high-grade sub-domains. Results confirm the nature of high grade mineralization in these areas, as well as overall shallower dipping zones than was previously interpreted. Due to the complex nature of mineralization, a total of 11 mineralization models were generated following non-linear trending structures. Mineral resources were estimated using locally varying anisotropies respecting local trends. Oxide densities were revised to reflect the gradational density difference associated with increasing depth from surface. Fresh rock densities were revised and averaged for mineralized and non-mineralized areas. A comparison of the reserve model against actual mined in 2014 indicates 2 percent higher tonnes, 5 percent higher grade and 8 percent higher ounces mined. This can be attributed to a shallower higher grade mineralization trend in oxides in areas delineated with wider spaced drilling. Overall, 72,000 ounces were added at Masato during 2014 including 16,000 ounces in the high-grade test blocks drilled. Due to the complexity of the high grade zones revealed from the 10 metre test block areas, extension of high grade intercepts will need to be continually updated as mining advances with 10 metre spacing from the RC grade control process. As a result, the high grade added in the updated model was in the near surface areas in Phase 1 where 10 metre spacing drilling occurred.
Table 1: Mineral Resources Summary Measured Indicated Measured and Indicated Tonnes Grade Au Tonnes Grade Au Tonnes Grade Au Area (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) Sabodala 23.73 1.21 0.92 19.55 1.23 0.77 43.28 1.22 1.70 Gora 0.49 5.27 0.08 1.84 4.93 0.29 2.32 5.00 0.37 Niakafiri 0.30 1.74 0.02 10.50 1.10 0.37 10.70 1.12 0.39 ML Other Subtotal Sabodala 24.52 1.30 1.02

Monarch Financial Reports Higher Income, Strong Loan Growth, and Declares Cash Dividend

CHESAPEAKE, Va., Jan. 30, 2015 (GLOBE NEWSWIRE) — Monarch Financial Holdings, Inc. (MNRK), the bank holding company for Monarch Bank, reported improved fourth quarter and annual financial performance. The Board of Directors also announced a quarterly common stock cash dividend of $0.08 per common share, payable on February 27, 2015, to shareholders of record on February 10, 2015.

Annual 2014 highlights are:

Net income of $11,211,850, for Return on Equity of 10.95% Diluted earnings per share of $1.05 Cash dividends of $0.31 paid per share, up 29% from 2013 Loans held for investment grew $59.9 million, up 8.4% Non-performing assets at 0.28% of total assets Net Interest Margin was 4.25% $1.6 billion in mortgage loans closed, with 80% home purchases

Fourth quarter 2014 highlights are:

Quarterly net income of $2,683,163, up 24% Return on equity of 10.03% Diluted earnings per share of $0.25 Loans held for investment grew $58.9 million $446 million in mortgage loans closed with 69% home purchase

“We are pleased with our quarterly and annual financial performance, with very strong organic loan growth finally taking hold in the fourth quarter. Unlike many of our peers we have grown loans with our bankers, in our markets, and have not purchased loans to drive this growth. Mortgage production was in line with the previous year with our best year ever for purchase mortgage loan closings. We improved our performance in all three lines of business to include banking, mortgage, and wealth management,” stated Brad E. Schwartz, Chief Executive Officer. “Non-performing assets remained low, our margin improved due to asset mix and pricing discipline, and our capital grew stronger with our retention of earnings. The market has responded to our performance with price appreciation in our common stock that, when combined with the increase in our common stock dividends, produced a 14% total shareholder return for 2014.”

For 2014 net income was $11,211,850 compared to $11,091,007 for the same period in 2013, a 1% increase. The 2014 return on average equity (ROE) was 10.95%, and the return on average assets (ROA) was 1.13%. Annual diluted earnings per share were $1.05 compared to $1.08 in 2013, as our higher earnings were more than offset by the number of additional outstanding shares.

Net income was $2,683,163 for the fourth quarter of 2014 compared to $2,156,566 for the same period in 2013, a 24% increase. The quarterly annualized return on average equity (ROE) was 10.03%, and the annualized quarterly return on average assets (ROA) was 1.04 %, both metrics up from the same period a year ago. Diluted earnings per share for the fourth quarter were $0.25, up 25% from the previous year.

Total assets at December 31, 2014 were $1.07 billion, up 5% from the prior year. In 2014 loans held for investment grew 8% to $773 million and mortgage loans held for sale grew 48% to $148 million. The vast majority of the net loan growth occurred in the fourth quarter. Total deposits grew 3% to $919 million, with demand deposits growing $40 million or 15% for the year. Demand deposits now represent 33% of total deposits, an achievement driven by our dedicated cash management and banking office teams. While the current rate environment does not appropriately reward banks for a transaction-focused funding strategy, this strategy should deliver net interest margin protection when rates eventually rise.

“We are pleased to deliver over 8% quarterly and year over year loan growth. We are equally proud that we produced each and every loan and have not been tempted by participation loans or other loan purchase programs we see in the marketplace,” stated E. Neal Crawford Jr., President of Monarch Bank. “We continue to hire talented bankers and expect to continue expanding the banking team into 2015. Our Richmond and Peninsula expansion is driving quality loan growth and deposit growth while our cash management and private banking teams continue to focus on growing core deposits.”

Non-performing assets were 0.28% as of December 31, 2014 compared to 0.25% one year prior, and non-performing loans to loans held for investment were 0.37% compared to 0.31% one year prior. Non-performing assets were $3.0 million, comprised of $175 thousand 90 days or more past due and still accruing interest, $2.7 million in non-accrual loans and $144,000 in one parcel of other real estate owned that is already under contract for sale. The allowance for loan losses represents 1.16% of total loans held for investment and 311% of non-performing loans.

Average equity to average assets rose to 10.39% at year-end 2014, an increase from 9.73% one year prior. Cash dividends of $0.08 per share were paid in the fourth quarter of 2014, and a total of $0.31 per share was paid during the year, an increase of 29% over 2013. Total risk-based capital to risk weighted assets at Monarch Bank equaled 13.79%, significantly higher than the required level to meet the highest rating of “Well Capitalized” by federal banking regulators. We also already meet the new Basel III capital standards for a well-capitalized bank. Monarch was again awarded the highest 5-Star “Superior” rating by Bauer Financial, an independent third-party bank rating agency that rates banks on safety and soundness.

Net interest income, our number one driver of profitability, was flat for the year driven by the large volume of mortgage loans held for sale in the first six months of 2013 compared to the balances carried in 2014. These balances are driven by mortgage loan closings. Excluding the mortgage loans held for sale volatility, the net interest income from core banking operations increased 5.9% or $1.9 million. Our net interest margin for 2014 was 4.25%, up from 4.10% due to asset mix, loan and deposit pricing, mortgage loans held for sale pricing, fee income capture, and the additional income from loans previously on non-accrual status. Loan growth that occurred late in the year had minimal impact on net interest income even though it should contribute to net interest income on a going forward basis.

Non-interest income decreased $2.8 million in 2014 over the previous year driven by lower mortgage revenues, which was more than offset by a reduction of $3.6 million in commissions and incentives. Net overhead, or the difference between non-interest income and non-interest expenses, increased only $372 thousand or 1.7% due to increased spending for facilities, technology, technology risk management, compliance and marketing. Salaries and benefits were held flat for the year, a significant accomplishment with our increased benefits costs. Investment revenues related to Monarch Bank Private Wealth totaled $1.6 million for the year compared to $1.1 million the previous year, a noteworthy increase. The Company is recognized by Raymond James Financial Services as a top performing bank investment program, with $235 million in assets under management accumulated since the formation of Monarch Bank Private Wealth in the third quarter of 2012.

Mortgage revenue remains the number one driver of non-interest income. $446 million in mortgage loans were closed during the fourth quarter of 2014 (69% purchase) compared to $350 million in the fourth quarter of 2013 (80% purchase). Monarch closed $1.6 billion in mortgage loans during 2014 compared to $2.0 billion in 2012. While volumes year over year declined approximately 20%, revenues from mortgage lending declined only 5% due to a strong focus on loan product mix, secondary market pricing, and fee income.

“Our focus on the purchase market paid off in 2014 when we had the best year of purchase mortgage business in our history. We closed $1.3 billion in home purchase loans and $0.3 billion in refinances, and altogether closed over 6,000 loans during the year,” stated William T. Morrison, CEO of Monarch Mortgage. “The year 2015 is beginning with an attractive rate environment and a much stronger pipeline of activity, and we expect it to be a great year for our mortgage operations.”

Monarch Financial Holdings, Inc. is the one-bank holding company for Monarch Bank. Monarch Bank is a community bank with ten banking offices in Chesapeake, Virginia Beach, Norfolk, and Williamsburg, Virginia. Monarch Bank also has loan production offices in Newport News and Richmond, Virginia. OBX Bank, a division of Monarch Bank, operates offices in Kitty Hawk and Nags Head, North Carolina. Monarch Mortgage and our affiliated mortgage companies have over thirty offices with locations in Virginia, North Carolina, Maryland, and South Carolina. Our subsidiaries/ divisions include Monarch Bank, OBX Bank, Monarch Mortgage (secondary mortgage origination), OBX Bank Mortgage (secondary mortgage origination), Coastal Home Mortgage, LLC (secondary mortgage origination), Monarch Bank Private Wealth (investment, trust, planning and private banking), Monarch Investments (investment and insurance solutions), Real Estate Security Agency, LLC (title agency) and Monarch Capital, LLC (commercial mortgage brokerage). The shares of common stock of Monarch Financial Holdings, Inc. are publicly traded on the Nasdaq Capital Market under the symbol “MNRK”.

This press release may contain “forward-looking statements,” within the meaning of federal securities laws that involve significant risks and uncertainties. Statements herein are based on certain assumptions and analyses by the Company and are factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies, or guidelines; significant changes in the economic scenario: significant changes in regulatory requirements; and significant changes in securities markets. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in the Company’s most recent Form 10-K and 10-Q reports and other documents filed with the Securities and Exchange Commission. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Consolidated Balance Sheets Monarch Financial Holdings, Inc. and Subsidiaries (In thousands) Unaudited

December 31, September 30, June 30, March 31, December 31,
2014 2014 2014 2014 2013 ASSETS:

Cash and due from banks $ 14,503 $ 21,083 $ 19,661 $ 18,510 $ 18,971 Interest bearing bank balances 49,761 58,207 37,166 37,033 31,955 Federal funds sold 1,135 3,938 29,761 84,232 53,985

Investment securities, at fair value 23,725 25,137 23,773 23,197 48,822

Mortgage loans held for sale 147,690 138,590 156,584 92,839 99,718

Loans held for investment, net of unearned income 772,590 713,667 700,159 715,088 712,671 Less: allowance for loan losses (8,949) (8,977) (9,070) (9,213) (9,061) Net loans 763,641 704,690 691,089 705,875 703,610

Bank premises and equipment, net 30,247 30,368 31,407 29,902 28,882 Restricted equity securities, at cost 3,633 3,179 3,169 3,156 3,683 Bank owned life insurance 9,687 9,587 7,526 7,467 7,409 Goodwill 775 775 775 775 775 Intangible assets, net — — 15 60 104 Accrued interest receivable and other assets 21,940 23,688 22,973 19,673 18,786 Total assets $ 1,066,737 $ 1,019,242 $ 1,023,899 $ 1,022,719 $ 1,016,700

LIABILITIES:

Demand deposits–non-interest bearing $ 235,301 $ 252,286 $ 240,348 $ 221,357 $ 206,891 Demand deposits–interest bearing 66,682 53,093 51,563 55,949 55,528 Money market deposits 369,221 365,041 377,096 367,590 374,462 Savings deposits 20,003 25,211 24,539 24,327 22,137 Time deposits 228,207 189,142 197,747 224,947 234,100 Total deposits 919,414 884,773 891,293 894,170 893,118

FHLB borrowings 1,075 1,100 1,125 1,150 1,175 Federal funds 10,000 — — — — Trust preferred subordinated debt 10,000 10,000 10,000 10,000 10,000 Accrued interest payable and other liabilities 18,710 18,145 18,650 17,422 14,661 Total liabilities 959,199 914,018 921,068 922,742 918,954

STOCKHOLDERS’ EQUITY:

Common stock 51,864 51,735 51,624 51,584 51,432 Capital in excess of par value 8,336 7,966 7,675 7,357 7,069 Retained earnings 47,354 45,523 43,566 41,232 39,437 Accumulated other comprehensive loss (102) (135) (159) (314) (419) Total Monarch Financial Holdings, Inc. stockholders’ equity 107,452 105,089 102,706 99,859 97,519 Noncontrolling interest 86 135 125 118 227 Total equity 107,538 105,224 102,831 99,977 97,746 Total liabilities and stockholders’ equity $ 1,066,737 $ 1,019,242 $ 1,023,899 $ 1,022,719 $ 1,016,700

Common shares outstanding at period end 10,652,475 10,646,873 10,624,668 10,619,444 10,502,323

Nonvested shares of common stock included in commons shares outstanding 279,750 299,910 299,910 302,710 215,960

Book value per common share at period end (1) $ 10.10 $ 9.87 $ 9.67 $ 9.40 $ 9.29 Tangible book value per common share at period end (2) $ 10.02 $ 9.80 $ 9.59 $ 9.33 $ 9.20 Closing market price $ 13.75 $ 12.56 $ 11.72 $ 12.26 $ 12.31

Total risk based capital – Consolidated company 13.79% 14.16% 14.29% 14.27% 13.91% Total risk based capital – Bank 13.81% 14.18% 14.31% 14.30% 13.95%

(1) Book value per common share is defined as stockholders’ equity divided by common shares outstanding. (2) Tangible book value per common share is defined as stockholders’ equity less goodwill and other intangibles divided by commons shares outstanding

Consolidated Statements of Income Monarch Financial Holdings, Inc. and Subsidiaries Unaudited
Three Months Ended Year Ended
December 31, December 31,
2014 2013 2014 2013 INTEREST INCOME:

Interest on federal funds sold $ 4,980 $ 42,283 $ 84,850 $ 115,963 Interest on other bank accounts 92,156 28,626 244,702 58,027 Dividends on equity securities 33,545 67,540 106,955 277,700 Interest on investment securities 100,957 60,311 359,604 230,496 Interest on mortgage loans held for sale 1,376,920 1,090,070 4,866,818 7,021,186 Interest and fees on loans held for investment 9,752,472 9,388,407 37,327,978 36,645,065 Total interest income 11,361,030 10,677,237 42,990,907 44,348,437 INTEREST EXPENSE:

Interest on deposits 722,537 905,970 3,185,965 3,936,203 Interest on trust preferred subordinated debt 46,337 122,850 416,233 491,910 Interest on other borrowings 16,615 15,002 58,966 358,345 Total interest expense 785,489 1,043,822 3,661,164 4,786,458 NET INTEREST INCOME 10,575,541 9,633,415 39,329,743 39,561,979 PROVISION FOR LOAN LOSSES — — — —

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 10,575,541 9,633,415 39,329,743 39,561,979

NON-INTEREST INCOME:

Mortgage banking income 16,210,774 13,276,836 62,440,013 65,672,402 Service charges and fees 489,974 502,373 2,058,262 1,941,926 Title income 216,895 124,774 669,785 789,253 Investment and insurance income 382,774 336,002 1,592,398 1,053,429 Other income 72,366 111,924 318,783 425,261 Total non-interest income 17,372,783 14,351,909 67,079,241 69,882,271 NON-INTEREST EXPENSE:

Salaries and employee benefits 8,798,996 8,772,157 34,134,998 34,112,834 Commissions and incentives 6,926,507 5,248,131 24,754,633 28,344,347 Occupancy and equipment 2,412,086 2,220,634 9,548,543 8,449,912 Loan expense 1,676,134 1,526,317 6,652,007 7,891,835 Marketing expense 990,383 807,717 3,111,535 2,873,259 Data processing 715,057 459,681 2,272,785 1,696,535 Telephone 296,396 314,984 1,226,389 1,184,894 Other expenses 1,789,789 1,212,731 6,778,966 6,357,202 Total non-interest expense 23,605,348 20,562,352 88,479,856 90,910,818

INCOME BEFORE TAXES 4,342,976 3,422,972 17,929,128 18,533,432 Income tax provision (1,616,093) (1,179,017) (6,490,273) (6,386,040) NET INCOME 2,726,883 2,243,955 11,438,855 12,147,392

Less: Net income attributable to noncontrolling interest (43,720) (87,389) (227,005) (1,056,385) NET INCOME ATTRIBUTABLE TO MONARCH FINANCIAL HOLDINGS, INC $2,683,163 $2,156,566 $11,211,850 $11,091,007

NET INCOME PER COMMON SHARE:

Basic $ 0.25 $ 0.21 $ 1.06 $ 1.09 Diluted $ 0.25 $ 0.20 $ 1.05 $ 1.08

Weighted average basic shares outstanding 10,648,184 10,486,056 10,619,443 10,167,156 Weighted average diluted shares outstanding 10,689,219 10,535,313 10,658,600 10,299,471

Return on average assets 1.04% 0.86% 1.13% 1.07% Return on average stockholders’ equity 10.03% 8.88% 10.95% 11.97%

Financial Highlights Monarch Financial Holdings, Inc. and Subsidiaries
(Dollars in thousands, For the Quarter Ended except per share data) December 31, September 30, June 30, March 31, December 31,
2014 2014 2014 2014 2013 EARNINGS

Interest income $ 11,361 $ 10,639 $ 10,557 $ 10,434 $ 10,677 Interest expense (786) (928) (977) (971) (1,044) Net interest income 10,575 9,711 9,580 9,463 9,633 Provision for loan losses — — — — — Noninterest income – mortgage banking income 16,211 16,658 17,369 12,202 13,277 Noninterest income – other 1,162 1,241 1,130 1,106 1,075 Noninterest expense (23,605) (23,121) (23,007) (18,747) (20,562) Pre-tax net income 4,343 4,489 5,072 4,024 3,423 Minority interest in net income (44) (46) (121) (16) (87) Income taxes (1,616) (1,635) (1,767) (1,471) (1,179) Net income $ 2,683 $ 2,808 $ 3,184 $ 2,537 $ 2,157

PER COMMON SHARE

Earnings per share – basic $ 0.25 $ 0.26 $ 0.30 $ 0.24 $ 0.21 Earnings per share – diluted 0.25 0.26 0.30 0.24 0.20 Common stock – per share dividends 0.08 0.08 0.08 0.07 0.07 Average Basic Shares Outstanding 10,648,184 10,635,275 10,620,869 10,600,766 10,486,056 Average Diluted Shares Outstanding 10,689,219 10,670,507 10,660,217 10,641,782 10,535,313

ALLOWANCE FOR LOAN LOSSES

Beginning balance $ 8,977 $ 9,070 $ 9,213 $ 9,061 $ 11,228 Provision for loan losses — — — — — Charge-offs (174) (181) (184) (12) (2,252) Recoveries 146 88 41 164 85 Net charge-offs (28) (93) (143) 152 (2,167) Ending balance $ 8,949 $ 8,977 $ 9,070 $ 9,213 $ 9,061

COMPOSITION OF RISK ASSETS

Nonperforming loans:

90 days past due $ 175 $ 243 $ 499 $ 759 $ 472 Nonaccrual loans 2,705 2,180 3,028 1,718 1,740 OREO 144 767 144 302 302 Nonperforming assets 3,024 3,190 3,671 2,779 2,514

ASSET QUALITY RATIOS

Nonperforming assets to total assets 0.28% 0.31% 0.36% 0.27% 0.25% Nonperforming loans to total loans 0.37 0.34 0.50 0.35 0.31 Allowance for loan losses to total loans held for investment 1.16 1.26 1.30 1.29 1.27 Allowance for loan losses to nonperforming loans 310.73 370.49 257.16 371.94 409.63 Annualized net charge-offs to average loans held for investment 0.02 0.05 0.08 -0.09 1.25

FINANCIAL RATIOS

Return on average assets 1.04% 1.11% 1.29% 1.06% 0.86% Return on average stockholders’ equity 10.03 10.72 12.63 10.46 8.88 Net interest margin (FTE) 4.42 4.18 4.18 4.25 4.13 Non-interest revenue/Total revenue 60.5 62.7 63.7 56.1 57.3 Efficiency – Consolidated 84.5 83.7 81.8 82.1 85.5 Efficiency – Bank only 61.2 61.7 63.9 59.9 60.4 Average equity to average assets 10.39 10.40 10.18 10.13 9.73

PERIOD END BALANCES (Amounts in thousands)

Total mortgage loans held for sale $ 147,690 $ 138,590 $ 156,584 $ 92,839 $ 99,718 Total loans held for investment 772,590 713,667 700,159 715,088 712,671 Interest-earning assets 1,003,332 945,697 949,872 956,160 952,981 Assets 1,066,737 1,019,242 1,023,899 1,022,719 1,016,700 Total deposits 919,414 884,773 891,293 894,170 893,118 Other borrowings 21,075 11,100 11,125 11,150 11,175 Stockholders’ equity 107,451 105,089 102,706 99,859 97,519

AVERAGE BALANCES (Amounts in thousands)

Total mortgage loans held for sale $ 131,471 $ 138,382 $ 116,851 $ 70,856 $ 104,104 Total loans held for investment 725,093 701,137 698,851 704,917 695,074 Interest-earning assets 958,904 930,420 927,552 910,929 935,059 Assets 1,021,591 999,358 993,003 970,815 990,734 Total deposits 883,478 867,980 867,217 848,969 869,113 Other borrowings 14,575 11,124 11,150 11,174 11,199 Stockholders’ equity 106,088 103,908 101,092 98,374 96,415

MORTGAGE PRODUCTION (Amounts in thousands)

Dollar volume of mortgage loans closed $ 445,846 $ 440,784 $ 446,863 $ 271,233 $ 349,695 Percentage of refinance based on dollar volume 30.9% 16.0% 15.0% 19.1% 20.3%

Financials IndustryBanking & Budgetingmortgage loans Contact:

Brad E. Schwartz - (757) 389-5111, www.monarchbank.com

[…]

First Cash Reports Full Year Earnings Per Share of $2.94; Fourth Quarter Revenues From Core Pawn Operations Increase …

ARLINGTON, Texas, Jan. 27, 2015 (GLOBE NEWSWIRE) — First Cash Financial Services, Inc. (FCFS), a leading international operator of retail pawn stores in the U.S. & Mexico, today announced record revenue, net income and earnings per share for the year ended December 31, 2014. The Company also initiated guidance for 2015 store growth and earnings expectations and announced that its Board of Directors has authorized a new share repurchase plan for up to two million shares of its common stock.

Mr. Rick Wessel, chief executive officer, stated, “I am excited by the significant milestones that we achieved in 2014. In addition to recording record revenues and net income, we added another 111 stores through the combination of de novo store openings and sizable acquisitions in both Mexico and the U.S. We ended the year with over 1,000 stores and have the most large format pawn locations of any operator in the Americas.”

“Revenue from core pawn retailing and lending activities increased to record levels despite significant fourth quarter foreign exchange weakness and further declines in scrap gold revenues. These headwinds impacted our fourth quarter earnings results by approximately $0.05 per share as compared to our previous forecast and tempers our dollar-translated earnings expectations for the upcoming year.”

“We continued in fiscal 2014 to generate significant operating cash flow, as evidenced by the Company’s EBITDA growth and generation of significant free cash flow. During 2014, we invested $83 million in acquisitions and capital expenditures and bought back $44 million of common stock, funded primarily by operating cash flows and a nominal increase in net debt. The Board of Directors’ decision to initiate a significant new buyback authorization reflects the strength of our balance sheet and confidence in our prospects for generating long-term earnings growth and cash flows.”

Earnings Highlights

Diluted earnings per share from continuing operations for fiscal 2014 were $2.94 compared to $2.86 in fiscal 2013 and in the fourth quarter of 2014 were $0.94 compared to $0.87 in the fourth quarter of 2013. Net income from continuing operations was $26.9 million for the fourth quarter and $85.4 million for the year ended December 31, 2014. While the Company experienced strong revenue growth from its core pawn operations, earnings results for the fourth quarter of 2014 were impacted by approximately $0.05 per share due to significant fourth quarter foreign exchange weakness and further declines in scrap gold volumes and pricing. The full year impact from foreign exchange headwinds and lower scrap gold profits was approximately $0.12 per share. Fourth quarter expenses also included non-recurring transaction and integration costs of approximately $0.03 per share associated with the recent 2014 acquisitions. Incremental interest expense related to the Company’s strategic senior note offering in March 2014 decreased earnings per share by $0.05 for the fourth quarter and $0.12 for the year, net of tax, which was partially offset by a lower effective income tax rate in 2014. EBITDA from continuing operations increased 11% for the quarter and 6% for fiscal 2014 despite the aforementioned currency and gold headwinds. Total EBITDA from continuing operations for fiscal 2014 was $147.3 million and net income from continuing operations was $85.4 million in fiscal 2014. A reconciliation of these non-GAAP financial measures to net income is provided elsewhere in this release.

All growth rates presented in “Revenue Highlights” and “Pawn Operating Metrics” are calculated on a constant currency basis by applying the currency exchange rate from the comparable prior-year period to the current year’s Mexican peso-denominated revenue. The average exchange rate for fiscal 2014 was 13.3 Mexican pesos / U.S. dollar versus 12.8 Mexican pesos / U.S. dollar in the comparable prior-year period. The average exchange rate for the fourth quarter of 2014 was 13.8 Mexican pesos / U.S. dollar versus 13.0 Mexican pesos / U.S. dollar in the comparable prior-year period.

Revenue Highlights

Revenue from core pawn activities (retail sales and pawn service fees) increased 19% in the fourth quarter of 2014 and 17% for the full year compared to the comparable prior-year periods. Total revenue for fiscal 2014 was $713 million, an increase of 10%, reflecting growth in core revenues partly offset by continued revenue decreases from non-core jewelry scrapping and payday lending operations. Even with the negative foreign exchange impact, 57% of fourth quarter 2014 revenue was generated in Mexico. For the full year, 54% of total fiscal 2014 revenue was from Mexico and 46% was from U.S. operations. Fourth quarter same-store core revenues in the Company’s pawn stores (which excludes wholesale jewelry scrapping) were up 4% compared to the prior-year period and resulted from an 8% increase in Mexico offset by a 2% decrease in the U.S. Full year 2014 same-store core revenue increased 4% in Mexico and 2% overall, while decreasing 3% in the U.S., as compared to the prior year. Revenue from non-core wholesale scrap jewelry operations decreased 25% and 29% in the fourth quarter and fiscal 2014, respectively, compared to the comparable prior-year periods. Gross profits from scrap jewelry operations for the full year totaled $7.5 million, accounting for only 2% of net revenue for the full year. The gross margin on scrap jewelry sales was 14% for the fourth quarter and 16% for the full year. Short-term loan and credit services revenue (collectively, payday lending operations) decreased 17% in the fourth quarter and 16% for the year compared to the prior-year periods. The decline was primarily the result of increased competition and additional regulatory restrictions in many Texas markets where the Company’s payday lending operations are focused. The non-core U.S. short-term loan business comprised only 4% of fourth quarter revenue and 5% of total revenue in fiscal 2014.

Pawn Operating Metrics

Pawn loans outstanding (receivable from customers) at year end increased by 15% in Mexico, 4% in the U.S. and 8% over the prior year. On a same-store basis, pawn loans increased 4% in Mexico, as loan growth remained strong in the interior markets, partially offset by slower growth in certain mature markets. Same-store pawn loans were down 5% in the U.S., attributable to the slightly lower than expected seasonal demand in the fourth quarter and strategic reductions of pawn balances in many acquired locations where the Company has been optimizing pawn lending practices and reducing loan to value ratios in order to improve long-term pawn yield and retail sales margins. With a solid December finish, the consolidated gross margin on retail merchandise sales remained impressive at 39% for both the fourth quarter and fiscal 2014 and compared favorably to the 39% retail margin in the fourth quarter of last year given the competitive climate and our continued shift toward slightly lower margin consumer electronics inventories. The average monthly pawn loan portfolio yield was unchanged at 14% for both fiscal 2014 and 2013, reflecting consistent pawn fee collection and redemption trends. Consolidated annualized inventory turns for fiscal 2014 remained strong at 3.6 times per year. Recent acquisition activity drove a slight increase in aged inventory (items held for over a year) but still accounted for only 5% of total inventory. Total inventories at December 31, 2014 increased 24% over the prior year, largely as a result of recent acquisitions.

Acquisitions and New Store Openings

A total of 111 pawn stores were added in fiscal 2014, bringing the total store count to 1,005. In total, 18 large format pawn store locations were opened during the fourth quarter of 2014, composed of two new store openings in Mexico and 16 store additions in the U.S. During fiscal 2014, a total of 78 large format, full-service stores were added in Mexico, composed of 31 new store openings and 47 acquired stores. These additions increased the number of large format pawn stores operated by the Company in Mexico by 14% over the past year. As of December 31, 2014, the Company had 674 stores in Mexico, of which 629 are large format, full-service locations. In October 2014, the Company completed the acquisition of a 15-store chain of large format pawn stores located in Kentucky, Tennessee, Missouri and South Carolina. Tennessee represents a new market for the Company. Fourth quarter store additions in the U.S. also included one de novo opening in Texas. For the full year of 2014, a total of 33 U.S. stores were opened or acquired in addition to the conversion of a small format pawn store to a large format pawn store. As of December 31, 2014, the Company had 255 large format, full-service pawn stores in the U.S., an increase of 12% over the prior year.

Financial Metrics

Operating efficiency improved during the fourth quarter, as the store-level pre-tax operating margin was 27% during the fourth quarter of 2014 compared to 26% in the fourth quarter of 2013. Full year store-level operating profit margin was 26% during fiscal 2014 compared to 27% during fiscal 2013. The EBITDA margin from continuing operations was 21% for fiscal 2014 and was consistent with prior year. The calculation of EBITDA margin from continuing operations is provided elsewhere in this release. Consolidated net operating margin (pre-tax income) for the fourth quarter was 18% and 16% for all of 2014. The Company’s return on equity for fiscal 2014 was 19%, while its return on assets for the year was 12%.

Liquidity

Total EBITDA from continuing operations was $45 million in the fourth quarter of 2014 and $147 million for the full fiscal year, resulting in increases of 11% and 6%, respectively, over the comparable prior-year periods. Cash provided by operating activities was $98 million for fiscal 2014, while free cash flow totaled $71 million for the year. EBITDA from continuing operations and free cash flow are defined in the detailed reconciliation of these non-GAAP financial measures provided elsewhere in this release. As of December 31, 2014, the Company had $68 million in cash on its balance sheet and $138 million of availability under its revolving bank credit facility. The leverage ratio at December 31, 2014 (outstanding indebtedness divided by trailing 12 months EBITDA from continuing operations) was 1.5:1. Net debt, defined as funded debt less invested cash, was $169 million at December 31, 2014. The leverage ratio of EBITDA from continuing operations to net debt was 1.1:1 and the ratio of net debt to equity was 0.38:1. During fiscal 2014, the Company invested $59 million in acquisitions, $24 million in capital expenditures and $44 million in stock repurchases, funded primarily with operating cash flow and a nominal $17 million increase in net debt.

Share Buyback Authorization

In January 2015, the Board of Directors authorized a new program for the repurchase of up to two million shares of the Company’s common stock. The authorized share repurchase total represents approximately 7% of the outstanding shares at December 31, 2014. Under its new share repurchase program, the Company can purchase common stock in open market transactions, block or privately negotiated transactions, and may from time to time purchase shares pursuant to a trading plan in accordance with Rule 10b5-1 and Rule 10b-18 under the Exchange Act or by any combination of such methods. The number of shares to be purchased and the timing of the purchases are based on a variety of factors, including, but not limited to, the level of cash balances, credit availability, debt covenant restrictions, general business conditions, regulatory requirements, the market price of the Company’s stock and the availability of alternative investment opportunities. No time limit was set for completion of repurchases under the new authorization and the program may be suspended or discontinued at any time. Under previously completed share repurchase programs over the past ten years, the Company has repurchased a total of 11.2 million shares, representing 39% of the currently outstanding share count, at an aggregate cost of $297 million.

Fiscal 2015 Outlook

For fiscal 2015, the Company is projecting 8% to 13% constant currency EBITDA growth from continuing operations, reflecting continued revenue and earnings growth from existing pawn operations and de novo store openings. The Company will continue to look opportunistically for large format pawn acquisitions in strategic markets, which could further increase EBITDA growth for 2015. Reflecting the recent strength of the U.S. dollar exchange rate for the Mexican peso and an anticipated increase in the Company’s effective tax rate, the Company is initiating its fiscal full-year 2015 guidance for earnings from continuing operations to be in a range of $2.75 to $2.90 per diluted share. The guidance assumes approximately $0.20 to $0.23 of earnings per share drag, net of tax, for fiscal 2015 due to the full year impact of an assumed exchange rate of 14.6 Mexican pesos / U.S. dollar for 2015, as compared to the actual rate of 13.3 in 2014. Full year earnings per share expectations are also impacted by approximately $0.18 to $0.21 per share in additional income tax expense in 2015 due to an expected increase in the effective tax rate to a normalized range of 31% to 32% for fiscal 2015, compared to 27% in 2014. Fiscal 2015 estimates are further tempered by expected declines in earnings from payday lending operations of approximately $0.04 per share, net of tax. The earnings per share guidance for fiscal 2015 does not include any assumed stock repurchases under the newly authorized two million share repurchase plan or any significant multi-store acquisitions. Given the complexity of the first quarter earnings comparisons that include the negative foreign exchange impact of approximately $0.04 per share, incremental interest expense related to the Company’s March 2014 senior note offering of approximately $0.05 per share, net of taxes, and the significantly higher effective tax rate compared to the first quarter of the prior year, the Company is providing first quarter earnings guidance of $0.56 to $0.60 per diluted share. This still implies positive currency-adjusted EBITDA growth compared to the first quarter of last year. The Company expects to add approximately 75 to 90 new stores in 2015, of which approximately 20 to 25 additions are expected to occur in the first quarter. A majority of the additions are expected to be de novo large format pawn stores in Mexico, but may include 15 to 20 new builds and/or small acquisitions in the U.S. Revenue growth in 2015 is expected to be generated exclusively from core pawn operations that will be partially offset by the continued de-emphasis of payday lending operations. The Company intends to close seven consumer loan stores during the first quarter of 2015. Approximately 96% of projected 2015 revenues are expected to be derived from the continued growth and focus on pawn operations.

Additional Commentary and Analysis

Mr. Wessel further commented on the Company’s fiscal 2014 results and expectations for 2015, “Although the impact of foreign exchange rates put unexpected pressure on earnings per share late in the year, we were pleased with most operational aspects of our fourth quarter results. The important fourth quarter retailing season was generally positive in both the U.S. and Mexico. On a constant currency basis, consolidated retail revenues increased 21% and were up 8% in Mexico on a same-store basis. We exceeded our prior-year December retail margin in Mexico, which was impressive given the margin pressures experienced by many electronics and discount retailers with whom we compete on a retail basis. Driven by the retail performance and solid pawn fee growth, consolidated same-store core revenues were up 4% in the fourth quarter, an improvement compared to both the prior sequential quarter and the prior year.”

“As we turn to 2015, our earnings expectations are primarily tempered by the significant variability in the foreign currency exchange market, as over half of our revenues are generated in Mexico. Our current outlook for the peso exchange rate is 14.6 to 1, a 10% decrease compared to the average rate of 13.3 to 1 in 2014. The change in the exchange rate is not expected to materially impact our core peso-based revenues, margins or profitability within Mexico. Additionally, the impact of foreign exchange rates on long term cash flows are largely mitigated by the fact that we retain our foreign cash in Mexico, where it can be utilized for reinvestment in new stores and strategic acquisitions in Mexico and potentially other future Latin American markets. We also began the year with additional headwinds from the return to a more normalized effective tax rate, which is estimated to be 31% to 32% for 2015, and somewhat lighter than expected seasonal pawn borrowing demand as we begin the year. As a result of these impacts, we have adjusted our forecasts accordingly. Lastly, our payday lending revenues and earnings continue by design to decline. While not a significant headwind, we still anticipate $0.04 per share of earnings drag when compared to the payday lending earnings contribution in 2014.”

“Even with these mostly non-core headwinds, our large format stores in both Mexico and the U.S. remain very profitable and should continue to generate industry-leading operating efficiencies and profitability margins. We expect to continue using our strong balance sheet and operating cash flows to invest in new stores and accretive acquisitions for long-term earnings growth. As we seek to generate significant free cash flows, we also anticipate returning a significant portion to our shareholders though the two million share buyback authorization announced today.”

“In summary, given our competitive strengths, growth platform and expanding customer base, we are excited about our ability to further grow our store count, revenues, and earnings. Our business model, coupled with our strong balance sheet, positions us to drive sustainable long-term growth in shareholder value. We continue to believe that we have the right formula for meaningful earnings and cash flow growth in the years to come.”

Forward-Looking Information

This release contains forward-looking statements about the business, financial condition and prospects of First Cash Financial Services, Inc. and its wholly owned subsidiaries (together, the “Company”). Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of forward-looking terminology such as “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” or “anticipates,” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy or objectives. Forward-looking statements can also be identified by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties.

Forward-looking statements in this release include, without limitation, the Company’s expectations of earnings per share, earnings growth, expansion strategies, regulatory exposures, store openings, liquidity (including the availability of capital under existing credit facilities), cash flow, consumer demand for the Company’s products and services, income tax rates, currency exchange rates, future share repurchases and the price of gold and the impacts thereof, earnings and related transaction expenses from acquisitions, the ability to successfully integrate acquisitions and other performance results. These statements are made to provide the public with management’s current assessment of the Company’s business. Although the Company believes the expectations reflected in forward-looking statements are reasonable, there can be no assurances such expectations will prove to be accurate. Security holders are cautioned such forward-looking statements involve risks and uncertainties. Certain factors may cause results to differ materially from those anticipated by the forward-looking statements made in this release. Such factors are difficult to predict and many are beyond the control of the Company and may include, without limitation, the following:

changes in regional, national or international economic conditions, including inflation rates, unemployment rates and energy prices; changes in consumer demand, including purchasing, borrowing and repayment behaviors; changes in pawn forfeiture rates and credit loss provisions; changes in the market value of pawn collateral and merchandise inventories, including gold prices and the value of consumer electronics and other products; changes or increases in competition; the ability to locate, open and staff new stores and successfully integrate acquisitions; the availability or access to sources of used merchandise inventory; changes in credit markets, interest rates and the ability to establish, renew and/or extend the Company’s debt financing; the ability to maintain banking relationships for treasury services and processing of certain consumer lending transactions; the ability to hire and retain key management personnel; new federal, state or local legislative initiatives or governmental regulations (or changes to existing laws and regulations) affecting pawn businesses, consumer loan businesses and credit services organizations (in both the United States and Mexico); risks and uncertainties related to foreign operations in Mexico; changes in foreign currency exchange rates and the U.S. dollar to Mexican peso exchange rate in particular; changes in import/export regulations and tariffs or duties; changes in anti-money laundering and gun control regulations; unforeseen litigation; changes in tax rates or policies in the U.S. and Mexico; inclement weather, natural disasters and public health issues; security breaches, cyber attacks or fraudulent activity; a prolonged interruption in the Company’s operations of its facilities, systems, and business functions, including its information technology and other business systems; the implementation of new, or changes in the interpretation of existing, accounting principles or financial reporting requirements; and future business decisions.

These and other risks, uncertainties and regulatory developments are further and more completely described in the Company’s 2013 annual report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2014, including the risks described in Item 1A “Risk Factors” of the Company’s annual report. Many of these risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. The forward-looking statements contained in this release speak only as of the date of this release, and the Company expressly disclaims any obligation or undertaking to report any updates or revisions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

About First Cash

Founded in 1988, First Cash is a leading international operator of retail pawn stores, which account for approximately 95% of the Company’s revenues. First Cash focuses on serving cash and credit constrained consumers through its retail locations, which buy and sell a wide variety of jewelry, electronics, tools and other merchandise, and make small consumer pawn loans secured by pledged personal property. Today, First Cash owns and operates 1,010 stores in 13 U.S. states and 29 states in Mexico.

First Cash is a component company in both the Standard & Poor’s SmallCap 600 Index(R) and the Russell 2000 Index(R). First Cash’s common stock (ticker symbol “FCFS”) is traded on the NASDAQ Global Select Market, which has the highest initial listing standards of any stock exchange in the world based on financial and liquidity requirements.

STORE COUNT ACTIVITY

The following table details store openings for the twelve months ended December 31, 2014:

Pawn Locations Consumer

Large Small Loan Total
Format (1) Format (2) Locations (3) Locations Domestic:

Total locations, beginning of period 227 25 57 309 New locations opened 7 1 — 8 Locations acquired 25 — — 25 Store format conversions 1 (12) 11 — Locations closed or consolidated (5) (3) (3) (11) Total locations, end of period 255 11 65 331

International:

Total locations, beginning of period 552 17 28 597 New locations opened 31 — — 31 Locations acquired 47 — — 47 Locations closed or consolidated (1) — — (1) Total locations, end of period 629 17 28 674

Total:

Total locations, beginning of period 779 42 85 906 New locations opened 38 1 — 39 Locations acquired 72 — — 72 Store format conversions 1 (12) 11 — Locations closed or consolidated (6) (3) (3) (12) Total locations, end of period 884 28 93 1,005

(1) The large format locations include retail showrooms and accept a broad array of pawn collateral including consumer electronics, appliances, power tools, jewelry and other general merchandise items. At December 31, 2014, 129 of the U.S. large format pawn stores also offered consumer loans or credit services products.

(2) The small format locations typically have limited retail operations and primarily accept jewelry and small electronic items as pawn collateral and also offer consumer loans or credit services products.

(3) The Company’s U.S. free-standing, small format consumer loan locations offer a credit services product and are all located in Texas. The Mexico locations offer small, short-term consumer loans. The Company’s credit services operations also include an internet distribution channel for customers in the state of Texas.
FIRST CASH FINANCIAL SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Three Months Ended Twelve Months Ended
December 31, December 31,
2014 2013 2014 2013
(in thousands, except per share amounts) Revenue:

Retail merchandise sales $ 130,336 $ 111,745 $ 428,182 $ 367,187 Pawn loan fees 52,386 47,897 199,357 181,555 Consumer loan and credit services fees 9,075 11,011 36,749 43,781 Wholesale scrap jewelry revenue 10,977 14,550 48,589 68,325 Total revenue 202,774 185,203 712,877 660,848

Cost of revenue:

Cost of retail merchandise sold 79,310 68,684 261,673 221,361 Consumer loan and credit services loss provision 2,395 3,280 9,287 11,368 Cost of wholesale scrap jewelry sold 9,436 13,047 41,044 58,545 Total cost of revenue 91,141 85,011 312,004 291,274

Net revenue 111,633 100,192 400,873 369,574

Expenses and other income:

Store operating expenses 52,267 48,559 198,986 181,321 Administrative expenses 14,236 10,840 54,586 49,530 Depreciation and amortization 4,475 4,015 17,476 15,361 Interest expense 4,122 1,018 13,527 3,492 Interest income (160) (55) (682) (322) Total expenses and other income 74,940 64,377 283,893 249,382

Income from continuing operations before income taxes 36,693 35,815 116,980 120,192

Provision for income taxes 9,752 10,297 31,542 35,713

Income from continuing operations 26,941 25,518 85,438 84,479

Loss from discontinued operations, net of tax (740) (272) (633)

Net income $ 26,941 $ 24,778 $ 85,166 $ 83,846

Basic income per share:

Income from continuing operations $ 0.95 $ 0.88 $ 2.98 $ 2.91 Loss from discontinued operations (0.03) (0.01) (0.02) Net income per basic share $ 0.95 $ 0.85 $ 2.97 $ 2.89

Diluted income per share:

Income from continuing operations $ 0.94 $ 0.87 $ 2.94 $ 2.86 Loss from discontinued operations (0.03) (0.01) (0.02) Net income per diluted share $ 0.94 $ 0.84 $ 2.93 $ 2.84

Weighted average shares outstanding:

Basic 28,397 28,933 28,671 29,079 Diluted 28,804 29,393 29,070 29,574
FIRST CASH FINANCIAL SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

December 31,
2014 2013
(in thousands) ASSETS

Cash and cash equivalents $ 67,992 $ 70,643 Pawn loan fees and service charges receivable 16,926 16,689 Pawn loans 118,536 115,234 Consumer loans, net 1,241 1,450 Inventories 91,088 77,793 Other current assets 12,092 8,413 Total current assets 307,875 290,222

Property and equipment, net 113,750 108,137 Goodwill, net 276,882 251,241 Other non-current assets 16,168 9,373 Total assets $ 714,675 $ 658,973

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current portion of notes payable $ — $ 3,326 Accounts payable and accrued liabilities 42,559 38,023 Income taxes payable 7,412 Total current liabilities 42,559 48,761

Revolving unsecured credit facility 22,400 182,000 Notes payable, net of current portion 5,026 Senior unsecured notes 200,000 — Deferred tax liabilities 1,165 8,827 Total liabilities 266,124 244,614

Stockholders’ equity:

Preferred stock — Common stock 397 394 Additional paid-in capital 188,062 176,675 Retained earnings 582,894 497,728 Accumulated other comprehensive loss from cumulative foreign currency translation adjustments (26,168) (7,751) Common stock held in treasury, at cost (296,634) (252,687) Total stockholders’ equity 448,551 414,359 Total liabilities and stockholders’ equity $ 714,675 $ 658,973

FIRST CASH FINANCIAL SERVICES, INC.
OPERATING INFORMATION
(UNAUDITED)

The following table details the components of revenue for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013 (in thousands). Constant currency results exclude the effects of foreign currency translation and are calculated by translating current-year results at prior-year average exchange rates, which is more fully described elsewhere in this release.

Three Months Ended

Increase/(Decrease)
December 31,

Constant Currency
2014 2013 Increase/(Decrease) Basis Domestic revenue:

Retail merchandise sales $ 49,604 $ 40,529 $ 9,075 22% 22% Pawn loan fees 24,154 22,109 2,045 9% 9% Consumer loan and credit services fees 8,437 10,227 (1,790) (18)% (18)% Wholesale scrap jewelry revenue 5,828 7,767 (1,939) (25)% (25)%
88,023 80,632 7,391 9% 9% International revenue:

Retail merchandise sales 80,732 71,216 9,516 13% 20% Pawn loan fees 28,232 25,788 2,444 9% 16% Consumer loan and credit services fees 638 784 (146) (19)% (14)% Wholesale scrap jewelry revenue 5,149 6,783 (1,634) (24)% (24)%
114,751 104,571 10,180 10% 16% Total revenue:

Retail merchandise sales 130,336 111,745 18,591 17% 21% Pawn loan fees 52,386 47,897 4,489 9% 13% Consumer loan and credit services fees 9,075 11,011 (1,936) (18)% (17)% Wholesale scrap jewelry revenue (1) 10,977 14,550 (3,573) (25)% (25)%
$ 202,774 $ 185,203 $ 17,571 9% 13%

(1) Wholesale scrap jewelry revenue during the three months ended December 31, 2014 consisted primarily of gold sales, of which approximately 7,800 ounces were sold at an average price of $1,222 per ounce, compared to approximately 10,400 ounces of gold sold at $1,213 per ounce in the prior-year period.

FIRST CASH FINANCIAL SERVICES, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)

The following table details the components of revenue for the twelve months ended December 31, 2014 as compared to the twelve months ended December 31, 2013 (in thousands). Constant currency results exclude the effects of foreign currency translation and are calculated by translating current-year results at prior-year average exchange rates, which is more fully described elsewhere in this release.

Twelve Months Ended

Increase/(Decrease)
December 31,

Constant Currency
2014 2013 Increase/(Decrease) Basis Domestic revenue:

Retail merchandise sales $ 172,354 $ 139,469 $ 32,885 24% 24% Pawn loan fees 89,952 79,398 10,554 13% 13% Consumer loan and credit services fees 34,051 40,378 (6,327) (16)% (16)% Wholesale scrap jewelry revenue 28,243 38,617 (10,374) (27)% (27)%
324,600 297,862 26,738 9% 9% International revenue:

Retail merchandise sales 255,828 227,718 28,110 12% 17% Pawn loan fees 109,405 102,157 7,248 7% 12% Consumer loan and credit services fees 2,698 3,403 (705) (21)% (17)% Wholesale scrap jewelry revenue 20,346 29,708 (9,362) (32)% (32)%
388,277 362,986 25,291 7% 11% Total revenue:

Retail merchandise sales 428,182 367,187 60,995 17% 20% Pawn loan fees 199,357 181,555 17,802 10% 12% Consumer loan and credit services fees 36,749 43,781 (7,032) (16)% (16)% Wholesale scrap jewelry revenue (1) 48,589 68,325 (19,736) (29)% (29)%
$ 712,877 $ 660,848 $ 52,029 8% 10%

(1) Wholesale scrap jewelry revenue during the twelve months ended December 31, 2014 consisted primarily of gold, of which approximately 33,100 ounces sold at an average selling price of $1,268 per ounce, compared to approximately 42,300 ounces of gold sold at $1,423 per ounce in the prior-year period.

FIRST CASH FINANCIAL SERVICES, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)

The following table details customer loans and inventories held by the Company and active credit service organization (“CSO”) credit extensions from an independent third-party lender as of December 31, 2014 as compared to December 31, 2013 (in thousands). Constant currency results exclude the effects of foreign currency translation and are calculated by translating current-year balances at the prior-year end-of-period exchange rate, which is more fully described elsewhere in this release.

Increase/(Decrease)
Balance at December 31,

Constant Currency
2014 2013 Increase/(Decrease) Basis Domestic:

Pawn loans $ 68,100 $ 65,716 $ 2,384 4% 4% CSO credit extensions held by independent third-party (1) 10,421 12,240 (1,819) (15)% (15)% Other consumer loans 790 832 (42) (5)% (5)%
79,311 78,788 523 1% 1% International:

Pawn loans 50,436 49,518 918 2% 15% Other consumer loans 451 618 (167) (27)% (18)%
50,887 50,136 751 1% 14% Total:

Pawn loans 118,536 115,234 3,302 3% 8% CSO credit extensions held by independent third-party (1) 10,421 12,240 (1,819) (15)% (15)% Other consumer loans 1,241 1,450 (209) (14)% (10)%
$ 130,198 $ 128,924 $ 1,274 1% 6% Pawn inventories:

Domestic pawn inventories $ 49,969 $ 40,910 $ 9,059 22% 22% International pawn inventories 41,119 36,883 4,236 11% 26%
$ 91,088 $ 77,793 $ 13,295 17% 24%

(1) CSO amounts outstanding are composed of the principal portion of active CSO extensions of credit by an independent third-party lender, which are not included on the Company’s balance sheet, net of the Company’s estimated fair value of its liability under the letters of credit guaranteeing the extensions of credit.

FIRST CASH FINANCIAL SERVICES, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)

The following table details the composition of pawn collateral and the average outstanding pawn loan receivable as of December 31, 2014 as compared to December 31, 2013.

Balance at December 31,
2014 2013 Composition of pawn collateral:

Domestic pawn loans:

General merchandise 44% 40% Jewelry 56% 60%
100% 100% International pawn loans:

General merchandise 88% 87% Jewelry 12% 13%
100% 100% Total pawn loans:

General merchandise 62% 61% Jewelry 38% 39%
100% 100%

Average outstanding pawn loan amount:

Domestic pawn loans $ 171 $ 171 International pawn loans (1) 67 71 Total pawn loans (1) 103 107

(1) Decline in average outstanding pawn loan is primarily due to the decline in the Mexican peso in 2014.

FIRST CASH FINANCIAL SERVICES, INC.
NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)

The Company uses certain financial calculations such as EBITDA from continuing operations, free cash flow and constant currency results (as defined or explained below) as factors in the measurement and evaluation of the Company’s operating performance and period-over-period growth. The Company derives these financial calculations on the basis of methodologies other than generally accepted accounting principles (“GAAP”), primarily by excluding from a comparable GAAP measure certain items that the Company does not consider to be representative of its actual operating performance. These financial calculations are “non-GAAP financial measures” as defined in Securities and Exchange Commission (“SEC”) rules. The Company uses these financial calculations in operating its business because management believes they are less susceptible to variances in actual operating performance that can result from the excluded items and other infrequent charges. The Company presents these financial measures to investors because management believes they are useful to investors in evaluating the primary factors that drive the Company’s operating performance and because management believes they provide greater transparency into the Company’s results of operations. However, items that are excluded and other adjustments and assumptions that are made in calculating EBITDA from continuing operations, free cash flow and constant currency results are significant components in understanding and assessing the Company’s financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, the Company’s GAAP financial measures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP and are thus susceptible to varying calculations, EBITDA from continuing operations, free cash flow and constant currency results as presented may not be comparable to other similarly titled measures of other companies.

FIRST CASH FINANCIAL SERVICES, INC.
NON-GAAP FINANCIAL INFORMATION (CONTINUED)
(UNAUDITED)

Earnings from Continuing Operations Before Interest, Taxes, Depreciation and Amortization

The Company defines EBITDA from continuing operations as net income (loss) before income (loss) from discontinued operations net of tax, income taxes, depreciation and amortization, interest expense and interest income. EBITDA from continuing operations is commonly used by investors to assess a company’s leverage capacity, liquidity and financial performance. However, EBITDA from continuing operations has limitations as an analytical tool and should not be considered in isolation or as a substitute for net income (loss) or other statement of income data prepared in accordance with GAAP. The following table provides a reconciliation of net income to EBITDA from continuing operations (in thousands):

Three Months Ended Twelve Months Ended
December 31, December 31,
2014 2013 2014 2013 Net income $ 26,941 $ 24,778 $ 85,166 $ 83,846 Loss from discontinued operations, net of tax 740 272 633 Income from continuing operations 26,941 25,518 85,438 84,479 Adjustments:

Income taxes 9,752 10,297 31,542 35,713 Depreciation and amortization 4,475 4,015 17,476 15,361 Interest expense 4,122 1,018 13,527 3,492 Interest income (160) (55) (682) (322) EBITDA from continuing operations $ 45,130 $ 40,793 $ 147,301 $ 138,723

EBITDA from continuing operations margin calculated as follows:

Total revenue from continuing operations $ 202,774 $ 185,203 $ 712,877 $ 660,848 EBITDA from continuing operations $ 45,130 $ 40,793 $ 147,301 $ 138,723 EBITDA from continuing operations as a percentage of revenue 22% 22% 21% 21%

Leverage ratio (indebtedness divided by EBITDA from continuing operations):

Indebtedness

$ 222,400 $ 190,352 EBITDA from continuing operations

$ 147,301 $ 138,723 Leverage ratio

1.5:1 1.4:1

FIRST CASH FINANCIAL SERVICES, INC.
NON-GAAP FINANCIAL INFORMATION (CONTINUED)
(UNAUDITED)

Free Cash Flow

For purposes of its internal liquidity assessments, the Company considers free cash flow, which is defined as cash flow from the operating activities of continuing and discontinued operations reduced by purchases of property and equipment and net cash outflow from loan receivables. Free cash flow is commonly used by investors as a measure of cash generated by business operations that will be used to repay scheduled debt maturities and can be used to invest in future growth through new business development activities or acquisitions, repurchase stock, or repay debt obligations prior to their maturities. These metrics can also be used to evaluate the Company’s ability to generate cash flow from business operations and the impact that this cash flow has on the Company’s liquidity. However, free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for cash flow from operating activities, including discontinued operations, or other income statement data prepared in accordance with GAAP. The following table reconciles “net cash flow from operating activities” to “free cash flow” (in thousands):

Twelve Months Ended
December 31,
2014 2013 Cash flow from operating activities, including discontinued operations $ 97,679 $ 106,718 Cash flow from investing activities:

Loan receivables (2,470) (411) Purchases of property and equipment (23,954) (26,672) Free cash flow $ 71,255 $ 79,635

Constant Currency

The Company’s reporting currency is the U.S. dollar. However, certain performance metrics discussed in this release are presented on a “constant currency” basis, which may be considered a non-GAAP measurement of financial performance under GAAP. The Company’s management uses constant currency results to evaluate operating results of certain business operations in Mexico, which are transacted in Mexican pesos. Pawn scrap jewelry in Mexico is sold in U.S. dollars and, accordingly, does not require a constant currency adjustment. Constant currency results reported herein are calculated by translating certain balance sheet and income statement items denominated in Mexican pesos using the exchange rate from the prior-year comparable period, as opposed to the current comparable period, in order to exclude the effects of foreign currency rate fluctuations for purposes of evaluating period-over-period comparisons. For balance sheet items, the end-of-period exchange rate of 13.1 to 1 at December 31, 2013 was used compared to the exchange rate of 14.7 to 1 at December 31, 2014. For income statement items, the average closing daily exchange rate for the appropriate period was used. The average exchange rate for the prior-year quarter ended December 31, 2013 was 13.0 to 1 compared to the current-quarter rate of 13.8 to 1. The average exchange rate for the prior-year twelve-month period ended December 31, 2013 was 12.8 to 1 compared to the current year-to-date rate of 13.3 to 1.

Professional ServicesInvestment & Company Information Contact:

For further information, please contact:
Gar Jackson
Global IR Group
Phone: (949) 873-2789
Email: gar@globalirgroup.com
Doug Orr, Executive Vice President and Chief Financial Officer
Phone: (817) 505-3199
Email: investorrelations@firstcash.com
Website: www.firstcash.com

[…]

Park National Corporation Reports Fourth Quarter and Full Year 2014 Financial Results and Declares Dividend

NEWARK, Ohio, Jan. 26, 2015 (GLOBE NEWSWIRE) — Park National Corporation (Park) (NYSE MKT:PRK) today announced financial results for the three months (fourth quarter) and year ended December 31, 2014. Park’s steady loan growth helped generate increased earnings for both the quarter and the year. The board of directors declared a quarterly cash dividend of $0.94 per common share, payable on March 10, 2015 to common shareholders of record as of February 20, 2015. The board also acknowledged the upcoming retirement of its past Chairman William T. McConnell.

Financial performance highlights

Park’s net income for the fourth quarter of 2014 was $24.3 million, compared to $17.5 million for the same period in 2013, an increase of $6.8 million or 38.9 percent. Net income per diluted common share for the fourth quarter of 2014 was $1.58, compared to $1.13 in the same period of 2013.

Park’s net income for the twelve months ended December 31, 2014 was $84.1 million, compared to $77.2 million for the same period in 2013, an increase of $6.9 million or 8.9 percent. Net income per diluted common share was $5.46 for the year ended December 31, 2014, compared to $5.01 for the same period of 2013.

“Individuals and business owners continue to tell us our local lenders consistently deliver professional, reliable service and a variety of loan options,” said Park President and CEO David L. Trautman. “I applaud our associates for their unwavering focus on serving our customers and inviting more to choose our bank.”

Park’s community-banking subsidiary, The Park National Bank, reported net income of $83.0 million for the year ended December 31, 2014, compared to net income of $75.6 million for the same period of 2013. The Park National Bank had total assets of $6.9 billion at December 31, 2014 and $6.5 billion at December 31, 2013. This performance generated a return on average assets of 1.22 percent and 1.15 percent for the bank for the twelve-month periods ended December 31, 2014 and 2013, respectively.

The Park National Bank loan portfolio expanded during the fourth quarter and full year 2014. Loans outstanding at December 31, 2014 were $4.78 billion, compared to $4.74 billion at September 30, 2014, an increase of $38 million or an annualized 3.14 percent. Loan growth for the year ended December 31, 2014 was $222 million, an increase of 4.88 percent, compared to the $4.56 billion outstanding at December 31, 2013. The $222 million increase in loans during 2014 was largely due to new loans added in the consumer loan portfolio, which increased by approximately $167 million.

Board member changes

Park Director William T. McConnell notified the board that he will retire from board service, effective April 27, 2015 at the end of his current term. A Park National Corporation board member since 1986, he is a past chairman of the board and most recently led the board’s executive committee. Also today, the board reported its plan to name McConnell a Director Emeritus on April 27, 2015.

“After 55 years of service to the Park National organization, we want to express our profound gratitude for all that Bill has given us,” said Park Chairman C. Daniel DeLawder. “He is a man of impeccable integrity, quick witted and smart as a whip. Bill’s forward-thinking style and superb leadership shaped this organization into what it is today. Individuals here at Park National, within our larger community and those exposed to the broader role he played within our industry at the state and national level have relied on his counsel and benefitted from his support. It’s an honor to call him a friend.”

The board elected a new board member to fill a vacancy in class of directors whose terms expire at the 2017 annual meeting of Park shareholders. James R. DeRoberts will join the boards of directors for both Park National Corporation and The Park National Bank effective February 16, 2015. DeRoberts is a partner at Gardiner Allen DeRoberts Insurance.

About Park National Corporation

Headquartered in Newark, Ohio, Park National Corporation had $7.0 billion in total assets (as of December 31, 2014). The Park organization principally consists of 11 community bank divisions, a non-bank subsidiary and two specialty finance companies. Park’s Ohio-based banking operations are conducted through Park subsidiary The Park National Bank and its divisions, which include Fairfield National Bank Division, Richland Bank Division, Century National Bank Division, First-Knox National Bank Division, Farmers Bank Division, United Bank, N.A. Division, Second National Bank Division, Security National Bank Division, Unity National Bank Division, and The Park National Bank of Southwest Ohio & Northern Kentucky Division; and Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance). The Park organization also includes Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below…

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Park cautions that any forward-looking statements contained in this Current Report on Form 8-K or made by management of Park are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation: Park’s ability to execute our business plan successfully and within the expected timeframe; general economic and financial market conditions, and the uneven spread of positive impacts of the recovery on the economy, specifically in the real estate markets and the credit markets, either nationally or in the states in which Park and our subsidiaries do business, may be worse or slower than expected which could adversely impact the demand for loan, deposit and other financial services as well as loan delinquencies and defaults; changes in interest rates and prices may adversely impact the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet; changes in consumer spending, borrowing and saving habits; changes in unemployment; changes in customers’, suppliers’, and other counterparties’ performance and creditworthiness; asset/liability repricing risks and liquidity risks; our liquidity requirements could be adversely affected by changes to regulations governing bank capital and liquidity standards as well as by changes in our assets and liabilities; competitive factors among financial services organizations could increase significantly, including product and pricing pressures, changes to third-party relationships and our ability to attract, develop and retain qualified bank professionals; clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; the nature, timing and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and our subsidiaries, including changes in laws and regulations concerning taxes, accounting, banking, securities and other aspects of the financial services industry, specifically the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), as well as future regulations which will be adopted by the relevant regulatory agencies, including the Consumer Financial Protection Bureau, to implement the Dodd-Frank Act’s provisions, the Budget Control Act of 2011, the American Taxpayer Relief Act of 2012 and the Basel III regulatory capital reforms; the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board, the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, and the accuracy of our assumptions and estimates used to prepare our financial statements; the effect of trade, monetary, fiscal and other governmental policies of the United States federal government, including interest rate policies of the Federal Reserve; disruption in the liquidity and other functioning of United States financial markets; the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the levels of U.S. and European government debt and concerns regarding the creditworthiness of certain sovereign governments, supranationals and financial institutions in Europe; unfavorable resolution of legal proceedings or other claims and regulatory and other governmental examinations or other inquiries; the adequacy of our risk management program; a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors and other service providers, including as a result of cyber-attacks; demand for loans in the respective market areas served by Park and our subsidiaries; and other risk factors relating to the banking industry as detailed from time to time in Park’s reports filed with the Securities and Exchange Commission including those described in “Item 1A. Risk Factors” of Part I of Park’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.

PARK NATIONAL CORPORATION Financial Highlights Three months ended December 31, 2014, September 30, 2014, and December 31, 2013 2014 2014 2013 Percent change vs. (in thousands, except share and per share data) 4th QTR 3rd QTR 4th QTR 3Q ’14 4Q ’13 INCOME STATEMENT:

Net interest income $ 57,294 $ 56,709 $ 55,900 1.0% 2.5% (Recovery of) provision for loan losses (8,349) 4,501 (85) N.M. N.M. Other income 21,009 19,396 17,778 8.3% 18.2% Loss on sale of investment securities (1,175) — — N.M. N.M. Other expense 52,437 46,903 51,146 11.8% 2.5% Income before income taxes $ 33,040 $ 24,701 $ 22,617 33.8% 46.1% Income taxes 8,699 6,398 5,163 36.0% 68.5% Net income $ 24,341 $ 18,303 $ 17,454 33.0% 39.5%

MARKET DATA:

Earnings per common share – basic (b) $ 1.58 $ 1.19 $ 1.13 32.8% 39.8% Earnings per common share – diluted (b) 1.58 1.19 1.13 32.8% 39.8% Cash dividends per common share 0.94 0.94 0.94 —% —% Book value per common share at period end 45.39 44.70 42.29 1.5% 7.3% Stock price per common share at period end 88.48 75.42 85.07 17.3% 4.0% Market capitalization at period end 1,361,919 1,160,896 1,311,095 17.3% 3.9%

Weighted average common shares – basic (a) 15,393,924 15,392,421 15,413,517 —% (0.1)% Weighted average common shares – diluted (a) 15,414,433 15,413,664 15,413,517 —% —% Common shares outstanding at period end 15,392,399 15,392,413 15,411,952 —% (0.1)%

PERFORMANCE RATIOS: (annualized)

Return on average assets (a)(b) 1.35% 1.05% 1.03% 28.6% 31.1% Return on average equity (a)(b) 13.81% 10.51% 10.87% 31.4% 27.0% Yield on loans 4.83% 4.80% 4.95% 0.6% (2.4)% Yield on investments 2.53% 2.54% 2.53% (0.4)% —% Yield on money markets 0.25% 0.25% 0.21% —% 19.0% Yield on earning assets 4.11% 4.17% 4.24% (1.4)% (3.1)% Cost of interest bearing deposits 0.32% 0.27% 0.31% 18.5% 3.2% Cost of borrowings 2.51% 2.58% 2.50% (2.7)% 0.4% Cost of paying liabilities 0.82% 0.79% 0.83% 3.8% (1.2)% Net interest margin (g) 3.47% 3.55% 3.59% (2.3)% (3.3)% Efficiency ratio (g) 67.82% 61.46% 69.16% 10.3% (1.9)%

OTHER RATIOS (NON – GAAP):

Annualized return on average tangible assets (a)(b)(e) 1.37% 1.06% 1.04% 29.2% 31.7% Annualized return on average tangible equity (a)(b)(c) 15.40% 11.74% 12.27% 31.2% 25.5% Tangible book value per share (d) $ 40.69 $ 40.00 $ 37.60 1.7% 8.2%

N.M. – Not meaningful

Note: Explanations (a) – (g) are included at the end of the financial highlights.

PARK NATIONAL CORPORATION Financial Highlights (continued) Three months ended December 31, 2014, September 30, 2014, and December 31, 2013 Percent change vs. BALANCE SHEET: December 31, 2014 September 30, 2014 December 31, 2013 3Q ’14 4Q ’13

Investment securities $ 1,500,788 $ 1,472,625 $ 1,424,234 1.9% 5.4% Loans 4,829,682 4,770,433 4,620,505 1.2% 4.5% Allowance for loan losses 54,352 57,674 59,468 (5.8)% (8.6)% Goodwill and other intangibles 72,334 72,334 72,334 —% —% Other real estate owned 22,605 19,185 34,636 17.8% (34.7)% Loans held for sale 1 — 28,606 — N.M. N.M. Total assets 7,003,256 7,013,272 6,638,347 (0.1)% 5.5% Total deposits 5,128,000 5,129,004 4,789,994 —% 7.1% Borrowings 1,108,582 1,137,653 1,132,820 (2.6)% (2.1)% Shareholders’ equity 698,598 688,016 651,747 1.5% 7.2% Tangible equity (d) 626,264 615,682 579,413 1.7% 8.1% Nonperforming loans 119,288 119,393 155,640 (0.1)% (23.4)% Nonperforming assets 141,893 160,563 190,276 (11.6)% (25.4)% 1 Loans held for sale at September 30, 2014 included both commercial ($22.0 million) and mortgage loans ($6.6 million) held for sale. There were no amounts reported as held for sale as of December 31, 2014 and 2013, respectively, as the only loans held for sale are the mortgage loans held for sale in each period, which were deemed immaterial and are thus not broken out separately.

ASSET QUALITY RATIOS:

Loans as a % of period end assets 68.96% 68.02% 69.60% 1.4% (0.9)% Nonperforming loans as a % of period end loans 2.47% 2.50% 3.37% (1.2)% (26.7)% Nonperforming assets as a % of period end loans + OREO 2.92% 3.35% 4.09% (12.8)% (28.6)% Allowance for loan losses as a % of period end loans 1.13% 1.21% 1.29% (6.6)% (12.4)% Net loan charge-offs (recoveries) $ (5,027) $ 4,738 $ (1,659) N.M. N.M. Annualized net loan charge-offs (recoveries) as a % of average loans (a) (0.41)% 0.39% (0.14)% N.M. N.M.

CAPITAL & LIQUIDITY:

Total equity / Period end assets 9.98% 9.81% 9.82% 1.7% 1.6% Tangible equity (d) / Tangible assets (f) 9.04% 8.87% 8.82% 1.9% 2.5% Average equity / Average assets (a) 9.80% 10.01% 9.49% (2.1)% 3.3% Average equity / Average loans (a) 14.53% 14.49% 13.86% 0.3% 4.8% Average loans / Average deposits (a) 92.43% 95.04% 94.74% (2.7)% (2.4)%

N.M. – Not meaningful

Note: Explanations (a) – (g) are included at the end of the financial highlights.

PARK NATIONAL CORPORATION

Financial Highlights

Twelve months ended December 31, 2014 and 2013

(in thousands, except share and per share data)
2014

2013
Percent change
vs. 2013
INCOME STATEMENT:

Net interest income $ 225,044 $ 221,025 1.8% (Recovery of) provision for loan losses (7,333) 3,415 N.M. Other income 76,707 73,277 4.7% Loss on sale of investment securities (1,158) — N.M. Other expense 195,234 188,529 3.6% Income before income taxes $ 112,692 $ 102,358 10.1% Income taxes 28,602 25,131 13.8% Net income $ 84,090 $ 77,227 8.9%

MARKET DATA:

Earnings per common share – basic (b) $ 5.46 $ 5.01 9.0% Earnings per common share – diluted (b) 5.46 5.01 9.0% Cash dividends per common share 3.76 3.76 —%

Weighted average common shares – basic (a) 15,394,971 15,412,365 (0.1)% Weighted average common shares – diluted (a) 15,413,832 15,412,365 —%

PERFORMANCE RATIOS: (Annualized)

Return on average assets (a)(b) 1.22% 1.15% 6.1% Return on average equity (a)(b) 12.32% 11.96% 3.0% Yield on loans 4.84% 5.02% (3.6)% Yield on investments 2.58% 2.67% (3.4)% Yield on earning assets 4.19% 4.29% (2.3)% Cost of interest bearing deposits 0.29% 0.35% (17.1)% Cost of borrowings 2.57% 2.57% —% Cost of paying liabilities 0.81% 0.86% (5.8)% Net interest margin (g) 3.55% 3.61% (1.7)% Efficiency ratio (g) 64.77% 63.78% 1.6%

ASSET QUALITY RATIOS:

Net loan charge-offs $ (2,217) $ (516) N.M. Net loan charge-offs as a % of average loans (a) (0.05)% (0.01)% N.M.

CAPITAL & LIQUIDITY:

Average stockholders’ equity / Average assets (a) 9.90% 9.63% 2.8% Average stockholders’ equity / Average loans (a) 14.47% 14.30% 1.2% Average loans / Average deposits (a) 94.02% 92.90% 1.2%

OTHER RATIOS (NON GAAP):

Return on average tangible assets (a)(b)(e) 1.23% 1.16% 6.0% Return on average tangible equity (a)(b)(c) 13.78% 13.48% 2.2%

Note: Explanations (a) – (g) are included at the end of the financial highlights.

PARK NATIONAL CORPORATION Financial Highlights (continued)
(a) Averages are for the quarters ended December 31, 2014, September 30, 2014 and December 31, 2013 or for the fiscal years ended December 31, 2014 and 2013, as appropriate. (b) Reported measure uses net income. (c) Net income for each period divided by average tangible equity during the period. Average tangible equity equals average shareholders’ equity during the applicable period less average goodwill and other intangibles during the applicable period.
RECONCILIATION OF AVERAGE SHAREHOLDERS’ EQUITY TO AVERAGE TANGIBLE EQUITY:
THREE MONTHS ENDED TWELVE MONTHS ENDED
December 31, 2014 September 30, 2014 December 31, 2013 December 31, 2014 December 31, 2013 AVERAGE SHAREHOLDERS’ EQUITY $ 699,218 $ 691,085 $ 636,886 $ 682,455 $ 645,533 Less: Average goodwill and other intangibles 72,334 72,334 72,334 72,334 72,464 AVERAGE TANGIBLE EQUITY $ 626,884 $ 618,751 $ 564,552 $ 610,121 $ 573,069

(d) Tangible book value divided by common shares outstanding at period end. Tangible equity equals ending shareholders’ equity less goodwill and other intangibles, in each case at the end of the period.

RECONCILIATION OF SHAREHOLDERS’ EQUITY TO TANGIBLE EQUITY:

December 31, 2014 September 30, 2014 December 31, 2013

SHAREHOLDERS’ EQUITY $ 698,598 $ 688,016 $ 651,747

Less: Goodwill and other intangibles 72,334 72,334 72,334

TANGIBLE EQUITY $ 626,264 $ 615,682 $ 579,413

(e) Net income available to shareholders for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill and other intangibles, in each case during the applicable period.

RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS:
THREE MONTHS ENDED TWELVE MONTHS ENDED
December 31, 2014 September 30, 2014 December 31, 2013 December 31, 2014 December 31, 2013 AVERAGE ASSETS $ 7,132,800 $ 6,903,127 $ 6,707,975 $ 6,895,308 $ 6,702,973 Less: Average goodwill and other intangibles 72,334 72,334 72,334 72,334 72,464 AVERAGE TANGIBLE ASSETS $ 7,060,466 $ 6,830,793 $ 6,635,641 $ 6,822,974 $ 6,630,509

(f) Tangible equity divided by tangible assets. Tangible assets equals total assets less goodwill and other intangibles, in each case at the end of the period.

RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:

December 31, 2014 September 30, 2014 December 31, 2013

TOTAL ASSETS $ 7,003,256 $ 7,013,272 $ 6,638,347

Less: Goodwill and other intangibles 72,334 72,334 72,334

TANGIBLE ASSETS $ 6,930,922 $ 6,940,938 $ 6,566,013

(g) Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown below assuming a 35% tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST
THREE MONTHS ENDED TWELVE MONTHS ENDED
December 31, 2014 September 30, 2014 December 31, 2013 December 31, 2014 December 31, 2013 Interest income $ 67,816 $ 66,622 $ 66,066 $ 265,143 $ 262,947 Fully taxable equivalent adjustment 191 209 273 845 1,302 Fully taxable equivalent interest income $ 68,007 $ 66,831 $ 66,339 $ 265,988 $ 264,249 Interest expense 10,522 9,913 10,166 40,099 41,922 Fully taxable equivalent net interest income $ 57,485 $ 56,918 $ 56,173 $ 225,889 $ 222,327

PARK NATIONAL CORPORATION Consolidated Statements of Income

Three Months Ended Twelve Months Ended December 31, December 31, (in thousands, except share and per share data) 2014 2013 2014 2013

Interest income:

Interest and fees on loans $ 58,395 $ 57,038 $ 227,644 $ 225,538 Interest on:

Obligations of U.S. Government, its agencies and other securities 9,223 8,911 36,981 36,686 Obligations of states and political subdivisions 4 3 45 Other interest income 198 113 515 678 Total interest income 67,816 66,066 265,143 262,947

Interest expense:

Interest on deposits:

Demand and savings deposits 445 382 1,677 1,773 Time deposits 2,776 2,516 9,323 11,235 Interest on borrowings 7,301 7,268 29,099 28,914 Total interest expense 10,522 10,166 40,099 41,922

Net interest income 57,294 55,900 225,044 221,025

(Recovery of) provision for loan losses (8,349) (85) (7,333) 3,415

Net interest income after (recovery of) provision for loan losses 65,643 55,985 232,377 217,610

Other income 21,009 17,778 76,707 73,277

Loss on sale of investment securities (1,175)(1,158)

Other expense 52,437 51,146 195,234 188,529

Income before income taxes 33,040 22,617 112,692 102,358

Income taxes 8,699 5,163 28,602 25,131

Net income $ 24,341 $ 17,454 $ 84,090 $ 77,227

Per Common Share:

Net income – basic $ 1.58 $ 1.13 $ 5.46 $ 5.01 Net income – diluted $ 1.58 $ 1.13 $ 5.46 $ 5.01

Weighted average shares – basic 15,393,924 15,413,517 15,394,971 15,412,365 Weighted average shares – diluted 15,414,433 15,413,517 15,413,832 15,412,365

Cash Dividends Declared $ 0.94 $ 0.94 $ 3.76 $ 3.76

PARK NATIONAL CORPORATION Consolidated Balance Sheets
(in thousands, except share data) December 31, 2014 December 31, 2013

Assets

Cash and due from banks $ 133,511 $ 129,078 Money market instruments 104,188 17,952 Investment securities 1,500,788 1,424,234 Loans 4,829,682 4,620,505 Allowance for loan losses (54,352) (59,468) Loans, net 4,775,330 4,561,037 Bank premises and equipment, net 55,479 55,278 Goodwill 72,334 72,334 Other real estate owned 22,605 34,636 Other assets 339,021 343,798 Total assets $ 7,003,256 $ 6,638,347

Liabilities and Shareholders’ Equity

Deposits:

Noninterest bearing $ 1,269,296 $ 1,193,553 Interest bearing 3,858,704 3,596,441 Total deposits 5,128,000 4,789,994 Borrowings 1,108,582 1,132,820 Other liabilities 68,076 63,786 Total liabilities $ 6,304,658 $ 5,986,600

Shareholders’ Equity:

Preferred shares (200,000 shares authorized; no shares outstanding at December 31, 2014 and December 31, 2013) $ $ — Common shares (No par value; 20,000,000 shares authorized in 2014 and 2013; 16,150,888 shares issued at December 31, 2014 and 16,150,941 shares issued at December 31, 2013) 303,104 302,651 Accumulated other comprehensive loss, net of taxes (13,608) (35,419) Retained earnings 486,541 460,643 Treasury shares (758,489 shares at December 31, 2014 and 738,989 at December 31, 2013) (77,439) (76,128) Total shareholders’ equity $ 698,598 $ 651,747

Total liabilities and shareholders’ equity $ 7,003,256 $ 6,638,347 PARK NATIONAL CORPORATION Consolidated Average Balance Sheets

Three Months Ended Twelve Months Ended December 31, December 31, (in thousands) 2014 2013 2014 2013

Assets

Cash and due from banks $ 118,027 $ 110,644 $ 112,113 $ 110,796 Money market instruments 314,096 211,544 204,874 272,851 Investment securities 1,442,416 1,361,295 1,416,476 1,368,275 Loans 4,812,439 4,594,974 4,717,297 4,514,781 Allowance for loan losses (58,760) (58,862) (58,917) (56,860) Loans, net 4,753,679 4,536,112 4,658,380 4,457,921 Bank premises and equipment, net 55,236 56,156 55,407 56,303 Goodwill and other intangibles 72,334 72,334 72,334 72,464 Other real estate owned 21,016 34,533 26,543 35,216 Other assets 355,996 325,357 349,181 329,147 Total assets $ 7,132,800 $ 6,707,975 $ 6,895,308 $ 6,702,973

Liabilities and Shareholders’ Equity

Deposits:

Noninterest bearing $ 1,266,459 $ 1,163,227 $ 1,196,625 $ 1,117,379 Interest bearing 3,940,248 3,686,721 3,820,928 3,742,361 Total deposits 5,206,707 4,849,948 5,017,553 4,859,740 Borrowings 1,154,502 1,151,994 1,130,885 1,123,661 Other liabilities 72,373 69,147 64,415 74,039 Total liabilities $ 6,433,582 $ 6,071,089 $ 6,212,853 $ 6,057,440

Shareholders’ Equity:

Preferred shares $ $ — $ $ — Common shares 303,004 302,651 302,822 302,652 Accumulated other comprehensive loss, net of taxes (7,982) (49,640) (16,164) (33,324) Retained earnings 481,559 459,947 473,188 452,503 Treasury shares (77,363) (76,072) (77,391) (76,298) Total shareholders’ equity $ 699,218 $ 636,886 $ 682,455 $ 645,533

Total liabilities and shareholders’ equity $ 7,132,800 $ 6,707,975 $ 6,895,308 $ 6,702,973 PARK NATIONAL CORPORATION Consolidated Statements of Income – Linked Quarters

2014 2014 2014 2014 2013 (in thousands, except per share data) 4th QTR 3rd QTR 2nd QTR 1st QTR 4th QTR

Interest income:

Interest and fees on loans $ 58,395 $ 57,492 $ 57,004 $ 54,753 $ 57,038 Interest on:

Obligations of U.S. Government, its agencies and other securities 9,223 9,011 9,271 9,476 8,911 Obligations of states and political subdivisions — 1 2 4 Other interest income 198 119 87 111 113 Total interest income 67,816 66,622 66,363 64,342 66,066

Interest expense:

Interest on deposits:

Demand and savings deposits 445 440 399 393 382 Time deposits 2,776 2,136 2,133 2,278 2,516 Interest on borrowings 7,301 7,337 7,270 7,191 7,268 Total interest expense 10,522 9,913 9,802 9,862 10,166

Net interest income 57,294 56,709 56,561 54,480 55,900

(Recovery of) provision for loan losses (8,349) 4,501 (1,260) (2,225) (85)

Net interest income after (recovery of) provision for loan losses 65,643 52,208 57,821 56,705 55,985

Other income 21,009 19,396 19,654 16,648 17,778

Gain/(loss) on sale of investment securities (1,175) — 17 — —

Other expense 52,437 46,903 48,196 47,698 51,146

Income before income taxes 33,040 24,701 29,296 25,655 22,617

Income taxes 8,699 6,398 7,469 6,036 5,163

Net income $ 24,341 $ 18,303 $ 21,827 $ 19,619 $ 17,454

Per Common Share:

Net income – basic $ 1.58 $ 1.19 $ 1.42 $ 1.27 $ 1.13 Net income – diluted $ 1.58 $ 1.19 $ 1.42 $ 1.27 $ 1.13 PARK NATIONAL CORPORATION Detail of other income and other expense – Linked Quarters

2014 2014 2014 2014 2013 (in thousands) 4th QTR 3rd QTR 2nd QTR 1st QTR 4th QTR

Other income:

Income from fiduciary activities $ 5,050 $ 4,734 $ 4,825 $ 4,541 $ 4,590 Service charges on deposits 3,651 4,171 3,942 3,659 4,169 Other service income 3,564 2,450 2,527 1,918 2,185 Checkcard fee income 3,433 3,431 3,493 3,213 3,330 Bank owned life insurance income 1,153 1,420 1,026 1,262 1,274 OREO valuation adjustments (380) (935) (675) (416) (951) Gain on the sale of OREO, net 45 2,149 2,603 706 358 Gain on loans held for sale 1,867 — — — — Miscellaneous 2,626 1,976 1,913 1,765 2,823 Total other income $ 21,009 $ 19,396 $ 19,654 $ 16,648 $ 17,778

Other expense:

Salaries and employee benefits $ 24,525 $ 26,243 $ 26,140 $ 25,060 $ 25,115 Net occupancy expense 2,378 2,339 2,457 2,832 2,415 Furniture and equipment expense 2,709 2,870 2,994 2,998 3,022 Data processing fees 1,196 1,281 1,121 1,114 1,064 Professional fees and services 8,195 6,934 8,168 6,283 10,520 Marketing 1,160 1,087 1,006 1,118 1,126 Insurance 1,413 1,396 1,467 1,447 1,391 Communication 1,328 1,304 1,293 1,343 1,489 Miscellaneous 9,533 3,449 3,550 5,503 5,004 Total other expense $ 52,437 $ 46,903 $ 48,196 $ 47,698 $ 51,146 PARK NATIONAL CORPORATION Asset Quality Information

Year ended December 31, (in thousands, except ratios) 2014
2013 2012
2011 2010

Allowance for loan losses:

Allowance for loan losses, beginning of period $ 59,468
$ 55,537 $ 68,444
$ 143,575 $ 116,717 Transfer of loans at fair value —
— —
(219) — Transfer of allowance to held for sale —
— —
(13,100) — Charge-offs 24,780 (B) 19,153 61,268 (A) 133,882 66,314 Recoveries 26,997
19,669 12,942
8,798 6,092 Net (recoveries) charge-offs (2,217)
(516) 48,326
125,084 60,222 (Recovery of) provision for loan losses (7,333)
3,415 35,419
63,272 87,080 Allowance for loan losses, end of period $ 54,352
$ 59,468 $ 55,537
$ 68,444 $ 143,575 (A) Year ended December 31, 2012 included the full charge-off of the Vision Bank ALLL of $12.1 million to bring the retained Vision Bank loan portfolio to fair value prior to the merger of Vision Bank (as constituted following the transaction with Centennial Bank and Home BancShares, Inc.) with and into SEPH, the non-bank subsidiary of Park, on February 16, 2012.

(B) Year ended December 31, 2014 included $4.3 million in charge-offs related to the transfer of $22.0 million of commercial loans to the held for sale portfolio.

General reserve trends:

Allowance for loan losses, end of period $ 54,352
$ 59,468 $ 55,537
$ 68,444 $ 143,575 Specific reserves 3,660
10,451 8,276
15,935 66,904 General reserves $ 50,692
$ 49,017 $ 47,261
$ 52,509 $ 76,671

Total loans $ 4,829,682
$ 4,620,505 $ 4,450,322
$ 4,317,099 $ 4,732,685 Impaired commercial loans 73,676
112,304 137,238
187,074 250,933 Total loans less impaired commercial loans $ 4,756,006
$ 4,508,201 $ 4,313,084
$ 4,130,025 $ 4,481,752

Asset Quality Ratios:

Net (recoveries) charge-offs as a % of average loans (0.05)%
(0.01)% 1.10%
2.65% 1.30% Allowance for loan losses as a % of period end loans 1.13%
1.29% 1.25%
1.59% 3.03% General reserves as a % of total loans less impaired commercial loans 1.07%
1.09% 1.10%
1.27% 1.71%

Nonperforming Assets – Park National Corporation:

Nonaccrual loans $ 100,393
$ 135,216 $ 155,536
$ 195,106 $ 289,268 Accruing troubled debt restructuring 16,254
18,747 29,800
28,607 — Loans past due 90 days or more 2,641
1,677 2,970
3,489 3,590 Total nonperforming loans $ 119,288
$ 155,640 $ 188,306
$ 227,202 $ 292,858 Other real estate owned – Park National Bank 10,687
11,412 14,715
13,240 8,385 Other real estate owned – SEPH 11,918
23,224 21,003
29,032 — Other real estate owned – Vision Bank —
— —
— 33,324 Total nonperforming assets $ 141,893
$ 190,276 $ 224,024
$ 269,474 $ 334,567 Percentage of nonaccrual loans to period end loans 2.08%
2.93% 3.49%
4.52% 6.11% Percentage of nonperforming loans to period end loans 2.47%
3.37% 4.23%
5.26% 6.19% Percentage of nonperforming assets to period end loans 2.94%
4.12% 5.03%
6.24% 7.07% Percentage of nonperforming assets to period end assets 2.03%
2.87% 3.37%
3.86% 4.59%

PARK NATIONAL CORPORATION Asset Quality Information (continued)

Year ended December 31, (in thousands, except ratios) 2014
2013 2012
2011 2010

Nonperforming Assets – Park National Bank and Guardian:

Nonaccrual loans $ 77,477
$ 99,108 $ 100,244
$ 96,113 $ 117,815 Accruing troubled debt restructuring 16,157
18,747 29,800
26,342 — Loans past due 90 days or more 2,641
1,677 2,970
3,367 3,226 Total nonperforming loans $ 96,275
$ 119,532 $ 133,014
$ 125,822 $ 121,041 Other real estate owned – Park National Bank 10,687
11,412 14,715
13,240 8,385 Total nonperforming assets $ 106,962
$ 130,944 $ 147,729
$ 139,062 $ 129,426 Percentage of nonaccrual loans to period end loans 1.61%
2.16% 2.28%
2.29% 2.88% Percentage of nonperforming loans to period end loans 2.00%
2.61% 3.03%
3.00% 2.96% Percentage of nonperforming assets to period end loans 2.23%
2.86% 3.36%
3.32% 3.16% Percentage of nonperforming assets to period end assets 1.55%
2.00% 2.27%
2.21% 1.99%

Nonperforming Assets – SEPH/Vision Bank (retained portfolio as of December 31, 2014, 2013, 2012, and 2011): Nonaccrual loans $ 22,916
$ 36,108 $ 55,292
$ 98,993 $ 171,453 Accruing troubled debt restructuring 97
— —
2,265 — Loans past due 90 days or more —
— —
122 364 Total nonperforming loans $ 23,013
$ 36,108 $ 55,292
$ 101,380 $ 171,817 Other real estate owned – Vision Bank —
— —
— 33,324 Other real estate owned – SEPH 11,918
23,224 21,003
29,032 — Total nonperforming assets $ 34,931
$ 59,332 $ 76,295
$ 130,412 $ 205,141 Percentage of nonaccrual loans to period end loans N.M.
N.M. N.M.
N.M. 26.77% Percentage of nonperforming loans to period end loans N.M.
N.M. N.M.
N.M. 26.82% Percentage of nonperforming assets to period end loans N.M.
N.M. N.M.
N.M. 32.02% Percentage of nonperforming assets to period end assets N.M.
N.M. N.M.
N.M. 25.90%

PARK NATIONAL CORPORATION Asset Quality Information (continued)

Year ended December 31, (in thousands, except ratios) 2014
2013 2012
2011 2010

New nonaccrual loan information – Park National Corporation

Nonaccrual loans, beginning of period $ 135,216
$ 155,536 $ 195,106
$ 289,268 $ 233,544 New nonaccrual loans 70,059
67,398 83,204
124,158 175,175 Resolved nonaccrual loans 86,384
87,718 122,774
218,320 119,451 Sale of nonaccrual loans held for sale 18,498
— —
— — Nonaccrual loans, end of period $ 100,393
$ 135,216 $ 155,536
$ 195,106 $ 289,268

New nonaccrual loan information – Ohio – based operations

Nonaccrual loans, beginning of period $ 99,108
$ 100,244 $ 96,113
$ 117,815 $ 85,197 New nonaccrual loans – Ohio-based operations 69,389
66,197 68,960
78,316 85,081 Resolved nonaccrual loans 78,288
67,333 64,829
100,018 52,463 Sale of nonaccrual loans held for sale 12,732
— —
— — Nonaccrual loans, end of period $ 77,477
$ 99,108 $ 100,244
$ 96,113 $ 117,815

New nonaccrual loan information – SEPH/Vision Bank

Nonaccrual loans, beginning of period $ 36,108
$ 55,292 $ 98,993
$ 171,453 $ 148,347 New nonaccrual loans – SEPH/Vision Bank 670
1,201 14,243
45,842 90,094 Resolved nonaccrual loans 8,096
20,385 57,944
118,302 66,988 Sale of nonaccrual loans held for sale 5,766
— —
— — Nonaccrual loans, end of period $ 22,916
$ 36,108 $ 55,292
$ 98,993 $ 171,453

Impaired Commercial Loan Portfolio Information (period end):

Unpaid principal balance $ 106,156
$ 175,576 $ 242,345
$ 290,908 $ 304,534 Prior charge-offs 32,480
63,272 105,107
103,834 53,601 Remaining principal balance 73,676
112,304 137,238
187,074 250,933 Specific reserves 3,660
10,451 8,276
15,935 66,904 Book value, after specific reserve $ 70,016
$ 101,853 $ 128,962
$ 171,139 $ 184,029 View photo.FinanceInvestment & Company InformationPark National Corporation Contact: Media contact:
Bethany Lewis
740.349.0421
blewis@parknationalbank.com
Investor contact:
Brady Burt
740.322.6844
bburt@parknationalbank.com
[…]

Salem Announces 19% Increase in Net Revenue for the Third Quarter 2014

CAMARILLO, CA–(Marketwired – Nov 6, 2014) – Salem Communications Corporation (NASDAQ: SALM) released its results for the three and nine months ended September 30, 2014.

Third Quarter 2014 Highlights

Total net revenue increased 19.0% Adjusted EBITDA(1) increased 14.3% Free cash flow(1) increased 29.5% Internet and e-commerce revenue increased 54.5% Publishing revenue increased 164.7% Repaid $5.0 million in principal on our Term Loan B

Third Quarter 2014 Results

For the quarter ended September 30, 2014 compared to the quarter ended September 30, 2013:

Consolidated

Total revenue increased 19.0% to $69.6 million from $58.5 million; Total operating expenses increased 22.7% to $60.8 million from $49.5 million; Operating expenses, excluding gains and losses on asset disposals, non-cash stock-based compensation expense, and changes in the fair value of contingent earn-out consideration increased 21.8% to $59.9 million from $49.2 million; Operating income decreased 1.4% to $8.8 million from $9.0 million; Net income decreased to $3.7 million, or $0.14 net income per diluted share, from $5.3 million, or $0.21 net income per diluted share, in the prior year; EBITDA(1) increased 10.5% to $14.1 million from $12.7 million; and Adjusted EBITDA(1) increased 14.3% to $15.0 million from $13.1 million.

Broadcast

Net broadcast revenue increased 2.1% to $47.0 million from $46.0 million; Station operating income (“SOI”)(1) decreased 5.3% to $14.4 million from $15.2 million; Same station net broadcast revenue increased 1.0% to $46.5 million from $46.0 million; Same station SOI decreased 4.8% to $14.4 million from $15.2 million; and Same station SOI margin decreased to 31.1% from 33.0%.

Internet and e-commerce

Internet and e-commerce revenue increased 54.5% to $14.5 million from $9.4 million; and Internet and e-commerce operating income(1) increased 30.4% to $3.6 million from $2.7 million.

Publishing

Publishing revenue increased 164.7% to $8.1 million from $3.1 million; and Publishing operating income(1) increased to $1.4 million from a loss of $0.2 million.

Included in the results for the quarter ended September 30, 2014 are:

A $0.5 million ($0.3 million, net of tax, or $0.01 per share) increase in the estimated fair value of the contingent earn-out consideration associated with the Twitchy.com and Eagle acquisitions; and A $0.3 million non-cash compensation charge ($0.2 million, net of tax, or $0.01 per share) related to the expensing of stock options consisting of: $0.2 million non-cash compensation included in corporate expenses; and $0.1 million non-cash compensation included in broadcast operating expenses.

Included in the results for the quarter ended September 30, 2013 are:

A $0.4 million non-cash compensation charge ($0.2 million, net of tax, or $0.01 per share) related to the expensing of stock options consisting of: $0.2 million non-cash compensation included in corporate expenses; $0.1 million non-cash compensation included in broadcast operating expenses; and $0.1 million non-cash compensation included in Internet operating expenses.

Per share numbers are calculated based on 26,265,957 diluted weighted average shares for the quarter ended September 30, 2014, and 25,921,391 diluted weighted average shares for the quarter ended September 30, 2013.

Year to Date 2014 Results

For the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013:

Consolidated

Total revenue increased 15.1% to $200.6 million from $174.2 million; Operating expenses increased 19.8% to $178.9 million from $149.4 million; Operating expenses excluding gains and losses on asset disposals, non-cash stock-based compensation expense, changes in the fair value of contingent earn-out consideration and impairment charges increased 20.0% to $176.5 million from $147.1 million; Operating income decreased 12.8% to $21.7 million from $24.8 million; Net income increased to $5.4 million, or $0.21 net income per diluted share, from a $8.1 million loss, or $0.32 net loss per share, in the prior year; EBITDA(1) increased to $36.4 million from $8.4 million; and Adjusted EBITDA(1) increased 0.8% to $38.8 from $38.5 million.

Broadcast

Net broadcast revenue increased 3.0% to $140.4 million from $136.3 million; SOI(1) decreased 5.2% to $42.7 million from $45.0 million; Same station net broadcast revenue increased 2.4% to $139.5 million from $136.2 million; Same station SOI decreased 4.7% to $43.0 million from $45.1 million; and Same station SOI margin decreased to 30.8% from 33.1%.

Internet and e-commerce

Internet and e-commerce revenue increased 44.1% to $41.8 million from $29.0 million; and Internet and e-commerce operating income(1) increased 27.3% to $11.0 million from $8.6 million.

Publishing

Publishing revenue increased 105.4% to $18.4 million from $8.9 million; and Publishing operating income(1) increased to $0.7 million from a loss of $0.8 million.

Included in the results for the nine months ended September 30, 2014 are:

A $0.9 million ($0.5 million, net of tax, or $0.02 per share) increase in the estimated fair value of the contingent earn-out consideration associated with the Twitchy.com and Eagle acquisitions; A $0.2 million loss ($0.1 million, net of tax) on disposals associated with the write-off of a receivable from a prior station sale and the relocation of our office and studio in San Francisco offset by insurance proceeds for damages associated with one of our stations; and A $1.3 million non-cash compensation charge ($0.8 million, net of tax, or $0.03 per share) related to the expensing of stock options consisting of: $0.8 million non-cash compensation included in corporate expenses; $0.3 million non-cash compensation included in broadcast operating expenses; $0.1 million non-cash compensation included in Internet operating expenses; and the remainder included in publishing operating expenses.

Included in the results for the nine months ended September 30, 2013 are:

A $27.8 million loss ($16.7 million, net of tax, or $0.68 per share) on the early retirement of long-term debt due to the repurchase of $212.6 million of our 9 5/8% senior secured second lien notes due in 2016 and the termination of then existing bank debt; A $0.8 million impairment loss ($0.5 million, net of tax, or $0.02 per share) associated with the goodwill and mastheads of our publishing businesses; and A $1.5 million non-cash compensation charge ($0.9 million, net of tax, or $0.04 per share) related to the expensing of stock options primarily consisting of: $1.0 million non-cash compensation included in corporate expenses; $0.3 million non-cash compensation included in broadcast operating expenses; and $0.2 million non-cash compensation included in Internet operating expenses.

Per share numbers are calculated based on 26,032,789 diluted weighted average shares for the nine months ended September 30, 2014, and 24,832,140 diluted weighted average shares for the nine months ended September 30, 2013.

Balance Sheet

As of September 30, 2014, the company had $2.8 million outstanding on its revolver and $284.0 million outstanding on the Term Loan B. The company was in compliance with the covenants of its credit facility. The company’s bank leverage ratio was 5.42 versus a compliance covenant of 6.50.

Cash Distribution

Salem paid a quarterly cash distribution of $0.0625 per share on its Class A and Class B common stock on September 30, 2014 to shareholders of record as of September16, 2014. The distributions totaled approximately $1.6 million.

Acquisitions and Divestitures

The following transactions were completed since July 1, 2014:

On October 1, 2014, we completed the acquisition of radio station KXXT-AM in Phoenix, Arizona for $0.6 million.

Conference Call Information

Salem will host a teleconference to discuss its results on November 6, 2014 at 2:00 p.m. Pacific Time. To access the teleconference, please dial (719) 325-2214, passcode 9300007 or listen via the investor relations portion of the company’s website, located at www.salem.cc. A replay of the teleconference will be available through November 20, 2014 and can be heard by dialing (719) 457-0820, passcode 9300007 or on the investor relations portion of the company’s website, located at www.salem.cc.

Fourth Quarter 2014 Outlook

For the fourth quarter of 2014, Salem is projecting total revenue to increase 6% to 8% over fourth quarter 2013 total revenue of $62.7 million. The company is also projecting operating expenses before gains or losses on disposal of assets, impairment losses, changes in the fair value of contingent earn-out consideration and stock-based compensation expense to increase 8% to 11% as compared to the fourth quarter of 2013 operating expenses of $52.3 million. Without the acquisition of Eagle, the company would be projecting revenue to be down 1% to up 1% and expenses to be down 1% to up 2%.

About Salem Communications

Salem Communications Corporation is America’s leading Christian and conservative multi-media corporation, with media properties comprising radio, digital media and book, magazine and newsletter publishing. Each day Salem serves a loyal and dedicated audience of listeners and readers numbering in the millions nationally. With its unique programing focus, Salem provides compelling content, fresh commentary and relevant information from some of the most respected figures across the media landscape.

The company, through its Salem Radio Group, is the largest commercial U.S. radio broadcasting company providing Christian and conservative programing. Salem owns and operates 105 local radio stations, with 63 stations in the top 25 media markets. Salem Radio Network (“SRN”) is a full-service national radio network, with nationally syndicated programs comprising Christian teaching and talk, conservative talk, news, and music. SRN is home to many industry-leading hosts including: Bill Bennett, Mike Gallagher, Hugh Hewitt, Michael Medved, Dennis Prager and Janet Mefferd.

Salem New Media is a powerful source of Christian and conservative themed news, analysis, and commentary. Salem’s Christian sites include: Christianity.com, BibleStudyTools.com, GodTube.com, GodVine.com, WorshipHouseMedia.com and OnePlace.com. Considered by many to be a consolidation of the conservative news and opinion sector’s most influential brands, Salem’s conservative sites include Townhall.com, HotAir.com, Twitchy.com, HumanEvents.com and RedState.com.

Salem’s Regnery Publishing unit, with a 65-year history, remains the nation’s leading publisher of conservative books. Having published many of the seminal works of the early conservative movement, Regnery today continues as the dominant publisher in the conservative space, with leading authors including: Ann Coulter, Dinesh D’Souza, Newt Gingrich, David Limbaugh, Michelle Malkin and Mark Steyn. Salem’s book publishing business also includes Xulon Press™, a leading provider of self-publishing services for Christian and conservative authors.

Salem Publishing™ publishes Christian and conservative magazines including Homecoming, YouthWorker Journal, The Singing News, Preaching and Townhall Magazine.

Salem Communications also owns Eagle Financial Publications and Eagle Wellness. Eagle Financial Publications provide market analysis and specific investment advice for individual investors from seasoned financial experts Mark Skousen, Nicholas Vardy, Chris Versace and Doug Fabian. Eagle Wellness provides practical health advice and is a trusted source for nutritional supplements from one of the country’s leading complementary health physicians.

Forward-Looking Statements
Statements used in this press release that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of certain risks and uncertainties, including but not limited to the ability of Salem to close and integrate announced transactions, market acceptance of Salem’s radio station formats, competition from new technologies, adverse economic conditions, and other risks and uncertainties detailed from time to time in Salem’s reports on Forms 10-K, 10-Q, 8-K and other filings filed with or furnished to the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Salem undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events.

(1) Regulation G

Station operating income, Internet and e-commerce operating income, publishing operating income, EBITDA, Adjusted EBITDA, and free cash flow are financial measures not prepared in accordance with generally accepted accounting principles (“GAAP”). Station operating income is defined as net broadcast revenue minus broadcast operating expenses. Internet and e-commerce operating income is defined as Internet and e-commerce revenue minus Internet and e-commerce operating expenses. Publishing operating income is defined as publishing revenue minus publishing operating expenses. EBITDA is defined as net income before interest, taxes, depreciation, amortization and change in fair value of interest rate swaps. Adjusted EBITDA is defined as EBITDA before gain or loss on the disposal of assets, change in estimated fair value of contingent earn-out consideration and non-cash compensation expense. Free cash flow is defined as Adjusted EBITDA less capital expenditures, less cash paid for income taxes, less cash paid for interest. Salem has provided supplemental information as an attachment to this press release, reconciling these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP. The company believes these non-GAAP financial measures, when considered in conjunction with the most directly comparable GAAP financial measures, provide useful measures of the company’s operating performance.

Station operating income, Internet and e-commerce operating income, publishing operating income, EBITDA, Adjusted EBITDA, and free cash flow are generally recognized by the broadcast and media industry as important measures of performance. These measures are used by investors and analysts who report on the industry to provide meaningful comparisons between entities. They are not a measure of liquidity or of performance in accordance with GAAP, and should be viewed as a supplement to and not a substitute for, or superior to, the company’s results of operations presented on a GAAP basis such as operating income and net income. Salem’s definitions of station operating income, Internet and e-commerce operating income, publishing operating income, EBITDA, Adjusted EBITDA, and free cash flow are not necessarily comparable to similarly titled measures reported by other companies.

Salem Communications Corporation Condensed Consolidated Statements of Operations (in thousands, except share, per share and margin data) Three Months Ended Nine Months Ended September 30, September 30, 2013 2014 2013 2014 (Unaudited) Net broadcast revenue $ 46,015 $ 46,962 $ 136,287 $ 140,393 Net Internet and e-commerce revenue 9,390 14,511 29,012 41,811 Net publishing revenue 3,071 8,130 8,941 18,369 Total net revenue 58,476 69,603 174,240 200,573 Operating expenses: Broadcast operating expenses 30,847 32,596 91,258 97,695 Internet and e-commerce operating expenses 6,644 10,931 20,372 30,811 Publishing operating expenses 3,301 6,766 9,776 17,624 Corporate expenses 4,951 5,254 15,839 17,542 Change in the estimated fair value of contingent earn-out consideration — 545914 Impairment of indefinite-lived long-term assets other than goodwill — — 345 — Impairment of goodwill — — 438 — Depreciation and amortization 3,784 4,671 11,389 14,104 (Gain) loss on disposal of assets (25 ) (7 ) (20 ) 214 Total operating expenses 49,502 60,756 149,397 178,904 Net operating income from continuing operations 8,974 8,847 24,843 21,669 Other income (expense): Interest income 16 2 52 43 Interest expense (3,770 ) (4,139 ) (13,212 ) (11,986 ) Change in fair value of interest rate swaps (1,033 ) 1,046 2,545 (1,423 ) Loss on early retirement of long-term debt (16 ) (18 ) (27,792 ) (26 ) Net miscellaneous income and expenses 4 572 15 652 Income (loss) from continuing operations before income taxes 4,175 6,310 (13,549 ) 8,929 Provision (benefit from) for income taxes (1,159 ) 2,567 (5,506 ) 3,492 Income (loss) from continuing operations 5,334 3,743 (8,043 ) 5,437 Loss from discontinued operations, net of tax (11 ) — (26 ) — Net income (loss) $ 5,323 $ 3,743 $ (8,069 ) $ 5,437 Basic income (loss) per share before discontinued operations $ 0.21 $ 0.14 $ (0.32 ) $ 0.21 Income (loss) per share from discontinued operations, net of tax — — — — Basic income (loss) per share after discontinued operations $ 0.21 $ 0.14 $ (0.32 ) $ 0.21 Diluted income (loss) per share before discontinued operations $ 0.21 $ 0.14 $ (0.32 ) $ 0.21 Income (loss) per share from discontinued operations, net of tax — — — — Diluted income (loss) per share after discontinued operations $ 0.21 $ 0.14 $ (0.32 ) $ 0.21 Distributions per share $ — $ 0.06 $ 0.10 $ 0.18 Basic weighted average shares outstanding 25,126,858 25,536,397 24,832,140 25,258,025 Diluted weighted average shares outstanding 25,921,391 26,265,957 24,832,140 26,032,789 Other data: Station operating income $ 15,168 $ 14,366 $ 45,029 $ 42,698 Station operating margin 33.0 % 30.6 % 33.0 % 30.4 % Salem Communications Corporation Condensed Consolidated Balance Sheets (in thousands) December 31, 2013 September 30, 2014 (Unaudited) Assets Cash $ 65 $ 311 Trade accounts receivable, net 37,627 40,168 Deferred income taxes 6,876 6,876 Other current assets 6,477 12,054 Property, plant and equipment, net 98,928 100,296 Intangible assets, net 413,871 425,052 Fair value of interest rate swap agreement 3,177 1,754 Deferred financing costs 4,130 3,628 Other assets 3,962 2,413 Total assets $ 575,113 $ 592,552 Liabilities and Stockholders’ Equity Current liabilities $ 31,782 $ 42,719 Long-term debt and capital lease obligations 287,672 283,506 Deferred income taxes 43,457 46,590 Other liabilities 10,417 14,603 Stockholders’ equity 201,785 205,134 Total liabilities and stockholders’ equity $ 575,113 $ 592,552 Salem Communications Corporation Supplemental Information (in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2013 2014 2013 2014 (Unaudited) Capital Expenditures $ 2,560 $ 1,793 $ 7,792 $ 7,910 Reconciliation of Same Station Net Broadcast Revenue to Total Net Broadcast Revenue Net broadcast revenue – same station $ 46,015 $ 46,491 $ 136,238 $ 139,475 Net broadcast revenue – acquisitions — 471 49 918 Total net broadcast revenue $ 46,015 $ 46,962 $ 136,287 $ 140,393 Reconciliation of Same Station Broadcast Operating Expenses to Total Broadcast Operating Expenses Broadcast operating expenses – same station $ 30,847 $ 32,048 $ 91,139 $ 96,505 Broadcast operating expenses revenue – acquisitions — 548 119 1,190 Total broadcast operating expenses $ 30,847 $ 32,596 $ 91,258 $ 97,695 Reconciliation of Same Station Operating Income to Total Station Operating Expenses Station operating income – same station $ 15,168 $ 14,443 $ 45,099 $ 42,970 Station operating income – acquisitions — (77 ) (70 ) (272 ) Total station operating income $ 15,168 $ 14,366 $ 45,029 $ 42,698 Salem Communications Corporation Supplemental Information (in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2013 2014 2013 2014 (Unaudited) Reconciliation of SOI and Internet Operating Income and Publishing Operating Income to Net Operating Income from Continuing Operations
Station operating income $ 15,168 $ 14,366 $ 45,029 $ 42,698 Internet and e-commerce operating income 2,746 3,580 8,640 11,000 Publishing operating income (loss) (230 ) 1,364 (835 ) 745 Less: Corporate expenses (4,951 ) (5,254 ) (15,839 ) (17,542 ) Change in the estimated fair value of contingent earn-out consideration — (545 )(914 ) Depreciation and amortization (3,784 ) (4,671 ) (11,389 ) (14,104 ) Impairment of indefinite-lived long-term assets other than goodwill — — (345 ) — Impairment goodwill — — (438 ) — (Gain) loss on disposal of assets 25 7 20 (214 ) Net operating income from continuing operations $ 8,974 $ 8,847 $ 24,843 $ 21,669 Reconciliation of Adjusted EBITDA to EBITDA to Net Income (Loss) Adjusted EBITDA $ 13,095 $ 14,972 $ 38,539 $ 38,829 Less: Stock-based compensation (358 ) (344 ) (1,529 ) (1,276 ) Loss on early retirement of long-term debt (16 ) (18 ) (27,792 ) (26 ) Discontinued operations, net of tax (11 ) — (26 ) — Change in the estimated fair value of contingent earn-out consideration — (545 )(914 ) Impairment of indefinite-lived long-term assets other than goodwill — — (345 ) — Impairment of goodwill — — (438 ) — (Gain) loss on disposal of assets 25 7 20 (214 ) EBITDA 12,735 14,072 8,429 36,399 Plus: Interest income 16 2 52 43 Less: Depreciation and amortization (3,784 ) (4,671 ) (11,389 ) (14,104 ) Interest expense (3,770 ) (4,139 ) (13,212 ) (11,986 ) Change in fair value of interest rate swap (1,033 ) 1,046 2,545 (1,423 ) Provision for (benefit from) income taxes 1,159 (2,567 ) 5,506 (3,492 ) Net income (loss) $ 5,323 $ 3,743 $ (8,069 ) $ 5,437 Reconciliation of Adjusted EBITDA to Free Cash Flow Adjusted EBITDA $ 13,095 $ 14,972 $ 38,539 $ 38,829 Less: Cash interest (3,549 ) (4,122 ) (13,384 ) (10,804 ) Cash taxes (5 ) (16 ) (250 ) (254 ) Capital expenditures (2,560 ) (1,793 ) (7,792 ) (7,910 ) Free Cash Flow $ 6,981 $ 9,041 $ 17,113 $ 19,861 Selected Debt Data Outstanding at September 30, 2014 Applicable
Interest Rate
Term Loan B (1) $ 134,000 4.50 % Term Loan B (2) 150,000 5.52 % Revolver 2,759 5.25 % (1) Subject to rolling LIBOR but no less than 1.00% plus a spread of 3.50%. (2) Under its swap agreement, the company pays a fixed rate of 1.645% plus a spread of 3.50%. The swap is subject to a LIBOR floor of 0.625% versus the Term Loan B debt floor of 1.00%. The swap matures March 28, 2019. […]

Uranium Resources Reports 3Q 2014 Results and Estimates Lower Cash Spend in 2015

CENTENNIAL, Colo.–(BUSINESS WIRE)–

Uranium Resources, Inc. (URRE) reported its 3Q 2014 financial results with cash and cash equivalents of $7.9 million at the end of the third quarter and achieving one of its 2014 goals to reduce the cash spend below $1.0 million per month during the third quarter.

Highlights for 3Q 2014 and to date:

Net cash used in operating activities decreased by 13% to $2.9 million in 3Q 2014 compared with $3.3 million for 3Q 2013. Operating and mineral property expenses increased 5% to $1.0 million in 3Q 2014 from $0.9 million in 3Q 2013 but were lower by 7% from 2Q 2014. The Company is enhancing its mid-term path to production through a strategic and creative non-cash asset exchange agreement whereby it is acquiring prospective properties in South Texas, as announced in the Company’s news release of September 8, 2014.

Christopher M. Jones, President and Chief Executive Officer, said, “During the third quarter, we achieved one of our 2014 goals to reduce our cash spend below $1.0 million per month and we expect to continue at this pace in 2015. We project our total cash budget for 2015 to be less than $10 million or approximately 20% lower than our total spend in 2014.”

Mr. Jones continued, “As part of our cash conservation measures, we are temporarily curtailing generation of technical reports using the Canada National Instrument 43-101 standards for our projects, including rescheduling of the technical report for the Churchrock Project. We will deliver a technical report for our Roca Honda Project later this month as that work is almost complete.”

Financial Overview

The Company’s net loss in the third quarter was $4.0 million compared with a net loss of $3.3 million in 3Q 2013. The net loss increase was due to higher interest expense of $675,000, including non-cash amortization of debt discount of $485,000, and an increase of $47,000 in mineral property expenses, partially offset by a non-cash gain in derivatives of $145,000.

Mineral property expenses were 5% higher at $1.0 million in 3Q 2014 compared with a year ago, reflecting timing of a land holding cost payment for a project. The Company’s general and administrative expenses were $2.2 million in 3Q 2014, essentially flat against 3Q 2013, as lower payroll and insurance rates offset $133,000 in consulting services for one-time due diligence costs related to the land exchange transaction.

Cash and equivalents were $7.9 million at September 30, 2014 compared with $2.0 million at September 30, 2013 and $1.1 million at December 31, 2013. On November 5, 2014, the cash balance was approximately $7.0 million and total shares outstanding was 25.2 million.

Table 1: Financial Summary (unaudited)

($ in 000) Q3 2014 Q3 2013 Variance Cash and Cash Equivalents $ 7,887 $ 2,007 293 % Current Assets 9,085 2,474 267 % Current Liabilities 2,302 2,761 -17 % Working Capital 6,783 (287 ) n.a. Convertible Loan1 8,000 – n.a. Total Shareholders’ Equity $ 28,542 $ 33,512 -15 %

1.

The current convertible loan totals $8.0 million at September 30, 2014. The convertible loan facility is recorded under long-term liabilities on the Company’s balance sheet at September 30, 2014 as a derivative liability at a fair value of $3.8 million and the convertible loan’s residual value of $3.9 million.

Table 2: Financial and Capital Summary (unaudited)

($ and Shares in 000, Except Per Share and Uranium Price)

Q3 2014

Q3 2013 Variance

First Nine
Months 2014

First Nine
Months 2013

Variance Net Cash Used in Operations $ (2,865 ) $ (3,289 ) -13 % $ (9,647 ) $ (11,513 ) -16 % Mineral Property Expenses 987 940 5 % 2,929 3,682 -20 % General and Administrative 2,203 2,175 1 % 7,002 6,750 4 % Interest & Fees Paid on Convertible Loan 200 – n.a. 885 – n.a. Net Loss $ (3,994 ) $ (3,273 ) 22 % $ (10,583 ) $ (11,943 ) -11 % Net Loss Per Share $ (0.16 ) $ (0.17 ) -6 % $ (0.44 ) $ (0.63 ) -30 % Avg. Weighted Shares Outstanding 24,954 19,820 26 % 23,987 18,996 26 % Uranium Average Spot Price (source:UxC) $ 31.17 $ 35.87 -13 % $ 31.99 $ 39.54 -19 %

During the first nine months of 2014, the Company utilized its At The Market (ATM) sales agreement and sold 788,186 shares for net proceeds of $2.6 million. There remains approximately $6.3 million under the ATM sales agreement. The Company expects that its existing cash and the ATM will provide it with working capital through the third quarter of 2015.

Mr. Jones commented, “We have the financial flexibility over the near term to realize further cost reductions and adjust our business priorities. The recent fall in commodity stocks, including in the uranium sector, emphasizes our continuing need to be financially nimble. We will be judicious in monitoring our financial position and maintain our ability to restart production when uranium prices strengthen.”

All periods prior to 4Q 2013 were restated to expense certain costs. The restatement did not impact the Company’s cash position, financing agreement or progress on operating plans.

Operations

At Rosita in South Texas, wells in a previously mined part of the project area are undergoing plugging as part of restoration work. Both Rosita and Kingsville Dome remain on standby for a potential restart when there is a sustained recovery in uranium prices and such restart would be subject to project financing.

Uranium Market Commentary

Since mid-July 2014, the uranium spot price has increased over 30% to the current $38 per pound level, while the long-term price has crept up only $1 to $45 per pound, according to UxC Consulting. Industry analysts attribute the rise in the spot price to the brief strike at Cameco’s McArthur River Mine in Canada, curtailment of mine production from the still low uranium price and more traders being active in the spot market. In September 2014, a weakening energy sector precipitated declines in the commodity and uranium stocks.

Outlook

During the remainder of 2014, the Company expects to:

Generate a Canada National Instrument 43-101 compliant technical report for the Roca Honda Project in New Mexico, Maintain costs under $1.0 million per month, and Pursue additions of quality mineral resources within an economic haulage distance for processing at the Company’s two facilities in South Texas, as well as opportunistic, value-accretive acquisitions and/or operating/processing agreements.

Conference Call/Webcast Details

The Company is hosting a conference call and webcast to discuss its 3Q 2014 financial results and recent developments today, November 6, 2014, at 11:00 a.m. Eastern time (9:00 a.m. Mountain). The conference call and presentation are also available via a live webcast through the Company’s website, www.uraniumresources.com.

Dial-in Numbers:

+1 (800) 319-4610 (U.S. and Canada)

+1 (604) 638-5340 (International)

Conference ID:

Uranium Resources Conference Call

A replay of the call will be available on the Company’s website through November 27, 2014.

Replay Numbers:

+1 (800) 319-6413 (U.S. and Canada)

+1 (604) 638-9010 (International)

Code:

1426 followed by the # sign.

About Uranium Resources

Uranium Resources, Inc. was incorporated in 1977 to explore, develop and recover uranium. Uranium Resources has two licensed and currently idled processing facilities and over 16,000 acres of prospective in situ recovery (ISR) projects in Texas. In New Mexico, the Company holds a federal Nuclear Regulatory Commission license to recover up to three million pounds of uranium per year using the ISR process at certain properties and controls minerals rights encompassing approximately 200,000 acres in the prolific Grants Mineral Belt in New Mexico, which holds one of the largest known concentrations of sandstone-hosted uranium deposits in the world. The Company acquired these properties over the past 25 years, along with an extensive uranium information database of historic drill hole logs, assay certificates, maps and technical reports for the Western United States.

Cautionary Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as “expects,” “estimates,” “projects,” “anticipates,” “believes,” “could,” and other similar words. All statements addressing operating performance, events or developments that the Company expects or anticipates will occur in the future, including but not limited to statements relating to (i) the timing or occurrence of production at or restoration of the Company’s properties, (ii) future improvements in the demand for and price of uranium, (iii) the adequacy of funding for the Company through 2015, (iv) expected reductions in the Company’s operating expenses and cash spend, (v) the completion of a technical report for the Company’s Roca Honda Project, (vi) additions of reserves and resources or acquisitions, including through the closing of the asset exchange announced in the Company’s news release of September 8, 2014 and (vii) entry into operating or processing agreements are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties include, but are not limited to, (a) the Company’s ability to raise additional capital in the future; (b) spot price and long-term contract price of uranium; (c) the Company’s ability to reach agreements with current royalty holders; (d) operating conditions at the Company’s projects; (e) government and tribal regulation of the uranium industry and the nuclear power industry; (f) world-wide uranium supply and demand; (g) maintaining sufficient financial assurance in the form of sufficiently collateralized surety instruments; (h) unanticipated geological, processing, regulatory and legal or other problems the Company may encounter; and other factors which are more fully described in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should any of the Company’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on the Company’s forward-looking statements. Except as required by law, the Company disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this news release.

Uranium Resources, Inc.

Consolidated Balance Sheets

(Unaudited)

September 30, December 31, 2014 2013 ASSETS

Current Assets:

Cash and cash equivalents $ 7,887,315 $ 1,117,303 Receivables, net 361,550 47,578 Prepaid and other current assets 836,037 638,100

Total Current Assets

9,084,902 1,802,981 Property, plant and equipment, at cost: Property, plant and equipment 96,415,388 96,407,310 Less accumulated depreciation, depletion and impairment (65,780,634 ) (65,566,411 ) Net property, plant and equipment 30,634,754 30,840,899

Restricted cash

4,010,968 4,010,937

Total Assets

$ 43,730,624 $ 36,654,817

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable $ 754,272 $ 1,243,169 Accrued liabilities 1,337,767 1,775,491 Current portion of asset retirement obligations 203,553 – Current portion of capital leases 6,491 10,543

Total Current Liabilities

2,302,083 3,029,203 Asset retirement obligations, net of current portion 3,839,102 3,833,608 Derivative liability – convertible loan 3,811,876 2,169,408 Convertible loan, related party 3,885,197 1,024,715 Other long-term liabilities and deferred credits 1,350,000 1,350,000 Long-term capital leases, less current portion – 4,495

Total Liabilities

15,188,258 11,411,429

Commitments and Contingencies

Stockholders’ Equity:

Common stock, 200,000,000 shares authorized, $.001 par value; 25,167,846 and 19,820,258 shares issued and outstanding, respectively 25,172 19,824 Paid-in capital 230,579,521 216,703,028 Accumulated deficit (202,052,909 ) (191,470,046 ) Less: Treasury stock (3,813 shares), at cost (9,418 ) (9,418 ) Total Stockholders’ Equity 28,542,366 25,243,388 Total Liabilities and Stockholders’ Equity $ 43,730,624 $ 36,654,817

Uranium Resources, Inc.

Consolidated Statements of Operations

(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30, 2014 2013 2014 2013 (Restated) (Restated)

Operating expenses

Mineral property expenses

$

(986,623

)

$ (940,017 ) $ (2,928,995 ) $ (3,682,470 ) General and administrative (2,202,952 ) (2,174,862 ) (7,001,670 ) (6,749,980 ) Accretion of asset retirement obligations (205,995 ) (97,435 ) (307,612 ) (292,305 ) Depreciation and amortization (68,271 ) (108,720 ) (245,977 ) (341,680 ) Impairment of uranium properties – (3,701 ) – (683,356 ) Total operating expenses (3,463,841 ) (3,324,735 ) (10,484,254 ) (11,749,791 )

Other income/(expenses)

Gain on derivatives 145,010 – 1,604,657 – Interest expense (679,168 ) (3,859 ) (1,717,234 ) (253,485 ) Other income, net 3,615 55,703 13,968 60,238

Total other income/(expense)

(530,543 ) 51,844 (98,609 ) (193,247 )

Net loss

$ (3,994,384 ) $ (3,272,891 ) $ (10,582,863 ) $ (11,943,038 )

LOSS PER SHARE – BASIC AND DILUTED

$ (0.16 ) $ (0.17 ) $ (0.44 ) $ (0.63 )

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING

24,954,029 19,820,258 23,986,792 18,995,957

Uranium Resources, Inc.

Consolidated Statements of Cash Flow

(Unaudited)

Nine Months Ended September 30,

2014

2013

(Restated)

Operating activities:

Net loss $ (10,582,863 ) $ (11,943,038 ) Reconciliation of net loss to cash used in operations: Accretion of asset retirement obligations 307,612 292,305 Amortization of debt discount

1,182,607

– Change in fair value of derivative liability (1,604,657 ) – Decrease in restoration and reclamation accrual (131,562 ) (1,269,663 ) Depreciation and amortization 245,977 341,680 Impairment of uranium properties – 683,356 Stock compensation expense 737,270 299,286 Common stock issued for land obligation 342,595 – Other non-cash items, net

23,174

73,875 Effect of changes in operating working capital items: Decrease in receivables 45,016 258,532 Increase in prepaid and other current assets

(272,968

)

(17,274 ) Increase/(decrease) in payables, accrued liabilities and deferred credits 60,462 (231,931 )

Net cash used in operating activities

(9,647,337

)

(11,512,872 )

Cash flows from investing activities:

Reduction in restricted cash – 5,481,015 Reductions in uranium properties – (122,165 ) Purchases of equipment (6,834 ) – Net cash provided by/(used in) investing activities (6,834 ) 5,358,850 Cash flows from financing activities: Proceeds from convertible loan 5,000,000 – Payments on borrowings (8,547 ) (103,173 ) Issuance of common stock, net

11,519,950

3,599,432 Payment of minimum withholding taxes on net share settlements of equity awards (87,220 ) –

Net cash provided by financing activities

16,424,183

3,496,259 Net increase/(decrease) in cash and cash equivalents 6,770,012 (2,657,763 ) Cash and cash equivalents, beginning of period 1,117,303 4,664,596

Cash and cash equivalents, end of period

$ 7,887,315 $ 2,006,833 Cash paid during the period for: Interest $ 21,301 $ 2,970 Other non-cash transactions: Common stock issued for payment of convertible loan fees and interest $ 676,409 $ – Common stock issued for repayment of short-term loan principal and interest – 5,095,833 Common stock issued for the settlement of litigation 333,847 – Common stock issued for services – 291,500 Restricted stock issued for services – 47 Total other non-cash transactions for the period: $ 1,010,256 $ 5,387,380 FinanceInvestment & Company Information Contact:

Uranium Resources, Inc.

Wendy Yang, Investor Relations

(303) 531-0478

info@uraniumresources.com
www.uraniumresources.com […]

RAIT Financial Trust Announces Third Quarter 2014 Financial Results

PHILADELPHIA–(BUSINESS WIRE)–

RAIT Financial Trust (“RAIT”) (RAS) today announced third quarter 2014 financial results.

Financial Performance

Total revenues grew 20.7% to $75.3 million for the quarter ended September 30, 2014 from $62.4 million for the quarter ended September 30, 2013. Cash Available for Distribution (“CAD”) per share was $0.00 for the quarter ended September 30, 2014 as a result of the previously announced SEC settlement charge pertaining to Taberna Capital Management of $21.5 million or $0.26 per share.

Dividends

On September 15, 2014, RAIT declared a third quarter 2014 common dividend of $0.18 per share, representing a 20% increase from the third quarter 2013 common dividend of $0.15 per common share. The third quarter common dividend record date was October 7, 2014 and will be paid on October 31, 2014. RAIT’s board expects to declare a fourth quarter dividend of at least $0.18 per common share.

CRE Loan Portfolio

Investments in mortgages and loans increased 22.0% to $1.37 billion at September 30, 2014 from $1.12 billion at December 31, 2013. RAIT originated $255.8 million of loans during the quarter ended September 30, 2014 consisting of $102.1 million bridge loans and $153.7 million conduit loans. RAIT originated $726.5 million of loans for the nine-month period ended September 30, 2014. RAIT sold $119.6 million of conduit loans during the quarter ended September 30, 2014 which generated $3.5 million of fee income.

CRE Property Portfolio

Average effective rent per unit per month in RAIT’s multifamily portfolio increased 6.6% to $811 for the quarter ended September 30, 2014 from $761 for the quarter ended September 30, 2013. As of September 30, 2014, RAIT’s investments in real estate increased 39% to $1.4 billion from $1.0 billion at December 31, 2013. Rental income increased 43% to $41.8 million during the quarter ended September 30, 2014 from $29.2 million for the quarter ended September 30, 2013 driven largely by the acquisition of 20 properties subsequent to September 30, 2013 which generated $11.0 million of rental income during the quarter ended September 30, 2014.

Assets Under Management

Assets under management increased 52% to $5.4 billion at September 30, 2014 from $3.6 billion at December 31, 2013 due primarily to inclusion of third party retail properties managed by RAIT’s retail-focused property manager beginning in 2014.

Liquidity

In August 2014, RAIT issued $71.9 million aggregate principal amount of its 7.125% Senior Notes due 2019 (RFTA) in an underwritten public offering. RAIT received approximately $69.2 million of net proceeds.

Scott Schaeffer, RAIT’s Chairman and CEO, said, “We continue executing on our multi-strategy approach to investing in commercial real-estate. During the third quarter, gross loan originations increased 53% to $255.8 million when compared to the third quarter of 2013. Our property portfolio grew through acquisitions and increasing rents which led to a 43% increase in rental income and a 53% increase in net operating income since September 30, 2013. As previously announced, we are undertaking to exit the legacy Taberna business with a goal of completing the process by December 31, 2014.”

Financial Results

RAIT reported CAD, a non-GAAP financial measure, for the three-month period ended September 30, 2014 of $(0.4) million, or $0.00 per share – diluted based on 82.0 million weighted-average shares outstanding – diluted, as compared to CAD for the three-month period ended September 30, 2013 of $15.9 million, or $0.23 per share – diluted based on 70.2 million weighted-average shares outstanding – diluted. RAIT reported a net loss allocable to common shares for the three-month period ended September 30, 2014 of $23.3 million, or $0.28 total loss per share – diluted based on 82.0 million weighted-average shares outstanding – diluted, as compared to net loss allocable to common shares for the three-month period ended September 30, 2013 of $17.1 million, or $0.24 total loss per share – diluted based on 70.2 million weighted-average shares outstanding – diluted. The third quarter 2014 net loss includes $10.2 million of unrealized losses relating primarily to non-cash mark-to-market adjustments in RAIT’s legacy Taberna portfolios and the associated hedges and the $21.5 million SEC settlement charge pertaining to Taberna Capital Management. Non-cash mark-to-market gains and losses are excluded from CAD.

RAIT reported CAD for the nine-month period ended September 30, 2014 of $36.6 million, or $0.45 per share – diluted based on 81.1 million weighted-average shares outstanding – diluted, as compared to CAD for the nine-month period ended September 30, 2013 of $38.7 million, or $0.58 per share – diluted based on 66.8 million weighted-average shares outstanding – diluted. RAIT reported a net loss allocable to common shares for the nine-month period ended September 30, 2014 of $63.5 million, or $0.78 total loss per share – diluted based on 81.1 million weighted-average shares outstanding – diluted, as compared to net loss allocable to common shares for the nine-month period ended September 30, 2013 of $173.5 million, or $2.60 total loss per share – diluted based on 66.8 million weighted-average shares outstanding – diluted. The nine-month period ended September 30, 2014 net loss includes $59.4 million of unrealized losses relating primarily to non-cash mark-to-market adjustments in RAIT’s legacy Taberna portfolios and the associated hedges. Non-cash mark-to-market gains and losses are excluded from CAD.

A reconciliation of RAIT’s reported net income (loss) allocable to common shares to its CAD is included as Schedule I to this release. A reconciliation of RAIT’s total shareholders’ equity to its adjusted book value, a non-GAAP financial measure, is included as Schedule II to this release. A reconciliation of RAIT’s net income (loss) allocable to common shares to its funds from operations (“FFO)”, a non-GAAP financial measure, and adjusted funds from operations (“AFFO”), a non-GAAP financial measure, is included as Schedule III to this release. These Schedules also include management’s respective rationales for the usefulness of each of these non-GAAP financial measures.

Key Statistics

(Unaudited and dollars in thousands, except per share information)

As of or For the Three-Month Periods Ended

September 30, 2014 June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 Financial Statistics: Total revenue $75,293 $73,256 $67,308 $67,607 $62,395 Earnings (loss) per share – diluted $(0.28) $(0.31) $(0.18) $(1.90) $(0.24) CAD per share, diluted $0.00(5) $0.24 $0.22 $0.27 $0.23 Common dividend declared per share $0.18 $0.18 $0.17 $0.16 $0.15 Assets under management $5,417,579 $5,266,296 $5,119,805 $3,595,530 $3,567,675 FFO per share, diluted $(0.17) $(0.20) $(0.07) $(1.74) $(0.12)

Commercial Real Estate (“CRE”) Loan Portfolio:

CRE loans– unpaid principal $1,369,138 $1,325,748 $1,228,452 $1,115,949 $1,103,272 Non-accrual loans — unpaid principal $40,741 $30,269 $28,019 $37,073 $45,337 Non-accrual loans as a % of reported loans 3.0% 2.3% 2.3% 3.3% 4.1% Reserve for losses $15,662 $15,336 $14,279 $22,955 $23,317 Reserves as a % of non-accrual loans

38.4%

50.7% 51.0% 61.9% 51.4% Provision for losses $1,500 $1,000 $1,000 $1,500 $500 CRE Property Portfolio: Reported investments in real estate(1) $1,400,715 $1,268,769 $1,205,995 $1,004,186 $986,296 Net operating income(1) $20,932 $19,524 $17,093 $13,919 $13,712 Number of properties owned(1) 80 74 71 62 61 Multifamily units owned(1) 13,516 12,388 12,014 9,372 8,940 Office square feet owned 2,286,284 2,248,321 2,097,022 2,009,852 2,015,524 Retail square feet owned 1,790,969 1,420,909 1,420,909 1,421,059 1,421,059 Land (acres owned) 21.92 21.92 21.92 21.92 21.92 Average occupancy data: Multifamily(1) 92.7% 92.8% 93.3% 92.2% 92.5% Office 75.0% 74.3% 74.8% 75.6% 74.1% Retail 73.3% 67.5% 66.6% 69.0% 68.9% Average Effective Rent per Unit/Square Foot (2): Multifamily (1)(3) $811 $799 $767 $763 $761 Office (4) $19.64 $20.10 $18.70 $18.40 $19.45 Retail (4) $12.68 $12.50 $12.44 $12.11 $12.05 (1) Includes 22 apartment properties owned by RAIT’s consolidated subsidiary, Independence Realty Trust, Inc. (“IRT”) (NYSE MKT: IRT), with 6,470 units and a book value of $423.2 million as of September 30, 2014. At September 30, 2014, RAIT owned 28% of IRT’s outstanding common stock. (2) Based on properties owned as of September 30, 2014. (3) Average effective rent is rent per unit per month. (4) Average effective rent is rent per square foot per year. (5) Includes $0.26 SEC settlement charge pertaining to Taberna Capital Management. Excluding this one-time item CAD per share would have been $0.26 per common share.

Conference Call

All interested parties can listen to the live conference call webcast at 9:00 AM ET on Thursday, October 30, 2014 from the home page of the RAIT Financial Trust website at www.rait.com or by dialing 877.703.6109, access code 80662508. For those who are not available to listen to the live call, the replay will be available shortly following the live call on RAIT’s website and telephonically until Thursday, November 6, 2014, by dialing 888.286.8010, access code 88214660.

About RAIT Financial Trust

RAIT Financial Trust is an internally-managed real estate investment trust that provides debt financing options to owners of commercial real estate and invests directly into commercial real estate properties located throughout the United States. In addition, RAIT is an asset and property manager of real estate-related assets. For more information, please visit www.rait.com or call Investor Relations at 215.243.9000.

Forward-Looking Statements

This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “trend”, “will,” “continue,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “look forward” or other similar words or terms. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, the current uncertainty in the global financial markets and the global economy; the risk that the settlement with the SEC will not be finalized and/or approved or that any final settlement will have different or additional material terms, the risk that RAIT will not be able to commit to or complete exiting the Taberna business, whether RAIT’s actual business performance, developments and ability to access the capital markets and economic conditions affecting commercial real estate will affect RAIT’s ability to realize its ability to pay the fourth quarter 2014 dividend and those disclosed in RAIT’s filings with the Securities and Exchange Commission. RAIT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

RAIT Financial Trust Consolidated Statements of Operations (Dollars in thousands, except share and per share information) (unaudited) For the Three-Month For the Nine-Month Periods Ended Periods Ended September 30, September 30, Revenues: 2014 2013 2014 2013 Net interest margin: Investment Interest income $ 33,273 $ 32,730 $ 102,882 $ 95,266 Investment Interest expense (7,636) (8,235) (22,342) (22,996) Net interest margin 25,637 24,495 80,540 72,270 Rental income 41,814 29,233 116,204 84,260 Fee and other income 7,842 8,667 19,113 22,738 Total revenue 75,293 62,395 215,857 179,268 Expenses: Interest expense 13,910 10,052 38,756 29,696 Real estate operating expense 20,882 15,521 58,655 44,842 Compensation expense 7,187 6,565 23,118 19,849 General and administrative expense 4,756 3,046 13,239 10,384 Acquisition expense 816 199 1,408 199 Provision for losses 1,500 500 3,500 1,500 Depreciation and amortization expense 13,236 8,784 38,719 25,972 Total expenses 62,287 44,667 177,395 132,442 Operating income 13,006 17,728 38,462 46,826 Other income (expense) (21,464) (3,849) (21,449) (3,704) Gains (losses) on assets 25 (191) (5,350) 30 Gains (losses) on extinguishment of debt – – 2,421 – Change in fair value of financial instruments (10,223) (24,659) (59,433) (200,436) Income (loss) before taxes and discontinued operations (18,656) (10,971) (45,349) (157,284) Income tax benefit (provision) 2,194 (164) 2,454 470 Net income (loss) (16,462) (11,135) (42,895) (156,814) (Income) loss allocated to preferred shares (7,407) (6,024) (20,628) (16,831) (Income) loss allocated to noncontrolling interests 603 53 20 130 Net income (loss) allocable to common shares $ (23,266) $ (17,106) $ (63,503) $ (173,515) Earnings (loss) per share—Basic: Total earnings (loss) per share—Basic $ (0.28) $ (0.24) $ (0.78) $ (2.60) Weighted-average shares outstanding—Basic 81,967,806 70,192,918 81,111,796 66,807,299 Earnings (loss) per share—Diluted: Total earnings (loss) per share—Diluted $ (0.28) $ (0.24) $ (0.78) $ (2.60) Weighted-average shares outstanding—Diluted 81,967,806 70,192,918 81,111,796 66,807,299 RAIT Financial Trust Consolidated Balance Sheets (Dollars in thousands, except share and per share information) (unaudited) As of As of September 30, December 31, 2014 2013 Assets Investments in mortgages and loans, at amortized cost: Commercial mortgages, mezzanine loans, other loans and preferred equity interests $ 1,369,782 $ 1,122,377 Allowance for losses (15,662) (22,955) Total investments in mortgages and loans 1,354,120 1,099,422 Investments in real estate, net of accumulated depreciation of $155,815 and $127,745, respectively 1,400,715 1,004,186 Investments in securities and security-related receivables, at fair value 568,279 567,302 Cash and cash equivalents 116,767 88,847 Restricted cash 133,374 121,589 Accrued interest receivable 54,929 48,324 Other assets 78,948 57,081 Deferred financing costs, net of accumulated amortization of $23,830 and $17,768, respectively 25,141 18,932

Intangible assets, net of accumulated amortization of $10,940 and $4,564, respectively

23,944 21,554 Total assets $ 3,756,217 $ 3,027,237 Liabilities and Equity Indebtedness: Recourse indebtedness $ 501,273 $ 235,011 Non-recourse indebtedness 2,112,044 1,851,390 Total indebtedness 2,613,317 2,086,401 Accrued interest payable 34,164 26,936 Accounts payable and accrued expenses 58,579 32,447 Derivative liabilities 81,998 113,331 Deferred taxes, borrowers’ escrows and other liabilities 132,200 79,462 Total liabilities 2,920,258 2,338,577 Series D Preferred Shares, 4,000,000 shares authorized, 4,000,000 and 2,600,000 shares issued and outstanding

76,176

52,970

Equity: Preferred shares, $0.01 par value per share, 25,000,000 shares authorized:

7.75% Series A cumulative redeemable preferred shares, liquidation preference $25.00 per share, 8,069,288 and 4,760,000 shares authorized, 4,075,569 and 4,069,288 shares issued and outstanding

41 41 8.375% Series B cumulative redeemable preferred shares, liquidation preference $25.00 per share, 4,300,000 shares authorized, 2,288,465 shares issued and outstanding

23

23

8.875% Series C cumulative redeemable preferred shares, liquidation preference $25.00 per share, 3,600,000 shares authorized, 1,640,100 shares issued and outstanding

17

17

Series E cumulative redeemable preferred shares, liquidation preference $25.00 per share, 4,000,000 shares authorized

Common shares, $0.03 par value per share, 200,000,000 shares authorized, 82,509,635 and 71,447,437 issued and outstanding, including 541,575 and 369,500 unvested restricted common share awards

2,474

2,143

Additional paid in capital 2,008,814 1,920,455 Accumulated other comprehensive income (loss) (43,039) (63,810) Retained earnings (deficit) (1,364,168) (1,257,306) Total shareholders’ equity 604,162 601,563 Noncontrolling interests 155,621 34,127 Total equity 759,783 635,690 Total liabilities and equity $ 3,756,217 $ 3,027,237 Schedule I RAIT Financial Trust Reconciliation of Net income (loss) Allocable to Common Shares and Cash Available for Distribution (1) (Dollars in thousands, except share and per share amounts) (unaudited)

For the Three-Month Period
Ended September 30,

For the Nine-Month Period Ended
September 30,

2014 2013 2014 2013

Amount

Per Share (2)

Amount

Per Share (3)

Amount

Per Share (2)

Amount

Per Share (3)

Cash Available for Distribution: Net income (loss) allocable to common shares $(23,266) $ (0.28) $(17,106) $(0.24) $(63,503) $ (0.77) $(173,515) $(2.60) Adjustments: Depreciation and amortization expense 13,236 0.16 8,784 0.13 38,719 0.47 25,972 0.39 Change in fair value of financial instruments 10,223 0.13 24,659 0.35 59,433 0.73 200,436 3.00 (Gains) losses on assets (25) 0.00 191 0.00 5,350 0.07 (30) 0.00 (Gains) losses on extinguishment of debt – – – – (2,421) (0.03) – – Taberna VIII and Taberna IX securitizations, net effect (6,975) (0.09) (8,176) (0.12) (21,063) (0.26) (26,178) (0.39) Straight-line rental adjustments (238) 0.00 (428) (0.01) (329) 0.00 (1,394) (0.02) Share-based compensation 1,148 0.01 1,096 0.02 3,777 0.05 2,562 0.04 Origination fees and other deferred items 5,718 0.07 6,807 0.10 15,450 0.18 9,785 0.15 Provision for losses 1,500 0.02 500 0.01 3,500 0.04 1,500 0.02 Noncontrolling interest effect from certain adjustments (1,716) (0.02) (405) (0.01) (2,351) (0.03) (414) (0.01) Cash Available for Distribution $(395) $0.00 $15,922 $0.23 $36,562 $0.45 $38,724 $0.58 (1) Cash available for distribution, or CAD, is a non-GAAP financial measure. We believe that CAD provides investors and management with a meaningful indicator of operating performance. Management also uses CAD, among other measures, to evaluate profitability and our board of trustees considers CAD in determining our quarterly cash dividends. We also believe that CAD is useful because it adjusts for a variety of noncash items (such as depreciation and amortization, equity-based compensation, realized gain (loss) on assets, provision for loan losses and non-cash interest income and expense items). Furthermore, CAD removes the effect from our consolidation of the legacy Taberna securitizations. We calculate CAD by subtracting from or adding to net income (loss) attributable to common shareholders the following items: depreciation and amortization items including, depreciation and amortization, straight-line rental income or expense, amortization of in place leases, amortization of deferred financing costs, amortization of discount on financings and equity-based compensation; changes in the fair value of our financial instruments, including such changes reflected in our consolidated Taberna securitizations; net interest income from consolidated Taberna securitizations; realized gain (loss) on assets and other; provision for loan losses; impairment on depreciable property; acquisition gains or losses and transaction costs; certain fee income eliminated in consolidation that is attributable to third parties and one-time events pursuant to changes in U.S. GAAP and certain other non-recurring items. CAD should not be considered as an alternative to net income (loss), determined in accordance with U.S. GAAP, as an indicator of operating performance. In addition, our methodology for calculating CAD may differ from the methodologies used by other comparable companies, including other REITs, when calculating the same or similar supplemental financial measures and may not be comparable with these companies. In these Schedules, references to “we”, “us”, and “our” refer to RAIT Financial Trust and its subsidiaries. (2) Based on 81,967,806 and 81,111,796 weighted-average shares outstanding-diluted for the three-month period and nine-month period ended September 30, 2014. (3) Based on 70,192,918 and 66,807,299 weighted-average shares outstanding-diluted for the three-month period and nine-month period ended September 30, 2013. Schedule II RAIT Financial Trust Reconciliation of Shareholders’ Equity to Adjusted Book Value (1) (Dollars in thousands, except share and per share amounts) (unaudited) As of September 30, 2014 Amount Per Share (2) Total shareholders’ equity $ 604,162 $ 7.32 Liquidation value of preferred shares characterized as equity(3) (200,103) (2.42) Book value 404,059 4.90 Adjustments: Taberna VIII and Taberna IX securitizations, net effect (214,101) (2.59) RAIT I and RAIT II derivative liabilities 25,127 0.30 Change in fair value for warrants and investor SARs 6,766 0.08 Accumulated depreciation and amortization 198,901 2.41 Valuation of recurring collateral, property management fees and other items (4) 88,827 1.08 Total adjustments $ 105,520 $ 1.28 Adjusted book value $ 509,579 $ 6.18 (1) Management views adjusted book value as a useful and appropriate supplement to shareholders’ equity and book value per share. The measure serves as an additional measure of our value because it facilitates evaluation of us without the effects of various items that we are required to record in accordance with GAAP but which have limited economic impact on our business. Those adjustments primarily reflect the effect of consolidated securitizations where we do not currently receive cash flows on our retained interests, accumulated depreciation and amortization, the valuation of long-term derivative instruments and a valuation of our recurring collateral and property management fees. Adjusted book value is a non-GAAP financial measurement, and does not purport to be an alternative to reported shareholders’ equity, determined in accordance with GAAP, as a measure of book value. Adjusted book value should be reviewed in connection with shareholders’ equity as set forth in our consolidated balance sheets, to help analyze our value to investors. Adjusted book value may be defined in various ways throughout the REIT industry. Investors should consider these differences when comparing our adjusted book value to that of other REITs. (2) Based on 82,509,635 common shares outstanding as of September 30, 2014. (3) Based on 4,075,569 Series A preferred shares, 2,288,465 Series B preferred shares, and 1,640,100 Series C preferred shares outstanding as of September 30, 2014, all of which have a liquidation preference of $25.00 per share. (4) Includes the estimated value of the (1) property management and collateral management fees to be received by RAIT as of September 30, 2014 from RAIT Residential and Urban Retail, and the Taberna I, Taberna VIII, Taberna IX, RAIT I and RAIT II securitizations and (2) advisory fees to be received by RAIT from IRT as of September 30, 2014 assuming the full deployment of IRT’s July 2014 common stock offering. The other item included is the incremental market value of RAIT’s ownership of 7.3 million shares of IRT common stock over RAIT’s book value for these shares at September 30, 2014. Schedule III RAIT Financial Trust Reconciliation of Net income (loss) Allocable to Common Shares and Funds From Operations (“FFO”) and Adjusted Funds From Operations (“AFFO”) (1) (Dollars in thousands, except share and per share amounts) (unaudited)

For the Three-Month Period
Ended September 30,

For the Nine-Month Period Ended
September 30,

2014 2013 2014 2013

Amount

Per Share (2)

Amount

Per Share (3)

Amount

Per Share (2)

Amount

Per Share (3)

Funds From Operations: Net income (loss) allocable to common shares $(23,266) $ (0.28) $(17,106) $ (0.24) $(63,503) $ (0.78) $(173,515) $ (2.60) Adjustments: Real estate depreciation and amortization 9,116 0.11 8,517 0.12 27,250 0.34 24,540 0.37 (Gains) losses on the sale of real estate (2) 0.00 191 0.00 319 0.00 1,517 0.02 Funds From Operations $(14,152) $(0.17) $(8,398) $(0.12) $(35,934) $(0.44) $(147,458) $(2.21) Adjusted Funds From Operations: Funds From Operations $(14,152) $(0.17) $(8,398) $(0.12) $(35,934) $(0.44) $(147,458) $(2.21) Adjustments: Change in fair value of financial instruments 10,223 0.12 24,659 0.35 59,433 0.73 200,436 3.00 (Gains) losses on debt extinguishment – – – – (2,421) (0.03) – – Capital expenditures, net of direct financing (1,754) (0.02) (889) (0.01) (3,696) (0.05) (1,858) (0.03) Straight-line rental adjustments (238) 0.00 (428) (0.01) (329) 0.00 (1,394) (0.02) Amortization of deferred items and intangible assets 7,394 0.09 6,912 0.10 21,225 0.26 11,312 0.17 Share-based compensation 1,148 0.01 1,096 0.02 3,777 0.05 2,562 0.04 Adjusted Funds From Operations $2,621 $0.03 $22,952 $0.33 $42,055 $0.52 $63,600 $0.95 (1) We believe that funds from operations, or FFO, and adjusted funds from operations, or AFFO, each of which are non-GAAP measures, are additional appropriate measures of the operating performance of a REIT and us in particular. We compute FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT, as net income or loss allocated to common shares (computed in accordance with GAAP), excluding real estate-related depreciation and amortization expense, gains or losses on sales of real estate and the cumulative effect of changes in accounting principles. AFFO is a computation made by analysts and investors to measure a real estate company’s cash flow generated by operations. We calculate AFFO by adding to or subtracting from FFO: change in fair value of financial instruments; gains or losses on debt extinguishment; capital expenditures, net of any direct financing associated with those capital expenditures; straight-line rental effects; amortization of various deferred items and intangible assets; and share-based compensation. Our calculation of AFFO differs from the methodology used for calculating AFFO by certain other REITs and, accordingly, our AFFO may not be comparable to AFFO reported by other REITs. Our management utilizes FFO and AFFO as measures of our operating performance, and believes they are also useful to investors, because they facilitate an understanding of our operating performance after adjustment for certain non-cash items, such as real estate depreciation, share-based compensation and various other items required by GAAP that may not necessarily be indicative of current operating performance and that may not accurately compare our operating performance between periods. Furthermore, although FFO, AFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we also believe that FFO and AFFO may provide us and our investors with an additional useful measure to compare our financial performance to certain other REITs. Neither FFO nor AFFO is equivalent to net income or cash generated from operating activities determined in accordance with U.S. GAAP. Furthermore, FFO and AFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO nor AFFO should be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flow from operating activities as a measure of our liquidity. (2) Based on 81,967,806 and 81,111,796 weighted-average shares outstanding-diluted for the three-month period and nine-month period ended September 30, 2014. (3) Based on 70,192,918 and 66,807,299 weighted-average shares outstanding-diluted for the three-month period and nine-month period ended September 30, 2013. FinanceInvestment & Company Information Contact: RAIT Financial Trust

Andres Viroslav, 215-243-9000

aviroslav@rait.com […]

Park National Corporation Reports Third Quarter 2014 Financial Results and Declares Dividend

NEWARK, Ohio, Oct. 27, 2014 (GLOBE NEWSWIRE) — Park National Corporation (Park) (NYSE MKT:PRK) today announced financial results for the three months (third quarter) and nine months ended September 30, 2014. While Park reported its net income for the nine-month period was nearly the same as the previous year, its banking subsidiary posted increases in net income due to the impact of continued loan growth. Park’s board of directors declared a quarterly cash dividend of $0.94 per common share, payable on December 10, 2014 to common shareholders of record as of November 21, 2014.

Net income for the third quarter of 2014 was $18.3 million, compared to $19.0 million for the same period in 2013, a decrease of $700,000, or 3.7 percent. Net income per diluted common share for the third quarter of 2014 was $1.19, compared to $1.23 in the same period of 2013.

Net income for the nine months ended September 30, 2014 was $59.7 million, compared to $59.8 million for the same period in 2013. Net income per diluted common share was $3.88 for the first nine months of both 2014 and 2013.

The Park National Bank Results

Park’s community-banking subsidiary, The Park National Bank, reported net income of $61.0 million for the nine months ended September 30, 2014, compared to net income of $57.5 million for the same period of 2013. The Park National Bank had total assets of $6.9 billion at September 30, 2014 and $6.6 billion at September 30, 2013. This performance generated a return on average assets of 1.22 percent and 1.17 percent for the bank for the periods ended September 30, 2014 and 2013, respectively.

The Park National Bank loan portfolio continued its steady growth during the third quarter and first nine months of 2014. Loans outstanding at September 30, 2014 were $4.72 billion, compared to $4.67 billion at June 30, 2014, an increase of $49 million or an annualized 4.14 percent. Loan growth through the first nine months of 2014 was $164 million, an annualized increase of 4.82 percent, compared to the $4.56 billion outstanding at December 31, 2013. The $164 million increase in loans through the first nine months of 2014 was largely due to new loans added in the consumer loan portfolio, which increased by approximately $158 million.

About Park National Corporation

Headquartered in Newark, Ohio, Park National Corporation had $7.0 billion in total assets (as of September 30, 2014). The Park organization principally consists of 11 community bank divisions, a non-bank subsidiary and two specialty finance companies. Park’s Ohio-based banking operations are conducted through Park subsidiary The Park National Bank and its divisions, which include Fairfield National Bank Division, Richland Bank Division, Century National Bank Division, First-Knox National Bank Division, Farmers Bank Division, United Bank, N.A. Division, Second National Bank Division, Security National Bank Division, Unity National Bank Division, and The Park National Bank of Southwest Ohio & Northern Kentucky Division; and Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance). The Park organization also includes Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Park cautions that any forward-looking statements contained in this Current Report on Form 8-K or made by management of Park are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation: Park’s ability to execute our business plan successfully and within the expected timeframe; general economic and financial market conditions, and the uneven spread of positive impacts of the recovery on the economy, specifically in the real estate markets and the credit markets, either nationally or in the states in which Park and our subsidiaries do business, may be worse or slower than expected which could adversely impact the demand for loan, deposit and other financial services as well as loan delinquencies and defaults; changes in interest rates and prices may adversely impact the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet; changes in consumer spending, borrowing and saving habits; changes in unemployment; asset/liability repricing risks and liquidity risks; our liquidity requirements could be adversely affected by changes to regulations governing bank capital and liquidity standards as well as by changes in our assets and liabilities; competitive factors among financial services organizations could increase significantly, including product and pricing pressures, changes to third-party relationships and our ability to attract, develop and retain qualified bank professionals; clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; the nature, timing and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and our subsidiaries, including changes in laws and regulations concerning taxes, accounting, banking, securities and other aspects of the financial services industry, specifically the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), as well as future regulations which will be adopted by the relevant regulatory agencies, including the Consumer Financial Protection Bureau, to implement the Dodd-Frank Act’s provisions, the Budget Control Act of 2011, the American Taxpayer Relief Act of 2012 and the Basel III regulatory capital reforms; the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board, the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, and the accuracy of our assumptions and estimates used to prepare our financial statements; the effect of trade, monetary, fiscal and other governmental policies of the United States federal government, including interest rate policies of the Federal Reserve; the adequacy of our risk management program; a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors and other service providers, including as a result of cyber attacks; demand for loans in the respective market areas served by Park and our subsidiaries; and other risk factors relating to the banking industry as detailed from time to time in Park’s reports filed with the Securities and Exchange Commission including those described in “Item 1A. Risk Factors” of Part I of Park’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.

PARK NATIONAL CORPORATION Financial Highlights Three months ended September 30, 2014, June 30, 2014, and September 30, 2013

2014 2014 2013 Percent change vs. (in thousands, except share and per share data) 3rd QTR 2nd QTR 3rd QTR 2Q ’14 3Q ’13 INCOME STATEMENT:

Net interest income $ 56,709 $ 56,561 $ 54,960 0.3% 3.2% Provision for (recovery of) loan losses 4,501 (1,260) 2,498 N.M. N.M. Other income 19,396 19,671 17,396 (1.4)% 11.5% Other expense 46,903 48,196 44,715 (2.7)% 4.9% Income before income taxes $ 24,701 $ 29,296 $ 25,143 (15.7)% (1.8)% Income taxes 6,398 7,469 6,114 (14.3)% 4.6% Net income $ 18,303 $ 21,827 $ 19,029 (16.1)% (3.8)%

MARKET DATA:

Earnings per common share – basic (b) $ 1.19 $ 1.42 $ 1.23 (16.2)% (3.3)% Earnings per common share – diluted (b) 1.19 1.42 1.23 (16.2)% (3.3)% Cash dividends per common share 0.94 0.94 0.94 —% —% Common book value per common share at period end 44.70 44.63 41.06 0.2% 8.9% Stock price per common share at period end 75.42 77.20 79.08 (2.3)% (4.6)% Market capitalization at period end 1,160,896 1,188,295 1,218,778 (2.3)% (4.7)%

Weighted average common shares – basic (a) 15,392,421 15,392,435 15,411,972 —% (0.1)% Weighted average common shares – diluted (a) 15,413,664 15,412,167 15,411,972 —% —% Common shares outstanding at period end 15,392,413 15,392,425 15,411,963 —% (0.1)%

PERFORMANCE RATIOS: (annualized)

Return on average assets (a)(b) 1.05% 1.29% 1.12% (18.6)% (6.3)% Return on average common equity (a)(b) 10.51% 12.93% 11.84% (18.7)% (11.2)% Yield on loans 4.80% 4.91% 4.95% (2.2)% (3.0)% Yield on investments 2.54% 2.60% 2.55% (2.3)% (0.4)% Yield on money markets 0.25% 0.25% 0.25% —% —% Yield on earning assets 4.17% 4.28% 4.19% (2.6)% (0.5)% Cost of interest bearing deposits 0.27% 0.27% 0.33% —% (18.2)% Cost of borrowings 2.58% 2.60% 2.54% (0.8)% 1.6% Cost of paying liabilities 0.79% 0.81% 0.84% (2.5)% (6.0)% Net interest margin 3.55% 3.65% 3.52% (2.7)% 0.9% Efficiency ratio (g) 61.46% 63.04% 61.57% (2.5)% (0.2)%

OTHER RATIOS (NON – GAAP):

Annualized return on average tangible assets (a)(b)(e) 1.06% 1.31% 1.13% (19.1)% (6.2)% Annualized return on average tangible common equity (a)(b)(c) 11.74% 14.47% 13.36% (18.9)% (12.1)% Tangible common book value per common share (d) $ 40.00 $ 39.93 $ 36.36 0.2% 10.0%

N.M. – Not meaningful Note: Explanations (a) – (g) are included at the end of the financial highlights.

PARK NATIONAL CORPORATION Financial Highlights (continued) Three months ended September 30, 2014, June 30, 2014, and September 30, 2013

Percent change vs. BALANCE SHEET: September 30,
2014
June 30,
2014
September 30,
2013

2Q ’14

3Q ’13

Investment securities $ 1,472,625 $ 1,417,910 $ 1,389,387 3.9% 6.0% Loans 4,770,433 4,728,910 4,566,966 0.9% 4.5% Allowance for loan losses 57,674 57,911 57,894 (0.4)% (0.4)% Goodwill and other intangibles 72,334 72,334 72,334 —% —% Other real estate owned 19,185 23,909 35,412 (19.8)% (45.8)% Loans held for sale 28,606 6,577 6,571 N.M. N.M. Total assets 7,013,272 6,789,173 6,705,891 3.3% 4.6% Total deposits 5,129,004 4,927,211 4,850,692 4.1% 5.7% Borrowings 1,137,653 1,118,404 1,162,091 1.7% (2.1)% Shareholders’ equity 688,016 686,971 632,745 0.2% 8.7% Common equity 688,016 686,971 632,745 0.2% 8.7% Tangible common equity (d) 615,682 614,637 560,411 0.2% 9.9% Nonperforming loans 119,393 142,902 162,522 (16.5)% (26.5)% Nonperforming including loans held for sale 141,378 142,902 162,522 (1.1)% (13.0)% Nonperforming assets 160,563 166,811 197,934 (3.7)% (18.9)%

ASSET QUALITY RATIOS:

Loans as a % of period end assets 68.02% 69.65% 68.10% (2.3)% (0.1)% Nonperforming loans as a % of period end loans 2.50% 3.02% 3.56% (17.2)% (29.8)% Nonperforming assets / Period end loans + OREO 3.35% 3.51% 4.30% (4.6)% (22.1)% Allowance for loan losses as a % of period end loans 1.21% 1.22% 1.27% (0.8)% (4.7)% Net loan charge-offs (recoveries) $ 4,738 $ 1,086 $ (285) N.M. N.M. Annualized net loan charge-offs (recoveries) as a % of average loans (a) 0.39% 0.09% (0.02)% N.M. N.M.

CAPITAL & LIQUIDITY:

Total equity / Period end assets 9.81% 10.12% 9.44% (3.1)% 3.9% Common equity / Period end assets 9.81% 10.12% 9.44% (3.1)% 3.9% Tangible common equity (d) / Tangible assets (f) 8.87% 9.15% 8.45% (3.1)% 5.0% Average equity / Average assets (a) 10.01% 10.00% 9.46% 0.1% 5.8% Average equity / Average loans (a) 14.49% 14.48% 14.04% 0.1% 3.2% Average loans / Average deposits (a) 95.04% 95.12% 92.77% (0.1)% 2.4%

N.M. – Not meaningful Note: Explanations (a) – (g) are included at the end of the financial highlights.

PARK NATIONAL CORPORATION Financial Highlights Nine months ended September 30, 2014 and 2013

(in thousands, except share and per share data)
2014

2013
Percent change
vs. 2013
INCOME STATEMENT:

Net interest income $ 167,750 $ 165,125 1.6% Provision for loan losses 1,016 3,500 N.M. Other income 55,715 55,499 0.4% Other expense 142,797 137,383 3.9% Income before income taxes $ 79,652 $ 79,741 (0.1)% Income taxes 19,903 19,968 (0.3)% Net income $ 59,749 $ 59,773 —%

MARKET DATA:

Earnings per common share – basic (b) $ 3.88 $ 3.88 —% Earnings per common share – diluted (b) 3.88 3.88 —% Cash dividends per common share 2.82 2.82 —%

Weighted average common shares – basic (a) 15,395,320 15,411,981 (0.1)% Weighted average common shares – diluted (a) 15,413,625 15,411,981 —%

PERFORMANCE RATIOS: (Annualized)

Return on average assets (a)(b) 1.17% 1.19% (1.7)% Return on average common equity (a)(b) 11.80% 12.32% (4.2)% Yield on loans 4.85% 5.05% (4.0)% Yield on investments 2.60% 2.72% (4.4)% Yield on earning assets 4.21% 4.30% (2.1)% Cost of interest bearing deposits 0.28% 0.36% (22.2)% Cost of borrowings 2.60% 2.60% —% Cost of paying liabilities 0.81% 0.87% (6.9)% Net interest margin (g) 3.58% 3.61% (0.8)% Efficiency ratio (g) 63.72% 61.98% 2.8%

ASSET QUALITY RATIOS:

Net loan charge-offs $ 2,810 $ 1,143 N.M. Annualized net loan charge-offs as a % of average loans (a) 0.08% 0.03% N.M.

CAPITAL & LIQUIDITY:

Average stockholders’ equity / Average assets (a) 9.93% 9.68% 2.6% Average stockholders’ equity / Average loans (a) 14.45% 14.45% —% Average loans / Average deposits (a) 94.58% 92.28% 2.5%

OTHER RATIOS (NON GAAP):

Annualized return on average tangible assets (a)(b)(e) 1.18% 1.21% (2.5)% Annualized return on average tangible common equity (a)(b)(c) 13.22% 13.88% (4.8)%

Note: Explanations (a) – (g) are included at the end of the financial highlights.

PARK NATIONAL CORPORATION

Financial Highlights (continued)

(a) Averages are for the quarters ended September 30, 2014, June 30, 2014 and September 30, 2013. (b) Reported measure uses net income available to common shareholders. (c) Net income for each period divided by average tangible common equity during the period. Average tangible common equity equals average shareholders’ equity during the applicable period less average goodwill and other intangibles during the applicable period.

RECONCILIATION OF AVERAGE SHAREHOLDERS’ EQUITY TO AVERAGE TANGIBLE COMMON EQUITY:

THREE MONTHS ENDED NINE MONTHS ENDED
September 30, 2014 June 30, 2014 September 30, 2013 September 30, 2014 September 30, 2013 AVERAGE SHAREHOLDERS’ EQUITY $ 691,085 $ 677,226 $ 637,529 $ 676,806 $ 648,446 Less: Average goodwill and other intangibles 72,334 72,334 72,397 72,334 72,508 AVERAGE TANGIBLE COMMON EQUITY $ 618,751 $ 604,892 $ 565,132 $ 604,472 $ 575,938

(d) Tangible common book value divided by common shares outstanding at period end. Tangible common equity equals ending shareholders’ equity less goodwill and other intangibles, in each case at the end of the period.

RECONCILIATION OF SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY:

September 30, 2014 June 30, 2014 September 30, 2013

SHAREHOLDERS’ EQUITY $ 688,016 $ 686,971 $ 632,745

Less: Goodwill and other intangibles 72,334 72,334 72,334

TANGIBLE COMMON EQUITY $ 615,682 $ 614,637 $ 560,411

(e) Net income available to common shareholders for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill and other intangibles, in each case during the applicable period.

RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS:

THREE MONTHS ENDED NINE MONTHS ENDED
September 30, 2014 June 30, 2014 September 30, 2013 September 30, 2014 September 30, 2013 AVERAGE ASSETS $ 6,903,127 $ 6,774,390 $ 6,739,055 $ 6,815,274 $ 6,701,287 Less: Average goodwill and other intangibles 72,334 72,334 72,397 72,334 72,508 AVERAGE TANGIBLE ASSETS $ 6,830,793 $ 6,702,056 $ 6,666,658 $ 6,742,940 $ 6,628,779

(f) Tangible common equity divided by tangible assets. Tangible assets equals total assets less goodwill and other intangibles, in each case at the end of the period.

RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:

September 30, 2014 June 30, 2014 September 30, 2013

TOTAL ASSETS $ 7,013,272 $ 6,789,173 $ 6,705,891

Less: Goodwill and other intangibles 72,334 72,334 72,334

TANGIBLE ASSETS $ 6,940,938 $ 6,716,839 $ 6,633,557

(g) Efficiency ratio is calculated by taking total other expense divided by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown below assuming a 35% tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME

THREE MONTHS ENDED NINE MONTHS ENDED
September 30, 2014 June 30, 2014 September 30, 2013 September 30, 2014 September 30, 2013 Interest income $ 66,622 $ 66,363 $ 65,410 $ 197,327 $ 196,881 Fully taxable equivalent adjustment 209 221 273 653 1,029 Fully taxable equivalent interest income $ 66,831 $ 66,584 $ 65,683 $ 197,980 $ 197,910 Interest expense 9,913 9,802 10,450 29,577 31,756 Fully taxable equivalent net interest income $ 56,918 $ 56,782 $ 55,233 $ 168,403 $ 166,154

PARK NATIONAL CORPORATION Consolidated Statements of Income

Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands, except share and per share data) 2014 2013 2014 2013

Interest income:

Interest and fees on loans 57,492 56,337 169,249 168,500 Interest on:

Obligations of U.S. Government, its agencies and other securities 9,011 8,880 27,758 27,795 Obligations of states and political subdivisions 7 3 40 Other interest income 119 186 317 546 Total interest income 66,622 65,410 197,327 196,881

Interest expense:

Interest on deposits:

Demand and savings deposits 440 422 1,232 1,391 Time deposits 2,136 2,729 6,547 8,719 Interest on borrowings 7,337 7,299 21,798 21,646 Total interest expense 9,913 10,450 29,577 31,756

Net interest income 56,709 54,960 167,750 165,125

Provision for loan losses 4,501 2,498 1,016 3,500

Net interest income after provision for loan losses 52,208 52,462 166,734 161,625

Other income 19,396 17,396 55,715 55,499

Other expense 46,903 44,715 142,797 137,383

Income before income taxes 24,701 25,143 79,652 79,741

Income taxes 6,398 6,114 19,903 19,968

Net income 18,303 19,029 59,749 59,773

Per Common Share:

Net income – basic 1.19 1.23 3.88 3.88 Net income – diluted 1.19 1.23 3.88 3.88

Weighted average shares – basic 15,392,421 15,411,972 15,395,320 15,411,981 Weighted average shares – diluted 15,413,664 15,411,972 15,413,625 15,411,981

Cash Dividends Declared 0.94 0.94 2.82 2.82

PARK NATIONAL CORPORATION Consolidated Balance Sheets
(in thousands, except share data) September 30, 2014 December 31, 2013

Assets

Cash and due from banks $ 101,760 $ 129,078 Money market instruments 201,526 17,952 Investment securities 1,472,625 1,424,234 Loans held for sale 28,606 1,666 Loans 4,770,433 4,618,839 Allowance for loan losses (57,674) (59,468) Loans, net 4,712,759 4,559,371 Bank premises and equipment, net 54,654 55,278 Goodwill and other intangibles 72,334 72,334 Other real estate owned 19,185 34,636 Other assets 349,823 343,798 Total assets $ 7,013,272 $ 6,638,347

Liabilities and Shareholders’ Equity

Deposits:

Noninterest bearing $ 1,175,991 $ 1,193,553 Interest bearing 3,953,013 3,596,441 Total deposits 5,129,004 4,789,994 Borrowings 1,137,653 1,132,820 Other liabilities 58,599 63,786 Total liabilities $ 6,325,256 $ 5,986,600

Shareholders’ Equity:

Preferred shares (200,000 shares authorized; no shares outstanding at September 30, 2014 and December 31, 2013) $ — $ — Common shares (No par value; 20,000,000 shares authorized in 2014 and 2013; 16,150,902 shares issued at September 30, 2014 and 16,150,941 shares issued at December 31, 2013) 303,003 302,651 Accumulated other comprehensive loss, net of taxes (14,304) (35,419) Retained earnings 476,930 460,643 Treasury shares (758,489 shares at September 30, 2014 and 738,989 at December 31, 2013) (77,613) (76,128) Total shareholders’ equity $ 688,016 $ 651,747

Total liabilities and shareholders’ equity $ 7,013,272 $ 6,638,347

PARK NATIONAL CORPORATION Consolidated Average Balance Sheets

Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands) 2014 2013 2014 2013

Assets

Cash and due from banks $ 110,023 $ 108,813 $ 110,120 $ 110,847 Money market instruments 185,899 295,634 168,066 293,511 Investment securities 1,396,880 1,359,690 1,407,734 1,370,627 Loans 4,768,253 4,539,685 4,685,235 4,487,756 Allowance for loan losses (57,949) (55,697) (58,969) (56,186) Loans, net 4,710,304 4,483,988 4,626,266 4,431,570 Bank premises and equipment, net 55,133 56,643 55,465 56,352 Goodwill and other intangibles 72,334 72,397 72,334 72,508 Other real estate owned 22,340 36,363 28,406 35,446 Other assets 350,214 325,527 346,883 330,426 Total assets $ 6,903,127 $ 6,739,055 $ 6,815,274 $ 6,701,287

Liabilities and Shareholders’ Equity

Deposits:

Noninterest bearing $ 1,170,280 $ 1,096,178 $ 1,173,091 $ 1,101,929 Interest bearing 3,846,846 3,797,118 3,780,717 3,761,111 Total deposits 5,017,126 4,893,296 4,953,808 4,863,040 Borrowings 1,130,133 1,137,877 1,122,926 1,114,113 Other liabilities 64,783 70,353 61,734 75,688 Total liabilities $ 6,212,042 $ 6,101,526 $ 6,138,468 $ 6,052,841

Shareholders’ Equity:

Preferred shares $ — $ — $ — $ — Common shares 302,870 302,652 302,762 302,653 Accumulated other comprehensive loss, net of taxes (11,967) (43,255) (18,922) (27,825) Retained earnings 477,795 454,507 470,367 449,993 Treasury shares (77,613) (76,375) (77,401) (76,375) Total shareholders’ equity $ 691,085 $ 637,529 $ 676,806 $ 648,446

Total liabilities and shareholders’ equity $ 6,903,127 $ 6,739,055 $ 6,815,274 $ 6,701,287

PARK NATIONAL CORPORATION Consolidated Statements of Income – Linked Quarters

2014 2014 2014 2013 2013 (in thousands, except per share data) 3rd QTR 2nd QTR 1st QTR 4th QTR 3rd QTR

Interest income:

Interest and fees on loans $ 57,492 $ 57,004 $ 54,753 $ 57,038 $ 56,337 Interest on:

Obligations of U.S. Government, its agencies and other securities 9,011 9,271 9,476 8,911 8,880 Obligations of states and political subdivisions 1 2 4 7 Other interest income 119 87 111 113 186 Total interest income 66,622 66,363 64,342 66,066 65,410

Interest expense:

Interest on deposits:

Demand and savings deposits 440 399 393 382 422 Time deposits 2,136 2,133 2,278 2,516 2,729 Interest on borrowings 7,337 7,270 7,191 7,268 7,299 Total interest expense 9,913 9,802 9,862 10,166 10,450

Net interest income 56,709 56,561 54,480 55,900 54,960

Provision for (recovery of) loan losses 4,501 (1,260) (2,225) (85) 2,498

Net interest income after provision for (recovery of) loan losses 52,208 57,821 56,705 55,985 52,462

Other income 19,396 19,671 16,648 17,778 17,396

Other expense 46,903 48,196 47,698 51,146 44,715

Income before income taxes 24,701 29,296 25,655 22,617 25,143

Income taxes 6,398 7,469 6,036 5,163 6,114

Net income $ 18,303 $ 21,827 $ 19,619 $ 17,454 $ 19,029

Per Common Share:

Net income – basic $ 1.19 $ 1.42 $ 1.27 $ 1.13 $ 1.23 Net income – diluted $ 1.19 $ 1.42 $ 1.27 $ 1.13 $ 1.23

PARK NATIONAL CORPORATION Detail of other income and other expense – Linked Quarters

2014 2014 2014 2013 2013 (in thousands) 3rd QTR 2nd QTR 1st QTR 4th QTR 3rd QTR

Other income:

Income from fiduciary activities $ 4,734 $ 4,825 $ 4,541 $ 4,590 $ 4,139 Service charges on deposits 4,171 3,942 3,659 4,169 4,255 Other service income 2,450 2,527 1,918 2,185 3,391 Checkcard fee income 3,431 3,493 3,213 3,330 3,326 Bank owned life insurance income 1,420 1,026 1,262 1,274 1,311 OREO valuation adjustments (935) (675) (416) (951) (2,030) Gain on the sale of OREO, net 2,149 2,603 706 358 895 Miscellaneous 1,976 1,930 1,765 2,823 2,109 Total other income $ 19,396 $ 19,671 $ 16,648 $ 17,778 $ 17,396

Other expense:

Salaries and employee benefits $ 26,243 $ 26,140 $ 25,060 $ 25,115 $ 25,871 Net occupancy expense 2,339 2,457 2,832 2,415 2,348 Furniture and equipment expense 2,870 2,994 2,998 3,022 2,639 Data processing fees 1,281 1,121 1,114 1,064 1,042 Professional fees and services 6,934 8,168 6,283 10,520 5,601 Amortization of intangibles — — — 112 Marketing 1,087 1,006 1,118 1,126 863 Insurance 1,396 1,467 1,447 1,391 1,174 Communication 1,304 1,293 1,343 1,489 1,268 Miscellaneous 3,449 3,550 5,503 5,004 3,797 Total other expense $ 46,903 $ 48,196 $ 47,698 $ 51,146 $ 44,715

PARK NATIONAL CORPORATION Asset Quality Information

Quarter ended Year ended December 31, (in thousands, except ratios) September 30, 2014 June 30, 2014 March 31, 2014
2013

2012

2011

2010

Allowance for loan losses:

Allowance for loan losses, beginning of period $ 57,911 $ 60,257 $ 59,468 $ 55,537 $ 68,444 $ 143,575 $ 116,717 Transfer of loans at fair value — — — — — (219) — Transfer of allowance to held for sale — — — — — (13,100) — Charge-offs 8,323 (B) 7,695 3,827 19,153 61,268 (A) 133,882 66,314 Recoveries 3,585 6,609 6,841 19,669 12,942 8,798 6,092 Net charge-offs (recoveries) 4,738 1,086 (3,014) (516) 48,326 125,084 60,222 Provision for (recovery of) loan losses 4,501 (1,260) (2,225) 3,415 35,419 63,272 87,080 Allowance for loan losses, end of period $ 57,674 $ 57,911 $ 60,257 $ 59,468 $ 55,537 $ 68,444 $ 143,575

(A) Year ended December 31, 2012 included the full charge-off of the Vision Bank ALLL of $12.1 million to bring the retained Vision Bank loan portfolio to fair value prior to the merger of Vision Bank (as constituted following the transaction with Centennial Bank and Home BancShares, Inc.) with and into SEPH, the non-bank subsidiary of Park, on February 16, 2012. (B) Quarter ended September 30, 2014 included $4.3 million in charge-offs related to the transfer of $22.0 million of commercial loans to the held for sale portfolio.

General reserve trends:

Allowance for loan losses, end of period $ 57,674 $ 57,911 $ 60,257 $ 59,468 $ 55,537 $ 68,444 $ 143,575 Specific reserves 4,120 6,343 11,322 10,451 8,276 15,935 66,904 General reserves $ 53,554 $ 51,568 $ 48,935 $ 49,017 $ 47,261 $ 52,509 $ 76,671

Total loans $ 4,770,433 $ 4,728,910 $ 4,620,416 $ 4,618,839 $ 4,424,579 $ 4,305,564 $ 4,724,345 Impaired commercial loans 76,198 95,974 105,833 112,304 137,238 187,074 250,933 Total loans less impaired commercial loans $ 4,694,235 $ 4,632,936 $ 4,514,583 $ 4,506,535 $ 4,287,341 $ 4,118,490 $ 4,473,412

Asset Quality Ratios:

Net charge-offs (recoveries) as a % of average loans (annualized for quarterly periods) 0.39% 0.09% (0.27)% (0.01)% 1.10% 2.65% 1.30% Allowance for loan losses as a % of period end loans 1.21% 1.22% 1.30% 1.29% 1.26% 1.59% 3.04% General reserves as a % of total loans less impaired commercial loans 1.14% 1.11% 1.08% 1.09% 1.10% 1.27% 1.71%

Nonperforming Assets – Park National Corporation:

Nonaccrual loans $ 100,471 $ 118,895 $ 128,026 $ 135,216 $ 155,536 $ 195,106 $ 289,268 Accruing troubled debt restructuring 17,135 17,514 17,957 18,747 29,800 28,607 — Loans past due 90 days or more 1,787 6,493 1,289 1,677 2,970 3,489 3,590 Total nonperforming loans $ 119,393 $ 142,902 $ 147,272 $ 155,640 $ 188,306 $ 227,202 $ 292,858 Loans held for sale 21,985 — — — — — — Total nonperforming loans, including loans held for sale $ 141,378 $ 142,902 $ 147,272 $ 155,640 $ 188,306 $ 227,202 $ 292,858 Other real estate owned – Park National Bank 7,082 7,727 12,486 11,412 14,715 13,240 8,385 Other real estate owned – SEPH 12,103 16,182 22,626 23,224 21,003 29,032 — Other real estate owned – Vision Bank — — — — — — 33,324 Total nonperforming assets $ 160,563 $ 166,811 $ 182,384 $ 190,276 $ 224,024 $ 269,474 $ 334,567 Percentage of nonaccrual loans to period end loans 2.11% 2.51% 2.77% 2.93% 3.52% 4.53% 6.12% Percentage of nonperforming loans to period end loans 2.50% 3.02% 3.19% 3.37% 4.26% 5.28% 6.20% Percentage of nonperforming assets to period end loans 3.37% 3.53% 3.95% 4.12% 5.06% 6.26% 7.08% Percentage of nonperforming assets to period end assets 2.29% 2.46% 2.68% 2.87% 3.37% 3.86% 4.59%

PARK NATIONAL CORPORATION Asset Quality Information (continued)

Year ended December 31, (in thousands, except ratios) September 30, 2014 June 30, 2014 March 31, 2014
2013

2012

2011

2010

Nonperforming Assets – Park National Bank and Guardian:

Nonaccrual loans $ 77,160 $ 89,231 $ 96,672 $ 99,108 $ 100,244 $ 96,113 $ 117,815 Accruing troubled debt restructuring 17,038 17,417 17,860 18,747 29,800 26,342 — Loans past due 90 days or more 1,787 6,493 1,289 1,677 2,970 3,367 3,226 Total nonperforming loans $ 95,985 $ 113,141 $ 115,821 $ 119,532 $ 133,014 $ 125,822 $ 121,041 Loans held for sale 15,475 — — — — — — Total nonperforming loans, including loans held for sale $ 111,460 $ 113,141 $ 115,821 $ 119,532 $ 133,014 $ 125,822 $ 121,041 Other real estate owned – Park National Bank 7,082 7,727 12,486 11,412 14,715 13,240 8,385 Total nonperforming assets $ 118,542 $ 120,868 $ 128,307 $ 130,944 $ 147,729 $ 139,062 $ 129,426 Percentage of nonaccrual loans to period end loans 1.63% 1.90% 2.11% 2.16% 2.30% 2.30% 2.88% Percentage of nonperforming loans to period end loans 2.02% 2.41% 2.52% 2.61% 3.05% 3.00% 2.96% Percentage of nonperforming assets to period end loans 2.50% 2.57% 2.80% 2.86% 3.38% 3.32% 3.16% Percentage of nonperforming assets to period end assets 1.71% 1.81% 1.91% 2.00% 2.27% 2.21% 1.99%

Nonperforming Assets – SEPH/Vision Bank (retained portfolio as of September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, 2012, and 2011):

Nonaccrual loans $ 23,311 $ 29,664 $ 31,354 $ 36,108 $ 55,292 $ 98,993 $ 171,453 Accruing troubled debt restructuring 97 97 97 — — 2,265 — Loans past due 90 days or more — — — — — 122 364 Total nonperforming loans $ 23,408 $ 29,761 $ 31,451 $ 36,108 $ 55,292 $ 101,380 $ 171,817 Loans held for sale 6,511 — — — — — — Total nonperforming loans, including loans held for sale $ 29,919 $ 29,761 $ 31,451 $ 36,108 $ 55,292 $ 101,380 $ 171,817 Other real estate owned – Vision Bank — — — — — — 33,324 Other real estate owned – SEPH 12,103 16,182 22,626 23,224 21,003 29,032 — Total nonperforming assets $ 42,022 $ 45,943 $ 54,077 $ 59,332 $ 76,295 $ 130,412 $ 205,141 Percentage of nonaccrual loans to period end loans N.M. N.M. N.M. N.M. N.M. N.M. 27.02% Percentage of nonperforming loans to period end loans N.M. N.M. N.M. N.M. N.M. N.M. 27.07% Percentage of nonperforming assets to period end loans N.M. N.M. N.M. N.M. N.M. N.M. 32.32% Percentage of nonperforming assets to period end assets N.M. N.M. N.M. N.M. N.M. N.M. 25.90%

PARK NATIONAL CORPORATION Asset Quality Information (continued)

Year ended December 31, (in thousands, except ratios) September 30, 2014 June 30, 2014 March 31, 2014
2013

2012

2011

2010

New nonaccrual loan information – Park National Corporation

Nonaccrual loans, beginning of period $ 118,895 $ 128,026 $ 135,216 $ 155,536 $ 195,106 $ 289,268 $ 233,544 New nonaccrual loans 25,739 14,785 12,875 67,398 83,204 124,158 175,175 Resolved nonaccrual loans 22,178 23,916 20,065 87,718 122,774 218,320 119,451 Loans transferred to held for sale 21,985 — — — — — — Nonaccrual loans, end of period $ 100,471 $ 118,895 $ 128,026 $ 135,216 $ 155,536 $ 195,106 $ 289,268

New nonaccrual loan information – Ohio – based operations

Nonaccrual loans, beginning of period $ 89,231 $ 96,672 $ 99,108 $ 100,244 $ 96,113 $ 117,815 $ 85,197 New nonaccrual loans – Ohio-based operations 25,069 14,785 12,875 66,197 68,960 78,316 85,081 Resolved nonaccrual loans 21,665 22,226 15,311 67,333 64,829 100,018 52,463 Loans transferred to held for sale 15,475 — — — — — — Nonaccrual loans, end of period $ 77,160 $ 89,231 $ 96,672 $ 99,108 $ 100,244 $ 96,113 $ 117,815

New nonaccrual loan information – SEPH/Vision Bank

Nonaccrual loans, beginning of period $ 29,664 $ 31,354 $ 36,108 $ 55,292 $ 98,993 $ 171,453 $ 148,347 New nonaccrual loans – SEPH/Vision Bank 670 — — 1,201 14,243 45,842 90,094 Resolved nonaccrual loans 512 1,690 4,754 20,385 57,944 118,302 66,988 Loans transferred to held for sale 6,511 — — — — — — Nonaccrual loans, end of period $ 23,311 $ 29,664 $ 31,354 $ 36,108 $ 55,292 $ 98,993 $ 171,453

Impaired Commercial Loan Portfolio Information (period end): (1)

Unpaid principal balance $ 120,773 $ 154,396 $ 160,199 $ 175,576 $ 242,345 $ 290,908 $ 304,534 Prior charge-offs 44,575 58,422 54,366 63,272 105,107 103,834 53,601 Remaining principal balance 76,198 95,974 105,833 112,304 137,238 187,074 250,933 Specific reserves 4,120 6,343 11,322 10,451 8,276 15,935 66,904 Book value, after specific reserve $ 72,078 $ 89,631 $ 94,511 $ 101,853 $ 128,962 $ 171,139 $ 184,029

(1) Excludes $22.0 million of commercial loans held for sale for the period ended September 30, 2014. View photo.FinanceInvestment & Company InformationPark National Corporation Contact: Media contact: Bethany Lewis, 740.349.0421,
blewis@parknationalbank.com
Investor contact: Brady Burt, 740.322.6844,
bburt@parknationalbank.com
[…]

JMP Group Reports Third Quarter 2014 Financial Results

SAN FRANCISCO–(BUSINESS WIRE)–

JMP Group Inc. (NYSE: JMP), an investment banking and alternative asset management firm, reported financial results today for the quarter and nine months ended September 30, 2014.

Adjusted net revenues, which exclude certain non-cash items and non-controlling interests, were $40.3 million, an increase of 11.3% from $36.2 million for the third quarter of 2013. For the nine months ended September 30, 2014, adjusted net revenues were a record $134.9 million, an increase of 27.0% from $106.2 million for the nine months ended September 30, 2013. For more information on adjusted net revenues, including a reconciliation to net revenues, please see the section below titled “Non-GAAP Financial Measures.” Operating net income was $3.4 million, or $0.15 per diluted share, an increase of 27.7% from $2.7 million, or $0.12 per share, for the third quarter of 2013. For the nine months ended September 30, 2014, operating net income was $11.9 million, or $0.52 per share, an increase of 23.3% from $9.6 million, or $0.43 per share, for the nine months ended September 30, 2013. For more information on operating net income, including a reconciliation to net income attributable to JMP Group, please see the section below titled “Non-GAAP Financial Measures.” On July 29, 2014, the company announced that it was evaluating a potential transaction whereby JMP Group would convert its corporate form into a limited liability company that would be taxed as a partnership, and no longer as a corporation, for U.S. federal income tax purposes. On August 20, 2014, the company announced that its board of directors approved the restructuring transaction. The potential restructuring will be subject to a shareholder vote before year-end. For the quarter, legal and other expenses in connection with the transaction were $0.4 million, or $0.01 per share after tax, which was included in operating EPS of $0.15. For the nine months ended September 30, 2014, such costs were $0.06 million, or $0.01 per share after tax, which was included in operating EPS of $0.52. For more information on the potential transaction, including pro forma financial information, please see the most recent amendment to the Form S-4 filed by JMP Group LLC with the Securities and Exchange Commission. Total net revenues under generally accepted accounting principles, or GAAP, were $33.7 million and $128.9 million for the quarter and nine months ended September 30, 2014, respectively, compared to $35.4 million and $89.5 million for the quarter and nine months ended September 30, 2013, respectively. Net income attributable to JMP Group on a GAAP basis was $1.5 million, or $0.06 per share, compared to $3.3 million, or $0.14 per share, for the third quarter of 2013. For the nine months ended September 30, 2014, GAAP net income was $8.7 million, or $0.37 per share, compared to $0.1 million, or $0.01 per share, for the nine months ended September 30, 2013.

“JMP Group posted another good quarter, thanks to our diversified business model, with operating earnings increasing 28% year-over-year to $0.15 per share, despite a slower pace in the equity capital markets environment,” said Chairman and Chief Executive Officer Joe Jolson. “Excluding net investment income and corporate costs, our three operating platforms earned a record $0.66 per share for the latest twelve months, an increase of 74% from $0.38 per share for the prior twelve-month period. The strong results drove a 12% increase in our tangible book value per share to $6.32 and also allowed us to return 48% of our operating earnings to stockholders through cash dividends and share buybacks over the past year.”

Segment Results of Operations

At JMP Securities, the broker-dealer segment, adjusted net revenues were $23.5 million, a decrease of 5.5% from $24.9 million for the third quarter of 2013. The broker-dealer segment’s operating margin on adjusted net revenues was 14.5%, compared to 16.8% for the prior quarter and 13.8% for the third quarter of 2013.

At Harvest Capital Strategies, the asset management segment, adjusted net revenues of $11.2 million increased 82.3% from $6.2 million for the third quarter of 2013. JMP Group’s return on its capital invested in hedge funds managed by Harvest Capital Strategies was 1.8% for the period.

At JMP Credit Advisors, the corporate credit management segment, adjusted net revenues totaled $1.2 million, a decrease of 8.6% from $1.4 million for the third quarter of 2013. For the third quarter of 2014, there was no net realized gain or loss on the sale or payoff of loans underlying collateralized loan obligations; while, for the third quarter of 2013, there was a net realized gain of $0.2 million.

A summary of JMP Group’s operating net income per share by segment for the quarter and nine months ended September 30, 2014, and for comparable prior periods is set forth below.

Quarter Ended Nine Months Ended ($ as shown) Sept. 30, 2014 June 30, 2014 Sept. 30, 2013 Sept. 30, 2014 Sept. 30, 2013 Broker-dealer $0.09 $0.13 $0.10 $0.40 $0.27 Asset management 0.04 0.02 0.01 0.06 0.01 Corporate credit management 0.00 0.02 0.01 0.02 0.02 Operating platform EPS 0.13 0.17 0.12 0.48 0.30 Investment income 0.11 0.12 0.07 0.35 0.42 Corporate costs (0.09 ) (0.11 ) (0.07 ) (0.31 ) (0.29 ) Operating EPS (diluted) $0.15 $0.18 $0.12 $0.52 $0.43

For more information on segment reporting; adjusted net revenues, including a reconciliation to net revenues; and operating net income, including a reconciliation to net income, please see the section below titled “Non-GAAP Financial Measures.”

Composition of Revenues

Investment Banking

Investment banking revenues were $17.1 million, a decrease of 10.8% from $19.1 million for the third quarter of 2013. For the nine months ended September 30, 2014, investment banking revenues were $65.2 million, an increase of 24.6% from $52.3 million for the nine months ended September 30, 2013.

A summary of the company’s investment banking revenues and transaction counts for the quarter and nine months ended September 30, 2014, and for comparable prior periods is set forth below.

Quarter Ended Nine Months Ended Sept. 30, 2014 June 30, 2014 Sept. 30, 2013 Sept. 30, 2014 Sept. 30, 2013 ($ in thousands) Count Revenues Count Revenues Count Revenues Count Revenues Count Revenues Public equity 26 $9,834 34 $14,717 27 $10,822 93 $44,072 97 $29,253

Debt and convertible securities

4 470 5 1,090 5 3,495 15 3,131 23 10,033

Private capital markets and other

1 125 – 325 2 1,534 2 1,148 4 4,509 Strategic advisory 4 6,634 8 6,929 4 3,286 15 16,826 9 8,506 Total 35 $17,063 47 $23,061 38 $19,137 125 $65,177 133 $52,301

Brokerage

Net brokerage revenues were $6.5 million, an increase of 12.3% from $5.8 million for the third quarter of 2013. For the nine months ended September 30, 2014, net brokerage revenues were $19.6 million, an increase of 9.3% from $17.9 million for the nine months ended September 30, 2013.

Asset Management

Asset management-related fee revenues were $11.1 million, an increase of 85.6% from $6.0 million for the third quarter of 2013, largely due to an increase in incentive fees to $6.2 million from $2.5 million. For the nine months ended September 30, 2014, asset management-related fee revenues were $32.6 million, an increase of 81.7% from $18.0 million for the nine months ended September 30, 2013. For more information on asset management-related fee revenues, please see the section below titled “Non-GAAP Financial Measures.”

Client assets under management at September 30, 2014, totaled $2.2 billion, including $1.1 billion of funds managed by Harvest Capital Strategies and HCAP Advisors and $1.1 billion par value of loans and cash managed by JMP Credit Advisors. Client assets under management were $1.9 billion at June 30, 2014, and $1.6 billion at September 30, 2013. Including sponsored funds in which Harvest Capital Strategies owns an economic interest, client assets under management totaled $2.5 billion at September 30, 2014.

At September 30, 2014, private capital, including corporate credit, small business lending, venture capital and real estate-related advisory services, represented 63.1% of client assets under management, including sponsored funds.

Principal Transactions

Principal transactions generated net realized and unrealized losses of $4.3 million and net realized and unrealized gains of $1.7 million for the quarter and nine months ended September 30, 2014, respectively, compared to net realized and unrealized gains of $0.6 million and $4.8 million for the quarter and nine months ended September 30, 2013, respectively.

A summary of the company’s principal transaction revenues for the quarter and nine months ended September 30, 2014, and for comparable prior periods is set forth below.

Quarter Ended Nine Months Ended (in thousands) Sept. 30, 2014 June 30, 2014 Sept. 30, 2013 Sept. 30, 2014 Sept. 30, 2013 Hedge fund investments $1,784 $2,255 $432 $5,747 $3,238 Principal investments:

Investment in Harvest Capital Credit Corporation

(1,273 ) 19 205 (1,417 ) 69 Other principal investments 26 (108 ) (139 ) (28 ) – Total principal investments (1,247 ) (89 ) 66 (1,445 ) 69 Venture investments:

Investment in Harvest Growth Capital funds

(164 ) 284 (33 ) (183 ) 34 Other venture investments and warrants (298 ) 255 794 246 1,831 Total venture investments (462 ) 539 761 63 1,865

Principal transaction revenues net of non-controlling interests in Harvest Growth Capital funds

75 2,705 1,259 4,365 5,172

Non-controlling interests in Harvest Growth Capital funds

(4,351 ) 6,983 (619 ) (2,646 ) (323 ) Total principal transaction revenues ($4,276 ) $9,688 $640 $1,719 $4,849

Included in the net loss of $4.3 million for the quarter ended September 30, 2014, was a loss of $4.4 million attributable to non-controlling interests in net realized and unrealized gains at Harvest Growth Capital and Harvest Growth Capital II, venture capital funds managed by Harvest Capital Strategies that are consolidated under GAAP. GAAP accounting requires that JMP Group consolidate both funds due to Harvest Capital Strategies’ role as the funds’ manager and managing member, despite the company’s ownership of just 4.8% of Harvest Growth Capital and 2.3% of Harvest Growth Capital II. The presentation of adjusted net revenues elsewhere in this press release excludes JMP Group’s non-controlling interests in these funds; and, accordingly, the aforementioned loss of $4.4 million is not included in adjusted net revenues. Net of its non-controlling interests, JMP Group had a net realized and unrealized loss of $0.2 million on its investments in Harvest Growth Capital and Harvest Growth Capital II for the quarter. For more information on adjusted net revenues, including reconciliation to net revenues, please see the section below titled “Non-GAAP Financial Measures.”

Collateralized Loan Obligations

The net returns on invested capital managed by JMP Credit Advisors were 3.9% and 12.4% for the quarter and nine months ended September 30, 2014, respectively, compared to 6.9% and 26.3% for the quarter and nine months ended September 30, 2013, respectively.

At September 30, 2014, discounts and reserves (including liquidity discounts, allowances for loan losses and deferred loan fees) equaled $11.4 million, or 1.2% of gross performing loans outstanding at JMP Credit. At September 30, 2013, such discounts and reserves equaled $8.5 million, or 1.2% of gross performing loans outstanding. There were no impaired loans at either September 30, 2014, or September 30, 2013.

A net loan loss provision of $1.0 million for the quarter was recorded at JMP Credit, which is consolidated under GAAP, primarily representing a general reserve in connection with the loan portfolio being accumulated for JMP Credit Advisors CLO III. At September 30, 2014, general loan loss reserves equaled 0.6% of gross performing loans at JMP Credit.

Net Interest Income

Net interest income was $4.4 million, compared to net interest income of $4.3 million for the third quarter of 2013.

For the nine months ended September 30, 2014, net interest income was $11.9 million, compared to net interest expense of $1.2 million for the nine months ended September 30, 2013, when interest expense due to net amortization of liquidity discounts at JMP Credit equaled $14.9 million. Excluding the amortization-related expense for the period, net interest income would have been $13.7 million for the nine months ended September 30, 2013. Further excluding net interest income of $1.8 million attributable to Harvest Capital Credit, which, due to its May 2013 initial public offering, is no longer consolidated by JMP Group, net interest income would have been $11.9 million for the nine months ended September 30, 2013.

Expenses

Compensation and Benefits

Compensation and benefits expense was $28.3 million, compared to $24.7 million for the third quarter of 2013. Excluding the cost of stock-based awards but accelerating and recognizing the cost of net deferred compensation related to the period, compensation and benefits expense was 68.7% of adjusted net revenues, compared to 69.0% for the third quarter of 2013. Further excluding compensation expense related to strategic initiatives and hedge fund incentive fees, the compensation ratio was 62.8%, compared to 65.3% for the third quarter of 2013.

For the nine months ended September 30, 2014, compensation and benefits expense was $97.7 million, compared to $69.1 million for the nine months ended September 30, 2013. Excluding the cost of stock-based awards but accelerating and recognizing the cost of net deferred compensation related to the period, compensation and benefits expense was 70.5% of adjusted net revenues, compared to 65.7% for the nine months ended September 30, 2013. Further excluding compensation expense related to strategic initiatives and hedge fund incentive fees, the compensation ratio was 64.7%, compared to 60.1% for the nine months ended September 30, 2013.

For more information on compensation ratios, please see the section below titled “Non-GAAP Financial Measures.”

Non-Compensation Expense

Non-compensation expense was $7.0 million, compared to $6.8 million for the third quarter of 2013. For the nine months ended September 30, 2014, non-compensation expense was $20.7 million, compared to $21.9 million for the nine months ended September 30, 2013. Excluding costs related to JMP Group’s conversion to a publicly traded limited liability company, non-compensation expense would have been $6.6 million for the quarter and $20.1 million for the nine months ended September 30, 2014.

Personnel

At September 30, 2014, the company had 233 full-time employees, compared to 231 at June 30, 2014, and 231 at September 30, 2013.

Non-GAAP Financial Measures

In addition to the GAAP financial results presented in this press release, JMP Group presents the non-GAAP financial measures discussed below. These non-GAAP measures are provided to enhance investors’ overall understanding of the company’s current financial performance. Furthermore, company management believes that this presentation enables more a meaningful comparison of JMP Group’s financial performance in various periods. However, the non-GAAP financial results presented should not be considered a substitute for results that are presented in a manner consistent with GAAP. A limitation of the non-GAAP financial measures presented is that the adjustments concern gains, losses or expenses that JMP Group generally expects to continue to recognize. The adjustment of these non-GAAP items should not be construed as an inference that these gains or expenses are unusual, infrequent or non-recurring. Therefore, both GAAP measures of JMP Group’s financial performance and the respective non-GAAP measures should be considered together. The non-GAAP measures presented herein may not be comparable to similarly titled measures presented by other companies.

Adjusted Net Revenue

Adjusted net revenue is a non-GAAP financial measure that (i) includes asset management fees, net interest income or expense, and other revenues eliminated upon the consolidation of Harvest Growth Capital, Harvest Growth Capital II and Harvest Capital Credit (until its IPO on May 2, 2013), (ii) excludes the net amortization of liquidity discounts on loans held and asset-backed securities issued by JMP Credit Advisors CLO I, (iii) reverses the general loan loss provision taken with regard to other CLOs, (iv) adjusts for unrealized mark-to-market gains and losses recorded at Harvest Capital Credit (prior to its IPO on May 2, 2013), (v) reverses net unrealized gains and losses on strategic equity investments and warrants, (vi) excludes the non-controlling interest in net unrealized gains and losses on Harvest Growth Capital and Harvest Growth Capital II, and (vii) reverses unrealized mark-to-market gains or losses on investments related to deferred compensation. In particular, adjusted net revenue adjusts for:

base management and incentive fees earned by Harvest Capital Strategies as manager of Harvest Growth Capital and Harvest Growth Capital II, both venture capital funds, and Harvest Capital Credit, a small business lending strategy; Harvest Capital Strategies is managing member of Harvest Growth Capital and Harvest Growth Capital II and was the external manager of Harvest Capital Credit, and, as a result of its ownership of each (until the IPO of Harvest Capital Credit on May 2, 2013), JMP Group has consolidated the three entities (for the appropriate periods) in accordance with GAAP accounting standards and has eliminated the fees in consolidation; presenting these fees as though Harvest Growth Capital, Harvest Growth Capital II and Harvest Capital Credit were deconsolidated presents the entities’ results in a manner similar to those of the other investment funds managed by Harvest Capital Strategies; the non-cash net amortization of liquidity discounts associated with JMP Credit Advisors CLO I, due to scheduled contractual principal repayments, for periods ending on or before June 30, 2013; the non-specific, non-cash loan loss provision recorded with regard to loans acquired during the period by JMP Credit Advisors CLO II and JMP Credit Advisors III, which is required by GAAP; unrealized mark-to-market gains or losses on the investment portfolio at Harvest Capital Credit; unrealized mark-to-market gains or losses on the company’s strategic equity investments as well as certain warrant positions; non-controlling interests in net unrealized gains and losses generated by Harvest Growth Capital and Harvest Growth Capital II, of which Harvest Capital Strategies is manager and managing member; under GAAP, JMP Group consolidates the two funds, however, as presented, unrealized gains and losses that do not accrue to the company are reversed; and unrealized mark-to-market gains or losses on investments in the company’s hedge funds that are made on behalf of employees who opt for such investments under the terms of their deferred compensation agreements; any gains or losses will accrue to the individual employee once the deferred compensation is released to that individual.

A reconciliation of JMP Group’s net revenues to its adjusted net revenues for the quarter and nine months ended September 30, 2014, and for comparable prior periods is set forth below.

Quarter Ended Nine Months Ended (in thousands) Sept. 30, 2014 June 30, 2014 Sept. 30, 2013 Sept. 30, 2014 Sept. 30, 2013 Revenues: Non-interest revenues $30,294 $53,942 31,531 $118,633 $93,142 Net interest income/(expense) 4,359 3,788 4,313 11,907 (1,222 ) Loan loss provision (956 ) (212 ) (467 ) (1,665 ) (2,391 ) Total net revenues 33,697 57,518 35,377 128,875 89,529

Asset management fees earned on Harvest Growth Capital funds and Harvest Capital Credit (1) (2)

281 366 387 1,025 1,766

Dividend distribution from Harvest Capital Credit (2)

– – – – 678

Less: Net interest income and other revenues from Harvest Capital Credit (2)

– – – – (2,116 )

Total net revenues including fee revenues from consolidated entities

33,978 57,884 35,764 129,900 89,857 Add back/(subtract):

Net amortization of liquidity discounts on loans and asset-backed securities issued

– – – – 14,979

General loan loss provision – collateralized loan obligations

919 382 377 1,851 1,505

Unrealized mark-to-market (gain) – Harvest Capital Credit

– – – – (515 )

Realization of mark-to-market gain – Harvest Capital Credit

– – – – 772

Net unrealized loss/(gain) on strategic equity investments and warrants

1,392

(72 ) (531 ) 1,494 (617 )

Non-controlling interests in net unrealized losses/(gains) on Harvest Growth Capital funds

4,361 (6,980 ) 619 2,678 323

Unrealized mark-to-market (gain)/loss – deferred compensation

(332 ) (656 ) 1 (1,058 ) (152 ) Adjusted net revenues $40,318 $50,558 $36,230 $134,865 $106,152 (1) Adjustments to reflect economic contributions from two Harvest Growth Capital funds and Harvest Capital Credit as though deconsolidated for purposes of financial reporting; upon deconsolidation, fee revenues and dividend payments would be recognized, while net interest income and other revenues generated by these entities would not be recorded by JMP Group. (2) Subsequent to its IPO on May 2, 2013, Harvest Capital Credit is no longer consolidated; therefore, fees and dividends related to Harvest Capital Credit are included in non-interest revenues following that date.

Company management has utilized adjusted net revenue, adjusted in the manner described above, as an additional device to aid in understanding and analyzing JMP Group’s financial results for the periods presented. Management believes that adjusting net revenue in these ways is useful in that it allows for a better evaluation of the performance of JMP Group’s ongoing business and facilitates a meaningful comparison of the company’s results in a given period to those in prior and future periods.

Asset Management-Related Fee Revenues

Asset management-related fee revenue is a non-GAAP financial measure that sums asset management fees with certain fee revenues (in particular, asset management fundraising fees generated by JMP Securities, loan fees, and revenues from fee-sharing arrangements with other asset managers) that are reported in JMP Group’s financial statements as other income. In addition, asset management-related fee revenues incorporate base management and incentive fees earned by Harvest Capital Strategies as manager of Harvest Growth Capital, Harvest Growth Capital II and Harvest Capital Credit. JMP Group consolidates the two Harvest Growth Capital funds and Harvest Capital Credit (until its IPO on May 2, 2013) in accordance with GAAP accounting standards; however, asset management fees generated by these entities are included in asset management-related fee revenues as though deconsolidated.

A statement of JMP Group’s asset management-related fee revenues for the quarter and nine months ended September 30, 2014, and for comparable prior periods is set forth below.

Quarter Ended Nine Months Ended (in thousands) Sept. 30, 2014 June 30, 2014 Sept. 30, 2013 Sept. 30, 2014 Sept. 30, 2013 Base management fees: Fees reported as asset management fees $2,983 $2,725 $2,585 $8,302 $7,502

Fees earned at Harvest Growth Capital, Harvest Growth Capital II and Harvest Capital Credit/HCAP Advisors

769 804 636 2,342 1,740 Total base management fees 3,752 3,529 3,221 10,644 9,242 Incentive fees: Fees reported as asset management fees 5,622 11,209 2,493 19,750 7,715

Fees earned at Harvest Growth Capital, Harvest Growth Capital II and Harvest Capital Credit/HCAP Advisors

538 485 – 665 417 Total incentive fees 6,160 11,694 2,493 20,415 8,132 Other fee income: Total fundraising and other fees 1,191 152 267 1,564 581 Asset management-related fee revenues $11,103 $15,375 $5,981 $32,623 $17,955 Summations: Fees reported as asset management fees $8,605 $13,934 $5,078 $28,052 $15,217

Fees earned at Harvest Growth Capital, Harvest Growth Capital II and Harvest Capital Credit/HCAP Advisors

1,307 1,289 636 3,007 2,157 Fees reported as other fee income 1,191 152 267 1,564 581

Company management has utilized asset management-related fee revenue as a means of assessing the performance of JMP Group’s combined asset management activities, including its fundraising and other services for third parties. Management believes that asset management-related fee revenues, as presented above, provide useful information by indicating the relative contributions of base management fees and performance-related incentive fees, thus facilitating a comparison of those fees in a given period to those in prior and future periods. Management also believes that asset management-related fee revenue is a more meaningful measure than standalone asset management fees as reported, because asset management-related fee revenues represent the combined impact of JMP Group’s various asset management activities on the company’s total net revenues.

Compensation Ratio

A compensation ratio expresses compensation expense as a percentage of net revenues in a given period. As utilized by JMP Group, an adjusted compensation ratio is a non-GAAP financial measure that employs adjusted net revenues as the denominator in its calculation. Furthermore, this ratio adjusts the financial impact of certain compensation-related and transaction-related expenses that are or are not recognized under GAAP. In particular, the adjusted compensation ratio reverses compensation expense and unrealized mark-to-market gains or losses related to stock-based awards and deferred compensation (so that the compensation expenses used in the numerator correspond to the adjusted net revenues generated in the periods presented). The adjusted compensation ratio is further adjusted by excluding compensation paid to employees hired in connection with JMP Group’s strategic investments in new business initiatives. In addition, the company presents an adjusted compensation ratio that excludes any compensation related to incentive fees generated by hedge funds, a majority of which is passed through to the funds’ investment teams if earned.

A statement of JMP Group’s compensation ratio for the quarter and nine months ended September 30, 2014, and for comparable prior periods is set forth below.

Quarter Ended Nine Months Ended ($ in thousands) Sept. 30, 2014 June 30, 2014 Sept. 30, 2013 Sept. 30, 2014 Sept. 30, 2013 Compensation Ratios Adjusted net revenues $40,318 $50,558 $36,230 $134,865 $106,152 Compensation and benefits $28,315 $37,979 $24,685 $97,670 $69,066 Subtract/(add back): Compensation expense – stock options 509 504 262 1,408 658 Compensation expense – RSUs 776 934 699 2,563 2,019

Compensation expense – net deferred compensation

(991 ) (891 ) (1,277 ) (2,479 ) (3,547 )

Unrealized mark-to-market gain/(loss) – deferred compensation

332 656 (1 ) 1,058 152 Adjusted compensation and benefits 27,689 36,776 25,002 95,120 69,784 Subtract:

Compensation expense – strategic initiatives

500 500 648 1,610 3,418

Adjusted compensation and benefits, excluding strategic initiatives

$27,189 $36,276 $24,354 $93,510 $66,366

Adjusted ratio of compensation expense to revenues

68.7 % 72.7 % 69.0 % 70.5 % 65.7 %

Adjusted ratio of compensation expense to revenues, excluding strategic initiatives

67.4 % 71.8 % 67.2 % 69.3 % 62.5 % Compensation Ratios Excluding Hedge Fund Incentive Fees Adjusted net revenues $40,318 $50,558 $36,230 $134,865 $106,152 Subtract:

Compensation expense – hedge fund incentive fees

4,982 10,372 2,038 17,797 6,322

Adjusted net revenues, excluding hedge fund incentive fees

$35,336 $40,186 $34,192 $117,068 $99,830

Adjusted compensation and benefits, excluding strategic initiatives

$27,189 $36,276 $24,354 $93,510 $66,366 Subtract:

Compensation expense – hedge fund incentive fees

4,982 10,372 2,038 17,797 6,322

Adjusted compensation and benefits, excluding strategic initiatives and hedge fund incentive fees

$22,207 $25,904 $22,316 $75,713 $60,044

Adjusted ratio of compensation expense to revenues, excluding strategic initiatives and hedge fund incentive fees

62.8 % 64.5 % 65.3 % 64.7 % 60.1 %

Company management has utilized compensation ratios, adjusted in the manners described above, to assess JMP Group’s personnel expenses as they relate to its revenues for the periods presented. Management believes that adjusted compensation ratios provide useful information by including or excluding certain expenses as a means of representing the company’s ongoing personnel costs resulting from its core business activities. Management also believes that compensation ratios are useful measures because they allow and facilitate meaningful comparisons of the company’s personnel expenses in a given period to those in prior and future periods.

Operating Net Income

Operating net income is a non-GAAP financial measure that (i) reverses compensation expense related to stock-based awards and deferred compensation, (ii) excludes the net amortization of liquidity discounts on loans held and asset-backed securities issued by JMP Credit Advisors CLO I, (iii) reverses the general loan loss provision taken with regard to other CLOs, (iv) adjusts for unrealized mark-to-market gains and losses recorded at Harvest Capital Credit, (v) reverses net unrealized gains and losses on strategic equity investments and warrants, and (vi) assumes an effective tax rate. In particular, operating net income adjusts for:

the grant of RSUs and stock options; net deferred compensation, which consists of (a) deferred compensation awarded at year-end 2012 and reflected in operating net income for 2012 though recognized as a GAAP expense in 2013 and 2014 less (b) compensation awarded at year-end 2013 and deferred into 2014 and 2015; the non-cash net amortization of liquidity discounts associated with JMP Credit Advisors CLO I, due to scheduled contractual principal repayments, for periods ending on or before June 30, 2013; the non-specific, non-cash loan loss provision recorded with regard to loans acquired during the period by JMP Credit Advisors CLO II and JMP Credit Advisors III, which is required by GAAP; unrealized mark-to-market gains or losses on the investment portfolio at Harvest Capital Credit; unrealized mark-to-market gains or losses on the company’s strategic equity investments as well as certain warrant positions; and a combined federal, state and local income tax rate of 38%.

A reconciliation of JMP Group’s net income to its operating net income for the quarter and nine months ended September 30, 2014, and for comparable prior periods is set forth below.

Quarter Ended Nine Months Ended (in thousands, except per share amounts) Sept. 30, 2014 June 30, 2014 Sept. 30, 2013 Sept. 30, 2014 Sept. 30, 2013

Net income attributable to JMP Group Inc.

$1,495 $3,195 $3,289 $8,688 $135 Add back:

Income tax expense

1,460 2,450 1,634 5,606 178

Income before taxes

2,955 5,645 4,923 14,294 313 Add back/(subtract): Compensation expense – stock options 509 504 262 1,408 658 Compensation expense – RSUs 776 934 699 2,563 2,019

Compensation expense – net deferred compensation

(991 ) (891 ) (1,277 ) (2,479 ) (3,547 )

Net amortization of liquidity discounts – JMP Credit Advisors CLO I

– – – 14,979

General loan loss provision – collateralized loan obligations

913 380 274 1,838 1,095

Unrealized mark-to-market (gain) – Harvest Capital Credit

– – – – (162 )

Realization of mark-to-market gain – Harvest Capital Credit

– – – – 772

Unrealized mark-to-market loss/(gain) – strategic equity investments and warrants

1,392 (72 ) (531 ) 1,494 (617 ) Operating income before taxes 5,554 6,500 4,350 19,118 15,510 Income tax expense (assumed rate of 38%) 2,111 2,470 1,653 7,265 5,893 Operating net income $3,443 $4,030 $2,697 $11,853 $9,617 Operating net income per share: Basic $0.16 $0.19 $0.12 $0.55 $0.43 Diluted (1) $0.15 $0.18 $0.12 $0.52 $0.43 Weighted average shares outstanding: Basic 21,686 21,712 22,014 21,739 22,271 Diluted (1) 23,093 22,901 22,713 22,843 22,669 (1) In 2013 and the first quarter of 2014, JMP Group issued restricted stock units, or RSUs, bearing non-forfeitable dividend equivalent rights. GAAP requires RSUs with non-forfeitable dividend equivalent rights to be included in the diluted share count (without applying the treasury method). Management prefers to present a non-GAAP diluted share count for the period, in keeping with the presentation for quarters not impacted by this GAAP requirement for such RSUs. The non-GAAP diluted share count reflects the impact of such RSUs under the treasury method, which is consistent with the calculation of the dilutive impact of all other RSUs outstanding. On a GAAP basis, the weighted average number of diluted shares outstanding for the quarter and nine months ended September 30, 2014, was 23,833,756 and 23,680,133, respectively. Given those denominators, operating net income per diluted share would have instead been $0.14 for the quarter and $0.50 for the nine months ended September 30, 2014, respectively.

Company management has utilized operating net income on a total and per share basis, adjusted in the manner described above, as an additional device to aid in understanding and analyzing JMP Group’s financial results for the periods presented. Management believes that operating net income provides useful information by excluding certain items that may not be representative of the company’s core operating results or core business activities. Management also believes that operating net income is a useful measure because it allows for a better evaluation of the performance of JMP Group’s ongoing business and facilitates a meaningful comparison of the company’s results in a given period to those in prior and future periods.

Segment Reporting

In order to demonstrate the contribution to the company’s results of each of its primary businesses on a standalone basis, JMP Group presents the operating net income generated by each segment in the tables that follow. Management believes that this presentation enables investors to better understand the separate but interrelated financial operations of the company’s various business lines and to more accurately assess the contribution of each to JMP Group’s aggregate results.

Total net revenues have been adjusted, in part, as detailed above in the section titled “Adjusted Net Revenue,” and the resulting adjusted net revenues (i) include asset management fees, net interest income or expense, and other revenues eliminated upon the consolidation of Harvest Growth Capital, Harvest Growth Capital II and Harvest Capital Credit (until its IPO on May 2, 2013), (ii) exclude the net amortization of liquidity discounts on loans held and asset-backed securities issued by JMP Credit Advisors CLO I, (iii) reverse the general loan loss provision taken with regard to other CLOs, (iv) adjust for unrealized mark-to-market gains and losses recorded at Harvest Capital Credit; (v) reverse net unrealized gains and losses on strategic equity investments and warrants and (vi) exclude non-controlling interests in net unrealized gains and losses on Harvest Growth Capital and Harvest Growth Capital II. Total non-interest expenses have been adjusted, in part, as detailed above in the section titled “Operating Net Income,” and the resulting adjusted non-interest expense reverses compensation expense related to stock-based awards granted subsequent to JMP Group’s initial public offering. For the purposes of calculating operating net income, an effective tax rate of 38% is assumed.

A statement of JMP Group’s operating net income on a segment basis for the quarter ended September 30, 2014, is set forth below.

Quarter Ended September 30, 2014 Corp. Invest- HGC Consoli- Broker- Asset Credit Operating ment Corp. Elimin- JMP Consoli- dated JMP (in thousands, except per share amounts) Dealer Mgmt. Mgmt. Platforms Income Costs ations Group dation Group Revenues: Investment banking $17,063 – – $17,063 – – – $17,063 – $17,063 Brokerage 6,455 – – 6,455 – – – 6,455 – 6,455 Asset management-related fees (1) – $11,212 $1,235 12,447 – –

($1,344

) 11,103 ($281 ) 10,822 Principal transactions (2) – – – – $1,134 – – 1,134 (4,351 ) (3,217 ) Gain on sale and payoff of loans – – – – (12 ) – – (12 ) – (12 ) Net dividend income – – – – 242 – – 242 – 242 Net interest income – – – – 4,369 – – 4,369 (10 ) 4,359 Provision for loan losses – – – – (36 ) – – (36 ) – (36 ) Adjusted net revenues 23,518 11,212 1,235 35,965 5,697 – (1,344 ) 40,318 (4,642 ) 35,676 Expenses: Non-interest expense/(income) (3) 20,107 9,899 1,172 31,178 1,544 3,276 (1,344 ) 34,654 41 34,695 Less: Non-controlling interest (4) – 8 – 8 101 – – 109 (4,683 ) (4,574 )

Operating income/(loss) before taxes

3,411 1,305 63 4,779 4,052 (3,276 ) – 5,555 – 5,555 Income tax expense/(benefit) 1,296 497 24 1,817 1,540 (1,245 ) – 2,112 – 2,112 Operating net income/(loss) $2,115 $808 $39 $2,962 $2,512 ($2,031 ) – $3,443 – $3,443

Operating net income/(loss) per share:

Basic $0.10 $0.04 $0.00 $0.14 $0.12 ($0.09 ) – $0.16 – $0.16 Diluted (5) $0.09 $0.04 $0.00 $0.13 $0.11 ($0.09 ) – $0.15 – $0.15 (1) Reflects revenues detailed in section above titled “Asset Management-Related Fee Revenues;” management fees of $0.3 million are eliminated upon consolidation of two Harvest Growth Capital funds. (2) Reverses net unrealized gains and losses on strategic equity investments and warrants. Excludes non-controlling interests in net realized and unrealized gains totaling $4.4 million that are recognized upon consolidation of two Harvest Growth Capital funds. (3) Reverses stock-based compensation expense as well as accounting adjustments related to deferred compensation expense and excludes fund-related expenses totaling $41,000 that are recognized upon consolidation of two Harvest Growth Capital funds. (4) Excludes non-controlling interests totaling $4.7 million in the net realized and unrealized gains of two Harvest Growth Capital funds that are recognized upon consolidation of the entities. (5) In 2013 and the first quarter of 2014, JMP Group issued restricted stock units, or RSUs, bearing non-forfeitable dividend equivalent rights. GAAP requires RSUs with non-forfeitable dividend equivalent rights to be included in the diluted share count (without applying the treasury method). Management prefers to present a non-GAAP diluted share count for the period, in keeping with the presentation for quarters not impacted by this GAAP requirement for such RSUs. The non-GAAP diluted share count reflects the impact of such RSUs under the treasury method, which is consistent with the calculation of the dilutive impact of all other RSUs outstanding. On a GAAP basis, the weighted average number of diluted shares outstanding for the quarter ended September 30, 2014, was 23,833,756; given that denominator, operating net income per diluted share would have been $0.14.

A statement of JMP Group’s operating net income on a segment basis for the nine months ended September 30, 2014, is set forth below.

Nine Months Ended September 30, 2014 Corp. Invest- HGC Consoli- Broker- Asset Credit Operating ment Corp. Elimin- JMP Consoli- dated JMP (in thousands, except per share amounts) Dealer Mgmt. Mgmt. Platforms Income Costs ations Group dation Group Revenues: Investment banking $65,265 – – $65,265 – – ($88 ) $65,177 – $65,177 Brokerage 19,585 – – 19,585 – – – 19,585 – 19,585 Asset management-related fees (1) 50 $32,897 $3,842 36,789 – – (4,166 ) 32,623 ($1,027 ) 31,596 Principal transactions (2) – – – – $4,801 – – 4,801 (2,647 ) 2,154 Gain on sale and payoff of loans – – – – (183 ) – – (183 ) – (183 ) Net dividend income – – – – 738 – – 738 – 738 Net interest income – – – – 11,938 – – 11,938 (31 ) 11,907 Provision for loan losses – – – – 186 – – 186 – 186 Adjusted net revenues 84,900 32,897 3,842 121,639 17,480 – (4,254 ) 134,865 (3,705 ) 131,160 Expenses: Non-interest expense/(income) (3) 69,983 30,813 3,184 103,980 4,370

$11,490

(4,166 ) 115,674 143 115,817 Less: Non-controlling interest (4) – (275 ) – (275 ) 343 – – 68 (3,848 ) (3,780 )

Operating income/(loss) before taxes

14,917 2,359 658 17,934 12,767 (11,490 ) (88 ) 19,123 – 19,123 Income tax expense/(benefit) 5,669 898 250 6,817 4,851 (4,365 ) (33 ) 7,270 – 7,270 Operating net income/(loss) $9,248 $1,461 $408 $11,117 $7,916 ($7,125 ) ($55 ) $11,853 – $11,853

Operating net income/(loss) per share:

Basic $0.43 $0.07 $0.02 $0.52 $0.36 ($0.33 ) ($0.00 ) $0.55 – $0.55 Diluted (5) $0.40 $0.06 $0.02 $0.48 $0.35 ($0.31 ) ($0.00 ) $0.52 – $0.52 (1) Reflects revenues detailed in section above titled “Asset Management-Related Fee Revenues;” management fees of $1.0 million are eliminated upon consolidation of two Harvest Growth Capital funds. (2) Reverses net unrealized gains and losses on strategic equity investments and warrants. Excludes non-controlling interests in net realized and unrealized gains totaling $2.7 million that are recognized upon consolidation of two Harvest Growth Capital funds. (3) Reverses stock-based compensation expense as well as accounting adjustments related to deferred compensation expense and excludes fund-related expenses totaling $143,000 that are recognized upon consolidation of two Harvest Growth Capital funds. (4) Excludes non-controlling interests totaling $3.8 million in the net realized and unrealized gains of two Harvest Growth Capital funds that are recognized upon consolidation of the entities. (5) In 2013 and the first quarter of 2014, JMP Group issued restricted stock units, or RSUs, bearing non-forfeitable dividend equivalent rights. GAAP requires RSUs with non-forfeitable dividend equivalent rights to be included in the diluted share count (without applying the treasury method). Management prefers to present a non-GAAP diluted share count for the period, in keeping with the presentation for quarters not impacted by this GAAP requirement for such RSUs. The non-GAAP diluted share count reflects the impact of such RSUs under the treasury method, which is consistent with the calculation of the dilutive impact of all other RSUs outstanding. On a GAAP basis, the weighted average number of diluted shares outstanding for the nine months ended September 30, 2014, was 23,680,133; given that denominator, operating net income per diluted share would have been $0.50.

Book Value per Share

At September 30, 2014, JMP Group’s tangible book value per share was $6.32, as set forth below.

(in thousands, except per share amounts) Sept. 30, 2014 June 30, 2014 Sept. 30, 2013 Total JMP Group stockholders’ equity $136,687 $133,593 $123,740 Less: Goodwill and intangible assets – – – Tangible stockholders’ equity $136,687 $133,593 $123,740 Tangible book value per share $6.32 $6.16 $5.63 Basic shares outstanding 21,619 21,690 21,961 Quarterly operating ROTE (1) 10.2 % 12.2 % 8.8 % LTM operating ROTE (1) 12.1 % 11.8 % 12.6 % (1) Return on tangible equity (ROTE) equals annualized operating net income divided by average tangible stockholders’ equity.

Share Repurchase Activity

During the quarter ended September 30, 2014, JMP Group repurchased 82,949 shares of its common stock at an aggregate price of approximately $0.5 million, or $6.43 per share. At quarter-end, approximately 0.8 million shares remained eligible for repurchase under the company’s existing repurchase authorization. Subsequently, on October 8, 2014, the company’s board of directors increased the repurchase authorization such that 1.5 million shares were eligible for repurchase.

Cautionary Note Regarding Quarterly Financial Results

Due to the nature of its business, JMP Group’s quarterly revenues and net income may fluctuate materially depending on: the size and number of investment banking transactions on which it advises; the timing of the completion of those transactions; the size and number of securities trades which it executes for brokerage customers; the performance of its asset management funds and inflows and outflows of assets under management; gains or losses stemming from sales of or prepayments on, or losses stemming from defaults on, loans underlying the company’s collateralized loan obligations; and the effect of the overall condition of the securities markets and economy as a whole. Accordingly, revenues and net income in any particular quarter may not be indicative of future results. Furthermore, JMP Group’s compensation expense is generally based upon revenues and can fluctuate materially in any quarter, depending upon the amount and sorts of revenue recognized as well as other factors. The amount of compensation and benefits expense recognized in a particular quarter may not be indicative of such expense in any future period. As a result, the company suggests that its annual results may be the most meaningful gauge for investors in evaluating the performance of its business.

Cautionary No […]