Hancock Institutional Advisors, LLC SEC Registered Investment Advisor

1. Finding Opportunities in Difficult Markets • November 21, 2014 • Nick Trentmann, Portfolio Manager • Jeff Holley, Portfolio Manager Hancock Institutional Advisors, LLC SEC Registered Investment Advisor • Hancock Securities Group, LLC • Member FINRA, SIPC, MSRB • Hancock Institutional Advisors, LLC • SEC Registered Investment Advisor • Hancock Management Services, LLC 383 Marshall Avenue St. Louis, MO 63119 (314) 997-3191 (tel) (314) 997-3358 (fax) www.hsg-hia.com • Confidential and Proprietary

2. Employment Outlook • Change in Nonfarm hiring was 214,000 in October and August was revised up from 180,000 to 203,000 • The last 9 months above 200k • Service sector again made up the majority of hiring

3. Employment Outlook • October Unemployment Rate fell to 5.8% from 5.9% • Labor Participation Rate was up slightly to 62.8% • Despite jobs dashboard, Fed still focuses most heavily on Unemployment Rate

4. Lack of Inflationary Pressure • Fed is willing to accept 2.5% inflation (measured by Core PCE) • October Core PCE was 1.5% • Without wage gains inflation will struggle to take hold

5. Gross Domestic Product • Annualized GDP growth was 3.5% in the third quarter • Biggest surprise: 1.7% drop in imports and 7.8% rise in exports • Net exports added 1.32% to GDP

6. Dollar Strengthening • Dollar continues to strengthen versus major currencies • Why a stronger dollar?

7. Oil Prices • If the Fed tightens sooner than expected, growth will be muted, leading to weaker oil demand • Saudi Arabia is resisting OPEC output cuts for fear higher prices will encourage more U.S. production • Lower oil prices may aid consumer spending

8. Treasury Rates • 10-year Treasury rate started the year at 3.0%, currently at 2.33% • Fed ended QE program, and the markets’ focus has shifted towards tightening • Rates will remain depressed as economy struggles to reach “Escape Velocity”

9. Themes from 2014 • Rates are extremely low. • Very active Fed. • Market expects funds locked at 0.25% until 2015. • Yield curve will steepen before Fed Funds rise. • Cash flow over the next two years not helpful. • Avoid tail risk. • Some increase in optionality is acceptable. • Avoid decisions today that limit options in the future. • The longer we stay at low rates, the greater the risks become to rising rates. • Look at the portfolio as a whole, not just individual bonds.

10. Themes from 2014 • What didn’t work? • Long-Dated Step-Ups • Multi-call Options with Long Maturities • Mortgage Backed Securities • What worked? • Floating Rate Structures • Credit (Corporate) • One-Time Call Options with Mid-Maturities

11. Defensive Bonds • Floating Rate Securities • Federal Family Education Loan Program (FFELP) • Corporate Floaters • Home Equity Conversion Mortgage (HECM) • Collateralized Loan Obligation (CLO) • 5- to 10-Year Part of the Curve • Picks up income versus floaters • Rolls the curve • Risk: underperforms if an aggressive rise in rates

12. Four Ways to Increase Income • Credit • Liquidity • Optionality (Cash Flow Volatility) • Maturity

13. Fixed Rate Investment Options Corporates Municipals Structured Notes Typically Investment Grade (BBB- or better) GO Unlimited / Limited Essential Service Revenue US SovereignCredit Rating Credit Highly Liquid Bid /Ask: 3 – 5 bps Highly Liquid Bid / Ask: 2 – 3 bps Liquidity Depends on Issue Optionality None Can be callable Callable Maturity 5 – 10 years 7 – 15 years Varies Please note that the characteristics provided above are typical of what our team sees in the market.

14. Floating Rate Investment Options FFELP CLOs HECM U.S. Sovereign Credit Rating US Sovereign Credit Rating Credit AAA Liquidity Depends on Issue Depends on Issue Depends on Issue Optionality Cash Flow Cash Flow Cash Flow Final Maturity: 20 – 30 years Average Life: 8+ Years Final Maturity: 15 years Average Life: 6 Years Final Maturity: 50 years Average Life: 7 – 8 Years Maturity Please note that the characteristics provided above are typical of what our team sees in the market.

15. Whole Loans Single Family Owner Occupied 5 / 1 Hybrid ARM 7 / 1 Hybrid ARM HELOC 15 Year Yes Yes, but very originator dependent Retained Credit Established Industry Credit Criteria Historical Loss Experience Servicing Yes < 25 bps Released Yes < 25 bps Released Yes < 25 bps Released Liquidity Unlimited / Limited Time to Sale Costs to Sell Limited 120 – 180 days 50 bps Limited 120 – 180 days 50 bps Limited 120 – 180 days 50 bps Limited 120 – 180 days 50 bps Spread Priced to: Prepayment Penalty ARM portion: Index Margin Caps Floors No Various 225 2/2/5 Sometimes No Various 225 2/2/5 Sometimes No N/A N/A N/A N/A Prime No Prime Various Various Various 150 -170 bps over like duration Treasury 125-150 bps over like duration Treasury 125-150 bps over like duration Treasury Please note that the characteristics provided above are typical of what our team sees in the market.

16. Whole Loans Commercial Multi-Family CRE Other Credit Established Industry Credit Criteria Historical Loss Experience Yes Yes Yes Yes Liquidity Unlimited / Limited Time to Sale Costs to Sell Limited 180 days 50 bps Limited 180 days 50 bps Spread Fixed Period Initial Spread to Treasury Prepayment Penalty ARM portion: Index Margin Caps 200 bps Yes LIBOR 275 1% annual 6% life 250 Yes LIBOR 275 1% annual 6% life Please note that the characteristics provided above are typical of what our team sees in the market.

17. Takeaways Greatest spread remain in corporate issues Reduce amount of cash flows in less than 2 years Yield curve is attractive in the 5- to 10-year sector Rates in the 5- to 10-year part of the curve have room to fall Fed purchases/reduced volume = MBS spreads to remain tight Roll of curve is attractive

18. Current State of Equity Markets • U.S. equities rose for the 7th straight quarter as the S&P 500 closed up 1.13%. • International and emerging market equities fell 4% as Japan, China and Europe deal with slower economic growth and deflation fears.

19. Current State of Equity Markets • Geopolitical tension and Ebola fears caused volatility to creep back into the markets. • As has been the case for the last 2 years, investors quickly bought the dip, and order was quickly restored.

20. Current State of Equity Markets • Equity performance has been highly correlated to Central Bank intervention • This includes actions by the European Central Bank, Bank of Japan, Bank of England and others.

21. Equity Outlook Source: Standard & Poor’s, Robert Shiller Data, FRB, FactSet, J.P. Morgan Asset Management. • Equities currently look fairly valued. Earnings growth has been fueled primarily by financial engineering (stock buybacks, margin expansion and M&A activity) and not sales growth. • Equity prices will move in tandem with earnings growth and not multiple expansion. • Strong economic growth is needed for continued 10%+ returns. We would view a 10%+ correction as healthy and would look to add.

22. Equity Outlook Source: Standard & Poor’s, FactSet, Robert Shiller Data, J.P. Morgan Asset Management. • Relative to bonds, equities look attractive. • Current S&P 500 yield is roughly 1.791% compared to the 10-year at roughly 2.35%. • Historically around 5%, current S&P 500 dividend growth rate per year is currently at 11.89% (YTD).

23. Current State of Equity Markets Normalized P/E Russell 2,000 Source: Russell Investment Group • Small-cap equities continued to underperform. They were down 7.36% for the quarter and have underperformed large-cap stocks by 15% in the last 12 months. Despite this underperformance, they still remain about 30% over fair value relative to large-cap stocks. • We expect small cap stocks to stay under pressure as investors remain cautious about this rally and sell riskier assets in favor of perceived safe havens like large cap stocks, bonds and cash.

24. Equity Outlook Source: Standard & Poor’s, Russell Investment Group, FactSet, J.P. Morgan Asset Management. • Favor growth over value and opportunistic value names.

25. Equity Outlook Source: Standard & Poor’s, Russell Investment Group, FactSet, J.P. Morgan Asset Management. • We currently favor the health care, information technology and energy names. • Falling oil prices have made consumer staples and discretionary names more attractive. • Financials will benefit from rising rates. Regulatory pressures and other added costs will continue to hinder earnings growth potential.

26. Equity Outlook • Consider an allocation to international equities (5 – 15%, based on the portfolio) • Valuations gap will close in the coming years if Europe can turn the corner and China can stay on stable ground and convert to a consumption-driven economy. • As of December 31, 2013, there were 631 companies outside of the U.S. with a dividend yield of at least 3%. Only 99 such companies exist in the U.S.

27. Portfolio Positioning • Stick with U.S. large cap dividend paying equities, specifically companies with strong balance sheets. • Increase allocation to alternative money managers – long/short equity, buy-write strategies and event driven funds. • For international stocks, look for experienced active managers with long term, multi cycle experience. Value focus with ability to add to positions in volatile markets.

28. Biographies and Disclaimer Nick J. Trentmann, Portfolio Manager At Hancock Institutional Advisors, LLC, Nick is responsible for portfolio and securities management and analytics for fixed income portfolios. He also assists in the firm’s sales and marketing efforts to institutional clients. Prior to joining Hancock in 2007, Nick was a financial advisor with Renaissance Financial and a credit analyst at Citi. Nick brings ten years experience in the financial services industry. Nick earned a bachelor’s degree from the University of Missouri. He holds Series 7 and 66 licenses from FINRA. • Jeffrey R. Holley, Financial Advisor & Portfolio Manager • At Hancock, Jeff Holley works alongside clients to help identify and achieve their financial goals. He conducts and distributes investment research throughout the firm, is a co-manager of the Conservative Equity Strategy, and serves on Hancock’s Investment Committee. In addition to his advisory-based roles, Jeff executes trades, maintains option orders, monitors the overall client allocation process, and writes investment commentary on behalf of the firm. Prior to joining Hancock in 2013, Jeff worked at Edward Jones where he most recently served as an Equities Investment Specialist, primarily involved in conducting research and providing solutions to Financial Advisors. Jeff earned a Bachelor of Science degree in Business Administration from the University of Missouri - Columbia. He holds Series 7 and 66 licenses from FINRA and is currently a Level II candidate in the CFA program. Jeff is an active member of Marian Middle School’s Young Friends Committee and Finance Committee. For copies of this presentation, please contact Nick at (314) 997-3191 x315 or ntrentmann@hsgstl.com. The material contained herein has been prepared from sources we believe to be reliable, but is provided without any representation as to accuracy or completeness. This material does not purport to be a complete analysis of the securities, companies or industries involved. This material is published solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or investment product. All opinions and estimates included with this material are our own unless otherwise stated and are subject to change without notice. All investments can fluctuate in price, value and/or income. Past performance is not necessarily a guide to future performance. This material has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient.