www.capstonefinancial.com

Performance & Characteristics:

Capstone Fixed Income is an intermediate-duration core portfolio utilizing investment-grade securities to maximize income and price appreciation while focusing on total return and capital preservation.

FIXED INCOME

September 30, 2014

Page 2 of 4Fixed Income

Fixed Income - Investment Profile

The Fixed Income strategy seeks to outperform the bond market over a market cycle while providing positive returns on an annual basis. Our Philosophy is predicated on the belief that superior long-term results can be achieved with less than market risk. To obtain those results, we focus our portfolios in high quality, primarily intermediate maturity securities and add value through duration management and the selective rotation of market sectors and the securities within those sectors.

Barclays Government/Credit Index Returns: 12/31/89 – 09/30/14

Benchmark:Barclays Capital Government Credit Index

Portfolio Duration:Within +/- 30% of the Barclays Capital Government Credit Index on average based on market outlook

Bond Market Sectors Utilized:U.S. Government, Agency, Corporate, & Mortgage-Backed

Value Added:• Active duration management• Yield curve structure management• Economic trading costs• Quantitative research• Sector rotation

-50%

0%

50%

100%

150%

200%

250%

300%

350%

400%

12/3

1/19

91

12/3

1/19

92

12/3

1/19

93

12/3

1/19

94

12/3

1/19

95

12/3

1/19

96

12/3

1/19

97

12/3

1/19

98

12/3

1/19

99

12/3

1/20

00

12/3

1/20

01

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1/20

02

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1/20

03

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04

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1/20

05

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06

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07

12/3

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08

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09

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10

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11

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1/20

12

12/3

1/20

13

9/30

/201

4

Price Appreciation Interest Total Return

Fixed Income Barclays Capital

Gov/Credit

Yield To Maturity 1.89%* 2.14%**

Duration 4.04 5.94

Years To Maturity 5.15 8.11

Current Yield 3.45% 2.90%

Average Coupon 3.79% 3.04%

Portfolio Quality AA GOVS

Average Price $107.39 $104.85

# of holdings 32 6,856

* Yield to Effective Maturity** Yield to Worst

Portfolio Characteristics

Page 3 of 4Fixed Income

Growth of $1 Million – 10 Year(a)(b) Risk vs. Return – 10 Year(a)(b)

Sector Distribution Trailing Returns(a)(b)

3%

66%

18%13%

0%

55%

26%19%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Less than 1 Year 1 - 5 Years 5 - 10 Years Over 10 Years

18%

27%

0%

8%

22% 25%

52%

5% 4% 5%

17% 17%

0%

10%

20%

30%

40%

50%

60%

70%

80%

U.S.Treasuries

Agencies AAA AA A BAA

3%

21%18%

27%28%

3%0%0%

11%

52%

5%

20%

3%

9%

0%

10%

20%

30%

40%

50%

60%

Short-Term Finance U.S.

Governments

Agencies Industrials Utilities Non-

Corporates

Fixed Income Barclays Capital Gov/Credit Fixed Income Barclays Capital Gov/Credit

Fixed Income Barclays Capital Gov/Credit

Maturity Distribution Quality Distribution

-0.0

3%

3.96

%

3.10

% 4.29

%

5.10

%

4.62

%

0.17

%

4.08

%

2.54

% 4.27

%

5.00

%

4.59

%

-4%

-2%

0%

2%

4%

6%

8%

Q3 2014 1 Year 3 Years(c) 5 Years(c) 7 Years(c) 10 Years(c)

-0.0

3%

3.96

%

3.10

% 4.29

%

5.10

%

4.62

%

0.17

%

4.08

%

2.54

% 4.27

%

5.00

%

4.59

%

-4%

-2%

0%

2%

4%

6%

8%

Q3 2014 1 Year 3 Years(c) 5 Years(c) 7 Years(c) 10 Years(c)

Fixed Income Barclays Capital Gov/Credit

$900,000

$1,000,000

$1,100,000

$1,200,000

$1,300,000

$1,400,000

$1,500,000

$1,600,000

Q3 2004 Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q3 2014

$1,570,553$1,566,989

Fixed IncomeBarclays Capital Gov/Credit

Risk (Standard Deviation)

Ann

ual R

etur

n

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%

Barclays Capital Gov/Credit

Fixed Income

Fixed Income Barclays Capital Gov/Credit

(a) Source: Zephyr StyleADVISOR (b) The current quarter’s returns are preliminary. (c) AnnualizedThis information is supplemental to a full disclosure presentation. Please see page 4 for full disclosure presentation.

Page 4 of 4Fixed Income

Capstone Asset Management CompanyFixed Income Wrap Composite Full Disclosure Presentation

* The current quarter’s returns are preliminary.

Capstone Fixed Income Wrap Composite contains fully discretionary wrap fixed income accounts. Fixed Income portfolios are invested in bonds of primarily intermediate maturity to provide high income and preservation of capital. For comparison purpose the composite is measured against Barclays Capital Government/Credit Index. Capstone Asset Management Company claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Capstone Asset Management Company has been independently verified for the periods January 1, 1995 through June 30, 2014.

Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Fixed Income Wrap composite has been examined for the periods January 1, 1998 through June 30, 2014. The verification and performance examination reports are available upon request.

Capstone Asset Management Company is an investment advisor registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The firm maintains a complete list and description of composites, which is available upon request. Effective December 31, 2012, all contracts for CF Solutions and Roger H. Jenswold and Company were transferred to Capstone Asset Management Company. Firm assets beginning on 12/31/12 include the transferred contracts. Prior to 12/31/12, the Firm did not include any RHJ or CF Solutions assets. Roger H. Jenswold and CF Solutions are no longer operating companies.

Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Past performance is not indicative of future results.

The U.S. Dollar is the currency used to express performance. Returns include the reinvestment of all income. Gross returns are shown as supplemental information and are stated as gross of all fees and have not been reduced by transaction costs. Net performance was calculated using the highest annual all inclusive wrap fee of 3.00% applied quarterly. Wrap accounts make up 100% of the composite for all periods shown. Wrap fees include Capstone’s portfolio management as well as all charges for trading costs, custody, and other administrative fees. The composite dispersion presented is an asset weighted standard deviation calculated for the accounts in the composite for the entire period shown. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. The three year annualized standard deviation measures the variability of the composite and the benchmark returns over the preceding 36 month period. The 3 year standard deviation was not required for periods prior to 2011.

The management fee schedule is as follows: 1.00% maximum on all assets. Wrap fee schedules are provided by independent wrap sponsors and are available upon request from the respective wrap sponsor. Actual returns will be reduced by investment advisory fees and other expenses that may be incurred in the management of the account. Investment advisory fees incurred by clients may vary. For information on management fees, Capstone Asset Management Company’s Form ADV Part 2 is available upon request.

The Capstone Fixed Income Wrap Composite was created January 1, 1998.

Composite Assets Performance Results

Year

FirmAssets

(millions)USD

(millions)Number ofPortfolios

Composite Gross Net

Barclays Capital

Gov/CreditCompositeDispersion

Composite3 Yr St. Dev.

Benchmark3 Yr St. Dev.

YTD 9/30/2014* 4,312 161 420 3.15% 0.87% 4.12% 0.32% n/a n/a

3Q14* 4,312 161 420 -0.03% -0.78% 0.17% 0.06% n/a n/a

2Q14 4,372 161 421 1.75% 1.00% 1.92% 0.18% n/a n/a

1Q14 4,519 167 441 1.41% 0.66% 1.98% 0.15% n/a n/a

2013 4,764 166 431 -0.87% -3.81% -2.35% 0.31% 2.85% 3.17%

2012 5,041 194 494 5.92% 2.83% 4.82% 0.68% 2.60% 2.96%

2011 3,502 186 482 6.58% 3.46% 8.74% 0.61% 2.98% 3.42%

2010 3,702 184 452 6.80% 3.69% 6.59% 0.51%

2009 3,280 144 348 7.67% 4.54% 4.52% 1.33%

2008 2,725 146 305 3.69% 0.64% 5.70% 1.80%

2007 2,894 145 333 6.44% 3.33% 7.23% 0.56%

2006 2,734 178 383 4.25% 1.19% 3.78% 0.24%

2005 2,629 200 456 1.95% -1.06% 2.37% 0.38%

2004 2,595 187 424 3.85% 0.79% 4.20% 0.29%

2003 2,754 163 402 4.41% 1.35% 4.67% 0.39%

2002 2,245 146 296 12.09% 8.85% 11.04% 1.10%

2001 2,756 96 168 9.03% 5.86% 8.50% 0.77%

Capstone Asset Management Company | 3700 West Sam Houston Parkway South #250 | Houston, Texas 77042 | Phone: 713.260.9000 | Toll Free: 800.262.6631 | Fax: 713.260.9050 |

E-mail: info@capstonefinancial.com | www.capstonefinancial.com