Barry Sloane - President, Chairman and Chief Executive Officer Jenny Eddelson - Executive Vice President and Chief Accounting Officer

Chris York - JMP Securities Mickey Schleien - Ladenburg Thalmann & Company Inc. Jefferson Harralson - KBW Robert Dodd - Raymond James Fred Small - Compass Point Robert Brock - West Family Investments Marc Silk - Silk Investment Advisors Kevin O'Leary - UBS

Good day, ladies and gentlemen, and welcome to the Newtek Business Services Corporation Third Quarter 2015 Earnings Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder, this conference call may be recorded. I would now like to turn the conference over Barry Sloane, President, Chairman and CEO. You may begin.

Good morning everyone and thank you for joining us for our third quarter 2015 financial results conference call. Today's call will be presented by myself and Jenny Eddelson, EVP and Chief Accounting Officer. For those of you who want to follow the PowerPoint Presentation, it is on our website thesba.com and on Investor Relations section. Jenny, would you like to read the forward-looking statement.

Sure. This presentation contains certain forward-looking statements. Words such as believes, expects, plans, anticipates, forecasts and future or similar expressions are intended to identify forward-looking statements. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements. Such risks and uncertainties include among other things intensified competition, operating problems and their impact on revenues and profit margins, anticipated future business strategies and financial performance, anticipated future number of customers, business prospects, legislative developments and similar matters. Risk factors, cautionary statements and other conditions which could cause Newtek's actual results to differ from management's current expectations are contained in Newtek's filings with the Securities and Exchange Commission and available through www.sec.gov.

Thank you, Jenny. I'd like to move everyone's attention to Slide number 2, third quarter and other financial highlights. And before I begin, I'd like to thank my executive team and associated workers of Newtek for their hard work over the course of the last year. We're approaching a one-year anniversary of transitioning into a BDC on 11/11/2014, a lot of hard work and great performance of the Company and its workers, particularly accounting and legal department and the precedence of worldwide portfolio lines. In the recently reported quarter September 30, 2015, our net asset value came in at $174.7 million, $16.88 per share that compares with $16.31 on December 31, 2014. On October 1, the Board declared a special dividend, $34 million dividend, the rationale for that special dividend was a one-time event by us converting to RIC as a result of the declaration on October 1, the Board adjusted the NAV to $135.6 million or $13.10. For the quarter, adjusted net investment income $0.50 a share, $5.1 million for the nine months ended, adjusted net income $15.4 million or $1.50 a share. During the quarter, we closed a public offering of our senior notes, the notes who trade on NASDAQ Global Market. Our common stock is now traded on the NASDAQ Global Market, symbol for the bonds NEWTZ. The bonds have been trading at a premium to where they were offered. Those were seven-year notes interest-only and the notes cleared at a 7.5% yield. The Company also on October 15, closed an underwritten offering of 2.3 million common shares of stock that includes the exercise of Greenshoe at $16.50. Moving to Slide number 3, looking forward Newtek's small business finance highlights, we funded $64.2 million of SBA 7(a) loans that was an increase of 32% over the prior quarter and prior year. Our fourth quarter fundings have historically been the strongest quarter typically comprising over a third of total annual fundings, we've got some history on that slide to what reaffirm that. We are maintaining our range of 7(a) originations between $230 million and $270 million, and we anticipate in the month of November, hopefully over the next few days to fund our first SBA 504 loan, we'll go through the math and the mechanics of that extremely important new product for us where we'll be able to continue to originate loans to small and medium sized business market and achieve extremely high rates of return. In the case of the 504 loan, once we selloff the conventional first and second, we have no balance sheet risk and nice gains on the sales. In the quarter, we completed our sixth securitization of notes which stand on our balance sheet, $40.8 million, AA rated. The notes were priced to yield 2.5% for the investors, that was a 100 basis point improvement on the overall yield in the last transaction. I think it's important to note, we're executing on our plan. Our securitizations which have been in the market since 2010 are performing well and our ratings of all have been maintained. Our loss rates are good. Once again an investment in Newtek is not an investment in a new company. We've been in business as publicly traded company since September of 2000. As of today, we're announcing, we entered into a new alliance partnership with LendingTree, I think that should be a very lucrative partnership for us. On Slide number 4 in dividend distributions, we talked about the $0.50 per share that was paid yesterday. To-date we paid $1.36 in cash dividends and $1.50 of NII. We have also forecasted even with the additional share increase from the capital raise to maintain the $1.82 cash dividend per share based on 12.6 million share count. So we are happy to be able to keep existing shareholders whole on the $1.82, that's based upon our business model where we get dividends from our portfolio companies as well as the interest and capital gains that we get from our SBA 7(a) business. We talked about the special dividend that we declared on October 1, that equates to a $2.69 per share based on 12.6 million shares of common stock. We've indicated that approximately 27% max we paid cash and 73% in shares. On Slide 5, we talk about the senior offering that we chatted about previously, that was our first issuance of publicly traded senior corporate debt and we're very happy with that execution and it is led by JMP and Ladenburg. We talked about the third quarter securitization that deal Sandler O'Neill acted as the placement agent. It was always a strive with cut investors back and it was placed with five institutional investors, there is continuing demand for that where we think Sandler O'Neill is a good partner and it's a pick of our endeavor as they have got relationships with a lot of communion banks that have a very strong appetite for floating rates AA notes at 2.5% yield. The equity offering we did which is on Slide number 7, 2.3 million shares which included the Greenshoe of 300,000 of KBW, Raymond James, JMP acted as joint bookrunners managers, also Ladenburg and Compass Point Research acted as co-managers. We've added new institutional investors as shareholders, the ones that are listed publicly and there are some new ones that will popup, and this is very rare for BDC. We're told BDC is a primarily retail product. Obviously, we are in a BDC wrapper, but the businesses underlying the BDC, we believe have value above and beyond where a traditional BDC's assets trade. Traditional BDC has a portfolio of debt instruments, which are levered by debt from sales, some of them have equity kickers, and it's fairly static portfolio or values won't change a whole heck of a lot and as credit deteriorates or interest rates move. In our case, we have operating businesses particularly in area the portfolio of companies that do qualify from 70% tax and we believe that the institutional interest that has invested in our BDC recognizes the tax advantage status that we have plus the outside potential in the valuations of these businesses. So we are happy to report our top institutional shareholders as of June, Wellington, Perritt, Zelman, Bridgeway, West Family Investments, Bard, Northpointe, Royce, we're happy with those institutional investors. We got new ones on the new transaction. And we're also happy to note that prior coming to BDC, we had one company doing research on us and we now have five analysts covering the Company in the quarter Compass Point Research and Raymond James pick that coverage. Use of the proceeds for the transactions that need continue investment in 7(a) business which has a very high rate of return on equity, and we plan on using capital to grow our 504 loan business, and we continue to explore acquisition opportunities similar to what we did with Premier at ranges of 4-8x EBITDA multiples. In the acquisition pipeline, we currently have one targeted company, it is a software development company. It's been in the business for 10 years as they have got very stable products with stable customers, stable cash flow, we hope to consummate this acquisition between four and five times EBITDA and has tremendous synergy with Newtek Technology Services. We look at our business, we look at market comparables, we compared our 7(a) business to Live Oak Banc, trading north of four times book and a very high multiple to earnings. We compare ourselves to other small business lenders, entities like On Deck Capital with very high valuations that just don't have our history. Our retail acquisition strategy, we've acquired 500,000 business referrals. There have been people who have looked at that and say there were at lead generation business. Endurance just acquired Constant Contact for $1.1 billion and be able to have relationships in context with customers, we do that. An investment in Newtek is an investment in this management team. It's an investment on the business pieces. It's an investment on the business model. So I know we have these calls and everyone got their slide rules out and they are trying to figure out where the straight lines are and are we increasing or are we declining. The reality of it is, we've been doing this for a long period of time. The business model is working and we're pertaining a story to the investment community with this as a long-term investment and you need to have patience, look at the business model and look at the steps that we're making. I want to reiterate, I'm extremely proud of the executive team and all the associates Newtek that come to work every day and have driven such great results. In drilling down to Newtek small business finance from some of our new investors with the largest non-bank 7(a) lender in the U.S. were ninth largest still even with the recent calendar year which ended September. The return on investment in 7(a) lending, risk adjusted is in excess of 30%. We've got over a 12-year history of loan to full frequency and severity through the up and down cycles of credit. We've been through the up and down cycles of prices pages on the government guarantee pieces with our six securitizations, the risk in our portfolio on the lending side as an average balance of $173,000. So when you look at risk adjusted returns and you look at what would you investment in a diversified rule of a $173,000 floating rate senior secured loan participations which rather invest in leverage buyout the [old zip] 4, 5 times EBITDA that has syndicated out. We've obviously made our choice I mean like our business model a lot. The secondary market for SBA 7(a) government-guaranteed program has been around for 61 years, we are also happy to announce that obviously there has been a new budget that's pass-through congress, we won't have budget issues for two years and also to announce the 7(a) programs are very much of a bipartisan program where guarantee was becoming in short supply in July both the house and the senate agreed on something amazing, but we are happy about that. President signed it over a weekend 23 billion increase from 18 billion. This is a program that works. It puts credit in the hands of small business at affordable interest rate with long-term amortization schedules and we are really proud to be part of it. Once we create loans, we sell the government-guaranteed piece off, and we ultimately finance the uninsured piece. Looking at our stock performance over the course of the last year on page 12, we were the number one performing BDC. You could see how well we performed against the S&P 500 and against the Russell. If you add dividends in Newtek had a realized return of 29% over the last 12 months. Our current 7(a) pipeline on a year-over-year comparison still continuing to grow, we are pleased with it. We believe this pipeline will generate the numbers that we put out into public guidance. On Slide number 14, that's the classic 7(a) loan example that we've used historically. Please note that in the recent quarter, a premium 11.4% that was down from prior quarters. We're going to go into an analysis of that. Even with the lower premium, we still catch out once we do securitizations. Slide number 15 talks about the gains and the income that comes off of 7(a) loans and I want to comment once again that is risk adjusted and we've been very comfortable with the credit worthiness of our portfolio. Jenny will talk about and as well you can see in our [Q] that we established. We've got a very good situation with respect unrealized and realized losses in our 7(a) portfolios, which performed very well that's based upon being in this business for 12 and 13 years, and obviously, a good economy doesn't hurt item. I would like to note in Q3, referral fees paid to alliance partners were net of about 50 basis point down from the average of 75 basis point, some of the things that we are able to tweak in the model, packaging fees, referral fees and the way we structure deals that will enable us to maximize prices. We have to make certain markets adjustments which we talk about to be able to maximize gain on sale and reduced expenses as well as receive additional piece on packaging and other things that we do to be able to give borrowers their ability to earn income. Currently, as many of you are aware, we retain on its balance sheet. 25% of the unguaranteed to repeat unguaranteed but not subordinated portion of the SBA 7(a) loans and it creates losses, our shared pro rata between the government and 75% and new Newtek at 25%. Those loans sit on our balance sheet on a nonrecourse basis and securitized for us. Once that clear out of the capital and bank line which we cleared out down to a zero balance. Beginning in 2016, the Company is going to explore the option to sell a portion of the 25% on guaranteed piece. There are market bids that are beginning to surface that are coming and around par our greater, that would effectively to us if you look at our business actually be another for us to raise capital, o rather than have 25% piece of the million dollar loan, example of $250,000 that we have to hold capital against in the warehouse line. We could effetely sell 25% piece down to as low as 10% with that SBA approval and being to sell 15% uninsured piece at par is very cost effective capital for us that is something that we're going to be able to explore going forward. The needs of types of assumptions that legal out to give us latitude in range in our business model that will enable us to forecast going forward and enable us to hit our numbers, having flexibility in our business model. We'll look at guaranteed loan pricing comparisons. We got a history over the last seven quarters and we know in Q4, 2014, we had 111.73 and in Q3 2014, we had 113.19. And that is the weighted average net priced [MSD] up which is the real important price/ Obviously, the other in sort of market prices. What is the term of these prices? Well, number one, the overall market clear yield and government-guaranteed piece. The other aspect of this is it a 10-year loan that we're doing or is it a 25-year. 25-year loan tends to be back by commercial real estate and they use for the acquisition of real estate to refinance. The other different which has popped up for the first time that we've seen this is larger balance loans in the month of September were discounting, and that's upon pull assemblers and investors changing some of their criteria. We have ways to structure around, some of the issues that affected us in the month of September or discussions with that figuring out how to do that, so we can get a better benefit from gain on sales. You could see when you look Q3 2015, the weighted average net price to MSBF on the 25-year deals was 13.04 which obviously was significantly higher and in vivo clearing, so the mix of 25% versus 10%, the size of loans the ability to structure selling earlier quarter in the quarter versus later in the quarter, all things that will help improve pricing. As you could see our loan sales premium income trend continues to grow. We view this as a reoccurring event. We originate loans, we send them into the market, and secondary market for SBA 7(a) loans has been for a long, long time and not going away that is our business model. So although it's not viewed as reoccurring income, like the reoccurring income that comes off in our payments business and our Managed Tech Solutions business and our insurance agency or payroll business gain on sales is something that we've experienced for the last 12 years. When you look at our comparative loan portfolio data, we believe strongly we are able to continue to maintain credit quality. We're not flooding into credit. We think the competitive environment for what we do is still good. And we're getting plenty of attractive looks to make types of loans that we want to do. SBA 504 loans a new focus for our organization. We'd anticipate having a close in November. These are loans made to small businesses that will collateralize the loans primarily with commercial real estate, I don't believe we'll do much in machinery equipment in this area. The way the loan works, it's a 50% LTV on a conventional first, a 40% second which the government takes out, the borrower puts down 10%. So if the borrower wants to buy $1 million piece of property to put its manufacturing entity and we can lend at the $900,000. Look at Slide number 21; that is an example of first mortgage from $500,000 a bridge for $400,000, $100,000 equity injection by the $1 million property. We sell off for 50% first, the 40% second is bought by the government. When you go to Slide number 22, you actually see the net cash created pretax on a loan of this type, we're able to actually origination fees in 504 which will not in 7(a), we're able to sell off 100% of the loan, so there is no balance sheet. We also get servicing income over time which has included in this example, but you can see the return on investment is extremely high. Slide number 23; we acquired premier payments in this quarter. Premier payments is our second operating business in the payment processing space, $16.5 million purchase price approximately 6 times EBITDA, this is a business that's growing fast top line and bottom line look at the year-over-year comparisons 20% web growth, 67% EBITDA growth. Newtek merchant solutions, we compare our payments business to other publicly traded comps for a state of resources recently went public that was the KKR company, 16 times trailing 12 months, you can look at the other public comps heartily adventive obviously were smaller and we got a private equity valuation, but clearly we are very comfortable with our valuations on these businesses. These are the valuations that are going into our NAV which was in last quarter $16.88, so we think that these businesses are valued appropriately and hopefully over the course of time with scale there is upside to our model which is why you cannot really look at Newtek and comp to other BDCs, look at it quarter-to-quarter, take that slide rollout, we dividend money up from these portfolio companies when it is appropriate to do so whether that's merchant solutions, whether that's the insurance agency, payroll, managed tech solutions. We think there was a great opportunity in the payment processing business. We believe that we'd be able to add additional alliance partners. American Express in the last year has gone to what I'd call acquiring models, some of these are MasterCard, so historically we are an entity like ours enable to get residual income, we can now do that through the AMEX OptBlue program on the smaller accounts. tablet and mobile-based cloud computing is clearly a growing trend for those of you travelling through airports [indiscernible] can't eat and I should put your order through an iPad these days. So I know we see that quite a bit in New York and some of the other major cities. That's a growing trend we are well positioned for that. And EMV compliance solutions only 40% according to recent survey that we did as well as other industry payment processors have converted to compliance solutions, so we feel good about the fact that we'll be able to go to clients and gain market share. In our Newtek Technology Services business, Jenny will about this so clearly being the MD&A in the Q. We recently significantly cut into a revenue decline as well as the EBITDA decline. For the first six months, I believe our revenue in this portfolio company was down about 15%, with EBITDA down at 50%. In the third quarter, I believe our revenues were only down about 7% and I believe our EBITDA was only down about 16%. We look forward to reporting the fourth quarter in this particular company, new management changes, expense reductions, and really a renewed focus on different what I would call datacenter services and products are rejuvenating this business. This business historically has been a great opportunity for Newtek. It was [enquired] in 2004 when it was doing $6 million of revenues and $2 million of EBITDA, at its height this business is $20 million of revenues and $7.6 million of EBITDA. So we look at opportunities in cloud computing. People say, how are you going to compete against Google, XOR, and Amazon web services. We're in a different market than they are. They're in the rack and stack business. They are in the data center business. They've got plenty of capacity to give out. We believe we can service customers they migrate dedicated servers to our data center and put their hardware and software in our cloud that will save them cost on equipment. Two 24x7 outsourced managed service solutions saves the cost on labor, pick up the phone call us anytime 24x7, we will certainly help them manage whatever solutions that they have. We also give them hot backup and live redundancy globally. We know have footprint in London, Singapore, New Jersey, Phoenix and Scottsdale. We also historically have been a clear in HIPAA-compliance solutions, we're rolling out some new solutions which are very, very important to the medical professional under the affordable care act. Slide number 28, EBITDA forecast, I've heard people say G you are very much well into gain on sales, it's all based upon signed the government-guaranteed piece off. When you look at the adjusted EBITDA breakdown on the businesses, there was one research piece that was staying 87% of our business is from the lender. Well, when you look at the EBITDA breakdown, I'm not in agreement with that. The cash flows coming off the other businesses are significant and we want them to be more significant going forward. Those are reoccurring cash flows from payments, payroll, insurance agency, and could computing. Approximately 64% of the forecast to 2015 EBITDA emanates from the lending business 36% from business services. Obviously, we are internally managed BDC, many of you that are familiar with us know that, our [indiscernible] is very much in line. The insiders, other founders of the Board on a major portion of this Company move into those numbers, internally managed BDCs for the most part of training in the medium premium to NAV. We are moving into a new location in Lake Success, New York, [indiscernible], but it's on the Queens border. It's a great location 34,000 square feet and anticipate really getting tremendous economies and we're putting many of the business lines together under one roof. We recently made a new hire John Traynor, has just joined as President and Chief Operating Officer of Newtek Merchant Solutions. John has over 35 years of experience in the banking business. A very senior banker, very highly experienced in the, what I would refer to is, transactional banking both in the United States as well as overseas. Looking at the Newtek from an investment summary standpoint, NAV on September 30, $16.88 obviously we declared a special dividend on October 1, which will be paid out. The cash portion will obviously reduce now and when the shares are issued to shareholders that will increase now. We made this conversion because we believe the Company clearly in the last year, the stock price has proved, was better suited for investors of the BDC versus Services Corp. We had very good stock performance in this past year particularly versus our peers. Most BDCs have traded down below NAV significantly and I think the institutional interest in our stock is appreciated what we are doing and what our business model is. We anticipate as we revised our guidance with the share raise $1.82, cash dividend pay, and obviously we have also stayed at that is anticipated to be paid out of earnings. We been in these businesses for over 10 years, and so we're not new to insurance agency, managed tech solutions, payment processing or SBA 7(a) lending. Our interest is very much in line between my own holdings founder, management board, we own approximately 16% of the outstanding shares. We're not investing in risky debt securities to get these yields. Your senior secured participation certificates primarily most secondly in the mezz financing, no direct exposure oil and gas. I apologize for the length of this today, but we have an extremely active third quarter, and I wanted to make [indiscernible] information out. Jenny, could you do a financial review.

Sure. Good morning everyone and thank you for joining today's call. I'd like to start with some financial highlights from our third quarter 2015 consolidated statement of operations. Please keep in mind this is our third full quarter reporting as a BDC, so there are no consolidated BDC financial statements to refer to for the comparable prior period. Please turn to Slide 34. We had investment income of $7 million, which included approximately $2.2 million of interest income. Substantially, all interest income for the three months ended September 30, 2015 and September 30, 2014 was derived from our SBA loan portfolio, which generated $2.1 million and $1.6 million of interest income, respectively. The increase in interest income can be attributed to the increase in the average outstanding performing portfolio of [originated loans], which went from $106.4 million at September 30, 2014 to $140.7 million as of September 30, 2015 at fair value. The increase was a result of new net loan originations over the 12-month period. Servicing income, which is recurring revenues that we earn from servicing the guaranteed portions of loans originated and sold by NSBF, increased $347,000 for the three months ended September 30, 2015 compared to the same period in 2014. The increase was attributable to the growth in the size of the total SBA loan portfolio for which we earn servicing income of approximately $145.5 million period over period. Dividend income was approximately $3.1 million for the three months ended September 30, 2015 and represents dividends declared from our controlled portfolio companies. Specifically, we received $1.3 million dividend from Universal Processing Services of Wisconsin, $300,000 from Premier Payments, $200,000 from Small Business Lending, $200,000 from Managed Technology Services, and one-time non-recurring $1 million dividend related to the liquidation of Exponential Business Development Corp. Our expenses for the quarter totaled approximately $8.5 million and include salaries, interest expense and other G&A such as rent, marketing and referral fees. As an internally managed BDC, we do not pay any incentive or base management fees to an external manager. We believe the internally managed structure presents multiple benefits to shareholders including better aligning the interest of our employees with our shareholders. Our net realized and unrealized gains for the period totaled a positive $6.2 million and primarily represent gain on sale of the guaranteed portions of SBA loans we sold during the period. For the three months ended September 30, 2015, we originated 75 loans totaling $64.2 million and sold guaranteed portion of 76 loans for a total of $50.2 million which included $6.8 million in realized gains. The average net sale price for the third quarter of 2015 as a percentage of the principal balance was 111.34%. During the same period last year, the Company originated 47 loans totaling $48.7 million and sold the guaranteed portion of 39 loans for a total of $36.5 million including $5.8 million in realized gains or premium income. The average sale price in the third quarter of 2014 was 113.19%. Overall, our net increase and net assets from operations was $4.7 million and our net increase in net assets per share was $0.46 for the quarter. Please turn to Slide 35, which is an analysis that changes the NAV and NAV per share for the first nine months of the year as well as our NAV as previously reported on October 1, when we declared the special dividend. Overall, our NAV per share increased by $0.57 or 3.5% for the nine-month period. We began the year with NAV of $16.31 per share. Changes in NAV for the first nine months included $6.3 million in net investment loss or $0.61 offset by $25.9 million of net realized and unrealized gains including the recurring gain on sale income we recognized in selling the guaranteed portion of loans and net appreciation in our portfolio company investments for the nine-month period. Overall, the proceeding represented an 11.8% or $0.93 increase in NAV per share for the nine-month period. NAV was also reduced for the first and second quarter dividends of $8.8 million or $0.86 per share as well as other adjustments which decreased NAV by $2.5 million or $0.50 per share bringing NAV on September 30, $274.7 million or $16.88 per share. On October 1, 2015, the special dividend of $34 million as well as the third quarter cash dividend was declared which reduced NAV per share $13.10. And finally Slide 36 is a reconciliation of our adjusted net investment income which includes our net investment income loss plus realized gains which are recurring revenue for the Company which we recognized when we sell the guaranteed portions of our SBA loans. Our adjusted net investment income per share for the three and nine-month periods was $0.50 and $1.50 respectively. I would now like to turn the call back to Barry.

Thank you, Jenny. Operator, we'll take questions now. That concludes our presentation.

Thank you. [Operator Instructions]. Our first question comes from the line of Chris York with JMP Securities. Your line is open.

Good morning guys and thanks for taking my questions. So Barry, could you walk us through the mechanics of the special dividend? Specifically what is the formula for the share price for the issuance of stock dividends? And then could you remind us when you will know the election of shareholders decision for cash versus stock split?

Okay. Chris, I appreciate the question. I think you got me without doing my homework, so I'm going to do the best that I can on this one. But there is specific instructions that are on our website in the Investor Relations section to the exact dates. What is going to occur is American Stock Transfer will be sending out an election document to all the shareholders who will have the opportunity to elect whether they want cash or stock. Historically, based upon what we've seen most people elect cash, but there is actual an election to be made. In the event, you do not make an election, the default is cash because we believe that could be the intention of most shareholders. So the dollar amount of the equity portion of the dividend is $25 million. So the price of the shares and the amount of the shares will be determined on three dates in December.

November.

Is in November?

Yeah.

e No, I think November, Jenny, is the ex-date. The date of the price of the share determination is three dates in December. It could be wrong. I think the three dates in December. Okay, I've now got my cue notes. Yes, December 11, 14 and 15. It is the valuation period for the stock portion of the dividend. The ex-dividend date is November the 16. So once we know what the share price would be, there is a deadline to receive the election form from the shareholders which is 20 days from the mailing. That deadline is 22nd. American Stock Transfer will calculate that. On the 24th Newtek will issue a press release upon that calculation to determine the exact number of shares that are issued. And on December 30, American Stock Transfer will be mailing dates for the dividend cheques. And the payment date for cash and stock election is December 31.

Perfect that's very helpful. So process clears a couple things for me. So the 11th, 14th and 15th, so the average price of those closing stock price in December, correct?

That's correct. And I would like to add, and obviously, to a certain degree -- and I'm going to use the word market speculation, so I'll characterize it as that. The stock portion of the special dividend in my opinion is similar to a stock split. So whatever the share price is, it is essentially assuming that the market is efficient investors are going to be made whole just the valuation issues, on what the stock happens to be trading at. The valuable portion of the stock dividend is the cash portion.

Got it. Makes sense.

And if I say that just my own opinion, that's my opinion as a shareholder as well, but other people may differ, but I think that nobody really should be overly concerned what the price of the stock is on those given days because if it's lower you are going to get more shares, it equals to the value.

Helpful. Switching gears on expenses. So we have seen this line increased sequentially throughout the year which was to be expected, but I'm curious on to learn your expectations for this line item in 2016 and the potential for operational leverage.

On expenses, which expense are you referring to, Chris?

Operating expenses, so on the income statement…

Overall?

Yes, so salaries and benefits and pretty G&A.

I mean to be frank with you I do not expect that there would be significant increases in that. On a matter of fact from my perspective, I would expect to hold the line, I think from an operating leverage perspective. We got a platform that is very, very scalable. We've got our lending lines in place. We've got our cash in place. We were a stocks filer this year so that increased some of our expenses. We also had some litigation this year that we had to defend ourselves and frankly countersue some counterparties in that area. I feel pretty good about us being able to hold the line on expenses.

Good. And then lastly, so in the press release, you guys noted the potential to close in November 504 loans, it might be early, but kind of would like to get your thoughts on the potential size of that business at Newtek or that portfolio for maybe 2016 and beyond?

Yeah. And I look forward to chasing Peter Downs over the next three days with the same question, Chris. I would tell you that I think that in 2016, we are hopeful that we could close between $20 million and $40 million of 504 loans, that maybe on the conservative side. I'd like to sharpen my pencil on that. Then I think about 504 loans is you can do up to a $10 million loan in the 504 loans. So realistically speaking those numbers could be grossly understated. The nice thing I like about 504 loans from a profit perspective is; number one, effectively all the risk goes off your balance sheet because of the 40%, second, it's effectively owned by the government and the 50% first is [indiscernible] conventionally, and there is deep bids for the 50% first. So our returns on this business are cash up front with a very little balance sheet implications expect for the timing, you need to keep in the warehouse line. Sterling National Bank increased our total facility from $15 million to $50 million in the quarter; part of that facility is used for 504 loans. So I think what we are going to be doing, once we get this share count in line. Jenny and I will be going out and giving the market some guidance based on appropriate share count. I mean one of the reasons why we did not give a 2016 picture today is, we really would rather go out and everybody [a lots of things], dividend per share, etcetera. We really want to get that share count down, and hopefully we'll be able to get to closer to that middle of December.

Great. I'm going to squeeze in one last one and then jump off the queue. So the premium sale price felled low, then what I'll call, maybe the three-year average roughly around like 112.8%, we're here at 111%. Can you explain kind of the dynamics that are going in there or what cause the decline sequentially?

Yeah. I think there were three items. The first one I'll define is the mix, more 10 years versus 25 years. The bigger issue was bigger loans. We sold a lot of short, large tenure loans into the market. And the problem with the short tenure years is the tenure loans don't have prepaid parties. On a pool assembler by the tenure loan, it particularly fell in a smaller loan. It's a smaller portion of the whole pool. But when it's bigger loan, it's a bigger portion of the whole pool. So one of the things that we need to do is we -- and by the way we've really -- we've never experienced this before, so we may need to take bigger loans instead of doing a $5 million loan to $2 million and $2.5 million loans or pretty smaller loans and disperse them to different pool assemblers, so that when they sell the pool there isn't as a bigger hit to the short wham to lack of repayment protection. There is got to be some more engineering on our part. The important aspect of the pricing decline that we have in the third quarter it was some effect of market changes, but not a lot. It was mostly affected by portfolio mix and by a change in the market that we need to shift how we actually sell these going forward. It's not the first time that we've had dips, that's why I pointed out in the fourth quarter of 2014, you had 111.73%. We are very cognizant of the price issues and our way to come back changes in the price issues are through volume, and putting on additional value through 504, so when you look at our guidance really doesn't have 504 in it for this year. So 504 should be incremental to next year and we need to do a better in engineering, but there haven't been any real major changes in market prices for the 7(a) product.

And then with the new capital potentially larger balance sheet, so the larger ticket size, is that you're selling in either a potential to that the premium could stay in kind of maybe sub-112% level for the remainder of the year?

For the remainder of 2016 or remainder of this year.

Yeah, remainder at this year.

I would like to think that we will outperform the third quarter price, but I won't go much further than that. I think that we have a price that we are very comfortable with which is consistent what I discussed on this call to be able to deliver the $1.82 as a cash dividend for the full year payout of earnings even with conservative pricing.

Got it. That's it for me. Thank you very much.

Thanks Chris.

Thank you. Our next question comes from the line Mickey Schleien with Ladenburg. Your line is open.

Yeah. Good morning Barry and Jenny. And just one follow-up to Chris' question about the pricing, was there any effect on the pricing from perceptions about prepayment risk changing given how volatile the markets were in the third quarter?

A very minor, Mickey. Our bigger issue in pricing was portfolio mix inside the loans.

Okay. Barry, can you give us some update or any color on the integration of Premier and your perspective on adopting its best practices at NMS?

I appreciate that Mickey. I just spent two days in Wisconsin with John Traynor, who is newly appointed President and Chief Operating Officer of UPS, Wisconsin. We have also named Jordan Stein, President and Chief Operating Officer of Premier Payments. John and Jordan are and will be working together to develop what we view as a best practice approach to being good in the payment space. With the acquisition of Premier we pick up a second platform. Most people know Newtek to be primarily a first data front and backend shop. We now offer data [indiscernible], we also do have a frontend from TSYS and we'll look to also have TSYS backend in the near future. With that said, with respect to best practices, [LO] volumes got two interesting tablet based solutions, one is silver which is an NCR product, second tablet I'm not familiar with. We have FDR clover and we have [indiscernible]. Moving into the new facility in February of next year will really help us integrate particularly the frontend of the business. Tom Harkins was been with our organization for close to two years and came to us with over 20 years of MasterCard experience. It's moving over as part of John Traynor's part of management team to work on the frontend of the business along Jordon. So we feel pretty good about some of these changes, they do take time, some of them I think will be helped by the geographical movement in the late success phase, but we've also made some management changes to enhance that some platform changes and Premier had a terrific quarter and we think it will have terrific fourth quarter as well. So we look forward to growing these businesses as we think they are important. And we think there is very good opportunities in the payment space.

Sticking with the payment space, Barry, I've noticed that a lot of merchants have installed the tip readers which have been required, but they aren't actually using them. They still require the swipe out card, so can you remind us, how does affect their liabilities and what opportunities does that present for both Premier and at NMS?

Yeah, I think my own statically significant samples, every time I think the credit card out, we ask them, do I insert or do I swipe. Right now we estimate other market participants only 40% of the market is EMV complaint. So although many people have the equipment, Mickey, you would find this hard to believe and I do and we're 30 days past the deadline, the major payment processors who I will not name on this phone call, do not have the software downloads into existing terminals to actually make the merchant totally complaint. So the industry frankly had led down retailers now. With that opportunity a lot of smaller merchants do not have equipment. They just delayed purchasing it. We're actually seeing, believe it or not, fraud in restaurants and [indiscernible], the common thinking that you wouldn't have that in the smaller merchant. It's not extensive, it's not big money, but it's encouraging the smaller guys to make the $200 investment. From our standpoint, given that we do have equipment in stock, we understand these markets and our model is not a rep model, and I don't say that and try to be tooth-sprague, most reps cannot bridge the technological needs of clients. We can't. We use people in-house that really experts in the area, a little less healthy, but a lot more technically astute. So I think there was an opportunity for us to gain market share, there is not a lot of risk here effectively at the -- the merchants can't handle the risk ultimately that would fall back on us to be responsible for it, but so far in the first month and has not been the big deal or a big issue at this point.

Okay. And my last question, Barry, you mentioned the potential to perhaps next year starting to sell the unguaranteed 7(a) loans. I'm just curios who are the natural buyers for paper? Certainly I can understand the market for the guaranteed portion, but given all the uncertainty as to how the Fed is going to behave and the outlook for the economy. I'm just trying to gauge what kind of demand there would be for that paper?

I appreciate. Believe it or not, it's banks and credit unions. Loan demand is still high, even if rates go up a little bit I can't see that changing and they are financial institutions that were interested in my participation, so a lot of that has traded I believe, one of our competitor Live Oak Banc in their public filings have stated, they have actually sold, have been selling that off. So we have begun preliminary conversations with some investors and would certainly consider executing on that.

Okay, thanks for your time this morning.

Thanks Mickey.

Thank you. Our next question comes from the line of Jefferson Harralson with KBW. Your line is open.

Hey thanks good morning.

Good morning.

Good morning, Jefferson.

[1Q FX] ask you about LendingTree, how [indiscernible] cadence that addition to the sort of fold and what kind referrals can we expect from them?

It's fairly new at this point, Jefferson, but we've spend a lot of time working with them integrating technology to technology to get their leads, and we believe that we've offered a different alternative to them than our competitors because we are technologically situated, so when you look at our model versus our competitors. We don't have $0.5 million or $0.75 million producers driving into verticals. We have really dedicated professionals that are lending finance specialists that can take a data feed and then call up a client very quickly from a remote location and start to assemble the loan without having a vested interest in the sale. What I mean by that is non-commission and that's extremely important. So we think that LendingTree who I believe has got a public offering in the market and is raising capital. So far from what we've seen, it's going to be a good partner to us and it won't be insignificant. However that's very fresh, it's two weeks fresh.

Alright, got you. I think you guys mentioned about Exponential Development Corp. [impact] -- is that a company you sold or what happens here and what was the strategy if you did sell that company?

Yeah. Exponential Development Corp. is an entity that we have owned and operated for about 11 years. It is one of our legacy capital businesses. We managed those assets, we'd liquidated those assets, and we're able to take dividends out of the liquidation of those assets. One thing I will say, Jefferson, I won't say Newtek is an easy follow, but we do manage our business, we have a lot of assets within our structure and organization and that was just one of the benefits that we were able to get value for our shareholders, and there are other things in our portfolio at our Company that are out there as well.

And lastly, I think you're talking about the timing of your 2015, you're talking about maybe originations or dividend guidance, did you guys believe you did that before year-end when you get the share count done or is this going to be sort of in the January thing kind of next earnings stuff or at the beginning of February when next earnings will come out?

I'd like to do it this year, I'd like to do it when we get the share count. We talked about doing it today, it would have been premature with the share count it would have been confusing, so we think of it, it was just more prudent for people to enjoy the cash dividends and the special dividends, and then turning to set return and the trusted management is going to [buzz their backs] to do it again next year.

Got it, thanks guys.

Thank you Jefferson. Appreciated.

Thank you. Our next question comes from the line of Robert Dodd with Raymond James. Your line is open.

Just going back to the [final four] program real quick, obviously relatively, you talk about it being in a portfolio of company. So it the intent to have any gains, origination fees, etcetera, premium and accrue to a portfolio company and then make a decision about whether that dividend sit up to the parent or is it going to be accounted for like the 7(a) program where we see the gains, premiums, etcetera just consolidated on the [BBC] balance sheet?

The former Robert, so it will be sitting in a portfolio of company, I appreciate you asking that question, it's a good one.

Got it. Thank you. And just looking at the payment business and the legal expenses, you're talking about $1.3 million so far. Was that concentrated in this quarter or has it been spread out and how long do you think those expenses are going to go on for us? I'm trying to get a handle on the sustainability, I mean it was excluding Premier as $1.5 million dividend from that unit and in the second quarter and $1.3 million in the third quarter, how much movement is there going to be in that?

Q3 was a pretty chunk of that number. I think that number should begin to tail off significantly. I can't [swear] it. My Chief Legal Officer and I have lovely conversations about this on a regular basis and those of you who are on the phone, I love you all, so I'd like to think that the worst of this is behind this. I'm not saying we're going to have another quarter, but this is not really a 20 -- I don't expect to see that type of a number in 2016 at all.

Got it. And then just last one, on originations and sales in 7(a). You talked about trying to manage the timing of when you sell and maybe not necessarily wanting to be sort of large loans or so backend loaded. I mean we've been through -- we're through October now, I mean any color you can give us on how that has gone in terms of managing the timing a little differently to maximize that gain on sale?

I think that I don't believe you'll see significant overhang from a timing perspective. The only thing I would or might say is that, if all of a sudden we see strength year-end pricing that could change our thought process, but I think from our perspective, we don't anticipate it. And I think we would like to for the purpose of this year sell. Now as I go into 2016 particularly with all the excess capital that we have and the excess cash, I certainly say and this is something to think about. First of all, from my perspective, it's always important to deliver what you said you're going to the market. So that's [item] number one, so we're already baked there. But as I look into 2016 and I can sit on $40 million let's say of government-guarantees of 61%, I may want to hold them accord. So as we think about things going forward, now I want to share that with the marketplace that kind of why I question everybody not per se for 2015, but for next year the world isn't necessarily a baked cake or everything is really straight line and you take your ruler out in it's sequential. So I believe what we will do is look to forecast long-term and deliver a long-term look on the outlook. We may decide in Q1 for example to hold. I do not believe we'll do that in Q4 unless we just see something really weird.

Okay got it. Very helpful thank you.

Thank you.

Thank you. Our next question comes from the line Fred Small with Compass Point. Your line is open.

Hey, good morning, thanks. Can you sort of walk through what was going on with the cash balances at the end of the quarter? And the main is being, why no sort of for the regular dividend -- why doesn't that show up on the balance sheet the accrual for that? And then what was the net cash that you received in the September securitization?

Thank you. I guess, I'll look at the last one first. Can you handle the middle one?

Yeah.

The net cash of the securitization was I think about $7 million to $8 million not including the prefunded amount. So not including prefunded amount we were able to pick up $7 million to $8 million. We're able to open up an old 2010 deal which has excess collateral and it was very beneficial to us. I would also to say, Fred, that we have mezzanine classes that we could prospect at least selloff of all their securitizations if we wanted to and have the capability to do. What was your first question? Why our cash balances are so low?

Okay.

As you're anticipated to not hold any cash, so rather than like what we used to do with the [C Corp.], we want to show a lot of cash. We basically paid down every single line of credit that we have and it just does not paid up still on cash. So that was question one and three. Jenny I'll let you handle. Could you repeat the middle question? Fred.

Sure. Just regular dividend not the special, is that sort of consolidated somewhere else on the balance sheet now or…?

No. actually the quarter dividend was declared on October 1, so it was not recorded as a liability at September 30, so it's recorded on the data declaration.

You don't record the liability, you don't [crew], you only record it when it's declared which is right, October 1, we declared all the liabilities.

Right.

Okay. Just now I understand that would have been negative. That would have made the cash balance negative. I mean at the end of the quarter had you done that I mean how do you sort of treated it like you do in…

Sure. If we had recorded it on September 30, it would have been a reduction in NAV on September 30 and an increase in dividends payable so it wouldn't reduce your cash balance until tax we paid.

Great okay. Then you said on prefunded amount on mezzanine of the older securitizations about how much is that? And what was the prefunded amount that you mentioned?

Prefunded about $9 million, so of the $40 million securitization effectively $9 million sits in cash and we are able to fill that with future originations, so the right thing about it like a warehouse line at a 2.5% yield.

Okay. Then the amount of the mez bonds you said that out there that you could update?

Yeah, I have to go back and recalculate five past securitizations, and I wouldn't want to get. It's not an insignificant amount, it's probably $5 million or $10 million but I'm just guessing, but the right part of that is that would be if we wanted more debt that's it would count for the leverage test. It would be collateralized that it should come at a fair price.

Got it. Thanks. Just on selling the unguaranteed piece that you talked about, I guess, how much do you think that you could do overall there?

On the uninsured?

Yeah on the non-guaranteed base, I mean I think you said you could sell it down to what 10% without getting [SPA] approval?

So let's for argument sake use this year's production, and say it's -- let's use a number that I could easily divide by let's say it's $240 million, so that means it will create $60 million of uninsureds, theoretically you can sell 60% of $60 million or $36 million, so on this year's production you could have theoretically sold $36 million of uninsureds, so what you understand theoretically, so you can put $60 million against the 55% warehouse line and that's $24 million, alright, then you only need $12 million so it's a savings of about $15 million of capital and $50 million of equity prospected it's like equity. When you sell [onsite] pieces off, it's like equity.

Yeah, you're getting cash and there is no recourse to you, right, so it's better than the securitization.

Correct and you're off loading risk.

So that sort of saves the business model from bumping its head against the leverage restrictions all the time.

We call it tools in the tool chest.

Got it. Okay. And then when do you expect the 10-Q will be out?

Tomorrow.

Okay. Awesome. Thanks a lot.

Thank you.

Thank you. [Operator Instructions]. Our next question comes from the line of Rob Brock with West Family Investments. Your line is open.

Hey Barry. Great quarter. Most of questions have been answered, but could you comment a little bit about the genesis of the 504 program, who is in it now and how big is it, if the profit margins are as big what kind of competition do you see? With regard to LendingTree, would you mind spending just one minute and kind of walk whole through exactly what exactly your role here in a LendingTree platform and is there any [indiscernible] who is actually providing this kind of service? Thanks.

Sure. I'll start on the last item. LendingTree many people are familiar with LendingTree, they are seeing it on TV, historically it's been a residential lending brand that that a ton of business in residential owned market, there is stock fuel currently on LendingTree on the market that I'm aware of. And you basically go to them and they do as they bid the deal of that amongst different participants. They apparently are diversifying into small business lending and other types of lending, so I guess they looked at sort of on a lending club day and they say, hey, listen, you know, and I'm paraphrasing, these are not their words this is just my opinion. Hey, we can be an exchange too. So in our relationship we have given them all of our loan products, our receivable line of credit, inventory line of credit, 7(a) and 504. We believe we will line up being in this space the provider of choice because of our technological competency. And I think technological competency and this is really important, and we do not have a rep oriented business model, it is a process oriented business model, unlike most of the other originators in this space. So we are getting leads from them. I'm not going to specify the numbers, but I won't say they are insignificant, but we don't anybody to dominate us. We want an alliance partner, a better alliance partner or maybe 5%. So I wouldn't be surprised that they become a 5% partner, we are somewhat surprised with the size of the alliance, I hate even talked about this because competitors are listening and they will be following me into this run, but anyway you get only a couple copy for this one. But anyway we think it's going to be a good one and we like the relationship and we work well with them and we are importantly technically aligned and we don't have black box, alright. So when somebody comes to us and we can offer them 6% loan with 10 or 25-year aim schedule and the borrower trying to have free call letter maybe move some money to us and we lock them down and we get a guarantee number, we are in. We are the lender. We are the player. So I think that we have a history of sort of operating in this way and our business model is based how do we [disseminate] not to be disrespectful to sales agents. It's a technologically based model, how we get lead flow and how we deal with that lead flow, so we are not looking to sell people finance, there is more of operations today doing this high rate finance out there. It's crazy. That's not what we do. We look to provide real good business solution. So that's where we see the LendingTree relationship going. What was your other question, Robert, sorry?

On 504.

So 504, I think this year this market, and this is a guess, it's nowhere near the size of 7(a), I'd say it's like $3 billion to $4 billion in 504. That before launch are typically driven by CDCs or development costs, they are not for profits and they are all this burst across the United States. They provide these loans in the community. A business owner can go to CDC or they go to a lender like us to trying to get a 504 loan. So if we get a 504 opportunity we are going to go to the local CDC and the local CDC will be in the position to take the second which ultimately go to the government, and then we take the first. It's a valuable program. I don't know the longevity of it. I got to bone up on that a little bit. It's been around as long as we have got in this business, so I can really say, it's been a long round for 14 years. 504 does not provide working capital which 7(a) does, so one of the benefits is we are one of the few 504 lenders at the 7(a), and one of the 7(a) lenders at this 504. So that is beneficial. As a matter of fact, we have a few deals in the pipeline because we are doing both, we're going to get both, so we can provide the working capital out of 7(a) and do the 504. Also 504 loans can be done fixed rate with prepayment penalties that's where you get the premiums. I think it's a great addition to what we're doing and it should be a nice supplement to our net income.

Is there anybody who is really big in the space out there?

I don't -- there are 504 lenders that have got portfolios, we don't need to say this, the bigger banks do a lot of them, so but a lot of them cloud be a couple of $100 million in a year. So there is nobody that dominates this business. When GE was in the government-guaranteed lending business a long time ago, they were pretty significant as was CIT, but there is nobody that really dominates 504 lending today. It's very fragmented. Community banks love it because they are 50% conventional first, 50% LTV.

Thanks very much. I appreciated.

Okay. Thank you.

Thank you. Our next question comes from the line of Marc Silk with Silk Investment Advisors. Your line is open.

Hey, Barry, great quarter. A lot of my questions have been answered. So I got a few here. So a shareholder who owned your stock before did this 2.3 million share offering was expecting a dividend of $3.29 and now it's $2.69. I know you are a big shareholder as well. So I guess spin on it could be something like, assume, we don't mind taking a step back as far not as much of a dividend for the existing shareholders because by doing this we see so many opportunities that we want to make sure that the dividend going forward is going to basically strong based on your earnings. Is that probably a correct assessment, I can relate to my client base?

Yeah, you certainly can't. Jenny, what was it before the $2.69?

$3.29.

$3.29. Here is what I'm going to tell him. From $3.29 to $2.69 and by the way that's not part of the 30% return. So I think what you got to say, are you kidding me.

No, trust me, when…

By the way Marc that's the most popular question that I have gotten over the last 60 days.

Sure. Listen trust me, we are very happy.

No, Marc. You can't believe even I can't believe it.

Well, you know Barry, if you didn't know so many shares then people could say, wait a second bud, you ask it again more than us. So the other thing is based on the public offering what people did bring up in the conference call, just selling the unguaranteed portion, it's just like another capital raise without diluting us which just could be huge because I think back of the day you are able to sell off 90% of those the guaranteed portion.

Longtime ago prior to the credit crisis in '08 and '09, there was a fairly active market for uninsured loan participation that we're on a premium. I would tell you, it's not a liquid market, but it does have value. And by the way, as we look at our uninsured loan participation portfolio and this is really important based upon where we have it on our books, using a loan forecasted frequency in default. They marked very well. So less than important aspect of what we try to do here. Back in the old days before there was all of this information, people used to invest in managers and business plans and companies. We're still old school. We have a lot of things going on. We're always looking forward. We never want to get caught behind and things are going to change. I'm not going to sit here and tell you, we're always going to get $1.12 on our [months], maybe it would be $1.16, I don't know and we're going to figure out how to deliver returns to shareholders. This is one way to do it. We won't be able to obviously sell what's out of the existing portfolio because as long as they are in securitizations and they are not at the point where we call on those are locked up, but for new production that is a possibility and that would be a significant boost and boon to our business model and there are other people out there in the public domain that are getting these executions and we need to find those buyers. We have not as of yet, we've actually begun the discussions with some people that are indicating that they would be interested in buying.

Well, it's good to have that option. It's funny you mentioned back of the day the only questions on your call would be of me and my elder brother Steve, so as there are so many questions, I'm trying to figure out what way we had a go from here. But I have got two actually for you that haven't really been discussed. So I know in the last call I asked you where do you see potentially the next growth engine coming from your company, and you really pondered the table on your cloud business. So you had 2.5 this quarter and look smart and I think where I like to hear more of this kind of what you bring into the table or is this maybe a sea change for you that now you're getting some very interesting relationships.

It's a good question and we have a lot of nice things in the pipeline in terms of business acquisitions that the pipeline companies that I talked about that comes along with a very interesting personnel that will help us in that particular area. And we have some real interesting transactions in the pipe to take advantage of the fact that we have cloud solutions where somebody could have their software and hardware in New Jersey and backup in London with hard backup. We've invested in hardware and software that enable us to do that. The companies had a 10 years plus history of being 24x7 answering phones and helping customers, and that is not what Amazon, Google and [XOR] do. They just don't, their customers can't call them up and stack boxes in there or get software products that people can develop on for free and then they get charged huge amounts of money. So most people go to Amazon because they give you a lot of stuff upfront free but then [indiscernible] and making all that money because that gives them not charging people for it, so there is very good market out there for us in what we do, and we do plan on taking decision to manage, but there is nothing we can really announce at this point in time, sometimes it takes a longtime for the cake to bake.

And then one last area, I know one of your favorite subjects is Obama Care and this quarter again you mentioned this, your health insurance option small business selling has exchanged, You're hearing some states are basically or only now offering just one solution as far as insurance to people. So how does this kind of play in to kind of take advantage of that or it's really a state to state type of things?

I would like to think that we could take advantage of this opportunity. I'm not sure that we're able to do it at this point time, just to be honest with you. That's just based upon what we have in-house at the moment. Generally speaking just for market perspective, huge opportunity to work with businesses to solve their health and benefit solutions. The mix has changed. We're just small at this point in the insurance agency space. We need to get bigger, that probably happens with bulk of acquisitions in the nature, but there is a huge opportunity in that particular segment. I won't exaggerate our ability to take advantage of it, but it definitely something that's out there. So we are looking at it.

And my last is more of a comment. In this environment of low interest rates where you got tenure of 2% and people are buying chunk volumes and getting 5% or 6% if they are lucky. I mean the fact of the matter is on your dividend forget about the special dividend that rate of return not to mention that like you said your BDC is not necessarily your typical BDC that you can really grow this Company and really have stock appreciation in addition to the healthy dividend, and so, half of my clients who want to thank you for your great job you're doing and continued success.

Thanks Marc. I do appreciate that. I think if you look at most companies that are operating businesses that are paying a 2% to 3% dividend, there is inconsistency. Putting that aside, we're going to continue to grind this out to tell our story and want to be awarded. I have to say with a lot of our BDC competitors trading at a discount for NAV, and our mind, we're trading at a premium to NAV and I realized through different definitions you're looking at NAV, you said 30 when you're looking at NAV, on 1 when you are looking at NAV, but we do appreciate the investment that you and other people have had, Marc, you are one of the long-term investors I have got, very significant group of people led have own this thing for 10 years. I don't like people like [R5], but the fact of the matter is they have got basis in the thing, split adjusted of $1 or some under a $1, and they have been awarded for long-term patient play and what we're trying to do to accomplish it here. So at $220 million I think still think we are very small, we need to get bigger, we need to get the critical maths and then I think we'll just take off. So that is our goal here. Our goal is, we need to get significantly bigger than we currently are.

As far as under $1, you're right I remember after the disaster in 2008, you're trading for $0.50 which is full adjusted at $2.50 and we were buying with a hint fist and that was really because of our belief in what you're doing so. Again continued success and look forward to next conference call.

Thank you, Marc. I appreciated.

Thank you. Our next question comes from Kevin O'Leary with UBS. Your line is open. Kevin O'Leary: Hey Barry and Jennifer, congratulations on the solid quarter. Most of my questions have actually been addressed, but perhaps if you could just give me a little bit more color on technology, specifically I'm surprised that more business owners haven't been investing in the technology to have the iPads to enhance the customer experience. What your thoughts and projections in that area?

I think that when you think about technology, we believe that business owners are going to run their business from tablets, in desktop solutions and desktop computing is going be a bigger and bigger area. So there was a main rush amongst software providers they could be able to deliver software solutions to people's tablets on a wireless standpoint or on a desktop and that is why we are staying in our space. We want to be the backend service provider to be able to get people to whether they are even smaller businesses to be able to use the tools that larger businesses use today. So we think it's a pretty good space to be in. Once again it's just really a matter of getting critical maths and getting bigger and being able to take advantage and execute on things. Kevin O'Leary: Okay. Thank you very much.

Thank you.

Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Barry Sloane for closing remarks.

Super. I appreciate everyone's interest in Newtek and in our call today. And thank you for your patience and your question. So we look forward to reporting our annual results. Thank you.

Ladies and gentlemen, thank you for participating in today conference. This does conclude the program. You may all disconnect. Everyone have a great day.