Welcome to the JMP Group’s Third Quarter 2013 Earnings Conference Call. Please note that today’s call is being recorded. (Operator Instructions). I will now turn the conference over to Mr. Andrew Palmer, the company’s Head of Investor Relations.

Good morning. Here with me today are Joe Jolson JMP’s Chairman and Chief Executive Officer and Ray Jackson our Chief Financial Officer. They are joined by Carter Mack President in JMP Group and Mark Lehmann President in JMP Securities. Before we move on I’d like to point out some of this morning’s comments may contain forward looking statements with our future events that are out of JMP’s control. Actual results may differ materially from those indicated or implied. The discussion and the uncertainties that could affect JMP’s future performance basically the description of risk factors included in our most recent 10-K. That said I’ll turn the call over to JMP’s Chairman and CEO Joe Jolson.

Thanks Andrew and thanks to everyone listening today and for your interest in JMP Group. I’m very proud to report the JMP Securities had the best third quarter in our history driven by a 57% year-on-year increase in investment banking revenues and positive operating margin leverage. The fact that productivity was broadly diversified across our four industry verticals and by product line demonstrates the rapidly growing value of our franchise. Having invested heavily to organically grow JMP Securities over the last four years we’re pleased to see such strong positive momentum. Excluding net investment income in corporate expenses JMP Group’s operating platform which would be JMP Securities and our three asset management managers are in $0.10 a share in the quarter compared to $0.03 a share a year ago. For the first nine month of the year platform earnings were $0.26 a share or more than twice last year’s level. Before I share some thoughts Ray will take you through few of the quarter’s financial highlights and Carter Mack will say some things about the current IPO environment. Ray?

Thanks Joe. Adjusted net revenues which exclude non-cash items and non-controlling interest was $36.2 million for the quarter and $106.3 for the nine months ended September 30. Operating net income was $2.7 million and $0.12 per share versus $3 million and $0.13 per share for the third quarter of 2012. For the nine months ended September 30th operating net income was $9.6 million or $0.43 per share compared to $10.6 million or $0.46 per share for the first nine months of 2012. Excluding a one-time asset expense of $0.03 per share related to the May IPO Harvest Capital Credit Corporation. Operating EPS for September 30th would have been $0.46 matching a total for the first nine months of last year. In the third quarter JMP Securities contributed $0.10 per operating EPS up from $0.03 a year earlier Harvest Capital strategies made $0.02 per share in line with its earnings for the third quarter of 2012. JMP Credit produced $0.09 of operating EPS versus $0.14 a year ago. At the corporate level net expense deducted $0.09 from operating EPS while that cost a $0.06 for the third quarter 2012. From expense stand point pro forma compensation and benefits expense which excludes on cash expense related to stock-based awards but includes any deferred compensation. As a percentage of adjusted net revenues was 69% for the third quarter and 65.8% for the first nine of the year. Our non-compensation expense ratio was 18.7% for the third quarter and 18.3% year-to-date excluding a $2.5 million one-time expense related to Harvest Capital Credit May IPO. With regards to the company’s balance sheet at September 30th JMP’s recourse cost debt-to-total capital ratio was 33.8% and our net cash and liquid securities per share was $1.80. Stockholder’s equity all of which was tangible with $123.7 million and tangible book value per share was $5.63. Adjusted tangible book value per share was $5.34 versus $4.88 a year earlier. Because of the accelerated amortization of the net liquidity discount on JMP Credit assets was completed in May, the only remaining difference between tangible and adjusted book value is due to our accelerated recognition of compensation expense, which must be deferred under GAAP. From a capital management standpoint, JMP used $1.2 million during the third quarter representing about $0.05 per share outstanding to repurchased approximately 190,000 shares of stock compared to cash dividend between $0.05 per shares. With that I’ll turn things over to Carter.

Thanks Ray. Periodically under earnings calls we will discuss the line of business or a product that is experiencing to get the growth to success which we want in detail for our investors. Today we wanted to highlight JMP’s activity in the IPO marketplace which has shown dramatic improvement in 2013. U.S. market for initial public offerings has experienced a substantial turnaround in 2013 and a sustained IPO window is opened after several years of deal maker below average activity to October 18th there would be 173 U.S. IPOs surpassing the full year totals for each of the last five years. The capital market is on track to complete well over 200 IPOs in 2013 which would be more in line with the average of 250 IPOs per year seen in the 2004 to 2007 timeframe. In our view the reopening of the U.S. IPO window is due to a number of factors including a recovering economy gives overall equity market performance low market volatility as evidenced by the [ph] VIC remaining below – excuse me, remaining below 20 throughout 2013. The rotation of investor funds into equity and the passage of the JOBS Act in May – in April 2012. The JOBS Act in particular has helped small and mid-cap companies by reestablishing the IPO market as a viable means of raising growth capital. Furthermore increased transaction volume has been reinforced by strong price appreciation and sector diversity. The average U.S. IPO is up 36% this year and no one sector represents more than 25% of total IPO transaction volume so very well diversified. This performance and the diversity of offerings has led to an acceleration of IPO filings and continued good investor receptivity the new offerings. Against this backdrop JMP has driven a dramatic improvement in its IPO…

Thanks Carter. I want to go over some third quarter highlights as well as some challenges to update everyone on our five year strategy growth plan and close with some remarks about our current stock valuation. First the positives, JMP Securities had a strong quarter, in fact as I said earlier it was our best third quarter in the firm’s history. We were relatively cautious about the prospects for JMP Securities on our last second quarter conference call given the uncertainties surrounding effect they bring and the route in the bond market that occurred combined with our expectation for a more normal seasonal slowdown. Driving the quarter’s excellent results was another better than expected performance from our investment banking group which has demonstrated overtime that it has successfully diversified not only by sector but by product. Investment banking revenues of $19.1 million for the third quarter or within 10% of the prior quarters record $21.1 million and are up 57% from a year ago. Through three quarters investment banking revenues were $52.3 million up 38%. JMP Securities is benefiting from substantial market share gains over the last four years as well as a the best equity capital markets environment since 2009 although the four industry sectors in which we participate has somewhat lagged the overall ECM surge falling from a market share of 50% of all activity last year to 44% in the latest 12 month period. Total U.S. equity underwriting fees totaled $7.1 billion for the trailing 12 months. JMP’s public equity underwriting revenues for that period made up just 46 basis points of the total. Our objective continues to be to increase the share to 1% by 2017 isolating the four industries on which we currently focus our share for the latest 12 months actually grew a 105…

(Operator Instructions). Your first question comes from the line of Joel Jeffrey with KBW.

Hey Joel. Joel Jeffrey – KBW: Appreciate all the color you gave on the IPO market, just kind of wondering though, I mean, what do you guys view as the biggest risk for this slowing down?

Of the IPO markets slowing down? Joel Jeffrey – KBW: Yeah.

Well you know it is cyclical as you know, and we’re in an up cycle and I think if you would go back over history you know once the cycle start they usually have a momentum that lasts for a year or two so I think it’s inevitable that at some point it all slowed down but I’ll let Carter you know may be elaborate on why we’re optimistic on – on the next 6 to 12 months you know for that business.

Yeah I mean I would say for some big market disruption, the market you know has a lot of momentum right now and I’d say it’s increasing momentum. We really you know we haven’t seen technology IPOs be as biggest part of the market as we traditionally see. It’s been pretty well diversified as I stated earlier, we would expect to see a lot more technology IPOs at the market in the next six months. I think Twitter if it goes well and once so it does we’ll have a big curtail effect for a number of companies in the internet space. So you know, we feel like it’s gaining momentum and that’s why I said I you know the market looks like the window is going to be opened well into 2014 make the other trend that just the big increase in biotech IPOs which you know continues and – and the performance has been really good. So, you know until we see a big disruption I think we – we’ve got a very, very good IPO window right now.

I mean just from a, forget about the cycle for a second, because may be we have another year or two to run after many years of being in a down cycle in that market. When you just look at the number of deals where you know the – run rate for the latest 12 months is still just back to the average as oppose to at any kind of peak level, but from a secular point of view it been in a negative trend for more than a decade because of a lot of – regulatory changes you know as well as essentially the acquisition of the entire you know small-cap middle market brokerage group in the late 90s or early 2000 right where all those companies including our former company got acquired. And, you know so that kind of heard smaller IPOs I’ll just say that is not talked about a lot and Carter mentioned his remarks the jobs at which by the way Carter was one of that three industry representatives on that committee that reviewed that made those recommendations that got adopted by through congress surprisingly. But, excuse me, but that’s been a much bigger factor for smaller cap IPOs than people realize I mean, for a company to go public now they don’t have to take the risk of being obviously on file for six to nine months while the – and see what the market does, they can file confidentially and wait around a lot longer and – and essentially before they actually go public they have to put it you know uncloak from the cloaking device of confidentiality for just 21 days I think right Carter and so.

Yes.

So I mean I think that – that’s been a big change in the last year in terms of the smaller cap IPOs.

I would agree and I think we’re just seeing the front wave of that Facebook IPO last year kind of put a wet blanket over the market and as we started to see momentum pick up you know I – I believe there is a lot of deals on top.

Yeah.

Right now and – and momentum continues. So…

So again I think that there has been a secular change and then of course they pass their, a change in the Sarb-Ox rules around the same time too they give companies that are smaller yeah that going public five year window before they have to – have to response you know they have to be publicly complying it with Sarb-Ox so that’s been helpful. So I think that’s a big change. And you know and after more than a decade of a secular downturn you know it’s a welcome relief for happy to see you that the business is turning here. Joel Jeffrey – KBW: Okay and happy to speaking on the investment banking side of the business I think what we’ve seen so far in terms of overall market activity on the M&A front there has been if you look at the number of deal announcements it’s been pretty weak but I mean in third quarter numbers for yourselves and a few of your competitors seem to come in you know fairly in line with last quarters than that probably you know slightly better than what was expected just kind of wondering what you’re saying is even more or just you know certainly specific deals you guys are seeing versus the overall industry trends or just on your reason why you know the numbers might be a little bit better than what people had been expecting?

On the M&A side you know I mean we get affected by general market you know issues like some of the – no the more guys that are more if you replace on that that would hopefully trade but we’re not smaller cap and it’s then they are our average M&A deal when consideration is around a $100 million and so, other than kind of fraud market disruptions that occur from time to time, you know our issue was really the better off spread you know between doing a transaction and – and I think that that got affected a little bit with the tax law change you know starting this year but it’s kind of normalized now as the years gone along. So we’re you know we do get affected somewhat by you know these broader things that impact the bigger cap company M&A trends, but generally speaking we’re – we’re in the lower middle market kind of niche there. so it’s a little bit less cyclical. Joel Jeffrey – KBW: Okay and then on the – on the asset management side of the business looks like you know the asset management fees are little bit stronger but it looks like due to incentive these just wondering if that was sort of just something we should expect to the seasonal issue this quarter or something that you’d see a little bit more sustainable on a quarterly basis going forward?

Well remember that you know of that let’s call it a $600 million kind of number that we have in our hedge funds you know over half of that’s in our small cap fund and – and of the $600 million not all of it is the contractually obligated to pay a full incentive fee whereas, in our small cap fund at all was. So that line item for us varies really from quarter-to-quarter when it has big swings by the performance of our small cap fund. And you know either a really good first quarter which is why incentive fees were so high it was up in the second quarter but not as – not a lot and which is why it went down and first quarter – and not as good as the first quarter but the first quarter as well so it’s kind of hard to predict that quarter-to-quarter and since he’s been close the new capital for 6 years now that probably not going to be growing you know in a – you know and there is no underlying growth rate in AUM there because you know continues to return capital to investors. So I think that’s just going to bounce around quarter-to-quarter now what’s might dry that up more over a longer period of time is raising more money for other funds and you know we’re trying and we have raised some money for other funds, but generally speaking I’d say 70% of not more of our carried interest opportunity resides in the funds managed by our small cap fund. It’s so it’s not seasonal you know it’s just return driven and – and there is really hard quarter-to-quarter there is not – is not correlated to the markets then or anything else which is good for a hedge fund manager but not so good for an analyst trying to project the quarterly revenues for that. Joel Jeffrey – KBW: Exactly. And then just lastly from me the comp ratio was at the touch higher than what we were sort of forecasting and thinking about the driver behind that I mean was it more sort of the 13 people you’ve added there in the quarter or was it just a revenue mix and you know how should we kind of think about it going forward?

No, the growth in a year we kind of out – at the end of last year we talked about you know that one up to $0.20 that we got might be the cost this year and then may be something like that or less next year depending on availability of M&A bankers kind of thing. And we’re you know on track there we’re not coming in over that budget but the holding companies paying for that so essentially you know there is no real revenues attached to that this year right. So a big chunk of the increase in kind of the comp ratio is just related to that money that we had been pending to higher people ahead of revenues right. And we’re really excited about the quality of the people that had joined the company this year and we’ve actually you know hired a number of people that haven’t added to employees because some of them had been upgrading seats type of thing. So it’s a lot more than just the employee growth, but I think that the – added 3 percentages points or 4 percentage points to the comp ratio this year and that’s kind of straight line by quarter. So it – it’s the same number each quarter no matter what the revenues are I think. So it can be, move that comp ratio little bit quarter-to-quarter. And then you know, investment income has been below plan this year and you know obviously that should and does have our lowest comp ratio which you know the time planning would tend to take that yearly number closer to 60% by you know in our range we talked about 60 to 65, and so we’ll see what the fourth quarter’s like for investing income but that’s been a driver of it as well. So I think we’re still year-to-date around the high end of that range and I think unless we have a bad investment quarter in the fourth quarter there is no reason to think for the year it will be above you know materially above that number or anything, but that’s that what affected in the third quarter. Joel Jeffrey – KBW: Great, thanks for taking on my questions.

Sure.

And there are no further questions at this time.

Okay, we appreciate the interest in our company as always. And we’re available for any follow-up questions that anyone might have. And we look forward to giving an update on how the year ended up in early February I guess. Take care.

Thank you ladies and gentlemen, this concludes today’s conference call. You may now disconnect your lines.