Market Update - Ides of March - 03-01-2011

The Ides of March is the name of 15 March in the Roman calendar. Today, many refer to the entire month as the Ides of March. It is meant to be a festive time dedicated to the God Mars. It is also known as the time that Julius Caesar thought he was bullet proof, only to be stabbed 23 times after not taking the advice of his seer. In a modern observance, Founders Brewing Company has a tradition of releasing Founders KBS beer on the Ides of March. Seems like a great tradition. Construction Spending fell .7% in January to a seasonally adjusted 791.8 billion, off 5.3% year on year. The ISM, Institute for Supply Management, released their manufacturing index. The number crossed the tape at 61.4%, expanding for 19 months in a row to the highest level since May 2004. Things are picking up on the manufacturing front. Gentle Ben is on the hill, testifying before Congress on monetary policy. The text of the semiannual event is available through this link:

www.federalreserve.gov/newsevents/testimony/bernanke20110301a.htm. Treasuries and mortgage backs have been volatile this morning, opening lower (higher yields/worsening mortgage pricing) on the heels of the ISM report, then reversing on Bernanke’s testimony citing deflationary risk negligible, but need stronger growth to sustain recovery. We are settling down during his Q & A with the 10 year note off 12/32’s (yield 3.46%), mortgage backs off 6/32’s, and stocks off 16 points on the big board. Technically, today’s selling has neutralized the chart which points to limited upside (potential to rally). We do not see any huge reversal to worsening pricing but at the same time, put your guard back up and put your defensive mind set back into pipeline management. 10 years ago was my first day at Prime Lending. Kim Bateman and I shared a nice little office that for a few days, no one steped foot in. Let’s just say that my new role with the company was not exactly popular. My first guest was Dave Debowsky who told me that I really wasn’t needed here and should tread lightly, then wished me well and went on his way. The same was true of Scott Drescher, Michael Hott, and others. Change is hard and I understand that. All of the above are good friends and colleagues today. It just took time. Pat Pullen was the first to step inside my prison walls with an issue. Seems as though the loan was going to be snapped away by a competitor and for her to meet the challenge she would pay to close the loan. The loan was approved and set to close so using our smoke and mirrors, we saved the loan and she got paid. One new ally, 300 to go. We closed 60 million that month, a new record at Prime lending. My time here has flown by. Two reasons for that. Tops is the people and we have the best people. Second is that I love what I do and am incredibly lucky to have been given the opportunity by Roseanna, Alan White, and George Mckleskey. Our growth has been phenomenal, both is the maturation of our young people and what we have accomplished within industry rankings. I am especially proud of being involved in the careers and lives of people like Dawn, Shawn F., Joe W., Chris , Mel, and many, many more. I also believe that the best is yet to come for this company, both in people power and scope. We have an opportunity to be the best mortgage company in the business. I plan to end my career here, trying to accomplish just that and I can’t think of a better bunch to do it with that all of your reading this right now. Let’s roll.

Scotty

Scott EggenSVP, Capital Markets

PrimeLending, A PlainsCapital Company

18111 Preston Road, Suite 900
Dallas, Texas 75252----------------© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.