Presented by Matthew A. Parson 525 N 9 th St, Cottage Grove Oregon 97424 (541) 942-7300

1. Second Quarter 2013 Market Overview Presented by Matthew A. Parson525 N 9th St, Cottage Grove Oregon 97424 (541) 942-7300

2. Economic Summary: Second Quarter 2013 • Milestones • Equity markets hit-all time high (again) • Bernanke’s “tapering” comments send tremors through all markets • Germany drops austerity and embraces stimulus • Japan turns to U.S. shale gas to cut soaring fuel costs • Obama fires IRS chief over targeting conservative and some liberal groups • Apple sells $17 billion in record bond deal • Brazilian social unrest emerges • Gold falls to three-year low • Housing recovery appears strong despite rise in rates • China growth continues to decline Certain sections of this commentary contain forward-looking statements based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results.

3. Economic Themes • Equity/fixed income • Housing • Credit and banking • Employment • Consumer behavior • Business and manufacturing activity Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results.

4. S&P 500 Index and Dow Jones Industrial Average: Q2 2013 Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

5. Q2 2013: Equity Returns by Style Source: Commonwealth Asset Management/Morningstar Direct Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

6. Q2 2013: Fixed Income Returns by Style Source: Commonwealth Asset Management/Morningstar Direct Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

7. Treasury Yields Yield up = Price down

8. Net Flows into Bank-Loan Funds

9. Fixed Income Past performance is no guarantee of future results.

10. Fixed Income continued Past performance is no guarantee of future results.

11. Fixed Income continued Announcement Past performance is no guarantee of future results.

12. Housing: Prices and Supply

13. Credit and Banking

14. Credit and Banking continued

15. Credit and Banking continued

16. Employment Expanding Source: Commonwealth Asset Management/Bloomberg

17. Employment continued

18. Employment continued

19. Business and Manufacturing Activity

20. Business and Manufacturing Activity continued

21. Business and Manufacturing Activity continued

22. Business and Manufacturing Activity continued

23. Conclusions • Job growth was reasonable in Q2; unemployment remained at 7.6 percent, but payroll growth was strong. • Inflation is not a large concern, for now. • ISM indices showed strong movements over the quarter. • Treasury rates moved aggressively higher across the curve. • Dividend sectors, especially utilities, remain relatively expensive, despite a sell-off with the rise in rates. • The housing recovery seems to be fully under way. • GDP growth could surprise to the upside.

24. Looking Forward . . . • Key themes to monitor • Employment improvement necessary for sustained recovery • Earnings season for Q2—beat or miss estimates? • Can housing continue its upward trend? • Will Europe emerge from recession? • Ongoing debt ceiling debates • Emerging markets manufacturing in Q2 • Fed “tapering” and direction of Treasury rates

25. Disclosure Investing involves risks, including loss of principal amount invested due to market fluctuations. All indices are unmanaged, and investors cannot invest directly in an index. Past performance is not indicative of future results. The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. The Dow Jones Industrial Average is a price-weighted average of 30 actively traded blue-chip stocks. The Bank of America Merrill Lynch U.S. Corporate Index tracks the performance of U.S. dollar-denominated investment-grade corporate debt publicly issued in the U.S. domestic market. The Merrill Lynch Municipal Master Index tracks the performance of U.S. dollar-denominated investment-grade tax-exempt debt publicly issued by U.S. states and territories, and their political subdivisions, in the U.S. domestic market. The Bank of America/Merrill Lynch High-Yield Master II Index tracks the performance of U.S. dollar-denominated below-investment-grade corporate debt publicly issued in the U.S. domestic market. International investing involves special risks such as currency fluctuation and political instability. The commodities industries can be significantly affected by commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions.