Good morning and welcome to OFS Capital Fourth Quarter and Year-End 2014 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Steve Altebrando, Vice President of Investor Relations. Please go ahead.

Thank you. Good morning, everyone and thank you for joining us. With me today is Bilal Rashid, our Chairman and Chief Executive Officer; and Jeff Cerny, our Chief Financial Officer and Treasurer. Please note that we issued a press release this morning announcing our fourth quarter and full-year results. This press releases was subsequently filed on Form 8-K with the SEC. Both documents can be obtained under the Investor Relations section of our website at ofscapital.com and we plan on filing our 10-K this afternoon. Before we begin please note that the statements made on this call and webcast may constitute forward-looking statements within the meaning of the Securities Act of 1933 as amended. Such statements reflect various assumptions by OFS Capital concerning anticipated results and are not guarantees of future performance, and are subject to known and unknown uncertainties and other factors that could cause actual results to differ materially from such statements. The uncertainties and other factors are in some ways beyond management's control including the risk factors described from time-to-time in our filings with the SEC. Although we believe these assumptions are reasonable, any of those assumptions could prove to be inaccurate and as a result the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on those forward-looking statements. OFS Capital undertakes no duty to update any forward-looking statements made herein. All forward-looking statements speak only as of the date of this call, a replay of this call will be available until March 16, 2015 beginning approximately two hours after we conclude this morning. Alternatively the webcast will be available for the next 30 days. To access either replay please visit our website at ofscapital.com. With that, I will turn the call over to our Chairman and Chief Executive Officer, Bilal Rashid.

Thank you, Steve. Good morning and welcome. As you probably saw, we issued a press release earlier this morning detailing our performance in the fourth quarter and for the year ended 2014. The year-over-year performance of OFS Capital was strong in terms of origination, revenue and earnings growth. We are continuing to put the pieces in place for sustained growth into 2015 and beyond. Our focus remains the same to increase earnings for our shareholders by originating quality loans. We continue to build and improve our origination platform to support that effort. On today's call, I will provide some color on the drivers of our fourth quarter and full year performance and describe our growth plans for the future. As we communicated in previous calls we have been highly focused on increasing originations in our SBIC. The focus of our originations has been the lower middle market. This is where we see significant opportunity for investing in high-yielding assets while maintaining our underwriting standards. We believe that the lower middle market provides us better pricing, lower leverage, and stronger covenants that will generate attractive risk adjusted returns. We believe that OFS Capital's credit-intensive culture, its thorough due diligence process and its expertise in structuring transactions enable us to navigate this market segment and drive attractive returns. Our plan going forward is to continue to originate attractively priced loans in the lower middle market with a particular focus on non-sponsored transactions. For the fourth quarter, our originations in the SBIC totaled $72.6 million and for the full year of 2014 originations totaled $163.8 million both of which significantly exceeded our previously announced targets. The significant increase in originations over the course of 2014 was a result of the increased recognition of the OFS Capital brand, our ability to provide flexible capital…

Thanks, Bilal. Turning to our fourth quarter results, our investment portfolio totaled $312.2 million on a fair value basis as of December 31, equating to 99.6% of cost. The investment portfolio was comprised of 62 companies, 36 in the senior loan fund and 26 in the SBIC fund. As a percentage of fair value at quarter-end, our investments were comprised of approximately 77% in senior secured loans, 17% in subordinated debt and 6% in equity. At December 31, the 62 companies in our portfolio were diversified across 19 industries. Our largest portfolio company accounted for 4.7% of the aggregate fair value of our portfolio. Additionally, our five largest investments accounted for approximately 22% of the portfolio's total fair value. Our average investment in each portfolio company was approximately $5 million at fair value or 1.6% of the portfolio’s total fair value. The weighted average yield to fair value on our debt investments was approximately 9.56% versus 9.09% as of September 30. This 47 basis point pickup in weighted average yield to fair value quarter-over-quarter reflects the continued ramp-up in our SBIC fund. On a fair value basis at December 31, the debt investments in the SBIC fund now represent approximately 60% of the debt portfolio versus 47% last quarter. The weighted average yield to fair value was 6.6% and debt investments in our senior loan fund and 11.6% on debt investments in our SBIC fund. As Bilal mentioned our intention is to continue to redeploy equity capital from our senior loan fund into higher-yielding assets. Our one non-accrual investment which I will discuss momentarily was omitted from the weighted average yield to fair value calculation. At the end of the fourth quarter, floating rate loans comprised 73% of our loan portfolio this is down from 82% last quarter, largely driven…

Thank you, Jeff. This has been a transformative year for OFS capital. At this important juncture, I would like to reiterate that our core values remain the same which are to put the interest of our shareholders first. As the largest shareholder of the Company, the external manager's interests are well aligned with those of our shareholders. To summarize, we continue to focus on growing the earnings the Company. We will do so by further increasing our origination activities while funding those activities in a manner that is accretive to our shareholders. Overall I am encouraged OFS Capital’s results in 2014. The Company has been working smarter and getting more efficient insourcing, evaluating and closing transactions. However, there is a lot more run rate to grow our earnings. I believe as we can accomplish that, if we remain laser focused on responding to the needs of our borrowers while adhering to our time tested underwriting criteria. We have a strong balance sheet and sufficient capital to deliver on our business plan. With that, operator, please open up the call for questions.

Thank you. [Operator Instructions] And our first question will come from Terry Ma of Barclays.

Hey, guys. So, on past calls, you guys have indicated about $30 million a quarter is what you're targeting for originations, and you guys - it looks like you have been running above that the last couple quarters. Can you maybe just give us a little color on how you're thinking about that? Whether or not that's still a reasonable run rate? And also what's been driving the increase the past couple quarters?

Yes, Terry, this is Jeff. How are you?

Good.

Yes, I think that we had previously talked about targets in the $30 million range. This is not a quarterly business. This is - we look at individual deal dynamics, the needs of our borrowers as we source deals. And so you are going to see some fluctuations quarter-to-quarter naturally, but we continue to stand by a target of $120 million a year and feel pretty good about that.

Got it. And if I just look at your SBIC assets as a percentage of debt investments - about 60% - what's the - I guess your long term target for that? Are you just going to wind down the senior loan fund?

Yes, I think we will continue to deemphasize the senior loan fund and continue to increase the SBIC related originations, so I think that is correct. We are looking to deemphasize the senior loan fund, given the yield on the assets are relatively lower, and we're able to originate loans in the lower middle market at much higher yields so if you look at the yield in the SBIC portfolio that's about 11.6% compared to the senior loan fund which is about 6.5%. So overall I think you're right. The plan is to continue to deemphasize that, the senior loan activity.

Okay, because I think at the time of the IPO, you guys were talking about a barbell strategy, about 50/50. So what's driving this shift in strategy? Is it just clearly on yield? And can you maybe just characterize how competitive the environment is in the lower middle market right now?

Yes, I mean I think that there's no shift in the strategy. I think that we are finding very attractive opportunities in the lower middle market, and focusing on the types of transactions that we have been doing and the SBIC, which are more focused on the non-sponsored part of the market and so I think we want to take advantage of the competitive advantage that we have in originating those types of transactions as opposed to the types of transactions that are in the senior loan fund, which are more sponsor-focused and more traditional part of the lower middle market. So as I mentioned earlier in my comments, we have a lot of expertise and experience here evaluating those lower middle market types of transactions because of our relationships and contacts within that part of the market and our credit intensive culture here to evaluate those types of transactions. So we want to take advantage of that competitive advantage that we have.

Okay, got it. And my last question just a bit of a housekeeping question. I apologize if I missed this earlier, but you guys had amortization and deferred financing costs about $200,000 a quarter. Did you just pull that forward with this write-off - with this $600,000 write-off?

Yes, so we actually reduced the financing facility. This was - we 8-K'd this from our $125 million. This is the senior loan fund facility to $100 million, so when we voluntarily reduced that, we had to take that charge. Accelerate that charge.

Okay, got it. And how should we think about dividend income going forward? Didn't you guys have $700, 000 and $600,000 in the last two quarters. How should we think about that going forward?

Sorry, I missed the question.

Dividend income on the equities. Interest income versus dividend income, is that the question?

Yes, correct.

Yes, I think it should be relatively stable. I mean we kind of 6% of our investments are an equity type instruments and I wouldn't expect that to change meaningfully, so I think you can probably look at a fairly consistent run rate on that.

Okay, great. Thank you.

Thanks, Terry. End of Q&A

[Operator Instructions] And showing no additional questions I'd like to turn the conference back over to Bilal Rashid for any closing remarks.

Thank you all for joining our call today and for your questions. We look forward to speaking with everyone again on our next call. Operator, you may end the call now.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.