Financial Statements. For the year ended June 30, (Unaudited)

Financial Statements For the year ended June 30, 2012 (Unaudited)

Table of contents June 30, 2012 Summary of financial results - (unaudited) 1 Consolidated financial statements - (unaudited) Statutory consolidated statement of admitted assets, liabilities and accumulated surplus 3 Statutory consolidated statement of operations 4 Comparative financial statements - (unaudited) Statutory comparative statement of admitted assets, liabilities and accumulated surplus 5 Statutory comparative statement of operations 6 Statutory comparative statement of operations PLA 7 Statutory comparative statement of operations CLA 8 Statutory comparative statement of operations COASTAL 9 Statutory comparative administrative expenses schedule 10 Budgetary analysis - (unaudited) Statutory statement of operations 11 Statutory statement of operations PLA 12 Statutory statement of operations CLA 13 Statutory statement of operations COASTAL 14 Statutory comparative administrative expenses schedule 15 GAAP analysis - (unaudited) GAAP consolidated statement of net assets 16 GAAP consolidated statement of revenues, expenses and 17 changes in net assets Reconciliation of STAT to GAAP 18 Adjusted GAAP total net assets - (unaudited) 19

1 Summary of financial results - statutory basis (unaudited) June 30, 2012 Key Financial Data (in millions) Consolidated Actual YTD Consolidated Budget YTD Amount Percent Amount Percent Consolidated Actual Prior YTD Fav/(Unfav) Fav/(Unfav) Fav/(Unfav) Fav/(Unfav) Direct written premiums $ 1,761.2 $ 1,879.4 $ 1,640.9 $ (118.2) -6% 120.3 7% Ceded written premiums to:.variance from budget..variance from prior year Takeout companies (59.5) (13.5) (13.2) (46.0) -341% (46.3) -351% FHCF (537.8) (550.0) (385.1) 12.2 2% (152.7) -40% Private reinsurers (271.1) (200.0) (113.6) (71.1) -36% (157.5) -139% Net written premiums $ 892.8 $ 1,115.9 $ 1,129.0 $ (223.1) -20% $ (236.2) -21% Net earned premiums $ 1,380.9 $ 1,491.5 $ 1,244.4 $ (110.6) -7% $ 136.5 11% Losses incurred $ 534.9 $ 563.9 $ 490.2 $ 29.0 5% $ (44.7) -9% LAE incurred 137.8 108.3 95.9 (29.5) -27% (41.9) -44% Net underwriting income $ 419.6 $ 522.2 $ 418.2 $ (102.6) -20% $ 1.4 0% Net Income (loss) $ 433.4 $ 509.7 $ 417.5 $ (76.3) -15% $ 15.9 4% Cash and invested assets $ 15,122.9 $ 11,601.8 $ 3,521.1 30% Loss and LAE reserves 1,541.0 1,021.7 (519.3) -51% Ending surplus (deficit) $ 6,048.8 $ 5,535.9 $ 512.9 9% Policy Data Policies in-force 1,440,112 1,587,054 1,386,476 (146,942) -9% 53,636 4% Polices serviced 1,520,400 1,600,722 1,409,144 (80,322) -5% 111,256 8% Key Underwriting Ratios Loss Ratio 39% 38% 39% -1% -3% 0% 0% LAE Ratio 10% 7% 8% -3% -43% -2% -25% Expense Ratio (based on DWP) 16% 16% 15% 0% 0% -1% -7% Combined Ratio 65% 61% 62% -4% -7% -3% -5%

2 Summary of financial results - statutory basis (unaudited) June 30, 2012 Key Financial Data (in millions) YTD Actual YTD Budget Prior YTD Actual PLA CLA COASTAL PLA CLA COASTAL PLA CLA COASTAL Direct written premiums $ 946.2 $ 113.7 $ 701.3 $ 1,037.7 $ 115.8 $ 725.9 $ 870.9 $ 112.7 $ 657.3 Ceded written premiums to: Takeout companies (56.6) - (2.9) (9.0) - (4.5) (11.0) - (2.2) FHCF (187.8) (40.0) (310.0) (180.0) (60.0) (310.0) (108.0) (32.0) (245.1) Private reinsurers - - (271.1) - - (200.0) - - (113.6) Net written premiums $ 701.8 $ 73.7 $ 117.3 $ 848.7 $ 55.8 $ 211.4 $ 751.9 $ 80.7 $ 296.4 Net earned premiums $ 787.3 $ 93.6 $ 500.0 $ 816.2 $ 113.3 $ 562.1 $ 650.6 $ 95.8 $ 498.0 Losses incurred $ 442.1 $ 21.8 $ 71.0 $ 474.1 $ 24.7 $ 65.1 $ 383.1 $ 22.0 $ 85.2 LAE incurred 104.2 6.0 27.6 82.5 5.7 20.1 71.1 3.5 21.3 Net underwriting income $ 90.1 $ 44.8 $ 284.7 $ 103.5 $ 61.3 $ 357.4 $ 76.0 $ 50.7 $ 291.5 Net Income (loss) $ 111.7 $ 58.0 $ 263.7 $ 123.2 $ 69.5 $ 316.9 $ 97.1 $ 59.3 $ 261.1 Cash and invested assets $ 5,366.6 $ 1,753.3 $ 8,003.0 $ 3,336.9 $ 1,424.4 $ 6,840.4 Loss and LAE reserves 1,162.7 166.4 212.0 687.8 177.0 157.0 Ending surplus (deficit) $ 1,813.6 $ 1,263.4 $ 2,971.8 $ 1,809.3 $ 1,121.2 $ 2,605.4 Policy Data Policies in-force 974,535 8,259 457,318 1,114,625 7,738 464,691 927,859 8,128 450,489 Polices serviced 1,049,722 8,259 462,419 1,124,978 7,738 468,006 947,212 8,128 453,804 Key Underwriting Ratios Loss Ratio 56% 23% 14% 58% 22% 12% 59% 23% 17% LAE Ratio 13% 6% 6% 10% 5% 4% 11% 4% 4% Expense Ratio (based on DWP) 16% 19% 17% 15% 19% 16% 14% 17% 15% Combined Ratio 85% 48% 37% 83% 46% 32% 84% 44% 36%

Consolidated Financial Statements

3 Statement of admitted assets, liabilities and accumulated surplus - statutory basis (unaudited) June 30, 2012 Consolidated PLA CLA COASTAL Assets Cash and invested assets $ 15,122,910,770 $ 5,366,628,251 $ 1,753,287,695 $ 8,002,994,824 Premium receivable, net 206,965,793 110,368,437 8,304,818 88,292,538 Due from takeout companies 4,683,356 4,330,864-352,492 Reinsurance recoverable 5,397,306 5,155,995-241,311 Edp equipment, net 3,444,351 3,444,351 - - Accrued investment income 76,790,969 15,469,261 5,959,954 55,361,754 Other assets 160,533 154,882-5,651 Due from investment broker 27,146,172 18,132,068 4,994,776 4,019,328 Inter-account receivable (payable) 70,628 133,024,745 (23,911,757) (109,042,360) Assessment receivables 403,541,302 (1,334,830) 4,489,316 400,386,816 Total assets $ 15,851,111,180 $ 5,655,374,024 $ 1,753,124,802 $ 8,442,612,354 Liabilities Loss reserves $ 1,258,771,702 $ 955,102,536 $ 137,347,926 $ 166,321,240 Loss expense reserves 282,248,505 207,553,672 29,035,460 45,659,373 Unearned premiums, net 923,153,544 712,182,120 73,986,887 136,984,537 Unearned assessment income 100,474,169 - - 100,474,169 Reinsurance premiums payable 796,586,422 190,000,000 40,000,000 566,586,422 Funds held under reinsurance treaties 3,000 - - 3,000 Provision for reinsurance 2,664,060 2,414,673-249,387 Advance premiums & suspended cash 152,853,049 78,939,405 9,253,865 64,659,779 Notes payable 5,934,552,444 1,449,416,822 173,306,893 4,311,828,729 Interest payable 26,065,391 1,552,293 185,608 24,327,490 Taxes and fees payable 1,215,045 889,014 175,500 150,531 Due to investment broker 193,857,554 156,941,692 21,152,098 15,763,764 Other liabilities 129,902,487 86,801,215 5,305,078 37,796,194 Total liabilities $ 9,802,347,372 3,841,793,442 489,749,315 5,470,804,615 Accumulated surplus Beginning surplus (deficit) 5,728,265,418 1,741,434,586 1,211,972,436 2,774,858,396 Restricted surplus 17,197,124 - - 17,197,124 Change in non-admitted assets (129,312,216) (39,568,787) (6,622,397) (83,121,032) Change in provision for reinsurance - - - - Change in net unrealized capital - - - - Change in other (801,340) - - (801,340) Net income 433,414,822 111,714,783 58,025,448 263,674,591 Ending surplus (deficit) 6,048,763,808 1,813,580,582 1,263,375,487 2,971,807,739 Total liabilities & surplus (deficit) $ 15,851,111,180 $ 5,655,374,024 $ 1,753,124,802 $ 8,442,612,354

4 Statement of operations - statutory basis (unaudited) As of June 30, 2012 Consolidated PLA CLA COASTAL Net earned premiums: Direct earned premiums $ 1,560,644,606 $ 859,348,077 $ 100,255,447 $ 601,041,082 Ceded earned premiums (179,708,539) (72,031,077) (6,666,667) (101,010,795) Net earned premiums 1,380,936,067 787,317,000 93,588,780 500,030,287 Underwriting expense: Losses incurred $ 534,911,468 $ 442,140,261 $ 21,777,137 $ 70,994,070 Loss adjustment expense incurred 137,811,881 104,247,320 5,994,271 27,570,290 Producer commissions 143,498,145 67,375,389 12,909,576 63,213,180 Ceded commissions 4,388,438 3,815,781-572,657 Taxes and assessments 33,430,858 18,472,487 2,314,692 12,643,679 Administrative and other underwriting 107,286,311 61,168,466 5,814,449 40,303,396 Total underwriting expenses 961,327,101 697,219,704 48,810,125 215,297,272 Net underwriting income $ 419,608,966 $ 90,097,296 $ 44,778,655 $ 284,733,015 Other income (expense) Investment income $ 92,262,683 $ 27,390,744 $ 14,009,236 $ 50,862,703 Interest expense (90,783,716) (1,009,099) (120,658) (89,653,959) Financing costs (8,405,108) (7,507,443) (897,665) - Takeout bonuses 43,103 43,103 - - Assessment income 16,239,042 - - 16,239,042 Other income and expense 4,449,852 2,700,182 255,880 1,493,790 Total other income (expense) 13,805,856 21,617,487 13,246,793 (21,058,424) Net income (loss) $ 433,414,822 $ 111,714,783 $ 58,025,448 $ 263,674,591

Comparative Financial Statements

5 Statutory statements of admitted assets, liabilities and accumulated surplus - comparative (unaudited) Consolidated PLA / CLA / COASTAL June 30, 2012 December 31, 2011 Variance Assets Cash and invested assets $ 15,122,910,770 $ 12,670,596,653 19% Premium receivable, net 206,965,793 181,017,669 14% Due from takeout companies 4,683,356 874,391 436% Reinsurance recoverable 5,397,306 3,130,295 72% Edp equipment, net 3,444,351 2,028,919 70% Accrued investment income 76,790,969 72,830,920 5% Other assets 160,533 2,401,235-93% Due from investment broker 27,146,172-100% Inter-account receivable (payable) 70,628 52,582 34% Assessment receivables 403,541,302 481,302,301-16% Total assets $ 15,851,111,180 $ 13,414,234,965 18% Liabilities Loss reserves $ 1,258,771,702 $ 1,093,917,314 15% Loss expense reserves 282,248,505 252,652,533 12% Unearned premiums, net 923,153,544 1,411,230,633-35% Unearned assessment income 100,474,169 116,713,211-14% Reinsurance premiums payable 796,586,422 55,683,887 1331% Funds held under reinsurance treaties 3,000 3,548-15% Provision for reinsurance 2,664,060 2,664,060 0% Advance premiums & suspended cash 152,853,049 99,291,432 54% Notes payable 5,934,552,444 4,643,315,600 28% Interest payable 26,065,391 27,479,242-5% Taxes and fees payable 1,215,045 6,477,051-81% Due to investment broker 193,857,554 1,380,677 13941% Other liabilities 129,902,487 115,284,562 13% Total liabilities 9,802,347,372 7,826,093,750 25% Accumulated surplus Beginning surplus (deficit) 5,728,265,418 5,089,807,822 13% Restricted surplus 17,197,124 11,726,079 47% Change in non-admitted assets (129,312,216) 35,023,773-469% Change in provision for reinsurance - 3,000,563-100% Change in net unrealized capital - - 0% Change in other (801,340) (118,148) -578% Net Income 433,414,822 448,701,126-3% Ending surplus (deficit) 6,048,763,808 5,588,141,215 8% Total liabilities & surplus (deficit) $ 15,851,111,180 $ 13,414,234,965 18%

6 Statutory statement of operations - comparative (unaudited) PLA / CLA / COASTAL Year to Date June 30, 2012 June 30, 2011 Variance Net earned premiums: Direct earned premiums $ 1,560,644,606 $ 1,347,547,564 16% Ceded earned premiums (179,708,539) (103,186,141) -74% Net earned premiums 1,380,936,067 1,244,361,423 11% Underwriting expense: Losses incurred 534,911,468 490,222,338 9% Loss adjustment expense incurred 137,811,881 95,895,812 44% Producer commissions 143,498,145 135,998,497 6% Ceded commissions 4,388,438 (2,145,077) 305% Taxes and assessments 33,430,858 31,856,966 5% Administrative and other underwriting 107,286,311 74,367,378 44% Total underwriting expenses 961,327,101 826,195,914 16% Net underwriting income 419,608,966 418,165,509 0% Other income (expense) Investment income 92,262,683 57,823,664 60% Interest expense (90,783,716) (82,088,608) -11% Financing costs (8,405,108) - -100% Takeout bonuses 43,103 1,908,432-98% Assessment income 16,239,042 17,260,278-6% Other income and expense 4,449,852 4,399,995 1% Total other income (expense) 13,805,856 (696,239) 2083% Net income (loss) $ 433,414,822 $ 417,469,270 4%

7 Statutory statement of operations - comparative (unaudited) Year to Date PLA June 30, 2012 June 30, 2011 Variance Net earned premiums: Direct earned premiums $ 859,348,077 $ 687,094,540 25% Ceded earned premiums (72,031,077) (36,533,853) -97% Net earned premiums 787,317,000 650,560,687 21% Underwriting expense: Losses incurred 442,140,261 383,072,753 15% Loss adjustment expense incurred 104,247,320 71,123,369 47% Producer commissions 67,375,389 62,838,423 7% Ceded commissions 3,815,781 (1,785,383) 314% Taxes and assessments 18,472,487 17,036,223 8% Administrative and other underwriting 61,168,466 42,302,387 45% Total underwriting expenses 697,219,704 574,587,772 21% Net underwriting income (loss) 90,097,296 75,972,915 19% Other income (expense) Investment income 27,390,744 16,599,727 65% Interest expense (1,009,099) - -100% Financing costs (7,507,443) - -100% Take-out bonuses 43,103 1,908,432-98% Assessment income - - 0% Other income and expense 2,700,182 2,615,390 3% Total other income (expense) 21,617,487 21,123,549 2% Net income (loss) $ 111,714,783 $ 97,096,464 15%

8 Statutory statement of operations - comparative (unaudited) Year to Date CLA June 30, 2012 June 30, 2011 Variance Net earned premiums: Direct earned premiums $ 100,255,447 $ 101,097,308-1% Ceded earned premiums (6,666,667) (5,340,713) -25% Net earned premiums 93,588,780 95,756,595-2% Underwriting expense: Losses incurred 21,777,137 21,982,269-1% Loss adjustment expense incurred 5,994,271 3,486,401 72% Producer commissions 12,909,576 12,934,802 0% Ceded commissions - - 0% Taxes and assessments 2,314,692 2,284,536 1% Administrative and other underwriting 5,814,449 4,412,185 32% Total underwriting expenses 48,810,125 45,100,193 8% Net underwriting income (loss) 44,778,655 50,656,402-12% Other income (expense) Investment income 14,009,236 8,255,588 70% Interest expense (120,658) - -100% Financing costs (897,665) - -100% Take-out bonuses - - 0% Assessment income - - 0% Other income and expense 255,880 360,412-29% Total other income (expense) 13,246,793 8,616,000 54% Net income (loss) $ 58,025,448 $ 59,272,402-2%

9 Statutory statement of operations - comparative (unaudited) Year to Date COASTAL June 30, 2012 June 30, 2011 Variance Net earned premiums: Direct earned premiums $ 601,041,082 $ 559,355,716 7% Ceded earned premiums (101,010,795) (61,311,575) -65% Net earned premiums 500,030,287 498,044,141 0% Underwriting expense: Losses incurred 70,994,070 85,167,316-17% Loss adjustment expense incurred 27,570,290 21,286,042 30% Producer commissions 63,213,180 60,225,272 5% Ceded commissions 572,657 (359,694) 259% Taxes and assessments 12,643,679 12,536,207 1% Administrative and other underwriting 40,303,396 27,652,806 46% Total underwriting expenses 215,297,272 206,507,949 4% Net underwriting income (loss) 284,733,015 291,536,192-2% Other income (expense) Investment income 50,862,703 32,968,349 54% Interest expense (89,653,959) (82,088,608) -9% Financing costs - - 0% Take-out bonuses - - 0% Assessment income 16,239,042 17,260,278-6% Other income and expense 1,493,790 1,424,193 5% Total other income (expense) (21,058,424) (30,435,788) 31% Net income (loss) $ 263,674,591 $ 261,100,404 1%

10 Statutory comparative administrative and other expenses (unaudited) Year to Date All departments June 30, 2012 June 30, 2011 Variance Salaries $ 39,829,585 $ 37,959,763 5% Employee benefits 8,154,810 7,558,778 8% Payroll taxes 3,306,506 2,914,112 13% Temporary services 4,386,657 1,593,655 175% Other underwriting fees 18,656,330 4,938,004 278% Other processing fees 735,486 723,954 2% Training 383,325 301,466 27% Recruiting 230,450 166,877 38% Printing 49,627 77,478-36% Office supplies 1,273,681 463,427 175% Subscriptions & dues 546,280 452,492 21% Postage 4,151,826 2,742,345 51% Telecommunications 2,056,488 1,813,730 13% Legal 194,400 (348,313) 156% Insurance 275,446 324,957-15% Travel & meals 915,271 675,094 36% Servicing carrier fees 5,072,129 4,888,650 4% Professional consulting 17,596,343 7,501,398 135% Miscellaneous 83,779 (23,333) 459% Rent - facilities 3,657,904 3,134,504 17% Rent - ofc equip & furn 237,187 228,776 4% Depreciation 1,860,611 2,654,250-30% Producer fees collected (299,651) (304,164) 1% Maintenance & repairs 1,012,184 887,201 14% Bank charges 163,614 179,358-9% Software maint & licensing 6,877,035 4,205,469 64% FMAP funding (138,276) (137,428) -1% ULAE expense allocation (13,982,716) (11,205,122) -25% Total admin and other $ 107,286,311 $ 74,367,378 44% Capital acquisitions $ 3,921,722 $ 684,207 473% Total expenditures $ 111,208,033 $ 75,051,585 48% Employee count 1,191 1,163 2%

Budgetary Analysis

11 Statement of operations - statutory basis (unaudited) Month ended June 30, 2012 PLA / CLA / COASTAL Actual Year to Date Budget Favorable (Unfavorable) Net earned premiums: Direct earned premiums $ 1,560,644,606 $ 1,627,241,979-4% Ceded earned premiums (179,708,539) (135,694,025) -32% Net earned premiums 1,380,936,067 1,491,547,954-7% Underwriting expense: Losses incurred 534,911,468 563,873,158 5% Loss adjustment expense incurred 137,811,881 108,294,092-27% Producer commissions 143,498,145 155,641,179 8% Ceded commissions 4,388,438 - -100% Taxes and assessments 33,430,858 29,116,766-15% Administrative and other underwriting 107,286,311 112,409,020 5% Total underwriting expenses 961,327,101 969,334,215 1% Net underwriting income (loss) 419,608,966 522,213,739-20% Other income (expense) Investment income 92,262,683 58,216,539 58% Interest expense (90,783,716) (90,370,946) 0% Financing costs (8,405,108) - -100% Take-out bonuses 43,103-100% Assessment income 16,239,042 15,830,997 3% Other income and expense 4,449,852 3,761,521 18% Total other income (expense) 13,805,856 (12,561,889) 210% Net income (loss) $ 433,414,822 $ 509,651,850-15%

12 Statutory statement of operations - budget to actual (unaudited) Month ended June 30, 2012 PLA Actual Year to Date Budget Favorable (Unfavorable) Net earned premiums: Direct earned premiums $ 859,348,077 $ 852,675,088 1% Ceded earned premiums (72,031,077) (36,522,898) -97% Net earned premiums 787,317,000 816,152,190-4% Underwriting expense: Losses incurred 442,140,261 474,087,349 7% Loss adjustment expense incurred 104,247,320 82,491,199-26% Producer commissions 67,375,389 75,119,304 10% Ceded commissions 3,815,781 - -100% Taxes and assessments 18,472,487 16,706,313-11% Administrative and other underwriting 61,168,466 64,215,626 5% Total underwriting expenses 697,219,704 712,619,791 2% Net underwriting income (loss) 90,097,296 103,532,399-13% Other income (expense) Investment income 27,390,744 17,615,763 55% Interest expense (1,009,099) - -100% Financing costs (7,507,443) - -100% Take-out bonuses 43,103-100% Assessment income - - 0% Other income and expense 2,700,182 2,076,890 30% Total other income (expense) 21,617,487 19,692,653 10% Net income (loss) $ 111,714,783 $ 123,225,052-9%

13 Statutory statement of operations - budget to actual (unaudited) Month ended June 30, 2012 Year to Date CLA Actual Budget Favorable (Unfavorable) Net earned premiums: Direct earned premiums $ 100,255,447 $ 123,291,181-19% Ceded earned premiums (6,666,667) (10,000,000) 33% Net earned premiums 93,588,780 113,291,181-17% Underwriting expense: Losses incurred 21,777,137 24,658,237 12% Loss adjustment expense incurred 5,994,271 5,730,576-5% Producer commissions 12,909,576 13,384,372 4% Ceded commissions - - 0% Taxes and assessments 2,314,692 1,966,025-18% Administrative and other underwriting 5,814,449 6,247,623 7% Total underwriting expenses 48,810,125 51,986,833 6% Net underwriting income (loss) 44,778,655 61,304,348-27% Other income (expense) Investment income 14,009,236 7,987,606 75% Interest expense (120,658) - -100% Financing costs (897,665) - -100% Take-out bonuses - - 0% Assessment income - - 0% Other income and expense 255,880 231,795 10% Total other income (expense) 13,246,793 8,219,401 61% Net income (loss) $ 58,025,448 $ 69,523,749-17%

14 Statutory statement of operations - budget to actual (unaudited) Month ended June 30, 2012 Year to Date COASTAL Actual Budget Favorable (Unfavorable) Net earned premiums: Direct earned premiums $ 601,041,082 $ 651,275,710-8% Ceded earned premiums (101,010,795) (89,171,127) -13% Net earned premiums 500,030,287 562,104,583-11% Underwriting expense: Losses incurred 70,994,070 65,127,572-9% Loss adjustment expense incurred 27,570,290 20,072,317-37% Producer commissions 63,213,180 67,137,503 6% Ceded commissions 572,657 - -100% Taxes and assessments 12,643,679 10,444,428-21% Administrative and other underwriting 40,303,396 41,945,771 4% Total underwriting expenses 215,297,272 204,727,591-5% Net underwriting income (loss) 284,733,015 357,376,992-20% Other income (expense) Investment income 50,862,703 32,613,170 56% Interest expense (89,653,959) (90,370,946) 1% Financing costs - - 0% Take-out bonuses - - 0% Assessment income 16,239,042 15,830,997 3% Other income and expense 1,493,790 1,452,836 3% Total other income (expense) (21,058,424) (40,473,943) 48% Net income (loss) $ 263,674,591 $ 316,903,049-17%

15 Administrative and other expenses - statutory basis (unaudited) Month ended June 30, 2012 Actual Year to Date Budget Favorable (Unfavorable) Salaries $ 39,829,585 $ 40,681,102 2% Employee benefits 8,154,810 8,127,893 0% Payroll taxes 3,306,506 2,842,414-16% Temporary services 4,386,657 3,817,830-15% Other underwriting fees 18,656,330 15,986,477-17% Other processing fees 735,486 751,872 2% Training 383,325 816,894 53% Recruiting 230,450 95,200-142% Printing 49,627 101,736 51% Office supplies 1,273,681 877,916-45% Subscriptions & dues 546,280 450,299-21% Postage 4,151,826 3,245,343-28% Telecommunications 2,056,488 2,002,789-3% Legal 194,400 375,000 48% Insurance 275,446 326,800 16% Travel & meals 915,271 1,750,086 48% Servicing carrier fees 5,072,129 7,882,383 36% Professional consulting 17,596,343 22,047,583 20% Miscellaneous 83,779 33,529-150% Rent - facilities 3,657,904 3,968,795 8% Rent - ofc equip & furn 237,187 294,763 20% Depreciation 1,860,611 2,145,793 13% Producer fees collected (299,651) (449,820) -33% Maintenance & repairs 1,012,184 1,464,861 31% Bank charges 163,614 192,000 15% Software maint & licensing 6,877,035 7,076,832 3% FMAP funding (138,276) (128,475) 8% ULAE expense allocation (13,982,716) (14,368,875) -3% Total admin and other $ 107,286,311 $ 112,409,020 5% Capital acquisitions $ 3,921,722 $ 7,864,595 50% Total expenditures $ 111,208,033 $ 120,273,615 8% Employee count 1,191 1,321 10%

GAAP Financials

16 GAAP Consolidated statement of net assets (unaudited) June 30, 2012 Consolidated PLA CLA COASTAL Assets Cash and investments $ 15,363,931,559 $ 5,416,643,440 $ 1,776,034,559 $ 8,171,253,560 Premium receivable, net 206,965,793 110,368,438 8,304,817 88,292,538 Due from takeout companies 4,683,357 4,330,864-352,493 Reinsurance recoverables 5,397,306 5,155,995-241,311 Accrued investment income 76,790,969 15,469,261 5,959,954 55,361,754 Prepaid reinsurance premiums 714,637,623 194,858,492 33,333,333 486,445,798 Deferred policy acquisition costs 173,702,258 88,111,128 14,125,421 71,465,709 Deferred takeout bonus - - - - Deferred financing costs 103,378,642 7,320,916 875,363 95,182,363 Fixed assets, net 10,895,037 10,895,037 - - Other assets 7,809,071 7,803,420-5,651 Due from investment broker 27,146,172 18,132,068 4,994,776 4,019,328 Inter-account receivable (payable) 70,628 133,024,745 (23,911,757) (109,042,360) Assessment receivables 403,541,302 (1,334,830) 4,489,316 400,386,816 Total assets $ 17,098,949,717 $ 6,010,778,974 $ 1,824,205,782 $ 9,263,964,961 Liabilities Loss reserves $ 1,258,771,702 $ 955,102,536 $ 137,347,926 $ 166,321,240 Loss expense reserves 282,248,505 207,553,672 29,035,460 45,659,373 Direct unearned premiums 1,637,791,167 907,040,613 107,320,220 623,430,334 Unearned assessment income 131,519,558 - - 131,519,558 Reinsurance premiums payable 796,586,422 190,000,000 40,000,000 566,586,422 Funds held under reinsurance treaties 3,000 - - 3,000 Advance premiums & suspended cash 152,853,049 78,939,405 9,253,865 64,659,779 Notes payable 5,934,552,444 1,449,416,822 173,306,893 4,311,828,729 Interest payable 26,065,391 1,552,293 185,608 24,327,490 Taxes and fees payable 1,215,045 889,014 175,500 150,531 Due to investment broker 193,857,554 156,941,692 21,152,098 15,763,764 Other liabilities 129,902,487 86,801,215 5,305,078 37,796,194 Total liabilities 10,545,366,324 4,034,237,262 523,082,648 5,988,046,414 Net assets Invested in capital assets 10,895,037 10,895,037 - - Restricted 17,197,124 - - 17,197,124 Unrestricted 6,525,491,232 1,965,646,675 1,301,123,134 3,258,721,423 Total net assets 6,553,583,393 1,976,541,712 1,301,123,134 3,275,918,547 Total liabilities and net assets $ 17,098,949,717 $ 6,010,778,974 $ 1,824,205,782 $ 9,263,964,961

17 GAAP consolidated statement of revenues, expenses and change in net assets (unaudited) As of June 30, 2012 Consolidated PLA CLA COASTAL Operating revenue: Premiums earned $ 1,380,936,067 $ 787,317,000 $ 93,588,780 $ 500,030,287 Operating expenses: Losses incurred 534,911,468 442,140,261 21,777,137 70,994,070 Loss adjustment expense incurred 137,811,881 104,247,320 5,994,271 27,570,290 Producer commissions, net 130,021,267 63,778,066 11,448,666 54,794,535 Taxes and assessments 30,396,732 17,183,704 2,080,896 11,132,132 Administrative and other underwriting 99,430,662 56,879,923 5,936,893 36,613,846 Total operating expenses 932,572,010 684,229,274 47,237,863 201,104,873 Operating income 448,364,057 103,087,726 46,350,917 298,925,414 Non-operating revenues (expenses): Investments income 143,648,708 38,848,407 18,884,473 85,915,828 Interest expense (99,144,230) (1,009,099) (120,658) (98,014,473) Financing costs (3,245,974) (186,527) (22,302) (3,037,145) Takeout bonuses 43,103 43,103 - - Assessment Income 25,070,190 - - 25,070,190 Other income and expense 4,055,129 2,449,433 429,408 1,176,288 Total non-operating revenues 70,426,926 40,145,317 19,170,921 11,110,688 Gain from operations 518,790,983 143,233,043 65,521,838 310,036,102 Federal income tax benefit - - - - Change in net assets $ 518,790,983 $ 143,233,043 $ 65,521,838 $ 310,036,102

18 Reconciliation of STAT to GAAP (unaudited) As of June 30, 2012 Consolidated PLA CLA COASTAL Net income - Statutory Basis $ 433,414,822 $ 111,714,783 $ 58,025,448 $ 263,674,591 Adjustments: Change in deferred policy acquisition costs 28,755,093 12,990,431 1,572,262 14,192,400 Change in deferred financing costs (3,201,381) 7,320,916 875,363 (11,397,660) Change in deferred takeout bonuses - - - - Change in allowance for doubtful accounts (394,724) (250,750) 173,528 (317,502) Change in unearned assessment income 8,831,148 - - 8,831,148 Change in unrealized gain (loss) on investments 51,386,025 11,457,663 4,875,237 35,053,125 Change in net assets - GAAP $ 518,790,983 $ 143,233,043 $ 65,521,838 $ 310,036,102 Consolidated PLA CLA COASTAL Accumulated surplus - Statutory Basis $ 6,048,763,808 $ 1,813,580,582 $ 1,263,375,487 $ 2,971,807,739 Adjustments: Deferred policy acquisition costs 173,702,258 88,111,128 14,125,421 71,465,709 Deferred financing costs 103,378,642 7,320,916 875,363 95,182,363 Deferred takeout bonuses - - - - Unrealized gain (loss) on investments 136,276,345 32,061,558 16,326,501 87,888,286 Statutory non-admitted assets other than premium 119,843,669 33,052,855 6,420,362 80,370,452 Unrealized assessment income change (31,045,389) - - (31,045,389) Statutory provision for reinsurance-sch F penalty 2,664,060 2,414,673-249,387 Total net assets - GAAP $ 6,553,583,393 $ 1,976,541,712 $ 1,301,123,134 $ 3,275,918,547

19 Adjusted GAAP total net assets per 16(L) of the Plan of Operations (unaudited)* As of June 30, 2012 Consolidated PLA CLA COASTAL GAAP total net assets $ 6,553,583,393 $ 1,976,541,712 $ 1,301,123,134 $ 3,275,918,547 Deferred takeout bonus - - - - Deferred financing costs (103,378,642) (7,320,916) (875,363) (95,182,363) Net assets related to pre-event notes (75,647,900) (67,568,705) (8,079,195) - Restricted cash - FSLSO (17,197,124) - - (17,197,124) Adjusted GAAP total net assets $ 6,357,359,727 $ 1,901,652,091 $ 1,292,168,576 $ 3,163,539,060 * GAAP for purposes of assessment calulation