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StoneCastle Financial Corp. Reports First Quarter 2017 Results

May 4, 2017 at 4:10 PM EDT

StoneCastle Financial Corp. Reports First Quarter 2017 Results

NEW YORK, May 04, 2017 (GLOBE NEWSWIRE) -- StoneCastle Financial Corp. (Nasdaq:BANX) ("StoneCastle Financial" or the "Company"), an investment company registered with the Securities and Exchange Commission ("SEC"), today announced results for the first fiscal quarter ended March 31, 2017.  

First Quarter 2017 Investment Highlights:

  • Invested $3.8 million in one investment  
  • Received full call proceeds of $7.0 million from three investments
  • Received partial calls and pay downs of $5.5 million from seven investments
  • Received sales proceeds of $1.9 million from one investment

A complete listing of investments as of the end of the quarter can be found on the Company's website at www.StoneCastle-Financial.com.

The estimated annualized yield generated by the invested portfolio as of March 31, 2017 (excluding cash and cash equivalents) was approximately 9.17%, up from 9.08% the prior quarter and up from 8.98%, year over year.

First Quarter 2017 Financial Results

Total earnings for the first quarter were $2,960,844 or $0.45 per share.  Net investment income was $2,569,348 or $0.39 per share, comprised of $4,518,875 in gross income and $1,949,527 of expenses.  Realized capital gains were $391,496 or $0.06 for the quarter.

Net Assets at quarter end were $139,347,934 and the Company's Net Asset Value was $21.32 per share.  

The Company declared a first quarter cash distribution of $0.37 per share.  The distribution was paid on March 29, 2017 to shareholders of record at the close of business on March 22, 2017.  

The Company had $52.75 million outstanding on its $70 million credit facility at the quarter end, which represents approximately 27.3% of total assets.  According to regulated investment company rules, the Company may borrow only up to 33.3% of its total assets.

Portfolio and Investment Summary 

As of the close of business on March 31, 2017, the Company had total assets of $193,388,769 consisting of total investments of $186,237,472, cash of $3,605,587 and other assets of $3,545,710.  Other assets include interest and dividends receivable of $2,822,970 and prepaid assets of $722,740.

During the quarter, the Company deployed $3,750,000 in one investment, Reliance Bancshares, 9% Fixed Rate Cumulative Perpetual Preferred Stock.  The Company received three full calls of $7,046,065 and seven partial calls or pay downs of $5,406,218.  The Company sold one investment, Pioneer Bancshares, Inc. Common Stock for $1,943,857, resulting in a capital gain of $442,657. 

Quarterly Conference Call

StoneCastle Financial will host a webcast and conference call on May 4, 2017 at 5:00 pm Eastern time.

The conference call can be accessed by dialing 1-877-407-9039 for domestic callers or 1-201-689-8470 for international callers. Participants may also access the call via live webcast by visiting StoneCastle Financial's investor relations website at www.stonecastle-financial.com. To listen to a live broadcast, go to the website at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. A replay will be available shortly after the call and be available through midnight (Eastern Time) on May 18, 2017. The replay can be accessed by dialing 1-844-512-2921 for domestic callers or 1-412-317-6671 for international callers. The passcode for the replay is 13659842. The archive of the webcast will be available on the Company's website for a limited time.

About StoneCastle Financial Corp.

StoneCastle Financial is an SEC registered non-diversified, closed-end management investment company listed on the NASDAQ Global Select Market under the symbol "BANX." StoneCastle Financial intends to make long-term, passive, non-control investments in community banks seeking capital for organic growth, acquisitions, share repurchases and other refinancing activities. Its investment objective is to provide current income and, to a lesser extent, capital appreciation. StoneCastle Financial is managed by StoneCastle Asset Management LLC.

Disclaimer and Risk Factors:

There is no assurance that StoneCastle Financial will achieve its investment objective. StoneCastle Financial is subject to numerous risks, including investment and market risks, management risk, income and interest rate risks, banking industry risks, preferred stock risk, convertible securities risk, debt securities risk, liquidity risk, valuation risk, leverage risk, non-diversification risk, credit and counterparty risks, market at a discount from net asset value risk and market disruption risk. Shares of closed-end investment companies may trade above (a premium) or below (a discount) their net asset value. Shares of StoneCastle Financial may not be appropriate for all investors. Investors should review and consider carefully StoneCastle Financial's investment objective, risks, charges and expenses. Past performance does not guarantee future results. Learn more at www.stonecastle-financial.com.

The Annual Report, Semi-Annual Report and other regulatory filings of the Company with the SEC are accessible on the SEC's website at www.sec.gov and on the Company's website at www.stonecastle-financial.com, and may discuss these or other factors that affect the Company.


STONECASTLE FINANCIAL CORP.
Statement of Assets and Liabilities (unaudited)
  
       
   March 31, 2017  December 31, 2016
Assets     
 Investments in securities, at fair value (cost: $189,866,948 and $201,215,633 respectively) $186,237,472   $197,481,652 
 Cash (1)  3,605,587    3,765,463 
 Interest and dividends receivable  2,822,970    3,890,480 
 Prepaid assets  722,740    801,403 
 Total assets    193,388,769       205,938,998  
       
Liabilities     
 Loan payable  52,750,000    61,500,000 
 Dividends payable  -    2,415,399 
 Payable for securities purchased  -    2,252,539 
 Investment advisory fee payable  949,243    790,907 
 Loan interest payable  41,028    70,325 
 Directors fee payable  12,630    13,326 
 Accrued expenses payable  287,934    341,296 
 Total liabilities    54,040,835       67,383,792  
Net Assets $   139,347,934    $   138,555,206  
       
Net Assets consist of:     
 Common stock at par ($0.001 per share) $6,536   $6,528 
 Paid-in-capital  144,732,513    144,588,229 
 Accumulated net investment loss  (1,473,061)   (1,625,496)
 Accumulated net realized loss on investments  (288,578)   (680,074)
 Net unrealized depreciation on investments  (3,629,476)   (3,733,981)
 Net Assets $   139,347,934    $   138,555,206  
       
       
Net Asset Value Per Share:     
Common Stock Shares Outstanding  6,535,847     6,528,105  
Net asset value per common share $   21.32    $   21.22  
Market price per share $   20.16    $   18.69  
Market price discount to net asset value per share  -5.44%   -11.92%
       
(1) Includes $3,500,000 of restricted cash held in a segregated account at Texas Capital Bank to cover collateral requirements.
       

 

STONECASTLE FINANCIAL CORP.
Statement of Operations (unaudited)
    
            
        For The Three
Months Ended
March 31,
 
2017
  For The Three
Months Ended
December 31,
 
2016
Investment Income         
 Interest      $3,254,934  $2,907,104 
 Dividends       1,185,283   1,151,098 
 Origination fee income      16,158   61,737 
 Other Income      62,500   93,500 
 Total Investment Income       4,518,875      4,213,439  
            
Expenses          
 Investment advisory fees     949,243(1) 905,907 
 Interest expense      549,620   483,078 
 Transfer agent, custodian fees and administrator fees   73,794   79,889 
 ABA marketing and licensing fees     60,810   61,568 
 Bank fees       55,263   55,083 
 Directors' fees      50,055   42,020 
 Professional fees      48,604   23,024 
 Investor relations fees      30,295   28,240 
 Insurance expense      22,695   22,641 
 Delaware franchise tax      22,192   23,580 
 Printing       21,613   2,082 
 Valuation fees      18,254   20,854 
 Due diligence expense      -   38,000 
 Miscellaneous fees      47,089   23,586 
 Total expenses before waiver        1,949,527      1,809,552  
 Less: Advisory fee waiver       -       (115,000)
 Net expenses after waiver       1,949,527      1,694,552  
 Net Investment Income     $   2,569,348   $   2,518,887  
            
Realized and Unrealized Gain / (Loss) on Investments      
 Net realized gain on investments    $391,496  $- 
 Net change in unrealized  depreciation  on investments  104,505   (493,066)
 Net realized and unrealized gain / (loss) on investments   496,001   (493,066)
 Net Increase in Net Assets Resulting From Operations  $   3,065,349   $   2,025,821  
            
(1)Investment advisory fee includes $115,000 related to fee previously waived in Q4 2016. 
            
            

 

 STONECASTLE FINANCIAL CORP.
 Financial Highlights (unaudited)
    
    
   For The Three Months
Ended March 31, 2017
 Per Share Operating Performance  
 Net Asset Value, beginning of period  $   21.22  
 Net investment income(1)  0.39 
 Net realized and unrealized gain on investments(1)  0.08 
 Total from investment operations    0.47  
    
 Less distributions to shareholders  
 From net investment income  (0.37)
 Total distributions     (0.37)
    
 Net asset value, end of period $   21.32  
 Per share market value, end of period $   20.16  
    
 Total Investment Return (2)  
 Based on market value   9.96%
 Based on net asset value  2.42%
    
 Ratios and Supplemental Data  
 Net assets, end of period (in millions) $   139.3  
 Ratios (as a percentage to average net assets):  
 Expenses before waivers(3)(4)*  5.69%
 Expenses after waivers(5)*  5.69%
 Net investment income(6)*  7.50%
 Portfolio turnover rate **  2%
    
 Revolving Credit Agreement  
 Total revolving credit agreement outstanding (000's) $52,750 
 Asset coverage per $1,000 for revolving credit agreement(7)  3,642 
    
(1)Based on the average shares outstanding during quarter.  
(2)Reflects reinvestment of distributions at the price obtained under the Dividend Reinvestment Plan.  
 Total return does not include sales load and offering expenses and are not annualized.  
(3)Excluding interest expense, the ratio would have been 4.09%.  
(4)Ratio of expenses before waivers to average managed assets equals 3.96%.  
(5)Ratio of expenses after waivers to average managed assets equals 3.96%.  
(6)Ratio of net investment income to average managed assets equals 5.22%.  
(7)Calculated by subtracting the Company's total liabilities (excluding the loan) from the Company's   
 total assets and dividing the amount by the loan outstanding in 000's.  
* Annualized  
**Not-annualized  
    

 

 

CONTACT: Investor Contact:

Julie Muraco

347-887-0324