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StoneCastle Financial Corp. Reports Fourth Quarter 2016 Results

February 28, 2017 at 4:10 PM EST

StoneCastle Financial Corp. Reports Fourth Quarter 2016 Results

NEW YORK, Feb. 28, 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 fourth fiscal quarter ended December 31, 2016. 

Fourth Quarter 2016 Investment Highlights:

  • Invested $23.2 million in 5 investments

  • Received repayment of $3.6 million from 1 investment

Investment Activity in the Fourth Quarter 2016 Included:

  • $13.0 million in Baraboo Bancorporation Inc., Senior Term Loan, Fixed Rate 10.50%, December 28, 2026   
     
  • $5.0 million in Midwest Regional Bank, Subordinated Term Loan, Fixed Rate 8.625%, January 1, 2027

  • $3.0 million in Halbur Bancshares, Inc., Subordinated Term Loan, Fixed Rate 8.75%, October 1, 2026

A complete listing of investments as of the end of the quarter can be found in the 2016 annual report and on the Company's website at www.StoneCastle-Financial.com.

The estimated annualized yield generated by the invested portfolio as of December 31, 2016 (excluding cash and cash equivalents) was approximately 9.08%.

Fourth Quarter 2016 Financial Results

Net investment income was $2,518,887 or $0.39 per share, comprised of $4,213,439 in gross income and $1,694,552 of net expenses.  There were no net realized gains or losses in the quarter.

Net Assets at quarter end were $138,555,206 and the Company's Net Asset Value was $21.22 per share. 

The Company declared a fourth quarter cash distribution of $0.37 per share.  The distribution was paid on January 3, 2017 to shareholders of record at the close of business on December 22, 2016.   

The Company had $61.5 million outstanding on its $70 million credit facility at the quarter end, which represents approximately 29.9% 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 December 31, 2016, the Company had total assets of $205,938,998 consisting of total investments of $197,481,652, cash of $3,765,463 and other assets of $4,691,883.  Other assets include interest and dividends receivable of $3,890,480, and prepaid assets of $801,403.

During the quarter, the Company deployed $23.2 million in three Term Loans and two Fixed Rate Cumulative Perpetual Preferred Stock investments.  The Company received one repayment totaling $3.6 million.

Quarterly Conference Call

StoneCastle Financial will host a webcast and conference call on February 28, 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 March 14, 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 13651988. 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
   
       
    December 31, 2016 September 30, 2016
 Assets    
  Investments in securities, at fair value (cost:
$201,215,633 and $179,935,988 respectively)
 $197,481,652  $176,695,072 
  Cash (1)  3,765,463   3,517,844 
  Interest and dividends receivable  3,890,480   3,460,123 
  Prepaid assets  801,403   662,710 
  Total assets    205,938,998      184,335,749  
       
 Liabilities    
  Loan payable  61,500,000   35,250,000 
  Dividends payable  2,415,399   73,927 
  Payable for securities purchased  2,252,539   9,054,000 
  Investment advisory fee payable  790,907   810,876 
  Loan interest payable  70,325   3,810 
  Directors fee payable  13,326   14,789 
  Accrued expenses payable  341,296   257,482 
  Total liabilities    67,383,792      45,464,884  
 Net Assets $   138,555,206   $   138,870,865  
       
 Net Assets consist of:    
  Common stock at par ($0.001 per share) $6,528  $6,524 
  Paid-in-capital  144,588,229   144,514,314 
  Accumulated net investment loss  (1,625,496)  (1,728,983)
  Accumulated net realized loss on investments  (680,074)  (680,074)
  Net unrealized depreciation on investments  (3,733,981)  (3,240,916)
  Net Assets $   138,555,206   $   138,870,865  
       
 Net Asset Value Per Share:    
 Common Stock Shares Outstanding  6,528,105    6,524,012  
 Net asset value per common share $   21.22   $   21.29  
 Market price per share $   18.69   $   18.67  
 Market price discount to net asset value per share  -11.92%  -12.31%
       
 (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  
   
             
         For The Year
Ended
December 31,
 
2016
 For the Three
Months Ended
December 31,
2016
 
 Investment Income         
  Interest      $10,899,369  $2,907,104  
  Dividends       5,690,604   1,151,098  
  Origination fee income      138,954   61,737  
  Other Income      306,013   93,500  
  Total Investment Income       17,034,940      4,213,439   
             
 Expenses          
  Investment advisory fees     3,416,253   905,907  
  Interest expense      1,777,067   483,078  
  Transfer agent, custodian fees and administrator fees   289,342   79,889  
  Professional fees      257,613   23,024  
  ABA marketing and licensing fees     250,000   61,568  
  Bank fees       214,834   55,083  
  Directors' fees      168,058   42,020  
  Investor relations fees      121,330   28,240  
  Insurance expense      90,000   22,641  
  Printing       75,000   2,082  
  Valuation fees      63,012   20,854  
  Due diligence expense      63,000   38,000  
  Miscellaneous fees (proxy, printing, rating agency, etc.)  189,186   47,166  
  Total expenses before waiver       6,974,695      1,809,552   
  Less: Advisory fee waiver       (115,000)    (115,000) 
  Net expenses after waiver       6,859,695      1,694,552   
  Net Investment Income     $   10,175,245   $   2,518,887   
             
 Realized and Unrealized Gain / (Loss) on Investments      
  Net realized gain on investments    $327,807  $-  
  Net change in unrealized  depreciation  on investments  (3,489,006)  (493,066) 
  Net realized and unrealized gain / (loss) on investments   (3,161,199)  (493,066) 
  Net Increase in Net Assets Resulting From Operations  $   7,014,046   $   2,025,821   
             

 

 STONECASTLE FINANCIAL CORP. 
 Financial Highlights  
     
     
   For The Three Months
Ended December 31, 2016
 
 Per Share Operating Performance   
 Net Asset Value, beginning of period  $   21.29   
 Net investment income(1)  0.39  
 Net realized and unrealized loss on investments(1)  (0.09) 
 Total from investment operations    0.30   
     
 Less distributions to shareholders   
 From net investment income  (0.37) 
 Total distributions     (0.37) 
     
 Net asset value, end of period $   21.22   
 Per share market value, end of period $18.69  
     
 Total Investment Return (2)   
 Based on market value   2.14% 
 Based on net asset value  2.71% 
     
 Ratios and Supplemental Data   
 Net assets, end of period (in millions) $   138.6   
     
 Ratios (as a percentage to average net assets):   
 Expenses before waivers(3)(4)*  5.19% 
 Expenses after waivers(5)*  4.86% 
 Net investment income(6)*  7.22% 
 Portfolio turnover rate **  1% 
     
 Revolving Credit Agreement   
 Total revolving credit agreement outstanding (000's) $61,500  
 Asset coverage per $1,000 for revolving credit agreement(7)  3,253  
     
(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 3.80%.   
(4)Ratio of expenses before waivers to average managed assets equals 3.69%.   
(5)Ratio of expenses after waivers to average managed assets equals 3.45%.   
(6)Ratio of net investment income to average managed assets equals 5.14%.   
(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   
     

Investor Contact:
Julie Muraco
347-887-0324