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StoneCastle Financial Corp. Reports Second Quarter 2016 Results

August 11, 2016 at 4:10 PM EDT

StoneCastle Financial Corp. Reports Second Quarter 2016 Results

NEW YORK, Aug. 11, 2016 (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 second fiscal quarter ended June 30, 2016. 

Second Quarter 2016 Investment Highlights:

  • Invested $22.6 million in 8 investments

  • Received partial repayment of $2.5 million from 1 investment

  • Received sales proceeds of $6.4 million from 4 investments

Investment Activity in the Second Quarter 2016 Included:

  • $8.5 million in Severn Bancorp Inc., Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9.00%

  • $5.0 million in Lincoln Park Bancorp, Subordinated Term Loan, due January 1, 2026, 8.25%

  • $3.5 million in BankGuam Holding Company, Subordinated Term Loan, due July 1, 2019, 7.99%  

  • $3.1 million in Preferred Term Securities, Ltd., Fixed Rate Mezzanine Notes, due September 15, 2030, 9.74%, 144A

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

The estimated annualized yield generated by the invested portfolio as of June 30, 2016 (excluding cash and cash equivalents) was approximately 8.97%.

Second Quarter 2016 Financial Results

Net investment income was $2,549,219 or $.39 per share, comprised of $4,260,158 in gross income and $1,710,939 of expenses.  Realized capital losses were ($139,372) or ($.02) per share.

Net Assets at quarter end were $138,380,529 and the Company's Net Asset Value was $21.21 per share, up $0.12 from the previous quarter. 

In the second quarter, the Company paid a cash distribution of $0.37 per share, up $0.02 from the prior quarter.  The distribution was paid on June 29, 2016 to shareholders of record at the close of business on June 20, 2016.   

The Company had drawn $60.75 million on its $70 million credit facility at quarter end, which represents 30.2% of total assets.  According to regulated investment company rules, the Company may borrow only up to 33.3% of its total assets.  The Company seeks a target leverage rate of 30%.

Portfolio and Investment Summary

As of the close of business on June 30, 2016, the Company had total assets of $201,304,543 consisting of total investments of $192,399,854, cash of $4,023,433 and other assets of $4,881,256.  Other assets include interest and dividends receivable of $4,141,279, and prepaid assets of $739,977.

During the quarter, the Company deployed $22.6 million in 8 investments. The Company purchased $10.0 million of preferred securities, $8.5 million of term loans and $4.1 million of debt and income notes.   The Company received a partial repayment totaling $2.5 million from 1 investment and sold 4 investments for proceeds of $6.4 million. 

Quarterly Conference Call

StoneCastle Financial will host a webcast and conference call on August 11, 2016 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 August 25, 2016. The replay can be accessed by dialing 1-877-870-5176 for domestic callers or 1-858-384-5517 for international callers. The passcode for the replay is 13639291. 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)  
     
          
    June 30, 2016  March 31, 2016  
 Assets       
      Investments in securities, at fair value (cost: $195,854,563 and $185,785,040 respectively)   $  192,399,854   $  181,536,543   
  Cash (1)    4,023,433      3,992,946   
  Interest and dividends receivable    4,141,279      2,993,712   
  Prepaid assets    739,977      756,985   
  Total assets    201,304,543       189,280,186    
          
 Liabilities       
  Loan payable    60,750,000      50,500,000   
  Payable for securities purchased    968,200      -    
  Dividends payable    -       70,983   
  Investment advisory fee payable     875,895      822,358   
  Loan interest payable    36,705      128,528   
  Directors fee payable    15,576      15,811   
  Accrued expenses payable    277,638      301,323   
  Total liabilities    62,924,014       51,839,003    
 Net Assets $   138,380,529    $   137,441,183    
          
 Net Assets consist of:       
  Common stock at par ($0.001 per share) $  6,524   $  6,515   
  Paid-in-capital    144,514,314      144,366,375   
  Accumulated net investment loss    (1,829,127)     (1,966,109)  
  Accumulated net realized loss on investments    (856,473)     (717,101)  
  Net unrealized depreciation on investments    (3,454,709)     (4,248,497)  
  Net Assets $   138,380,529    $   137,441,183    
          
 Net Asset Value Per Share:       
 Common Stock Shares Outstanding  6,524,012     6,515,388    
 Net asset value per common share $   21.21    $   21.09    
 Market price per share $   18.34    $   17.31    
 Market price discount to net asset value per share  -13.53%   -17.92%  
          
 (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 Six
Months Ended
June 30,
  2016
 For the Three
Months Ended
June 30, 2016
  
 Investment Income      
      Interest  $  5,165,315  $  2,690,459   
  Dividends    3,195,723     1,481,474   
  Origination fee income    64,990     10,725   
  Other Income    150,000     77,500   
  Total Investment Income    8,576,028      4,260,158    
         
 Expenses      
  Investment advisory fees     1,699,470     875,894   
  Interest expense    831,044     415,709   
  ABA marketing and licensing fees    126,865     60,899   
  Professional fees    145,355     75,563   
  Transfer agent, custodian fees and administrator fees    137,727     68,407   
  Bank fees    104,668     52,287   
  Directors' fees    85,076     40,516   
  Investor relations fees    61,299     31,428   
  Insurance expense    44,718     22,395   
  Valuation fees    31,333     10,467   
  Miscellaneous fees (proxy, printing, rating agency, etc.)   166,143     57,374   
  Total expenses    3,433,698      1,710,939    
  Net Investment Income    5,142,330      2,549,219    
         
 Realized and Unrealized Gain / (Loss) on Investments      
  Net realized gain / (loss) on investments    151,408     (139,372)  
  Net change in unrealized  appreciation / (depreciation) on investments      (3,209,734)    793,787   
  Net realized and unrealized gain / (loss) on investments    (3,058,326)    654,415   
  Net Increase in Net Assets Resulting From Operations $   2,084,004   $   3,203,634    
         

 

 STONECASTLE FINANCIAL CORP.
 Financial Highlights (unaudited)
   
   
  For The Three
Months Ended
June 30, 2016
 Per Share Operating Performance 
 Net Asset Value, beginning of period$   21.09  
 Net investment income(1)   0.39 
 Net realized and unrealized gain on investments(1)   0.10 
 Total from investment operations   0.49  
   
 Less distributions to shareholders 
 From net investment income   (0.37)
 Total distributions   (0.37)
   
 Net asset value, end of period$   21.21  
 Per share market value, end of period$  18.34 
 Total investment return based on market value (2) 8.22%
   
 Ratios and Supplemental Data 
 Net assets, end of period (in millions)$   138.4  
 Ratios (as a percentage to average net assets): 
 Expenses(3)(4) 4.99%
 Net investment income(5)* 7.43%
 Portfolio turnover rate ** 5%
   
 Revolving Credit Agreement 
 Total revolving credit agreement outstanding (000's)$  60,750 
 Asset coverage per $1,000 for revolving credit agreement(6)   3,278 
   
 (1)Based on the average shares outstanding during quarter.
 (2)Based on share market price and reinvestment of distributions at the price obtained under the
 Dividend Reinvestment Plan. Total return does not include sales load and offering expenses.
 (3)Excluding interest expense, the ratio would have been 3.78%.
 (4)Ratio of expenses to average managed assets equals 3.52%.
 (5)Ratio of net investment income to average managed assets equals 5.25%.
 (6)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