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StoneCastle Financial Corp. Reports Second Quarter 2019 Results

August 8, 2019 at 4:20 PM EDT

StoneCastle Financial Corp. Reports Second Quarter 2019 Results

NEW YORK, Aug. 08, 2019 (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, 2019.   

Second Quarter 2019 Investment Highlights:

  • Invested $4.5 million in two investments

  • Received full call proceeds of $12.9 million from three investments

Investment Activity in the Second Quarter 2019 Included:

  • Invested $4.4 million in Fidelity Federal Bancorp, Fixed Rate Cumulative Perpetual Preferred Stock Series A, 9%

  • Invested $51,000 in Fidelity Federal Bancorp, Fixed Rate Cumulative Perpetual Preferred Stock, Series B, 9%

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 June 30, 2019 (excluding cash and cash equivalents) was approximately 9.16%.

Second Quarter 2019 Financial Results

Net investment income was $2,466,244 or $0.38 per share, comprised of $4,043,437 gross income and $1,577,193 of expenses.  Net Assets at quarter end were $142,937,337.  The Company’s Net Asset Value was $21.80 per share.  The unrealized appreciation of the portfolio increased by $1,235,125, or $0.19.

In the second quarter, the Company paid a cash distribution of $0.38 per share.  The distribution was paid on June 26, 2019 to shareholders of record at the close of business on June 20, 2019.   

The Company had $24 million outstanding on its $62.0 million credit facility at the quarter end, which represents approximately 14% 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 June 30, 2019, the Company had total assets of $168,153,822 consisting of total investments of $165,115,844, cash of $159,250, and other assets of $2,878,728.  Other assets include interest and dividends receivable of $2,226,763 and prepaid assets of $651,965.

During the quarter, the Company invested a total of $4,490,000 in Fidelity Federal Bancorp Fixed Rate Cumulative Perpetual Preferred Series A and B, 9%.  The Company received full call proceeds of $12,899,000 from three investments.

Quarterly Conference Call

StoneCastle Financial will host a webcast and conference call on August 8, 2019 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 22, 2019. 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 13691505. 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.govand on the Company's website at www.stonecastle-financial.com, and may discuss these or other factors that affect the Company.

CONTACT:
Investor Contact: 
Julie Muraco
347-887-0324

  STONECASTLE FINANCIAL CORP.
  Statement of Assets and Liabilities (unaudited)
     
               
        June 30, 2019     March 31, 2019
  Assets          
    Investments in securities, at fair value (cost: $164,361,636 and $173,545,428 respectively)   $ 165,115,844       $ 173,064,511  
    Cash     159,250         5,566,326  
    Interest and dividends receivable     2,226,763         1,936,971  
    Prepaid assets     651,965         749,793  
    Total assets       168,153,822           181,317,601  
               
  Liabilities          
    Loan payable     24,000,000         38,000,000  
    Investment advisory fee payable     733,082         783,180  
    Loan interest payable     3,672         238,916  
    Directors fee payable     5,876         1,534  
    Accrued expenses payable     473,855         505,662  
    Total liabilities       25,216,485           39,529,292  
  Net Assets   $   142,937,337       $   141,788,309  
               
  Net Assets consist of:          
    Common stock at par ($0.001 per share)   $ 6,557       $ 6,555  
    Paid-in-Capital     143,826,543         143,778,146  
    Total distributable earnings / (loss)     (895,763 )       (1,996,392 )
    Net Assets   $   142,937,337       $   141,788,309  
               
  Net Asset Value Per Share:          
  Common Stock Shares Outstanding     6,557,261         6,554,983  
  Net asset value per common share   $   21.80       $   21.63  
  Market price per share   $   21.81       $   21.43  
  Market price premium / (discount) to net asset value per share     0.05%         -0.92%  
               


STONECASTLE FINANCIAL CORP.
Statement of Operations (unaudited)
         
      For The Three
Months Ended
June 30, 2019		   For The Three
Months Ended
March 31, 2019
  Investment Income      
    Interest $ 2,826,558     $ 3,056,839  
    Dividends   1,091,134       1,056,299  
    Origination fee income   41,127       13,527  
    Other Income (service fees and due diligence fees)   84,618       108,885  
    Total Investment Income     4,043,437         4,235,550  
           
  Expenses      
    Investment advisory fees   733,081       783,180  
    Interest expense   361,786       527,794  
    Professional fees   88,773       113,772  
    Transfer agent, custodian fees and administrator fees   72,364       51,031  
    Directors' fees   58,835       56,959  
    Bank administration fees   40,017       36,251  
    ABA marketing and licensing fees   37,434       36,875  
    Investor relations fees   30,865       30,526  
    Delaware franchise tax   22,694       21,420  
    Insurance expense   17,951       17,753  
    Valuation fees   14,988       16,707  
    Printing   14,511       8,648  
    Miscellaneous fees (proxy, rating agency, etc.)   83,894       52,804  
    Total expenses     1,577,193         1,753,720  
    Net Investment Income $   2,466,244     $   2,481,830  
           
  Realized and Unrealized Gain / (Loss) on Investments      
    Net realized loss on investments $ (109,845 )   $ (91,503 )
    Net change in unrealized appreciation on investments   1,235,125       1,414,753  
    Net realized and unrealized gain / (loss) on investments     1,125,280         1,323,250  
    Net Increase in Net Assets Resulting From Operations $   3,591,524     $   3,805,080  
           


STONECASTLE FINANCIAL CORP.
Financial Highlights (unaudited)
             
             
            For The Three
Months Ended
June 30,  2019
  Per Share Operating Performance          
  Net Asset Value, beginning of period         $   21.63  
             
  Net investment income(1)         $   0.38  
  Net realized and unrealized gain on investments(1)         $   0.17  
  Total from investment operations         $   0.55  
             
  Less distributions to shareholders          
  From net investment income         $   (0.38 )
  Total distributions         $   (0.38 )
             
  Net asset value, end of period         $   21.80  
             
  Per share market value, end of period         $   21.81  
             
  Total Investment Return (2)          
  Based on market value           3.59%  
  Based on net asset value           2.59%  
             
  Ratios and Supplemental Data          
  Net assets, end of period (in millions)         $   142.9  
  Ratios (as a percentage to average net assets):          
  Expenses before waivers(3)(4)*           4.44%  
  Expenses after waivers(5)*           4.44%  
  Net investment income(6)*           6.95%  
  Portfolio turnover rate **           3%  
             
  Revolving Credit Agreement          
  Total revolving credit agreement outstanding (000's)         $   24,000  
  Asset coverage per $1,000 for revolving credit agreement(7)             6,956  

(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 3.42%.
(4) Ratio of expenses before waivers to average managed assets equals 3.62%.
(5) Ratio of expenses after waivers to average managed assets equals 3.62%.
(6) Ratio of net investment income to average managed assets equals 5.66%.
(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

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Source: StoneCastle Financial Corp.