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The primary investment objectives of ArrowMark Financial Corp. (Nasdaq: BANX) are income generation, capital preservation and providing total risk-adjusted returns.

 

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StoneCastle Financial Corp. Reports Third Quarter 2020 Results

November 12, 2020 at 4:20 PM EST

StoneCastle Financial Corp. Reports Third Quarter 2020 Results

DENVER, Nov. 12, 2020 (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 third fiscal quarter ended September 30, 2020.

Third Quarter 2020 Investment Highlights:

  • Invested approximately $23.7 million in three investments
  • Realized proceeds of $45.9 million from the sale of two investments
  • Realized proceeds from partial paydowns of $3.9 million from five investments

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.

Subsequent to the end of the quarter, the Company invested $13.7 million in two investments.

The estimated annualized yield generated by the invested portfolio as of September 30, 2020 (excluding cash and cash equivalents) was approximately 9.18%.

Third Quarter 2020 Financial Results

Net investment income was $2,753,775 or $0.42 per share, comprised of $4,281,927 gross income and $1,528,152 of expenses. Net Assets at quarter end were $137,102,601. The Company’s Net Asset Value was $20.89 per share, up $0.62 from the prior quarter.

In the third quarter, the Company paid a cash distribution of $0.38 per share. The distribution was paid on September 30, 2020 to shareholders of record at the close of business on September 25, 2020.  

The Company had $10 million outstanding on its $62.0 million credit facility at the quarter end, which represents approximately 7% 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 September 30, 2020, the Company had total assets of $149,864,407 consisting of total investments of $146,967,849, cash and other assets of $2,896,558.  

During the quarter, the Company invested a total of $23,691,493 in three bank-related investments. The Company invested a total of $18,668,160 in two alternative capital securities, and $5,023,333 in one community bank subordinated note. The Company received proceeds of $45,920,472 from the sale of two investments, including Community Funding CLO, Ltd, Preferred Shares and received partial paydowns of $3,930,454 from five investments.

Quarterly Conference Call

StoneCastle Financial will host a webcast and conference call on November 12, 2020 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 November 26, 2020. 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 13712218. 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." Its investment objective is to provide stockholders with current income and, to a lesser extent, capital appreciation. StoneCastle Financial is managed by StoneCastle-ArrowMark Asset Management, LLC. To learn more, visit www.stonecastle-financial.com.

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.

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.

CONTACT: Investor Contact:

Julie Muraco

212-468-5441

  STONECASTLE FINANCIAL CORP.
  Statement of Assets and Liabilities (unaudited)
     
               
        September 30, 2020     June 30, 2020
  Assets          
    Investments in securities, at fair value (cost: $150,661,873 and $176,329,751 respectively)   $ 146,967,849       $ 165,755,271  
    Cash     545,156         271,693  
    Foreign cash (cost: $209,344 and $5,036,821 respectively)   209,228         5,036,962  
    Unrealized appreciation on forward currency exchange contracts   -         347  
    Interest and dividends receivable     1,498,511         2,333,443  
    Prepaid assets     643,663         586,535  
    Total assets     149,864,407         173,984,251  
               
  Liabilities          
    Loan payable     10,000,000         33,000,000  
    Dividends payable     27,705         -  
    Payable for securities purchased     -         5,181,389  
    Options written, at value (premiums received $1,801,080)   1,181,250         1,513,750  
    Investment advisory fee payable     654,515         750,435  
    Unrealized depreciation on forward currency exchange contracts   156,491         -  
    Loan interest payable     858         33,856  
    Directors fee payable     1,851         -  
    Accrued expenses payable     739,136         445,587  
    Total liabilities     12,761,806         40,925,017  
  Net Assets   $ 137,102,601       $ 133,059,234  
               
  Net Assets consist of:          
    Common stock at par ($0.001 per share)   $ 6,564       $ 6,564  
    Paid-in-Capital     144,961,221         144,961,221  
    Total distributable earnings / (loss)     (7,865,184 )       (11,908,551 )
    Net Assets   $ 137,102,601       $ 133,059,234  
               
  Net Asset Value Per Share:          
  Common Stock Shares Outstanding     6,563,892         6,563,892  
  Net asset value per common share   $ 20.89       $ 20.27  
  Market price per share   $ 19.41       $ 15.90  
  Market price discount to net asset value per share     -7.08 %       -21.56 %
               


STONECASTLE FINANCIAL CORP.
Statement of Operations (unaudited)
           
              For The Three Months
Ended September 30,
2020		     For the Three
Months Ended
June 30, 2020
  Investment Income              
    Interest         $ 3,346,806       $ 2,873,378  
    Dividends           830,671         1,008,211  
    Origination fee income         18,552         36,853  
    Other Income (service fees and due diligence fees)     85,898         99,530  
    Total Investment Income       4,281,927         4,017,972  
                     
  Expenses                
    Investment advisory fees       654,514         750,435  
    Interest expense         200,308         183,810  
    Directors' fees         117,621         101,156  
    Transfer agent, custodian fees and administrator fees     93,159         72,364  
    Bank administration fees         40,457         40,018  
    Professional fees         182,760         39,774  
    ABA marketing and licensing fees       37,845         37,431  
    Investor relations fees         41,204         30,866  
    Delaware franchise tax         22,943         22,693  
    Insurance expense         20,148         17,950  
    Valuation fees         40,152         14,987  
    Printing           17,670         14,511  
    Miscellaneous fees (proxy, rating agency, etc.)     59,371         29,512  
    Total expenses         1,528,152         1,355,507  
    Net Investment Income       2,753,775         2,662,465  
                     
  Realized and Unrealized Gain / (Loss) on Investments and Foreign Currency Transactions          
    Net realized loss on investments       (2,745,166 )       (327,535 )
    Net realized loss from forward foreign currency transactions     (674,739 )       (208,064 )
    Net realized gain / (loss) from foreign currency transactions     144,713         (228,928 )
    Net change in net unrealized appreciation on investments     6,880,456         8,643,982  
    Net change in unrealized appreciation on written options     332,500         287,330  
    Net change in unrealized appreciation / (depreciation) on forward currency transactions     (156,838 )       347  
    Net change in unrealized appreciation on foreign currency transactions     2,945         7,252  
    Net realized and unrealized gain/(loss) on investments, written options, forward foreign currency contracts and foreign currency transactions     3,783,871         8,174,384  
                     
    Net Increase in Net Assets Resulting From Operations   $ 6,537,646       $ 10,836,849  
                     


STONECASTLE FINANCIAL CORP.
Financial Highlights (unaudited)
               
               
            For The Three Months Ended September 30, 2020  
  Per Share Operating Performance            
  Net Asset Value, beginning of period         $ 20.27    
  Net investment income(1)           0.42    
  Net realized and unrealized gain / (loss) on investments           0.58    
  Total from investment operations           1.00    
               
  Less distributions to shareholders            
  From net investment income           (0.38 )  
  Total distributions           (0.38 )  
               
  Net asset value, end of period         $ 20.89    
               
  Per share market value, end of period         $ 19.41    
               
  Total Investment Return (2)            
  Based on market value           24.62 %  
  Based on net asset value           5.21 %  
               
  Ratios and Supplemental Data            
  Net assets, end of period (in millions)         $ 137.1    
  Ratios (as a percentage to average net assets):            
  Expenses before waivers(3)(4)*           4.50 %  
  Expenses after waivers(5)*           4.50 %  
  Net investment income(6)*           8.11 %  
  Portfolio turnover rate **           13.0 %  
               
  Revolving Credit Agreement            
  Total revolving credit agreement outstanding (000's)         $ 10,000    
  Asset coverage per $1,000 for revolving credit agreement(7)           14,710    

(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 3.91%.                                                                

(4) Ratio of expenses before waivers to average managed assets equals 3.75%.                        

(5) Ratio of expenses after waivers to average managed assets equals 3.75%.                        

(6) Ratio of net investment income to average managed assets equals 6.77%.                        

(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.