Washington, D.C. 20549





Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934


Date of Report (Date of earliest event reported) May 5, 2016


StoneCastle Financial Corp.

(Exact Name of Registrant as Specified in Charter)


Delaware 333-189307 90-0934878
(State or other jurisdiction
of incorporation)
File Number)
(IRS Employer
Identification No.)


152 West 57th Street, 35th floor, New York, NY 10019
(Address of principal executive offices) (Zip Code)


Registrant’s telephone number, including area code (212) 354-6500


(Former name or former address, if changed since last report.)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.  


On May 5, 2016 the registrant issued a press release announcing its financial results for the first quarter ended March 31, 2016. The text of the press release is included as Exhibit 99.1 to this Form 8-K.


The information disclosed under this item 2.02 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.


Item 9.01 Financial Statements and Exhibits.  


(d) Exhibits:


Exhibit Number   Description  
99.1   Press Release, dated May 5, 2016  

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date: May 5, 2016      
      By: /s/ Patrick J. Farrell
      Name: Patrick J. Farrell
      Title: Chief Financial Officer

Exhibit Index


Exhibit Number   Description  
99.1   Press Release, Dated May 5, 2016  

Exhibit 99.1



StoneCastle Financial Corp. Reports First Quarter 2016 Results


NEW YORK, May 5, 2016 – 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, 2016.


First Quarter 2016 Investment Highlights:


·Invested $20.7 million in 5 investments


·Received issuer calls and partial repayments of $17.5 million from 14 investments


·Received sales proceeds of $6.3 million from 5 investments


Investment Activity in the First Quarter 2016 Included:


·$12.1 million in Citizens Bancshares Company Cumulative Perpetual Preferred Stock, Series A, 9.00%


·$0.8 million in Citizens Bancshares Company Cumulative Perpetual Preferred Stock, Series B, 9.00%


·$5.0 million in First Colebrook Bancorp, Inc. Subordinated Term Loan, due April 2026, 7.99%


·$2.8 million in TriSummit Bank Cumulative Perpetual Preferred Stock, Series A, 9.00%


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 March 31, 2016 (excluding cash and cash equivalents) was approximately 8.98%.


First Quarter 2016 Financial Results


Total earnings for the first quarter were $2,883,891 or $0.44 per share. Net investment income was $2,593,111 or $0.40 per share, comprised of $4,315,870 in gross income and $1,722,759 of expenses. Realized capital gains were $290,780 or $0.04 per share.


Net Assets at quarter end were $137,441,183 and the Company’s Net Asset Value was $21.09 per share.


The Company paid a cash distribution of $0.35 per share for the first quarter. The distribution was paid on March 29, 2016 to shareholders of record at the close of business on March 21, 2016.


The Company had drawn $50.5 million on its $70 million credit facility at quarter end, which represents approximately 26.7% 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 March 31, 2016, the Company had total assets of $189,280,186 consisting of total investments of $181,536,543, cash of $3,992,946 and other assets of $3,750,697.  Other assets include interest and dividends receivable of $2,993,712, and prepaid assets of $756,985.


During the quarter, the Company deployed $20.7 million in new investments. The Company purchased $15.7 million of preferred securities, and $5.0 million of term loans. The Company received issuer calls and partial repayments totaling $17.5 million from 14 investments and sold 5 investments for proceeds of $6.3 million.


Quarterly Conference Call


StoneCastle Financial will host a webcast and conference call on May 5, 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 May 19, 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 13634518. 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.


CONTACT: Investor Contact:


Julie Muraco





Statement of Assets and Liabilities (unaudited)


  March 31, 2016   December 31, 2015 
Investments in securities, at fair value (cost: $185,785,040 and $184,998,847 respectively)  $181,536,543  $184,753,872 
Cash (1)   3,992,946    4,009,133 
Interest and dividends receivable   2,993,712    2,948,819 
Prepaid assets   756,985    821,845 
Total assets   189,280,186    192,533,669 
Loan payable   50,500,000    25,000,000 
Payable for securities purchased       23,184,943 
Dividends payable   70,983    2,278,834 
Investment advisory fee payable   822,358    849,259 
Loan interest payable   128,528    34,032 
Directors fee payable   15,811    13,000 
Accrued expenses payable   301,323    403,681 
Total liabilities   51,839,003    51,763,749 
Net Assets   137,441,183    140,769,920 
Net Assets consist of:          
Common stock at par ($0.001 per share)   6,515    6,511 
Paid-in-capital   144,366,375    144,295,099 
Accumulated net investment loss   (1,966,109)   (2,278,834)
Accumulated net realized loss on investments   (717,101)   (1,007,881)
Net unrealized depreciation on investments   (4,248,497)   (244,975)
Net Assets  $137,441,183  $ 140,769,920 
Net Asset Value Per Share:          
Common Stock Shares Outstanding   6,515,388    6,510,953 
Net asset value per common share  $ 21.09  $ 21.62 
Market price per share  $17.31  $ 16.30 
Market price discount to net asset value per share   -17.92%   -24.61%


(1)Includes $3,500,000 of restricted cash held in a segregated account at Texas Capital Bank to cover collateral requirements.


Statement of Operations (unaudited)


   For The Three
Months Ended
March 31, 2016
   For the Three
Months Ended
December 31, 2015
Investment Income          
Interest  $2,474,856   $2,302,180 
Dividends   1,714,249    1,365,072 
Origination fee income   54,265    709,527 
Other Income   72,500    106,000 
Total Investment Income   4,315,870    4,482,779 
Investment advisory fees   823,576    849,259 
Interest expense   415,335    345,840 
ABA marketing and licensing fees   65,966    77,868 
Professional fees   69,792    75,393 
Transfer agent, custodian fees and administrator fees   69,320    70,558 
Bank fees   52,381    70,478 
Directors’ fees   44,560    44,915 
Valuation fees   20,866    37,970 
Investor relations fees   29,871    30,430 
Insurance expense   22,323    22,530 
Miscellaneous fees (proxy, printing, rating agency, etc.)   108,769    107,800 
Total expenses   1,722,759    1,733,041 
Net Investment Income   2,593,111    2,749,738 
Realized and Unrealized Gain / (Loss) on Investments          
Net realized gain / (loss) on investments   290,780    (3,005,896)
Net change in unrealized depreciation on investments   (4,003,521)   (503,005)
Net realized and unrealized loss on investments   (3,712,741)   (3,508,901)
Net Decrease in Net Assets Resulting From Operations  $(1,119,630)  $(759,163)


Financial Highlights (unaudited)


  For The Three
Months Ended
March 31, 2016
Per Share Operating Performance    
Net Asset Value, beginning of period  $21.62 
Net investment income(1)   0.40 
Net realized and unrealized gain on investments(1)   (0.58)
Total from investment operations   (0.18)
Less distributions to shareholders     
From net investment income   (0.35)
Total distributions   (0.35)
Net asset value, end of period   $21.09 
Per share market value, end of period   $17.31 
Total investment return based on market value (2)   8.38%
Ratios and Supplemental Data     
Net assets, end of period (in millions)  $137.4 
Ratios (as a percentage to average net assets):     
Expenses (3)(4)*   4.98%
Net investment income(5)*   7.50%
Portfolio turnover rate **   11%
Revolving Credit Agreement     
Total revolving credit agreement outstanding (000’s)   $50,500 
Asset coverage per $1,000 for revolving credit agreement(6)   3,722 


(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 3.63%.
(5) Ratio of net investment income to average managed assets equals 5.46%.
(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.
* Annualized
** Not-annualized