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) November 9, 2017


StoneCastle Financial Corp.

(Exact Name of Registrant as Specified in Charter)


Delaware 333-189307 90-0934878
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) 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))


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company o


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02          Results of Operations and Financial Condition.


On November 9, 2017 the registrant issued a press release announcing its financial results for the third quarter ended September 30, 2017. 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 November 9, 2017  

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: November 9, 2017  
  By: /s/ Patrick J. Farrell
  Name: Patrick J. Farrell
  Title: Chief Financial Officer

Exhibit Index


Exhibit Number   Description  
99.1   Press Release, Dated November 9, 2017  

Section 2: EX-99.1 (EX-99.1)


Exhibit 99.1




StoneCastle Financial Corp. Reports Third Quarter 2017 Results


NEW YORK, November 9, 2017 – 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, 2017.


Third Quarter 2017 Investment Highlights:


  Received full call proceeds of $13.0 million from one investment
  Received pay-downs of $37,752 from six 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.


The estimated annualized yield generated by the invested portfolio as of September 30, 2017 (excluding cash and cash equivalents) was approximately, 9.06% up from 8.96%, year over year.


Third Quarter 2017 Financial Results


Net investment income was $2,601,835 or $0.40 per share, comprised of $4,359,828 in gross income and $1,757,993 of expenses. Realized capital losses were ($147,236).


Net Assets at quarter end were $141,078,696, up from $140,419,836 in the previous quarter. The Company’s Net Asset Value was $21.56 per share, up $0.09 from the prior quarter. The value of the invested portfolio increased $630,018.


In the third quarter, the Company paid a cash distribution of $0.38 per share, up $0.01 from the prior quarter. The distribution was paid on September 28, 2017 to shareholders of record at the close of business on September 21, 2017.


The Company had $36.5 million outstanding on its $62.0 million credit facility at the quarter end, which represents approximately 20.4% 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, 2017, the Company had total assets of $178,703,715 consisting of total investments of $174,745,784, cash of $248,128 and other assets of $3,709,803.  Other assets include interest and dividends receivable of $2,600,690 and prepaid assets of $1,109,113.


During the quarter, the Company received one call and six pay-downs for a total of $13,074,627.


Quarterly Conference Call


StoneCastle Financial will host a webcast and conference call on November 9, 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 November 23, 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 13671317. 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)


   September 30, 2017  June 30, 2017
Investments in securities, at fair value (cost:
$176,825,546 and $188,732,477 respectively)
  $174,745,784     $186,022,696 
Cash   248,128    521,184 
Interest and dividends receivable   2,600,690    3,334,760 
Prepaid assets   1,109,113    1,141,050 
Total assets  178,703,715    191,019,690 
Loan payable   36,500,000    49,500,000 
Investment advisory fee payable   788,255    833,664 
Directors fee payable   12,908    12,491 
Loan interest payable   1,149    12,320 
Accrued expenses payable   322,707    241,379 
Total liabilities   37,625,019    50,599,854 
Net Assets  $141,078,696   $140,419,836 
Net Assets consist of:          
Common stock at par ($0.001 per share)  $6,542   $6,539 
Paid-in-capital   144,858,951    144,799,774 
Accumulated net investment loss   (1,252,819)   (1,369,717)
Accumulated net realized loss on investments   (454,216)   (306,979)
Net unrealized depreciation on investments   (2,079,762)   (2,709,781)
Net Assets  $141,078,696   $140,419,836 
Net Asset Value Per Share:          
Common Stock Shares Outstanding   6,542,289    6,539,308 
Net asset value per common share  $21.56   $21.47 
Market price per share   $20.64   $20.40 
Market price discount to net asset value per share   -4.27%   -4.98%


Statement of Operations (unaudited)


   For The Three  For The Three
   Months Ended  Months Ended
   September 30, 2017  June 30, 2017
Investment Income          
Interest  $3,329,471     $3,177,617 
Dividends   960,763    1,011,275 
Origination fee income   7,094    5,121 
Other Income   62,500    62,500 
Total Investment Income   4,359,828    4,256,513 
Investment advisory fees   788,255    833,664 
Interest expense   428,246    463,780 
Professional fees   141,981    52,620 
Bank fees   69,742    61,051 
Transfer agent, custodian fees and administrator fees   68,357    67,045 
ABA marketing and licensing fees   55,096    62,604 
Directors’ fees   51,793    51,858 
Investor relations fees   32,946    32,615 
Delaware franchise tax   22,684    22,438 
Insurance expense   22,019    23,267 
Printing   18,195    11,997 
Valuation fees   12,338    12,071 
Miscellaneous fees   46,341    39,894 
Total expenses   1,757,993    1,734,904 
Net Investment Income  $2,601,835   $2,521,609 
Realized and Unrealized Gain / (Loss) on Investments          
Net realized loss on investments  $(147,236)  $(18,402)
Net change in unrealized depreciation on investments   630,018    919,696 
Net realized and unrealized gain on investments   482,782    901,294 
Net Increase in Net Assets Resulting From Operations  $3,084,617   $3,422,903 


Financial Highlights (unaudited)


   For The Three
Months Ended
September 30, 2017
Per Share Operating Performance     
Net Asset Value, beginning of period  $21.47 
Net investment income(1)   0.40 
Net realized and unrealized gain on investments(1)   0.07 
Total from investment operations   0.47 
Less distributions to shareholders     
From net investment income   (0.38)
Total distributions   (0.38)
Net asset value, end of period  $21.56 
Per share market value, end of period  $20.64 
Total Investment Return (2)     
Based on market value   3.11%
Based on net asset value   2.34%
Ratios and Supplemental Data     
Net assets, end of period (in millions)  $141.1 
Ratios (as a percentage to average net assets):     
Expenses before waivers(3)(4)*   4.96%
Expenses after waivers(5)*   4.96%
Net investment income(6)*   7.33%
Portfolio turnover rate**   0%
Revolving Credit Agreement     
Total revolving credit agreement outstanding (000’s)  $36,500 
Asset coverage per $1,000 for revolving credit agreement(7)   4,865 

(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 3.75%.
(4) Ratio of expenses before waivers to average managed assets equals 3.77%.
(5) Ratio of expenses after waivers to average managed assets equals 3.77%.
(6) Ratio of net investment income to average managed assets equals 5.58%.
(7) Calculated by subtracting the Company’s total liabilities (excluding the loan) from the Company total assets and dividing the amount by the loan outstanding in 000’s.
* Annualized
** Not-annualized