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StoneCastle Financial Corp. Reports Third Quarter 2020 Results

Published: 2020-11-12 21:20:00 ET
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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.

ThirdQuarter2020Investment 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%.

ThirdQuarter 2020Financial 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 TheThree 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 FromOperations $6,537,646    $10,836,849  
           

STONECASTLE FINANCIAL CORP.
Financial Highlights (unaudited)
        
        
      For TheThree 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.