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StoneCastle Financial Corp. Reports Fourth Quarter 2019 Results

Published: 2020-02-27 21:20:00 ET
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DENVER, Feb. 27, 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 fourth fiscal quarter ended December 31, 2019.   

Fourth Quarter 2019 Investment Highlights:

  • Invested $700,000 in F.N.B.C. of La Grange, Inc., Subordinated Debt, 6.38%, due 1/1/2030 with an effective yield of 9.08%
  • Realized a capital gain of $425,000 from the partial call of $1.8 million of MMCaps Funding I, Ltd, Fixed Rate Senior Notes, 6.34%, due 6/8/2031
  • Realized a capital gain of $366,000 on the sale of Howard Bancorp common stock

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 December 31, 2019 (excluding cash and cash equivalents) was approximately 9.58%.

Fourth Quarter 2019 Financial Results

Total earnings for the fourth quarter were $3,453,993 or $0.53 per share.  Net investment income was $2,663,178 or $0.41 per share, comprised of $4,114,601 gross income and $1,451,423 of expenses.  For the quarter, net realized capital gains were $790,815 or $0.12 per share.  Net Assets at quarter end were $143,199,234.  The unrealized appreciation of the portfolio decreased by $442,960 or $0.07 per share.  The Company’s Net Asset Value was $21.83 per share, up $0.08 from the prior quarter.  

In the fourth quarter, the Company paid a cash distribution of $0.38 per share.  The distribution was paid on January 3, 2020 to shareholders of record at the close of business on December 23, 2019.   

The Company had $17.7 million outstanding on its $62.0 million credit facility at the quarter end, which represents approximately 11.0% 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 December 31, 2019, the Company had total assets of $164,703,377 consisting of total investments of $162,264,915, cash of $35,328, and other assets of $2,403,134.  Other assets include interest and dividends receivable of $1,784,784 and prepaid assets of $618,350.

During the quarter, the Company purchased $700,000F.N.B.C. of La Grange, Inc. Subordinated Debt, 6.38%, due 1/1/2030 with an effective yield of 9.08%.   The Company received partial call proceeds of $1,837,622 from MMCaps Funding I, Ltd, Fixed Rate Senior Notes 6.34%, 6/8/2031.  Additionally, the Company also received $1,369,640 from the sale of Howard Bancorp common stock.

Quarterly Conference Call

StoneCastle Financial will host a webcast and conference call on February 27, 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 March 12, 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 13698624. 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.govand 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
   
        
    December 31, 2019  September 30, 2019
 Assets     
  Investments in securities, at fair value (cost: $163,178,428 and $167,368,577 respectively) $162,264,915   $166,898,025 
  Cash  35,328    118,193 
  Interest and dividends receivable  1,784,784    1,533,447 
  Prepaid assets  618,350    653,468 
  Total assets    164,703,377       169,203,133  
        
 Liabilities     
  Loan payable  17,700,000    25,200,000 
  Dividends payable  2,492,424    - 
  Investment advisory fee payable  726,500    746,924 
  Loan interest payable  38,976    38,541 
  Directors fee payable  20,325    825 
  Accrued expenses payable  525,918    536,219 
  Total liabilities    21,504,143       26,522,509  
 Net Assets $  143,199,234    $  142,680,624  
        
 Net Assets consist of:     
  Common stock at par ($0.001 per share) $6,559   $6,559 
  Paid-in-Capital  144,875,823    143,864,020 
  Total distributable earnings / (loss)  (1,683,148)   (1,189,955)
  Net Assets $  143,199,234    $  142,680,624  
        
 Net Asset Value Per Share:     
 Common Stock Shares Outstanding  6,559,010     6,559,010  
 Net asset value per common share $  21.83    $  21.75  
 Market price per share $  22.30    $  22.16  
 Market price premium to net asset value per share  2.15%    1.89% 
        

STONECASTLE FINANCIAL CORP. 
Statement of Operations 
          
           For The Three Months Ended December 31, 2019  For The Three Months Ended September 30, 2019
 Investment Income           
  Interest        $3,023,153   $3,053,901 
  Dividends         909,992    774,108 
  Origination fee income        27,553    13,828 
  Other Income (service fees and due diligence fees)      153,903    119,326 
  Total Investment Income         4,114,601       3,961,163  
               
 Expenses            
  Investment advisory fees       726,500    746,924 
  Interest expense        263,564    258,348 
  Professional fees        40,760    66,760 
  Transfer agent, custodian fees and administrator fees      73,159    73,159 
  Directors' fees        77,879    66,827 
  Bank administration fees       40,457    40,457 
  ABA marketing and licensing fees       37,846    37,845 
  Investor relations fees        31,204    31,205 
  Delaware franchise tax        22,943    22,943 
  Insurance expense        18,148    18,148 
  Valuation fees        15,153    15,152 
  Printing         14,671    14,670 
  Due diligence expense        45,400    - 
  Miscellaneous fees (proxy, rating agency, etc.)      43,739    69,225 
  Total expenses           1,451,423       1,461,663  
  Net Investment Income       $  2,663,178    $  2,499,500  
               
 Realized and Unrealized Gain / (Loss) on Investments         
  Net realized gain on investments      $790,815   $922,827 
  Net change in unrealized appreciation on investments      (442,960)   (1,224,760)
  Net realized and unrealized gain / (loss) on investments        347,855       (301,933)
  Net Increase in Net Assets Resulting From Operations     $  3,011,033    $  2,197,567  

STONECASTLE FINANCIAL CORP.
Financial Highlights
       
       
      For The Three Months Ended December 31,  2019
 Per Share Operating Performance     
 Net Asset Value, beginning of period     $  21.75  
       
 Net investment income(1)    $0.41 
 Net realized and unrealized gain / (loss) on investments(1)    $0.05 
 Total from investment operations    $  0.46  
       
 Less distributions to shareholders     
 From net investment income    $(0.38)
 Total distributions     $  (0.38)
       
 Net asset value, end of period    $  21.83  
       
 Per share market value, end of period    $  22.30  
       
 Total Investment Return (2)     
 Based on market value      2.35% 
 Based on net asset value     2.08% 
       
 Ratios and Supplemental Data     
 Net assets, end of period (in millions)    $  143.2  
 Ratios (as a percentage to average net assets):     
 Expenses before waivers(3)(4)*     4.03% 
 Expenses after waivers(5)*     4.03% 
 Net investment income(6)*     7.39% 
 Portfolio turnover rate **     2% 
       
 Revolving Credit Agreement     
 Total revolving credit agreement outstanding (000's)    $17,700 
 Asset coverage per $1,000 for revolving credit agreement(7)     9,090 

_______________________________________
(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 3.30%. 
(4)Ratio of expenses before waivers to average managed assets equals 3.45%. 
(5)Ratio of expenses after waivers to average managed assets equals 3.45%. 
(6)Ratio of net investment income to average managed assets equals 6.33%. 
(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.