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StoneCastle Financial Corp. Reports Second Quarter 2020 Results

August 6, 2020 at 4:20 PM EDT

StoneCastle Financial Corp. Reports Second Quarter 2020 Results

DENVER, Aug. 06, 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 second fiscal quarter ended June 30, 2020.   

Second Quarter 2020 Investment Highlights:

  • Invested $36.3 million in six investments

  • Realized proceeds of $5.0 million from the partial sale of one investment

  • Realized proceeds from paydowns of $598,996 from two 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 June 30, 2020 (excluding cash and cash equivalents) was approximately 10.10%

Second Quarter 2020 Financial Results

Net investment income was $2,662,465 or $0.41 per share, comprised of $4,017,972 gross income and $1,355,507 of expenses.  Net Assets at quarter end were $133,059,234.  The Company’s Net Asset Value was $20.27 per share, up $1.27 from the prior quarter.  

In the second quarter, the Company paid a cash distribution of $0.38 per share.  The distribution was paid on June 26, 2020 to shareholders of record at the close of business on June 19, 2020.   

The Company had $33 million outstanding on its $62.0 million credit facility at the quarter end, which represents approximately 19% 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 June 30, 2020, the Company had total assets of $173,984,251 consisting of total investments of $165,755,271, cash and other assets of $8,228,980.  

During the quarter, the Company invested a total of $36,326,963 in six bank-related investments.  The Company invested a total of $25,185,650 in alternative capital securities, $6,826,313 in one common stock, and $4,315,000 in one preferred stock.  The Company received proceeds of $5,025,252 from the partial sale of iShares S&P U.S. Preferred Stock Index Fund (PFF).

Quarterly Conference Call

StoneCastle Financial will host a webcast and conference call on August 6, 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 August 20, 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 13706664. 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)
   
           
      June 30, 2020   March 31, 2020
Assets        
  Investments in securities, at fair value (cost: $176,329,751 and $152,196,520 respectively)   $ 165,755,271     $ 132,978,058  
  Cash     271,693       62,841  
  Foreign cash (cost: $5,036,821)     5,036,962       -  
  Unrealized appreciation on forward currency exchange contracts     347       -  
  Interest and dividends receivable     2,333,443       1,288,615  
  Prepaid assets     586,535       594,907  
  Total assets     173,984,251       134,924,421  
           
Liabilities        
  Loan payable     33,000,000       9,000,000  
  Payable for securities purchased     5,181,389       -  
  Options written, at value (premiums received $1,801,080)   1,513,750       -  
  Investment advisory fee payable     750,435       587,069  
  Loan interest payable     33,856       3,829  
  Directors fee payable     -       92,603  
  Accrued expenses payable     445,588       562,442  
  Total liabilities     40,925,018       10,245,943  
Net Assets   $ 133,059,234     $ 124,678,478  
           
Net Assets consist of:        
  Common stock at par ($0.001 per share)   $ 6,564     $ 6,562  
  Paid-in-Capital     144,961,221       143,912,066  
  Total distributable earnings / (loss)     (11,908,551 )     (19,240,150 )
  Net Assets   $ 133,059,234     $ 124,678,478  
           
Net Asset Value Per Share:        
Common Stock Shares Outstanding     6,563,892       6,561,700  
Net asset value per common share   $ 20.27     $ 19.00  
Market price per share   $ 15.90     $ 16.23  
Market price discount to net asset value per share     -21.56 %     -14.58 %
           


STONECASTLE FINANCIAL CORP.
Statement of Operations (unaudited)
       
    For The Three Months Ended June 30, 2020   For The Three Months Ended March 31, 2020
Investment Income      
  Interest $ 2,873,378     $ 2,809,760  
  Dividends   1,008,211       737,056  
  Origination fee income   36,853       27,402  
  Other Income (service fees and due diligence fees)   99,530       111,075  
  Total Investment Income   4,017,972       3,685,293  
         
Expenses      
  Investment advisory fees   750,435       587,069  
  Interest expense   183,810       166,826  
  Directors' fees   101,156       77,399  
  Transfer agent, custodian fees and administrator fees   72,364       72,364  
  Bank administration fees   40,018       40,017  
  Professional fees   39,774       39,773  
  ABA marketing and licensing fees   37,431       37,437  
  Investor relations fees   30,866       30,865  
  Delaware franchise tax   22,693       22,694  
  Insurance expense   17,950       17,951  
  Valuation fees   14,987       14,988  
  Printing   14,511       14,511  
  Miscellaneous fees (proxy, rating agency, etc.)   29,512       33,261  
  Total expenses   1,355,507       1,155,155  
  Net Investment Income   2,662,465       2,530,138  
         
Realized and Unrealized Gain / (Loss) on Investments and Foreign Currency Transactions      
  Net realized loss on investments   (327,535 )     (301,223 )
  Net realized loss from forward foreign currency transactions   (208,064 )     -  
  Net realized loss from foreign currency transactions   (228,928 )     -  
  Net change in net unrealized appreciation / depreciation on investments   8,643,982       (18,304,949 )
  Net change in unrealized appreciation on written options   287,330       -  
  Net change in unrealized appreciation on forward currency transactions   347       -  
  Net change in unrealized appreciation on foreign currency transactions   7,252       -  
  Net realized and unrealized gain/(loss) on investments, written options, forward foreign currency contracts and foreign currency transactions   8,174,384       (18,606,172 )
         
  Net Increase / (Decrease) in Net Assets Resulting From Operations $ 10,836,849     $ (16,076,034 )
         


STONECASTLE FINANCIAL CORP.
Financial Highlights (unaudited)
     
     
    For The Three Months Ended June 30, 2020
  Per Share Operating Performance  
  Net Asset Value, beginning of period $ 19.00  
  Net investment income(1)   0.41  
  Net realized and unrealized gain / (loss) on investments   1.24  
  Total from investment operations   1.65  
     
  Less distributions to shareholders  
  From net investment income   (0.38 )
  Total distributions   (0.38 )
     
  Net asset value, end of period $ 20.27  
     
  Per share market value, end of period $ 15.90  
     
  Total Investment Return (2)  
  Based on market value   0.15 %
  Based on net asset value   9.06 %
     
  Ratios and Supplemental Data  
  Net assets, end of period (in millions) $ 133.1  
  Ratios (as a percentage to average net assets):  
  Expenses before waivers(3)(4)*   4.10 %
  Expenses after waivers(5)*   4.10 %
  Net investment income(6)*   8.05 %
  Portfolio turnover rate **   13 %
     
  Revolving Credit Agreement  
  Total revolving credit agreement outstanding (000's) $ 33,000  
  Asset coverage per $1,000 for revolving credit agreement(7)   5,032  
     
     
(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 3.54%. 
(4 ) Ratio of expenses before waivers to average managed assets equals 3.13%. 
(5 ) Ratio of expenses after waivers to average managed assets equals 3.13%. 
(6 ) Ratio of net investment income to average managed assets equals 6.15%. 
(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.