Investors

Our primary objective is to provide our investors with current income and capital appreciation primarily through investment in U.S. community banks


The primary investment objective of StoneCastle Financial Corp. (Nasdaq: BANX) is current income. The secondary objective is capital appreciation.


Philosophy: We are a disciplined investor focused on investing in U.S. community banks. StoneCastle Financial Corp's investment philosophy is to minimize the risk of loss of principal while capitalizing on opportunity in the community banking sector.

As a value investor, we seek to invest in companies that have demonstrated a long history of generating significant free cash flow, and at prices well below long-term intrinsic value. We seek investments where there is a significantly higher probability of upside potential than downside risk.

Preservation of Capital: We expect a significant portion of our investments to be made in the form of income generating preferred stock with warrants or equity conversion rights. We therefore seek to minimize downside risk by investing in banks that exhibit the potential for long-term stability. We focus on minimizing the risk of losses by using StoneCastle Financial Corp's disciplined and proven underwriting process when providing capital to community banks. We target:

    • long-term investments in established companies;

    • disciplined credit underwriting processes and positive regulatory relationships;

    • companies with stable balance sheets, lending in attractive markets with solid fundamentals; and

    • experienced management teams with exceptional track records and ties to their local markets.


Schedule of Investments (unaudited)

As of December 31, 2015

StoneCastle Financial Corp. lists the breakdown of portfolio holdings on a yearly basis as reflected in the Company's public filings with the U.S. Securities and Exchange Commission. More information about StoneCastle Financial can be found in the investor relations portion of our website or by visiting, www.SEC.gov.

This presentation is for informational purposes only.

Company(1) Investment # of Shares/Par Amount($)(2) Fair
Value ($)(3)
Term Loans - 5.3%
Banking - 5.3%
Community 1st Bancorp Subordinated Term Loan, 7.99%%, Due 01/01/2026

$

5,000,000

5,000,000

MidWest Community Financial Corporation Subordinated Term Loan, 7.25%, Due 01/01/2026

$

2,500,000

2,500,000

Total Term Loan(Cost $7,500,000)

7,500,000

Debt Securities - 4.1%
Banking - 4.1%
MMCapS Funding I, Ltd./MMCapS Funding I, Inc. Fixed Rate Mezzanine Notes, 8.04%, Due 06/08/2031, 144A(4)

$

6,512,291

5,698,255

Total Debt Securities(Cost $5,025,472)

5,698,255

Trust Preferred Securities - 33.1%
Banking - 33.1%
Amboy Capital Trust I Trust Preferred Security, 9.00%, Due 07/29/2029, 144A(4)

$

15,500,000

15,500,000

Capital City TPS LLC Capital City TPS 2015-1 9.74%, Note, Due 09/30/2030, 144A(4)

$

1,920,854

1,923,255

Central Trust Company Capital Trust I. Junior Subordinated Debt, 10.25%, Due 07/25/2031

$

2,500,000

2,534,375

Countrywide Capital Trust IV Trust Preferred Security, 6.75%

38,562

975,619

Deutsche Bank Contingent Capital Trust V Trust Preferred Security, 8.05%

57,444

1,560,179

First Alliance Capital Trust I Junior Subordinated Debt, 10.25%, Due 07/25/2031

$

6,500,000

6,548,750

First Citizens TPS LLC First Citizens TPS 2015-1 9.74%, Note, Due 09/30/2030, 144A(4)

$

2,240,997

2,243,798

M&T TPS LLC Series M&T TPS 2015-1 9.74%, Note, Due 09/30/2030, 144A(4)

$

2,561,138

2,577,146

Mercantil TPS LLC Series 2015-1 Mercantil TPS 2015-1 9.74%, Note, Due 09/30/2030, 144A(4)

$

4,802,135

4,826,146

Merrill Lynch Preferred Capital Trust III Trust Preferred Security, Series D, 7.00%

21,729

545,615

Merrill Lynch Preferred Capital Trust IV Trust Preferred Security, Series E, 7.12%

30,263

759,904

Merrill Lynch Preferred Capital Trust V Trust Preferred Security, Series F, 7.28%

76,206

1,914,295

National Bank of Indianapolis TPS LLC National Bank Of Indianapolis TPS 2015-1 9.74%, Note, Due 09/30/2030, 144A(4)

$

4,321,922

4,338,129

PrivateBancorp Capital Trust IV Trust Preferred Security, 10.00%

13,322

362,092

Total Trust Preferred Securities(Cost $47,298,299)

46,609,303

Preferred Share of Credit Securitization - 31.9%
Banking - 31.9%
Community Funding CLO, Ltd* Preferred Shares(Estimated effective yield 10.49%), 144A(4)(5)

$

45,500,000

44,894,850

Total Preferred Share of Credit Securitization(Cost $45,746,924)

44,894,850

Perferred Stocks - 47.1%
Banking - 47.1%
Banc of California Inc. Depositary Shares, Each Representing a 1/40th Interest in a Share of 7.375% Non-Cumulative Perpetual Preferred Stock, Series D

40,000

1,038,400

Blue Ridge Bancshares, Inc. Fixed Rate Cumulative Perpetual Preferred Stock, Series B, 9%

$

200,000

200,000

Chicago Shore Corporation Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

6,400,000

6,400,000

Chicago Shore Corporation Fixed Rate Cumulative Perpetual Preferred Stock, Series B, 9%

$

150,000

150,000

Colony Bankcorp, Inc. Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

3,661,000

3,661,000

F&M Financial Corporation Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

6,400,000

6,304,000

F&M Financial Corporation Fixed Rate Cumulative Perpetual Preferred Stock, Series B, 9%

$

175,000

172,375

Fidelity Financial Corporation Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

2,579,000

2,579,000

Fidelity Financial Corporation Fixed Rate Cumulative Perpetual Preferred Stock, Series B, 9%

$

210,000

210,000

First Priority Financial Corp. Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

1,117,000

1,117,000

First Reliance Bancshares Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

9,626,000

9,626,000

First Reliance Bancshares Fixed Rate Cumulative Perpetual Preferred Stock, Series B, 9%

$

487,000

487,000

First United Corporation Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

16,000,000

16,000,000

First Western Financial, Inc. Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

219,000

219,000

First Western Financial, Inc. Fixed Rate Cumulative Perpetual Preferred Stock, Series B, 9%

$

131,000

,000

Katahdin Bankshares Corporation Floating Rate Non-Cumulative Preferred Stock, Series D, 8.75%

$

10,000,000

10,000,000

The Queensborough Company Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

250,000

247,500

SouthCrest Financial Group, Inc. Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

1,900,000

1,881,000

SouthCrest Financial Group, Inc. Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

345,000

341,550

Tennessee Valley Financial Holdings Inc. Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

100,000

104,050

Tennessee Valley Financial Holdings Inc. Fixed Rate Cumulative Perpetual Preferred Stock Series B, 9%

$

49,000

56,779

Universal Bancorp Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

5,203,000

5,203,000

Universal Bancorp Fixed Rate Cumulative Perpetual Preferred Stock, Series B, 9%

$

95,000

95,000

Total Preferred Stocks(Cost $66,770,191)

66,223,654

Convertible Preferred Stocks - 3.8%
Banking - 3.8%
Civista Bancshares Inc. Depositary Shares, Each Representing a 1/40th Interest in a 6.50% Non-Cumulative Redeemable Convertible Perpetual Preferred Share, Series B

59,001

2,168,287

SB Financial Group Inc. Depositary Shares, Each Representing a 1/100th Interest in a 6.50% Non-Cumulative Convertible Perpetual Preferred Share, Series A

250,000

3,162,500

Total Convertible Preferred Stocks(Cost $3,975,025)

5,330,787

Common Stocks - 2.5%
Banking - 2.0%
Happy Bancshares, Inc. Equity Security, Private Placement, 144A(4)(6)

44,000

1,112,760

Pioneer Bancshares, Inc. Equity Security(6)

83,400

1,703,862

2,816,622

Non-Banking Financial - 0.5%
Medallion Financial Corporation Equity Security - Business Development Corporation

104.590

736,313

736,313

Total Common Stocks(Cost $3,554,142)

3,552,935

Exchange Traded Fund - 2.6%
Diversified Financial Services - 2.6%
iShares S&P U.S. Preferred Stock Index Fund Preferred Stock Exchange Traded Fund

95,797

3,721,713

Total Exchange Traded Fund(Cost $3,798,602)

3,721,713

Limited Partnership Interest - 0.6%
Banking - 0.6%
Priam Capital Fund I, L.P. Limited partnership(6)

$

1,000,000

895,500

Limited Partnership Interest(Cost $1,003,317)

895,500

Total Long Term Investments(Cost $184,671,972)

184,426,997

Short-Term Investments - 0.2%
Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio Institutional Share Class

326,875

326,875

Total Short-Term Investments (Cost $326,875)

326,875

Total Investments (Cost $184,998,847) (7)(8)†: 131.2%

184,753,872

Other assets and liabilities, net: (31.2)%(9)

(43,983,952)

Total Net Assets: 100.0%

$ 140,769,920

(1) We do not "control" and are not an "affiliate" of any of our portfolio companies, each as defined in the Investment Company Act
  (the "1940 Act").
(2) ($) represents security position traded in par amount.
(3) Fair Value is determined in good faith in accordance with the Company's valuation policy and is reviewed and accepted by the company's Board of Directors.
(4) Security is exempt from registration under Rule 144A of the Securities Act of 1933.
(5) The preferred shares are considered an equity position in the credit securitization. Equity investments are entitled to recurring distributions which are generally equal to the remaining cash flow of the payments made by the underlying company's securities less contractual payments to debt holders and company expenses. The estimated effective yield indicated is based upon a current projection of the amount and timing of these recurring distributions and the estimated amount of repayment of principal upon termination. Such projections are periodically reviewed and adjusted as needed. The estimated yield may ultimately not be realized.
(6) Currently non-income producing security.
(7) Investments are income producing assets unless otherwise noted by footnote (6).
(8) Cost values reflect accretion of original issue discount or market discount, and amortization of premium.
(9) Includes $25.0 million in bank loans from Texas Capital Bank.
As of December 31, 2015, the cost basis of investment securities owned was substantially identical for both book and tax purposes. Gross unrealized appreciation of investments was $2,416,791 and gross unrealized depreciation was $2,661,766, resulting in net unrealized depreciation of $244,975.
* The following is a listing of the underlying unsecured loans, unsecured subordinated debentures and notes that were made by Community Funding CLO, Ltd. See Notes to Financial Statements for additional information on StoneCastle Financial Corp's. investment in Community Funding CLO, Ltd.


Portfolio

Our board of directors provides the overall supervision and review of our affairs. Management of our portfolio will be the responsibility of our advisor's, StoneCastle Asset Management, LLC (our "Advisor"), investment committee. Messrs. Siegel and Shilowitz will be responsible for negotiating, structuring and managing of our investments. Our Advisor's investment professionals have significant experience sourcing, analyzing, investing and managing investments in community banks.

We expect to create and maintain an investment portfolio of securities focused on the bank market, with an emphasis on community banks, through investment in numerous issuers differentiated by asset sizes, business models and geographies to create a more stable, long-term portfolio of assets. Our Advisor will monitor our portfolio companies and market concentrations and may adjust its underwriting criteria based on market conditions and portfolio concentrations. Our Advisor's monitoring operations will include sensitivity analyses to determine the effects of changes in market conditions on our asset portfolio. These analyses may include, among other things, simulations of changes in interest rates, changes in economic activity and other events that would affect the forecasted performance of our assets.

Press Releases

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SEC Filings

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Annual Reports

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2013 Annual Report .... 30kb ...

Quarterly Results

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2012

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