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 September 30, 2016

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 - 15.1%
Banking - 15.1%
BankGuam Holding Company Subordinated Term Loan, 7.99%, Due 01/01/2019

$

3,500,000

3,500,000

Community 1st Bancorp Subordinated Term Loan, 7.99%, Due 01/01/2026

$

5,000,000

5,000,000

First Colebrook Bancorp, Inc. Subordinated Term Loan, 7.99%, 4/1/2026

$

5,000,000

5,000,000

Lincoln Park Bancorp Subordinated Term Loan, 8.25%, 1/1/2026

$

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 $21,000,000)

21,000,000

Debt Securities - 6.2%
Banking - 6.2%
MMCapS Funding I, Ltd./MMCapS Funding I, Inc. Fixed Rate Mezzanine Notes, 8.04%, Due 06/08/2031, 144A(4)

$

6,512,291

5,637,202

Preferred Term Securities, Ltd. / Preferred Term Securities, Inc. Fixed Rate Mezzanine Notes, 9.74%, 9/15/2030, 144A(4)

$

3,037,918

3,025,386

Total Debt Securities(Cost $8,129,507)

8,662,588

Trust Preferred Securities - 29.0%
Banking - 29.0%
Amboy Capital Trust I Trust Preferred Security, 9.00%, Due 07/29/2029, 144A(4)

$

15,500,000

15,441,875

Capital City TPS LLC Trust Preferred Security, Series 2015-1 9.74%, Note, 9/30/2030, 144A(4)

$

1,913,432

1,903,865

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

$

2,500,000

2,512,500

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

$

6,500,000

6,532,500

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

$

2,232,338

2,221,177

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

$

2,551,242

2,551,242

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

$

4,783,580

4,783,580

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

$

4,305,222

4,305,222

Total Trust Preferred Securities(Cost $40,846,303)

40,251,961

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

$

45,500,000

43,254,575

U.S. Capital Funding I, Ltd. / U.S. Capital Funding I, Corp. Subordinate Income Note, 5/1/2034, 144A(4)(6)

$

4,700,000

1,045,750

Total Preferred Share of Credit Securitization(Cost $46,703,714)

44,300,325

Perferred Stocks - 40.9%
Banking - 40.9%
Blue Ridge Bancshares, Inc. Fixed Rate Cumulative Perpetual Preferred Stock, Series B, 9%

$

338,000

338,000

Chicago Shore Corporation Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%(6)*

$

6,400,000

5,520,000

Chicago Shore Corporation Fixed Rate Cumulative Perpetual Preferred Stock, Series B, 9%(6)**

$

150,000

129,375

Citizens Bancshares Company Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

12,000,000

11,640,000

Citizens Bancshares Company Fixed Rate Cumulative Perpetual Preferred Stock, Series B, 9%

$

750,000

727,500

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

$

1,551,000

1,551,000

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

$

126,000

126,000

First Priority Financial Corporation Fixed Rate Cumulative Perpetual Preferred Stock, Series C, 9%

$

428,000

428,000

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

$

10,666,670

10,666,670

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

$

131,000

131,000

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

$

219,000

219,000

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

$

10,000,000

10,000,000

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

98,500

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

$

49,000

48,510

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

$

1,218,000

1,199,730

TriSummit Bank Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 9%

$

2,765,000

2,765,000

Total Preferred Stocks(Cost $58,620,186)

56,810,835

Common Stocks - 2.6%
Banking - 2.6%
Happy Bancshares, Inc. Equity Security, Private Placement, 144A(4)(6)

44,000

1,221,000

Pioneer Bancshares, Inc. Equity Security, Private Placement, 144A(4)(6)

83,400

2,421,102

Total Common Stocks(Cost $2,502,200)

3,595,174

Limited Partnership Interest - 0.6%
Banking - 0.7%
Priam Capital Fund I, L.P. Private Placement of Limited Partnership Interest(6)+

$

1,000,000

896,500

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

896,500

Total Long Term Investments(Cost $178,805,227)

175,564,311

Short-Term Investments - 0.3%
Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio Institutional Share Class

1,130,761

1,130,761

Total Short-Term Investments (Cost $1,130,761)

1,130,761

Total Investments (Cost $179,935,988) (7)(8)†: 127.2%

176,695,072

Other assets and liabilities, net: (27.2.0)%(9)

(37,824,207)

Total Net Assets: 100.0%

$ 138,870,865

(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 effective 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 $35,250,000 in bank loans from Texas Capital Bank.
+ The Limited Partnership is an entity organized solely for the purpose of investing in First Mariner Bank.
*As of September 30, 2016, this investment has deferred, undeclared and compounding dividends of $518,335 that will be recognized by StoneCastle Financial Corp. once they are declared by Chicago Shore Corporation.
**As of September 30, 2016, this investment has deferred, undeclared and compounding dividends of $12,148 that will be recognized by StoneCastle Financial Corp. once they are declared by Chicago Shore Corporation.
As of September 30, 2016, the cost basis of investment securities owned was substantially identical for both book and tax purposes. Gross unrealized appreciation of investments was $1,807,037 and gross unrealized depreciation was $5,047,953, resulting in net unrealized depreciation of $3,240,916.
aThe following is a listing of the underlying unsecured loans, subordinated debentures and notes that were made by Community Funding CLO, Ltd. See Notes to Schedule of Investments 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

Filing Description Date Filed Size View
4 BANX Report Jul 23, 2013 30kb .... ...

Annual Reports

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

Quarterly Results

2013

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2012

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