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'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'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

As of March 31, 2014

These holdings reflect the portfolio of the Company as of a given calendar month-end date. This presentation is for informational purposes only and should not be substituted for fiscal quarter-end portfolio holdings filed with the Securities and Exchange Commission. The Company's portfolio is actively managed and its composition will vary. Portfolio holdings and allocations are as of the date noted and subject to change.

Company Investment # of Shares/Par Amount Market
Value ($)
Long-Term Investments: 65.6%
Preferred Securities: 44.4%
Convertible Preferred Stock: 1.7%
Banking: 1.7%
First Citizens Banc Corp Depositary Shares Representing a 1/40th Interest in a 6.50% Noncumulative Redeemable Convertible Perpetual Preferred Share, Series B 59,001 1,755,280
Subtotal - Convertible Preferred Stock 1,755,280
Preferred Stock: 42.7%
Banking: 42.7%
BNCCORP, Inc. Fixed Rate Cumulative Perpetual Preferred Stock Series A, 9% 13,750 13,754,583
Chicago Shore Corporation Fixed Rate Cumulative Perpetual Preferred Stock Series A, (5% through 8/14/2014, 9% thereafter) 6,400 6,343,467
Chicago Shore Corporation Fixed Rate Cumulative Perpetual Preferred Stock Series B, 9% 150 150,100
Community First Bancshares, Inc. Fixed Rate Cumulative Perpetual Preferred Stock Series A, (5% through 5/14/2014, 9% thereafter) 7,250 7,148,500
Community First Bancshares, Inc. Fixed Rate Cumulative Perpetual Preferred Stock Series B, 9% 400 398,667
Community West Bancshares Fixed Rate Cumulative Perpetual Preferred Stock Series A, 9% 3,850 3,821,125
Farmers Capital Bank Corporation Fixed Rate Cumulative Perpetual Preferred Stock Series A, 9% 5,494 5,384,120
Fidelity Financial Corporation Fixed Rate Cumulative Perpetual Preferred Stock Series A, 9% 3,607 3,588,965
Fidelity Financial Corporation Fixed Rate Cumulative Perpetual Preferred Stock Series B, 9% 293 291,535
National Bancshares, Inc. Fixed Rate Cumulative Perpetual Preferred Stock Series T1, (5% through 5/14/2014, 9% thereafter) 3,250 3,201,250
National Bancshares, Inc. Fixed Rate Cumulative Perpetual Preferred Stock Series T2, 9% 1,000 991,250
Premier Financial Bancorp, Inc. Fixed Rate Cumulative Perpetual Preferred Stock Series A, (5% through 11/15/2014, 9% thereafter) 468 462,540
Subtotal - Preferred Stock 45,536,102
Total Preferred Securities (Cost $47,574,851) 47,291,382
Debt Securities: 21.2%
Banking: 21.2%
MMCapS SM Funding I, Ltd./MMCapS SM Funding I, Inc. Fixed Rate Mezzanine Notes Due 2031 (9.48% matures 6/15/2030), 144A(1) 8,597,901 6,373,194
Preferred Term Securities, Ltd./Preferred Term Securities, Inc. Fixed Rate Mezzanine Notes Due September 15, 2030 (9.74% matures 9/15/2030), 144A(1) 16,728,006 16,267,986
Total Debt Securities (Cost $22,294,087) 22,641,180
Total Long Term Investments (Cost $69,868,938) 69,932,562
Short-Term Investments: 37.9%
Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio Institutional Share Class 40,388,812 40,388,812
Total Short-Term Investments (Cost $40,388,812) 40,388,812
Total Investments (Cost $110,257,750) (2)(3): 103.5% 110,321,374
Other assets and liabilities, net: (3.5%) (3,769,865)
Total Net Assets: 100.0% 106,551,509

(1) Security is exempt from registration under Rule 144A of the Securities Act of 1933.
(2) Cost values reflect accretion of market discount.
(3) All Investments are income producing assets.


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

Title Type Size
2013 Annual Report .... 30kb ...

Quarterly Results

2013

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2012

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