StoneCastle Financial Corp. (NASDAQ:BANX) Q4 2018 Earnings Conference Call - Final Transcript

Feb 28, 2019 • 05:00 pm ET

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StoneCastle Financial Corp. (NASDAQ:BANX) Q4 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to the StoneCastle Financial Corp. Fourth Quarter 2018 Investor Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) Please note, this conference is being recorded. Now, I would like to turn the call over to Rachel Schatten, General Counsel of StoneCastle Financial.

Executive
Rachel Schatten

Good afternoon. Before we begin this conference call, I'd like to remind everyone that certain statements made during the call may be considered forward-looking statements based on current management's expectations that involve substantial risks and uncertainties. Actual results may differ materially from the results stated in or implied by these forward-looking statements. This would depend on numerous factors, such as changes in securities or financial markets or general economic conditions; the volume of sales and purchases of shares of common stock; the continuation of investment advisory, administrative and service contracts; and other risks discussed from time-to-time in the Company's filings with the SEC, including annual and semi-annual reports of the Company.

StoneCastle Financial has based the forward-looking statements included in this presentation on information available to us as of December 31, 2018. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of today, February 28, 2019. Now, I will turn the call over to StoneCastle Financials' Chairman and Chief Executive Officer, Josh Siegel.

Executive
Joshua Siegel

Thank you, Rachel. Good afternoon, and welcome to StoneCastle Financials fourth quarter 2018 investor call. In addition to Rachel, joining me today is George Shilowitz, President; and Pat Farrell, our Chief Financial Officer. I would like to start the call today with a review of StoneCastle Financials quarterly results, with brief comments and the market environment, as well as updates on the Company. Then I will turn the call over to Pat, who will provide you with greater detail on our financial results, before I open up the call for questions. Net investment income for the quarter was $2.7 million or $0.42 per share. Total assets were approximately $196.2 million, and the value of the invested portfolio was approximately $189.1 million. The net asset value at the end of the quarter was $21.43, down $0.61 from the prior quarter. This decline was predominantly due to unrealized depreciation in the quarter decreasing by $3.4 million or $0.51 per share. We believe no meaningful credit issues currently exist within the portfolio, and the majority of the underlying banks continued to be scored investment grade by Kroll Bond Rating Agency.

Now, let me turn to the portfolio review. This was another quiet quarter within the community banking industry. As published by SNL, there were 10 reported sub-debt deals closed during the quarter, raising just under $500 million of capital of coupons ranging from 5.9% to 7%, with a weighted average coupon of 6.1%. One $300 million issuance with a coupon of 5.9% accounted for approximately 60% of this total. These statistics put in perspective the strength of StoneCastle's ability to originate bespoke investment opportunities, even in