StoneCastle Financial Corp. (NASDAQ:BANX) Q2 2019 Earnings Conference Call - Final Transcript

Aug 08, 2019 • 05:00 pm ET

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StoneCastle Financial Corp. (NASDAQ:BANX) Q2 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings. Welcome to StoneCastle Financial Second Quarter Financial Release Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Rachel Schatten, General Counsel for StoneCastle Financial. Thank you. You may begin.

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 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 semiannual reports of the Company.

StoneCastle Financial has based the forward-looking statements included in this presentation on information available to us as of June 30th, 2019. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of today, August 8th, 2019.

Now, I will turn the call over to StoneCastle Financial's Chairman and Chief Executive Officer, Josh Siegel.

Executive
Joshua Siegel

Thank you, Rachel. Good afternoon, and welcome to StoneCastle Financial's second quarter 2019 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 an updated StoneCastle Financial's quarterly results and portfolio review. 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 $2.5 million or $0.38 per share. Total assets were approximately $168.2 million and the value of the invested portfolio was approximately $165.1 million. The net asset value at the end of the quarter was $21.80 per share, up $0.17 from the prior quarter. We believe no meaningful credit issues currently exist within the portfolio, and the majority of the underlying banks continue to be scored investment-grade by Kroll Bond Rating Agency.

Now let me turn to the portfolio review. As expected, this was another quiet quarter within the community banking industry. That said, StoneCastle made an investment in the TARP issuer, Fidelity Federal Bancorp Series A and B, cumulative perpetual preferred shares, both of which are 9% coupons. According to S&P Global Market Intelligence, debt offerings by all the US banks and thrifts below $10 billion in assets were reported to be only $176 million in Q2, with a weighted average coupon of 5.27%.

During the quarter, we had $12.9 million of securities redeemed with the majority of the proceeds coming from Reliance Bancshares preferred stock. However, we are in discussions with an issuer for a transaction of approximately $10 million that we believe will have an estimated yield