StoneCastle Financial Corp. (NASDAQ:BANX) Q3 2019 Earnings Conference Call - Final Transcript

Oct 30, 2019 • 05:00 pm ET

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StoneCastle Financial Corp. (NASDAQ:BANX) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings, ladies and gentlemen. And welcome to the StoneCastle Financial Corp Q3 2019 Investor Conference Call. [Operator Instructions]. A question-and-answer session will follow the formal presentation. [Operator Instructions]

It is now my pleasure to turn the call over to your host, Rachel Schatten, General Counsel of StoneCastle Financial. Please go ahead.

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 September 30, 2019. The company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of today, October 30, 2019.

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

Executive
Josh Siegel

Thank you, Rachel. Good afternoon and welcome to StoneCastle Financial's third 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 of 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. We are pleased to report that earnings for the third quarter were approximately $3.4 million or $0.52 per share. This figure was comprised of net investment income of $2.5 million or $0.38 per share, and approximately $1 million in net realized capital gains of $0.14 per share.

Total assets were $169.2 million and the value of the invested portfolio was $166.9 million. The net asset value at the end of the quarter was $21.75 per share, down $0.05 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 at investment-grade by Kroll Bond Rating Agency.

Now let me turn to the portfolio review. During the quarter the company sold its equity interest in Happy Bancshares, a position held since 2014. While we typically seek income producing investments, this was the case where we identified an attractive private equity investment in the common stock of the bank.

The company invested $1 million in a privately negotiated transaction and sold the position for a realized capital gain of approximately $1 million. This was a double our investment, resulting in an average annualized