ArrowMark Financial Corp. Reports Third Quarter 2022 Results
10 November 2022 - 8:20AM
ArrowMark Financial Corp. (Nasdaq: BANX) (“ArrowMark Financial” or
the “Company”), an investment company registered with the
Securities and Exchange Commission (“SEC”), today announced results
for the third fiscal quarter ended September 30, 2022.
Third Quarter 2022 Investment
Highlights:
- Invested
approximately $17.9 million in four investments
- Realized
proceeds of approximately $10.4 million from the sale of three
investments
- Realized
proceeds from partial paydowns of $4.5 million from seven
investments
A complete listing of investments as of the end of the quarter
can be found on the Company’s website at
ir.arrowmarkfinancialcorp.com, under SEC filings.
The estimated annualized yield generated by the invested
portfolio as of September 30, 2022 (excluding cash and cash
equivalents) was approximately 11.85%, up 174 basis points from
10.11% in the prior quarter.
Third Quarter 2022 Financial
Results
Net investment income was $3.3 million or $0.46
per share, comprised of $5.3 million in gross income and $2.0
million of expenses. The Company also reported a net realized and
unrealized loss on investments of ($0.27) per share. Net Assets at
quarter end were $147.3 million. The Company’s Net Asset Value was
$20.74 per share, down ($0.20) from the prior quarter.
In the third quarter, the Company paid a regular
cash distribution of $0.39 per share which was paid on September
29, 2022, to shareholders of record at the close of business on
September 22, 2022.
The Company had $62.3 million outstanding on its
$70.0 million credit facility at the quarter end, which represents
approximately 29% of total assets. According to regulated
investment company rules, the Company may borrow only up to 33.3%
of its total assets.
Portfolio and Investment
Summary
During the quarter, the Company invested a total
of $17.9 million in four bank-related regulatory relief capital
investments. The Company received total proceeds of approximately
$14.9 million, including $10.4 million from the sale of three
investments, and $4.5 million from partial paydowns from seven
investments.
Quarterly Conference Call
ArrowMark Financial will host a webcast and
conference call on November 9, 2022, at 5:00 pm Eastern time. The
call will include a presentation hosted by Chairman & CEO,
Sanjai Bhonsle, President, Dana Staggs, and Chief Financial
Officer, Patrick J. Farrell. There will be no open Q&A session.
All questions can be immediately addressed by calling ArrowMark
Financial’s Investor Relations at 212-468-5441 or emailing
investorrelations@arrowmarkfinancialcorp.com to schedule a
meeting with the management.
The conference call can be accessed by dialing
1-844-826-3035 for domestic callers or 1-412-317-5195 for
international callers. Participants may also access the call via
live webcast by visiting ArrowMark Financial's investor relations
website at ir.arrowmarkfinancialcorp.com. To listen to a live
broadcast, go to the website at least 15 minutes prior to the
scheduled start time to register, download and install any
necessary audio software. A replay will be available shortly
after the call and be available through midnight (Eastern Time) on
November 23, 2022. The replay can be accessed by dialing
1-844-512-2921 for domestic callers or 1-412-317-6671 for
international callers. The passcode for the replay is 10171795. The
archive of the webcast will be available on the Company's website
for a limited time.
About ArrowMark Financial Corp.
ArrowMark Financial is an SEC registered
non-diversified, closed-end management investment company listed on
the NASDAQ Global Select Market under the symbol "BANX." Its
investment objective is to provide stockholders with current
income. ArrowMark Financial is managed by ArrowMark Asset
Management, LLC. The Company’s website can be found at
ir.arrowmarkfinancialcorp.com.
Disclaimer and Risk Factors:
There is no assurance that ArrowMark Financial
will achieve its investment objective. ArrowMark Financial is
subject to numerous risks, including investment and market risks,
management risk, income and interest rate risks, banking industry
risks, preferred stock risk, convertible securities risk, debt
securities risk, liquidity risk, valuation risk, leverage risk,
non-diversification risk, credit and counterparty risks, market at
a discount from net asset value risk and market disruption risk.
Shares of closed-end investment companies may trade above (a
premium) or below (a discount) their net asset value. Shares of
ArrowMark Financial may not be appropriate for all investors.
Investors should review and consider carefully ArrowMark
Financial's investment objective, risks, charges and expenses. Past
performance does not guarantee future results.
The Annual Report, Semi-Annual Report and other regulatory
filings of the Company with the SEC are accessible on the SEC's
website at www.sec.gov and on the Company's
website at ir.arrowmarkfinancialcorp.com.
CONTACT: Investor Contact:Julie Muraco212-468-5441
|
ARROWMARK
FINANCIAL CORP. |
|
Statement of
Assets and Liabilities (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
September
30, 2022 |
|
June 30,
2022 |
|
Assets |
|
|
|
|
|
Investments in securities, at fair value cost: $209,448,494 and
$207,554,612 respectively) |
$ |
193,181,830 |
|
|
$ |
197,055,807 |
|
|
|
Interest and
dividends receivable |
|
12,225,520 |
|
|
|
2,894,419 |
|
|
|
Foreign cash
(cost: $21,298 and $23,338 respectively) |
|
21,418 |
|
|
|
22,443 |
|
|
|
Cash |
|
5,297,472 |
|
|
|
127,284 |
|
|
|
Unrealized
appreciation on forward currency exchange contracts |
|
35,701 |
|
|
|
- |
|
|
|
Prepaid
assets |
|
1,494,260 |
|
|
|
1,535,171 |
|
|
|
Total assets |
|
212,256,201 |
|
|
|
201,635,124 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Loan
payable |
|
62,300,000 |
|
|
|
51,500,000 |
|
|
|
Investment
advisory fee payable |
|
930,951 |
|
|
|
877,992 |
|
|
|
Loan
interest payable |
|
296,986 |
|
|
|
33,990 |
|
|
|
Unrealized
depreciation on forward currency exchange contracts |
|
1,202,041 |
|
|
|
399,809 |
|
|
|
Accrued
expenses payable |
|
199,614 |
|
|
|
162,644 |
|
|
|
Total liabilities |
|
64,929,592 |
|
|
|
52,974,435 |
|
|
Net Assets |
$ |
147,326,609 |
|
|
$ |
148,660,689 |
|
|
|
|
|
|
|
|
Net Assets consist of: |
|
|
|
|
|
Common stock
at par ($0.001 per share) |
$ |
7,103 |
|
|
$ |
7,101 |
|
|
|
Paid-in-Capital |
|
156,724,166 |
|
|
|
156,696,147 |
|
|
|
Total
distributable earnings / (loss) |
|
(9,404,660 |
) |
|
|
(8,042,559 |
) |
|
|
Net
Assets |
$ |
147,326,609 |
|
|
$ |
148,660,689 |
|
|
|
|
|
|
|
|
Net Asset Value Per Share: |
|
|
|
|
Common Stock Shares Outstanding |
|
7,102,626 |
|
|
|
7,101,054 |
|
|
Net asset value per common share |
$ |
20.74 |
|
|
$ |
20.94 |
|
|
Market price per share |
$ |
17.26 |
|
|
$ |
19.20 |
|
|
Market price premium/(discount) to net asset value per
share |
|
-16.78 |
% |
|
|
-8.31 |
% |
|
|
|
|
|
|
ARROWMARK
FINANCIAL CORP. |
Statement of
Operations (unaudited) |
|
|
|
|
|
|
|
|
For The Three Months Ended September 30,
2022 |
For The Three Months Ended June 30, 2022 |
|
Investment Income |
|
|
|
|
Interest |
$ |
5,130,810 |
|
$ |
4,713,141 |
|
|
|
Dividends |
|
146,258 |
|
|
259,077 |
|
|
|
Origination
fee income |
|
32,278 |
|
|
32,127 |
|
|
|
Other income
(service fees and due diligence fees) |
|
38,768 |
|
|
32,238 |
|
|
|
Total Investment Income |
|
5,348,114 |
|
|
5,036,583 |
|
|
|
|
|
|
|
Expenses |
|
|
|
|
Investment
advisory fees |
|
930,951 |
|
|
877,992 |
|
|
|
Interest
expense |
|
652,189 |
|
|
486,112 |
|
|
|
Directors'
fees |
|
104,052 |
|
|
125,152 |
|
|
|
Transfer
agent, custodian fees and administrator fees |
|
73,159 |
|
|
82,364 |
|
|
|
Bank
administration fees |
|
76,504 |
|
|
51,772 |
|
|
|
Professional
fees |
|
79,313 |
|
|
148,450 |
|
|
|
Investor
relations fees |
|
31,205 |
|
|
29,080 |
|
|
|
Insurance
expense |
|
18,148 |
|
|
17,951 |
|
|
|
Valuation
fees |
|
15,152 |
|
|
69,988 |
|
|
|
Miscellaneous fees (proxy, rating agency, etc.) |
|
92,165 |
|
|
89,309 |
|
|
|
Total expenses |
|
2,072,838 |
|
|
1,978,170 |
|
|
|
Net
Investment Income |
|
3,275,276 |
|
|
3,058,413 |
|
|
|
|
|
|
|
Realized and Unrealized Gain / (Loss) on Investments and
Foreign Currency Transactions |
|
|
|
Net realized
gain / (loss) on investments |
|
(110,240 |
) |
|
(808,687 |
) |
|
|
Net realized
gain from forward foreign currency contracts |
|
4,983,569 |
|
|
3,540,799 |
|
|
|
Net realized
gain / (loss) from foreign currency translations |
|
(184,231 |
) |
|
(226,172 |
) |
|
|
Net change
in net unrealized appreciation / (depreciation) on investments |
|
(5,767,859 |
) |
|
(6,714,234 |
) |
|
|
Net change
in unrealized appreciation / (depreciation) on forward currency
contracts |
|
(766,531 |
) |
|
313,406 |
|
|
|
Net change
in unrealized appreciation / (depreciation) on foreign currency
translations |
|
(22,674 |
) |
|
(9,092 |
) |
|
|
Net
realized and unrealized gain/(loss) on investments, forward foreign
currency contracts and foreign currency translations |
|
(1,867,966 |
) |
|
(3,903,980 |
) |
|
|
|
|
|
|
|
Net
Increase/(Decrease) in Net Assets Resulting From
Operations |
$ |
1,407,310 |
|
$ |
(845,567 |
) |
|
|
|
|
|
ARROWMARK
FINANCIAL CORP. |
Financial
Highlights (unaudited) |
|
|
|
|
|
For The Three Months Ended September 30, 2022 |
|
Per
Share Operating Performance |
|
|
Net Asset Value, beginning of period |
$ |
20.94 |
|
|
Net
investment income(1) |
|
0.46 |
|
|
Net realized
and unrealized gain (loss) on investments |
|
(0.27 |
) |
|
Total from investment operations |
|
0.19 |
|
|
|
|
|
Less
distributions to shareholders |
|
|
From net
investment income |
|
(0.39 |
) |
|
Total distributions |
|
(0.39 |
) |
|
|
|
|
Net
asset value, end of period |
$ |
20.74 |
|
|
Per
share market value, end of period |
$ |
17.26 |
|
|
|
|
|
Total Investment Return (2) |
|
|
Based on market value |
|
-8.14 |
% |
|
Based on net asset value |
|
1.21 |
% |
|
|
|
|
Ratios and Supplemental Data |
|
|
Net
assets, end of period (in millions) |
$ |
147.3 |
|
|
Ratios (as a
percentage to average net assets): |
|
|
Expenses
before waivers(3)(4)* |
|
5.55 |
% |
|
Expenses
after waivers(5)* |
|
5.55 |
% |
|
Net
investment income(6)* |
|
8.77 |
% |
|
Portfolio
turnover rate ** |
|
9 |
% |
|
|
|
|
Revolving Credit Agreement |
|
|
Total
revolving credit agreement outstanding (000's) |
$ |
62,300 |
|
|
Asset
coverage per $1,000 for revolving credit agreement(7) |
|
3,365 |
|
|
|
|
(1 |
) |
Based on the
average shares outstanding during quarter. |
|
(2 |
) |
Reflects reinvestment of distributions at the price obtained under
the Dividend Reinvestment Plan. |
|
Total return does not include sales load and offering expenses and
are not annualized. |
(3 |
) |
Excluding
interest expense, the ratio would have been 3.80%. |
|
(4 |
) |
Ratio of expenses before waivers to average managed assets equals
4.05%. |
(5 |
) |
Ratio of expenses after waivers to average managed assets equals
4.05%. |
(6 |
) |
Ratio of net investment income to average managed assets equals
6.39%. |
(7 |
) |
Calculated by subtracting the Company's total liabilities
(excluding the loan) from the Company's |
|
total assets and dividing the amount by the loan outstanding in
000's. |
* |
Annualized |
|
** |
Not-annualized |
|
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