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ArrowMark Financial Corp. Reports Third Quarter 2022 Results
Source: Nasdaq GlobeNewswire / 09 Nov 2022 15:20:00 America/Chicago
DENVER, Nov. 09, 2022 (GLOBE NEWSWIRE) -- 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 Muraco
212-468-5441ARROWMARK 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, 2022For The Three Months
Ended June 30, 2022Investment 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, 2022Per 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