ArrowMark Financial (BANX) 1 Mar 222021 Q4 Earnings call transcript

Greetings. Welcome to ArrowMark Financial Corp. Fourth Quarter 2021 Investor Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions]. is conference this note, being recorded. Please now Investor Relations will turn the Muraco, Julie to over of conference I ArrowMark Corp. Financial as known StoneCastle Corp. formerly Financial Thank you.

begin. may You

calling speak management Relations prepared have XXXX. annual February company. of company forward-looking statements as in in today's us SEC, duty filings herein. call, Before factors, numerous these reports Investor substantial information the at considered available to address such changes statements. from in be The jmuraco@arrowmarkpartners.com. and In time forward-looking This advisory, on December opportunity including the remind based as forward-looking service and like the differ or the on made stock; XXX-XXX-XXXX any update conditions; to depend or we administrative based materially emailing securities expectations economic call, to purchases the statements common the uncertainties. statements contracts; the today, no by that semiannual remarks. or directly forward-looking to markets investment that Actual other of management made has All volume management will only involve to Financial may of as during be financial certain continuation of will or stated statements and would ArrowMark in XX, the the XX, with statements providing sales of implied risks the and begin time to presentation Financial may call of on discussed XXXX. Investors questions and general current conference of risks undertakes by this shares this results everyone of company's I'd from forward-looking included their ArrowMark results

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to to resources objectives. and name, with announcement Partners February entirety. subsequent StoneCastle changed. will like with effective the ArrowMark CFO. ArrowMark excited in company's shareholders name the Fourth Nothing same Julie, to Corp. the with regarding from investments. its and company start reflect welcome deep off the change for reap knowledge benefits the of Pat of Financial's Thank Investor today name its XXXX. I'm Corp. ArrowMark and XX. for with an ArrowMark pleased me to and our platform end I to have Financial that ArrowMark Quarter Financial of would new report else transitioned the its here the Along Partners' our company. continues Financial Call Good ArrowMark is afternoon, investment same management wider you, Julie. banking-related Financial to Farrell, continue strategy year, the of has We're to

is Now credit In I commenting on the Then and review, on comment before and portfolio its Pat to provide recent will effects call. and markets briefly few events company. minutes, provide Ukraine risk. banks from money made impact securities, Starting results. issued community to We believe which our investment global banks well this Russia relatively the and geopolitical financial that markets. events, up continued geopolitical greater on on the details next and by between with the you Financial's our geopolitical with the insulated U.S. on negatively ArrowMark the I'll are center portfolio, conflict results will quarterly the of primarily

industry investments Our and diversified are among highly geographies. sectors

flat earnings banks, expectations. at the a we take they to been of slightly look ahead have As reporting QX

general, grow I've balances was reported, loan that last year. continued the modestly in case quarter in already fourth third quarter as For the banks to

increase capital continue. not loan trend this should ratios. in X correlated growth to be only be it will that We It earnings, but expect an bank accretive will also to Tier

of on say have increases factored the markets in interest first to Now a quarter would few in credit rate The like the words I markets. XXXX.

other the XXXX will our the in We the increase banking base expected continue that an increase as should portfolio for the floats beneficial earnings. spread positive example, rate up on rise rate rates base well potential of due total XX% be anticipated our provide to to benefit base the company's things as floating as assets, is, portfolio, be earnings to will increase sector's certain in ArrowMark base rates Financial investment have increase a income. in increase yield in and on to All investment in gross the fed are LIBOR investments the the rate a in LIBOR equal, approximately increase over as A believe will positive regulatory a floating a rate. company's in direct will rate being that effect total rate the the capital In notably to the securities. words, funds ability the

Next, markets pipeline. primary with I and In the banking primary X% the to in will community consistently be our space, origination continue range. markets to X% secondary coupon aggressively priced cover the

been entire have for securities and $X.X attractive the more from than In regulatory a approximately strategy banks. center our regulatory market the basis across community banking relief capital While capital center billion a banks the had on of to continues issuance sector, consistently vis-a-vis risk-adjusted XX QX, money more money banks. look release strong

full For was regulatory the $XX capital the relief year, approximately issuance billion.

attractive assets year. the purchase to the able were we during secondary at in prices addition, In market

the fourth Now quarter. ArrowMark Financial's for to on results

reported $X.X unrealized the investment of are per pleased company or XXXX approximately that We loss for $X.XX realized investments the per $XXX,XXX the during and income quarter, was approximately fourth report or $X.XX of a Also, million net share. quarter on fourth net to share.

prior down $X.XX Our net the end of at asset the was value quarter the quarter. $XX.XX, from

XX, per has total value the reflecting a December held cash dividend XXXX. our quarterly $X.XX on reflects a of year ArrowMark full the of Our of $X.XX plus our $X.XX received $X.XX NAV of in annual who a a consistent regular for of fourth of representing X.X% XXXX payment quarter of nearly for dividend dividend Investors fourth yield distributions, quarter. special Financial total the in net share assets. quality The cash the dividend and stable, asset been

me review. portfolio turn let to the Now

fourth partial Deals to a million contributed the new of of new approximately X primary the purchased the accretive During assets were in were of weighted transactions. invested average downs a million with of coupon the to majority the from quarter, capital investments. The of remain partially portfolio. proceeds yield The investments XX.X%. market. maturity partial QX PFF the a in $XX.X during investments XX% in securities these the call from average increase one offset of company investment with The to portfolio regulatory positively $XX.X total sale X and X and pay investment, in weighted

PFF securities only now X.X% investments. portfolio's the income PFF ETF. recall, is You and preferred is of may iShares total

its continue in entire the Financial PFF. can expect portfolio, we to yield optimize As to ArrowMark to of reduce see continued the position investors

the Given low-yielding in effective its of as from estimated X.XX% of XX of to the basis or prior end. increase yield quarter assets annualized during partial high-yielding PFF position fourth the XX. and an X.X% quarter reported points up The from purchase yield quarter, up fourth December company sell-down the is

remarks, on from the reported I'm to of results. XX% report highlight a the X.X% want prior per declared year-end, the the stable at my strong reporting $XXX.X half that up In For XX% the additional share $XXX.X value was of while were pleased the million, of and were financial reported in offering. deliver The reported consistent direct share assets dividends year. from company's to The the portfolio I to growth prior company our year. at as was closing income, invested of higher that the up million, our second and total able shares income, results, absorb XXXX that including net count was registered result investment in NAV portfolio

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financial in each do prior The going quarterly the down the from dividend. quarter net results an in $X.XX in I decline declared value share, December was the will results through $XX.XX of company's present components of $X.XX As quarter, company's dividend $X.XX additional part the asset on quarter. reflects special NAV by fourth The plus per I XX the detail.

capital X change the and the the value investment on is and The gains the of of the losses; to components. Now portfolio's comprised net during paid in distributions breakdown income; components: NAV lastly, realized period. investments; NAV of

$X.XX approximately $X.XX or per or per expenses net income were million $X.XX investment review million quarter quarter Let's Total $X.X these for income or million share. the in the resulting was components. $X.X for share, Gross share. per of for $X.X quarter the

component As is investment share. of and generation the of calls in affecting timing activities $X.XX company. capital the and second $X.X every or million losses quarter, from case gains the impact quarter the gains change NAV. net realized the the pay is income per capital in approximately were the Realized The downs

the from the quarter how of The previous portfolio, the the changes entire to investment unrealized or ends to third has component, end. depreciation portfolio changed the in value of quarter current appreciation relates

or earn company's consistently cash the distribution a or value distribution depreciation quarter The the $X.XX want special and For from change was investments XXXX. change from fourth per currency its the X, was component cash dividend on $X.XX distribution. regular XXX% company and net of $X.X the dividend activities unrealized the foreign fourth ability net million paid out $X.XX quarterly affecting is do quarterly prior hedging share. transactions for total for the foreign The to not the $X.XX rate. $X.XX was losses January per on dividend point gains year and declared quarter, our a reflects also to impact over special currency income. I The net in up share. approximately The in asset

the a quarter of net the current share. of its fourth since per fact, company the asset earned has $X.XX with began summary, In quarter value XXXX. In over $XX.XX we dividend

total million, and quarter, transactions gains of $X.X But from currency unrealized share of $X.X December was in $X.X which million components value of capital some approximately we quarter. asset prior value $X.XX distribution $XX.XX XX, net per of million. a per the the by a down the generated and the portfolio realized $X.XX income share, During reduced these decreased by net of of foreign resulted net on

holdings. be valuations portfolio the majority the of Turning vast the independently marked. to to portfolio worth It noting is that our for continues

of comprised assets X the a asset confidence value or or are other provide assets total interest portfolios. direct quotations self-mark growth minimum therefore, greater have should million an to quarter the or the degree actual due approximately consisting receivable million, many earlier. These portfolio. actively portfolios and in and to had during I represent readily note, BDCs of the total line the use of would period. million company's million. the of For closed-end for of $X.X available of assessment increased registered totaling and quotations $XX.X the the quarter, yield in Sanjai assets the X%. highlight XX%, At current dividend portfolio publicly investments offering, our of This our of million portfolio quotations company dividends prices total the along credit identifying in marks At assets was underlying versus whose a in and assets independent $XX closing $XXX.X reflect This $XXX.X the market of investors. as mentioned accretive in Of prepaid prices. optimizing not investments year-over-year, to value XX% part assets exchange of end, company's of quarter-end, approximately do that midyear like funds was their traded third-party growth our cash, with and the up

total of At of from assets. XXXX, had our investment assets. the $XX Now company of on on XX, drawn XX.X% we up the our regulated update the borrow to you may million balance December me Based total credit or facility facility. company XX% only rules, let

Now closing back call to over remarks. for Sanjai the I turn want to

the Pat. on everyone like thank for you, I'd call in Thank listening today. to

to from hope to and forward As night. look always, soon. hearing see I Good you you

conference. you. concludes This Thank today's

may thank at this You you your disconnect participation. your time, for and lines