StoneCastle Financial: Direct Capital Investment

"After meeting the StoneCastle Financial team, we were very impressed with their disciplined investing approach and made the decision to pursue a capital investment in our bank. The process was straightforward, definitely worth the effort, and ultimately we were able to raise Tier One Capital for our bank on competitive terms.”

– Jon Prescott, CEO, Katahdin Bankshares

StoneCastle Financial ("BANX") is the first public investment company specifically established to invest in healthy community banks. StoneCastle Financial allows banks to expand their investor base to include a knowledgeable bank investor and efficiently receive the capital they need to grow.

StoneCastle Financial’s Senior Management team is comprised of long-term investors in community banks and is prepared to invest immediately in well-positioned banks and savings institutions.

New Subordinated Debt Opportunity for Community Banks

StoneCastle Financial Corp is currently available to invest in community banks seeking capital. Subordinated debt investments of
$1 million to $10 million with 5- to 10-year maturities can be funded at any time with rates as low as 6.5% for qualified issuers. Direct investments are available to both private and public banks. Investment criteria for eligible issuers include:

Private and public banks and holding companies
Total assets between $100 million and $3 billion
At least 7 years of operating history
No current enforcement actions restricting dividends

See the fact sheet to learn more. For more information please contact ABA’s Helen Sullivan at hsulliva@aba.com.

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Solution

Investment types and features include, but are not limited to:

Non-control investments from as little as $2 million
Preferred stock, debt and, to a lesser extent, common equity – depending on individual bank need and situation
Pricing – each bank negotiates their own cost of capital with StoneCastle Financial

Criteria

Banks interested in capital investments will need to meet preliminary, baseline criteria before being referred to StoneCastle Financial for further investment consideration. The baseline preliminary criterion includes, but is not limited to the following:

Operating history of at least seven years
Banks should not be under any formal regulatory enforcement actions
Tangible equity to tangible assets greater than 5%
Recent ROA greater than 50 bps annualized
Total loans to total deposits less than 100%
Specific asset quality and earnings metrics

Note: This is not a full list of the preliminary criteria. Please contact the Corporation for American Banking's Helen Sullivan to discuss further and complete a preliminary due diligence form for consideration. For Institutional Use Only.

NEITHER THE AMERICAN BANKERS ASSOCIATION NOR ANY OF ITS AFFILIATES, INCLUDING CAB MARKETING, LLC AND CAB, LLC, HAS PASSED ON, APPROVED OR ENDORSED THE MERITS OR ACCURACY OF THIS OFFERING OR ANY EXHIBITS ATTACHED HERETO AND ANY REPRESENTATION OR IMPLICATION TO THE CONTRARY IS UNLAWFUL. ENDORSEMENTS ARE PROVIDED TO STONECASTLE FINANCIAL THROUGH CAB, LLC AND ALL SERVICES ARE PROVIDED BY CAB MARKETING, LLC. NO SERVICES OR ENDORSEMENTS HAVE BEEN PROVIDED DIRECTLY BY THE AMERICAN BANKERS ASSOCIATION.

Learn more at: www.stonecastle-financial.com

Provider

StoneCastle Financial Corp. is a closed-end investment company established to serve as an investor in healthy community banks seeking capital for organic growth, acquisitions, share repurchases and other refinancing activities. They invest in community banks that have experienced management teams, stable earnings, sustainable markets and growth opportunities.

StoneCastle Financial Corp. is managed by their external advisor StoneCastle Asset Management LLC. StoneCastle Asset Management LLC ("Advisor") is an SEC-registered investment adviser dedicated to the community banking sector. StoneCastle Partners, the parent of their Advisor and its affiliates ("StoneCastle") has a more than ten-year history of investing in trust preferred capital securities and other obligations issued by community, regional and money center banks.

See more about StoneCastle Financial Corp.

Benefits

Ever since the financial crisis, raising capital has been difficult for community banks, especially the smallest ones. With these banks in mind, StoneCastle Financial Corp. has developed a structured product that enables community banks to pool together to raise needed capital at relatively low cost.

Following the successful closing on October 15, 2015, of a $250 million subordinated loan transaction that consisted of 35 banks across 24 states , StoneCastle Financial is seeking immediate opportunities to invest in community bank issued subordinated debt at competitive rates on a first-come-first-served basis.

The capital, which can be counted as Tier 2 capital qualifying subordinated loan, will be priced between 6.75% and 6.99%. This presents an ideal opportunity to refinance higher cost SBLF preferred stock around the time of step up in dividend rate. Learn more.

Take advantage of this great opportunity! Contact ABA's Helen Sullivan at
1-800-BANKERS, ext. 5167 today.

Resources

Contacts

ABA Contact

Helen Sullivan
202-663-5167

Due Diligence Report

Due diligence reports are currently available on select solutions and for bank members only.
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Questions? Please contact Helen Sullivan for more information.