ArrowMark Financial Stock Price, News & Analysis
Company Description
ArrowMark Financial Corp. (NASDAQ: BANX) is an SEC-registered, non-diversified, closed-end management investment company listed on the NASDAQ Global Select Market under the symbol BANX. According to the company, its primary investment objective is to provide shareholders with current income, and to a lesser extent, capital appreciation. BANX is part of the finance and insurance sector and is associated with the securities and commodity exchanges industry.
The fund states that it pursues its investment objective by investing primarily in regulatory capital securities of financial institutions. These are securities issued by banks and other financial institutions in connection with regulatory capital requirements. In multiple public communications, ArrowMark Financial notes that it focuses on regulatory capital securities of financial institutions, and that it is managed by ArrowMark Asset Management, LLC, which serves as the fund’s investment adviser.
ArrowMark Financial describes itself as a non-diversified, closed-end fund. As a closed-end fund, its shares trade on an exchange and may trade at a premium or discount to net asset value. The company highlights that its investment objective centers on generating current income for shareholders, with capital appreciation being a secondary goal.
In its disclosures and press releases, ArrowMark Financial emphasizes that there is no assurance it will achieve its investment objective and that its shares may not be appropriate for all investors. The company outlines a range of risks associated with its strategy, 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, the risk that shares may trade at a discount or premium to net asset value, and market disruption risk.
The fund has communicated that it pays cash distributions to shareholders, and has referenced both regular distributions and special distributions generated from excess income. In its public statements, ArrowMark Financial has linked these distributions to its objective of providing shareholders with consistent income, while also noting that distributions are made if and when declared by its board of directors and that there can be no assurance regarding the amount or timing of future distributions.
ArrowMark Financial has also discussed capital-raising activities through registered offerings of its common stock, including registered direct offerings and rights offerings made pursuant to effective registration statements and related prospectus supplements. The company has indicated that proceeds from such offerings are expected to be invested in accordance with its stated investment strategy, which centers on regulatory capital securities of financial institutions.
The fund reports that its regulatory filings, including Annual Reports, Semi-Annual Reports and other documents, are available through the SEC’s EDGAR system. It also notes that it provides estimated and unaudited net asset value information as of certain month-end dates, while clarifying that such estimates are not comprehensive statements of its financial condition or results for the period.
ArrowMark Financial repeatedly underscores that past performance does not guarantee future results and encourages investors to review carefully its investment objective, risks, charges and expenses as set out in its prospectus and regulatory filings.
Business model and investment focus
ArrowMark Financial’s business model, as described in its public communications, is to operate as a closed-end fund that seeks to generate current income for shareholders. It does this by investing primarily in regulatory capital securities of financial institutions. The company has also referred to investing in regulatory capital relief securities issued by financial institutions, and has highlighted that these securities can provide income distributions.
The fund’s non-diversified status means that it is permitted to invest a relatively larger portion of its assets in a smaller number of issuers than a diversified fund, which can increase exposure to issuer-specific risk. ArrowMark Financial notes that it is subject to non-diversification risk as part of its overall risk profile.
Risk considerations
In its disclosures, ArrowMark Financial lists numerous risks associated with its investment strategy and structure. These include:
- Investment and market risks
- Management risk
- Income and interest rate risks
- Banking industry risks
- Preferred stock risk and convertible securities risk
- Debt securities risk
- Liquidity and valuation risks
- Leverage risk
- Non-diversification risk
- Credit and counterparty risks
- Risk that shares may trade at a discount from or premium to net asset value
- Market disruption risk
The company stresses that investors should consider these risks carefully and that its shares may not be suitable for all investors.
Capital markets activity and NAV information
ArrowMark Financial has reported entering into securities purchase agreements for registered direct offerings of its common stock and has also described rights offerings to existing shareholders. These activities are conducted under effective registration statements filed with the SEC and are accompanied by prospectus supplements and base prospectuses. The fund has indicated that such offerings are made in accordance with applicable securities laws and that offering documents provide additional details about the terms and risks.
The company has also released estimated and unaudited net asset value figures as of certain month-end dates, while emphasizing that these estimates are not comprehensive statements of financial condition or results for the relevant periods.
Regulatory status and governance
ArrowMark Financial states that it is registered with the SEC as a closed-end management investment company. Its common shares are registered under the Securities Exchange Act of 1934 and trade on the NASDAQ Global Select Market under the symbol BANX. The fund has also reported changes to its board of directors, including the appointment of independent directors who meet specified exchange listing and audit committee requirements.
Through its SEC filings, ArrowMark Financial discloses material agreements related to the distribution of its common stock, including distribution agreements with distributors and sub-placement agents for at-the-market offerings conducted under Rule 415 of the Securities Act of 1933.
Summary
According to its public statements and regulatory filings, ArrowMark Financial Corp. (BANX) is a closed-end fund focused on generating current income for shareholders by investing primarily in regulatory capital securities of financial institutions. The fund operates as a non-diversified, SEC-registered investment company, trades on the NASDAQ Global Select Market, and is managed by ArrowMark Asset Management, LLC. It highlights a range of investment, market, structural and sector-specific risks, and directs investors to its SEC filings and prospectus materials for detailed information on its objectives, strategies, risks, charges and expenses.