1 | ||||
3 | ||||
4 | ||||
5 | ||||
6 | ||||
7 | ||||
8 | ||||
9 | ||||
15 | ||||
26 |
Market Price | $14.80 | ||||
NAV | $16.33 | ||||
Premium (Discount) to NAV | (9.37% | ) | |||
Market Price Distribution Rate (1) | 8.80% | ||||
NAV Distribution Rate (1) | 7.97% |
Average Annual Returns | ||||||
One Year | Three Year | Since Inception (2) | ||||
Angel Oak Financial Strategies Income Term Trust – NAV | (7.94%) | 0.13% | 0.42% | |||
Angel Oak Financial Strategies Income Term Trust – Market Price | (11.83%) | (2.59%) | (2.24%) | |||
Bloomberg U.S. Aggregate Bond Index (3) | (9.12%) | (0.21%) | 0.27% |
* | As a percentage of total investments. The percentages presented in the table above may differ from those in the Schedule of Investments because the percentages in the Schedule of Investments are calculated based on net assets. |
Assets | |||||
Investments in unaffiliated securities at fair value* | $581,786,495 | ||||
Dividends and interest receivable | 6,905,816 | ||||
Prepaid expenses | 31,840 | ||||
Total Assets | 588,724,151 | ||||
Liabilities | |||||
Payable for reverse repurchase agreements | 94,191,000 | ||||
Payable for senior notes (net of unamortized deferred issuance costs of $876,831) | 84,123,169 | ||||
Interest payable for senior notes and reverse repurchase agreements | 303,203 | ||||
Payable to Adviser | 652,751 | ||||
Payable to administrator, fund accountant, and transfer agent | 37,833 | ||||
Payable to custodian | 3,834 | ||||
Other accrued expenses | 63,584 | ||||
Total Liabilities | 179,375,374 | ||||
Net Assets | $409,348,777 | ||||
Net Assets consist of: | |||||
Paid-in capital | $438,529,471 | ||||
Total distributable earnings (accumulated deficit) | (29,180,694 | ) | |||
Net Assets | $409,348,777 | ||||
Shares outstanding (unlimted number of shares authorized, no par value) | 25,062,638 | ||||
Net asset value (“NAV”) and offering price per share | $16.33 | ||||
*Identified Cost: | |||||
Investments in unaffiliated securities | $593,306,277 |
Investment Income | |||||
Interest | $11,906,515 | ||||
Dividends from unaffiliated investments | 1,527,995 | ||||
Dividends from affiliated investments | 10,438 | ||||
Total Investment Income | 13,444,948 | ||||
Expenses | |||||
Investment Advisory (See Note 6) | 3,238,563 | ||||
Interest & commissions (See Note 10) | 1,738,465 | ||||
Merger expense (See Note 1) | 329,868 | ||||
Service Fees (See Note 6) | 167,925 | ||||
Fund accounting | 36,735 | ||||
Legal | 33,185 | ||||
Trustee | 23,985 | ||||
Administration | 23,524 | ||||
Printing | 22,094 | ||||
Audit & tax | 17,261 | ||||
Registration | 14,448 | ||||
Transfer agent | 10,871 | ||||
Custodian | 8,855 | ||||
Compliance | 6,335 | ||||
Insurance | 5,164 | ||||
Miscellaneous | 29,146 | ||||
Total Expenses | 5,706,424 | ||||
Fees contractually waived by Adviser (See Note 6) | (1,673 | ) | |||
Net Expenses | 5,704,751 | ||||
Net Investment Income (Loss) | $7,740,197 | ||||
Realized and Unrealized Gain (Loss) on Investments | |||||
Net realized gain (loss) on investments in unaffiliated securities | ($33,733 | ) | |||
Net realized gain (loss) on investments in affiliated securities | (55,434 | ) | |||
Net change in unrealized appreciation (depreciation) on unaffiliated investments | (21,620,196 | ) | |||
Net change in unrealized appreciation (depreciation) on affiliated investments | (1,790 | ) | |||
Net realized and unrealized gain (loss) on investments | (21,711,153 | ) | |||
Net increase (decrease) in net assets resulting from operations | ($13,970,956 | ) | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net (increase) decrease in net assets resulting from operations | ($13,970,956 | ) | |||
Net adjustments to reconcile net increase in net assets from operations to net cash provided by (used in) operating activities: | |||||
Net amortization and accretion of premium and discount | 415,653 | ||||
Purchases of short-term investments, net | 4,730,921 | ||||
Purchases of investments | (134,458,164 | ) | |||
Proceeds from sales of long-term investments | 13,736,970 | ||||
Net change in unrealized appreciation (depreciation) on investments | 21,621,986 | ||||
Net realized gain (loss) on investments | 89,167 | ||||
Change in: | |||||
Receivable for investments sold | 4,612,743 | ||||
Dividends and interest receivable | (2,020,590 | ) | |||
Prepaid expenses | (15,778 | ) | |||
Interest payable for senior notes and reverse repurchase agreements | 119,646 | ||||
Payable to Adviser | 25,458 | ||||
Payable to administrator, fund accountant and transfer agent | 8,898 | ||||
Payable to custodian | 736 | ||||
Other accrued expenses | (73,305 | ) | |||
Net cash provided by (used in) operating activities | ($105,176,615 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Proceeds from shares sold | 78,683,039 | ||||
Distributions paid to shareholders | (13,239,126 | ) | |||
Purchases of reverse repurchase agreements | 94,191,000 | ||||
Proceeds from reverse repurchase agreements | (54,365,000 | ) | |||
Proceeds from senior notes | (93,298 | ) | |||
Net cash provided by (used in) financing activities | 105,176,615 | ||||
Net change in cash | $— | ||||
CASH: | |||||
Beginning Balance | — | ||||
Ending Balance | $— | ||||
SUPPLEMENTAL DISCLOSURES: | |||||
Cash paid for interest | $1,618,819 | ||||
Cash held in money market investments | $1,489,064 |
For the Period Ended July 31, 2022 (Unaudited) | For the Year Ended January 31, 2022 | |||||||||
Increase (Decrease) in Net Assets due to: | ||||||||||
Operations | ||||||||||
Net investment income (loss) | $7,740,197 | $12,231,817 | ||||||||
Net realized gain (loss) on investment transactions and futures contracts | (89,167 | ) | 2,074,017 | |||||||
Net change in unrealized appreciation (depreciation) on investments and futures contracts | (21,621,986 | ) | 2,404,258 | |||||||
Net increase (decrease) in net assets resulting from operations | (13,970,956 | ) | 16,710,092 | |||||||
Distributions to Shareholders | ||||||||||
Total distributions | (7,740,197 | ) | (12,621,982 | ) | ||||||
Return of capital | (5,478,574 | ) | (8,858,520 | ) | ||||||
Total distributions to shareholders | (13,218,771 | ) | (21,480,502 | ) | ||||||
Capital Transactions | ||||||||||
Proceeds from shares sold | 78,683,039 | (a) | — | |||||||
Proceeds from rights offering, net of offering costs | — | 78,046,253 | ||||||||
Net increase (decrease) in net assets resulting from capital transactions | 78,683,039 | 78,046,253 | ||||||||
Total Increase (Decrease) in Net Assets | 51,493,312 | 73,275,843 | ||||||||
Net Assets | ||||||||||
Beginning of period | 357,855,465 | 284,579,622 | ||||||||
End of period | $409,348,777 | $357,855,465 | ||||||||
Share Transactions | ||||||||||
Shares sold | 4,757,307 | — | ||||||||
Shares sold in connection with rights offering | — | 5,076,333 | ||||||||
Net increase (decrease) in share transactions | 4,757,307 | 5,076,333 | ||||||||
(a) | Includes proceeds from reorganization (see Note 1). |
For the Period Ended July 31, 2022 (Unaudited) | For the Year Ended January 31, 2022 | For the Year Ended January 31, 2021 | For the Period Ended January 31, 2020 (a) | |||||||||||||||||
Selected Per Share Data: | ||||||||||||||||||||
Net asset value, beginning of period | $17.62 | $18.69 | $20.53 | $20.00 | ||||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.38 | 0.73 | (g) | 0.82 | 0.55 | |||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.02 | ) | 0.37 | (1.41 | ) | 0.80 | ||||||||||||||
Total from investment operations | (0.64 | ) | 1.10 | (0.59 | ) | 1.35 | ||||||||||||||
Less distributions to shareholders: | ||||||||||||||||||||
From net investment income | (0.38 | ) | (0.77 | ) | (0.79 | ) | (0.67 | ) | ||||||||||||
Return of capital | (0.27 | ) | (0.54 | ) | (0.46 | ) | (0.15 | ) | ||||||||||||
Total distributions | (0.65 | ) | (1.31 | ) | (1.25 | ) | (0.82 | ) | ||||||||||||
Capital share transactions: | ||||||||||||||||||||
Dilution due to rights offering | – | (0.84 | )(h) | – | – | |||||||||||||||
Offering costs due to rights offering | – | (0.02 | )(h) | – | – | |||||||||||||||
Total capital share transactions | – | (0.86 | ) | – | – | |||||||||||||||
Net asset value, end of period | $16.33 | $17.62 | $18.69 | $20.53 | ||||||||||||||||
Total return on net asset value (b)(c) | (3.63 | %) | 1.11 | % | (2.71 | %) | 6.89 | % | ||||||||||||
Total return on market value (b)(d) | (6.63 | %) | 2.99 | % | (12.70 | %) | 10.86 | % | ||||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (000’s omitted) | $409,3 | 49 | $357,8 | 55 | $284,5 | 80 | $236,4 | 62 | ||||||||||||
Ratio of expenses to average net assets before waiver and reimbursement/recoupment (e) | 3.37 | % | 3.22 | % | 3.34 | % | 2.41 | % | ||||||||||||
Ratio of expenses to average net assets before waiver and reimbursement/recoupment excluding interest expense (e) | 2.15 | % | 2.18 | % | 2.25 | % | 1.93 | % | ||||||||||||
Ratio of expenses to average net assets after waiver and reimbursement/recoupment (e) | 3.37 | % | 3.27 | % | 3.20 | % | 1.91 | % | ||||||||||||
Ratio of expenses to average net assets after waiver and reimbursement/recoupment excluding interest expense (e) | 2.15 | % | 2.23 | % | 2.11 | % | 1.43 | % | ||||||||||||
Ratio of expenses to average managed assets after waiver and reimbursement/recoupment excluding interest expense. Average managed assets represent the total assets of the fund, including the assets attributable to the proceeds from any forms of financial leverage, less liabilities, other than liabilites related to any form of leverage (e) | 1.52 | % | 1.59 | % | 1.50 | % | 1.25 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets before waiver and reimbursement/recoupment (e) | 4.58 | % | 4.02 | % | 4.05 | % | 3.58 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets after waiver and reimbursement/recoupment (e) | 4.58 | % | 3.97 | % | 4.19 | % | 4.08 | % | ||||||||||||
Portfolio turnover rate (b) | 2.81 | % | 13.82 | % | 24.55 | % | 21.14 | % | ||||||||||||
Credit facility and reverse repurchase agreements, end of period (000s) | $178,3 | 14 | $138,5 | 81 | $116,3 | 63 | $81,51 | 4 | ||||||||||||
Asset coverage per $1,000 unit of senior indebtedness (f) | $3,29 | 6 | $3,58 | 2 | $3,44 | 6 | $3,90 | 1 |
(a) | Fund commenced operations on May 31, 2019. |
(b) | Not annualized for periods less than one year. |
(c) | Total return on net asset value is computed based upon the net asset value of common stock on the first business day and the closing net asset value on the last business day of the period. Dividends and distributions are assumed to be reinvested at the prices obtained under the Fund’s dividend reinvestment plan. |
(d) | Total return on market value is computed based upon the New York Stock Exchange market price of the Fund’s shares and includes the effect of brokerage commissions. Dividends and distributions are assumed to be reinvested at the prices obtained under the Fund’s dividend reinvestment plan. |
(e) | Annualized for periods less than one year. |
(f) | Calculated by subtracting the Fund’s total liabilities (not including borrowings) from the Fund’s total assets and dividing by the total number of senior indebtedness units, where one unit equals $1,000 of senior indebtedness. |
(g) | Net investment income/(loss) per share has been calculated based on average shares outstanding during the period. |
(h) | Amount represents per share impact related to a rights offering. See Note 11. |
Principal Amount | Value | |||||||||
Bank Loans – 0.59% | ||||||||||
BJ Services LLC, 0.000%, 1/28/2023 | $1,200,584 | $1,128,549 | ||||||||
JUUL Term Loan, 8.500% (3 Month LIBOR USD + 9.000%), 8/2/2023 (a) | 926,000 | 851,920 | ||||||||
Premier Brands, 9.006% (3 Month LIBOR USD + 8.250%), 3/20/2024 (a) | 472,568 | 453,665 | ||||||||
TOTAL BANK LOANS (Cost – $2,596,341) | $2,434,134 | |||||||||
Common Stocks – 0.43% | Shares | |||||||||
Financial – 0.43% | ||||||||||
AGNC Investment Corp. | 30,500 | 384,605 | ||||||||
Annaly Capital Management, Inc. | 60,000 | 412,800 | ||||||||
Ellington Financial, Inc. | 15,750 | 252,787 | ||||||||
New Residential Investment Corp. | 25,000 | 272,750 | ||||||||
PennyMac Mortgage Investment Trust | 13,000 | 199,680 | ||||||||
Redwood Trust, Inc. | 25,750 | 222,995 | ||||||||
TOTAL COMMON STOCKS (Cost – $2,020,603) | $1,745,617 | |||||||||
Convertible Obligations – 0.21% | Principal Amount | |||||||||
Financial – 0.21% | ||||||||||
FedNat Holding Co., 5.000%, 4/19/2026 (b) | $1,000,000 | 840,000 | ||||||||
TOTAL CONVERTIBLE OBLIGATIONS (Cost – $1,000,000) | $840,000 | |||||||||
Corporate Obligations – 133.80% | ||||||||||
Financial – 133.80% | ||||||||||
A10 Capital LLC, 5.875%, 8/17/2026 (b) | 4,000,000 | 3,839,848 | ||||||||
Allegiance Bancshares, Inc., 4.700% (SOFR + 3.392%), 10/1/2029 (a)(c) | 1,750,000 | 1,757,338 | ||||||||
Alpine Banks of Colorado, 5.875% (TSFR3M + 5.690%), 6/15/2030 (a)(b)(c) | 4,000,000 | 4,071,921 | ||||||||
Amalgamated Financial Corp., 3.250% (TSFR3M + 2.300%), 11/15/2031 (a) | 2,600,000 | 2,415,755 | ||||||||
Ameris Bancorp, 5.445% (3 Month LIBOR USD + 3.616%), 3/15/2027 (a) | 2,510,000 | 2,513,193 | ||||||||
Ameris Bancorp, 4.250% (TSFR3M + 2.940%), 12/15/2029 (a)(c) | 2,250,000 | 2,219,128 | ||||||||
Amur Equipment Finance, Inc., 6.125%, 3/15/2026 (b) | 1,500,000 | 1,446,451 | ||||||||
ANB Corp., 4.000% (TSFR3M + 3.875%), 9/30/2030 (a)(b)(c) | 2,500,000 | 2,420,811 | ||||||||
Arbor Realty Trust, Inc., 5.000%, 4/30/2026 | 2,000,000 | 1,808,036 | ||||||||
Arbor Realty Trust, Inc., 4.500%, 3/15/2027 (b) | 1,500,000 | 1,315,857 | ||||||||
Arena Finance LLC, 6.750%, 9/30/2025 (b)(c) | 2,000,000 | 1,962,500 | ||||||||
Avidbank Holdings, Inc., 5.000% (TSFR3M + 3.595%), 12/30/2029 (a)(b)(c) | 6,000,000 | 5,935,676 | ||||||||
B. Riley Financial, Inc., 6.375%, 2/28/2025 (d) | 1,000,000 | 995,200 | ||||||||
B. Riley Financial, Inc., 6.500%, 9/30/2026 (d) | 298,650 | 294,708 | ||||||||
B. Riley Financial, Inc., 5.500%, 3/31/2026 (d) | 1,000,000 | 976,000 | ||||||||
B. Riley Financial, Inc., 5.000%, 12/31/2026 (d) | 2,000,000 | 1,864,000 | ||||||||
B. Riley Financial, Inc., 6.000%, 1/31/2028 (d) | 3,000,000 | 2,769,600 | ||||||||
Banc of California, Inc., 5.250%, 4/15/2025 (c) | 3,000,000 | 3,001,439 | ||||||||
Bancorp Bank, 4.750%, 8/15/2025 (c) | 1,500,000 | 1,486,627 | ||||||||
BancPlus Corp., 6.000% (TSFR3M + 5.860%), 6/15/2030 (a)(b)(c) | 5,000,000 | 5,106,373 | ||||||||
Bank of California, 4.375% (SOFR + 4.195%), 10/30/2030 (a)(c) | 1,675,000 | 1,598,700 |
Principal Amount | Value | |||||||||
Corporate Obligations – (continued) | ||||||||||
Financial – (continued) | ||||||||||
Bank of Commerce Holdings, 6.671% (3 Month LIBOR USD + 5.260%), 12/10/2025 (a)(b) | $6,500,000 | $6,504,980 | ||||||||
BankGuam Holding Co., 6.350% (3 Month LIBOR USD + 4.660%), 6/30/2029 (a) | 9,000,000 | 8,970,474 | ||||||||
BankGuam Holding Co., 4.750% (TSFR3M + 4.130%), 7/1/2031 (a)(b) | 3,000,000 | 2,868,259 | ||||||||
Banksouth Holding Co., 5.875% (3 Month LIBOR USD + 4.020%), 7/30/2029 (a)(b) | 5,000,000 | 4,985,828 | ||||||||
Banterra Bank, 6.000% (3 Month LIBOR USD + 4.120%), 6/7/2029 (a) | 7,500,000 | 7,496,406 | ||||||||
Bar Harbor Bankshares, 4.625% (TSFR3M + 3.270%), 12/1/2029 (a)(c) | 6,000,000 | 5,914,656 | ||||||||
BayCom Corp., 5.250% (SOFR + 5.210%), 9/15/2030 (a)(c) | 2,000,000 | 1,980,612 | ||||||||
BayFirst Financial Corp., 4.500% (SOFRINDX + 3.780%), 6/30/2031 (a)(b) | 1,000,000 | 946,392 | ||||||||
Berkshire Hills Bancorp, Inc., 5.500% (SOFR + 2.490%), 7/1/2032 (a) | 1,000,000 | 1,017,365 | ||||||||
Big Poppy Holdings, Inc., 6.500%, 7/1/2027 | 3,500,000 | 3,500,000 | ||||||||
Business Development Corp. of America, 4.750%, 12/30/2022 (b) | 6,000,000 | 5,974,720 | ||||||||
Business Development Corp. of America, 4.850%, 12/15/2024 (b)(c) | 2,000,000 | 1,930,897 | ||||||||
Byline Bancorp, Inc., 6.000% (TSFR3M + 5.880%), 7/1/2030 (a)(c) | 6,000,000 | 6,178,632 | ||||||||
Cadence Bancorp, 4.750% (3 Month LIBOR USD + 3.030%), 6/30/2029 (a)(c) | 2,000,000 | 1,958,288 | ||||||||
Capstar Financial Holdings, Inc., 5.250% (SOFR + 5.130%), 6/30/2030 (a)(c) | 3,000,000 | 2,975,137 | ||||||||
CB Financial Services, Inc., 3.875% (TSFR3M + 2.800%), 12/15/2031 (a)(b) | 6,000,000 | 5,619,036 | ||||||||
CB&T Holding Corp., 6.250% (TSFR3M + 6.015%), 12/15/2030 (a)(b) | 5,000,000 | 5,100,000 | ||||||||
Central Bancshares, Inc., 5.750% (3 Month LIBOR USD + 3.870%), 6/30/2029 (a)(b) | 5,000,000 | 4,983,349 | ||||||||
Central Pacific Financial Corp., 4.750% (TSFR3M + 4.560%), 11/1/2030 (a) | 1,000,000 | 983,982 | ||||||||
Citizens Community Bancorp, Inc., 6.000% (SOFR + 5.910%), 9/1/2030 (a)(b) | 2,000,000 | 1,992,129 | ||||||||
Citizens Community Bancorp, Inc., 4.750% (TSFR3M + 3.290%), 4/1/2032 (a)(b) | 1,500,000 | 1,474,457 | ||||||||
Clear Blue Financial Holdings LLC, 5.375%, 12/30/2028 (b)(c) | 10,000,000 | 10,251,903 | ||||||||
Clear Street Capital LLC, 6.000%, 10/15/2025 (b)(c) | 5,000,000 | 4,956,441 | ||||||||
CoastalSouth Bancshares, Inc., 5.950% (TSFR3M + 5.820%), 9/15/2030 (a)(b) | 2,000,000 | 1,989,181 | ||||||||
Colony Bankcorp, Inc., 5.250% (SOFRINDX + 5.250%), 5/20/2032 (a)(b) | 1,000,000 | 988,065 | ||||||||
Commercial Credit Group, Inc., 4.875%, 5/30/2026 (b)(c) | 1,500,000 | 1,405,623 | ||||||||
Community Financial Corp., 4.750% (TSFR3M + 4.580%), 10/15/2030 (a) | 1,000,000 | 984,200 | ||||||||
Community Heritage Financial, Inc., 5.750% (3 Month LIBOR USD + 4.395%), 10/30/2029 (a)(b) | 4,500,000 | 4,482,403 | ||||||||
Congressional Bancshares, Inc., 5.750% (TSFR3M + 4.390%), 12/1/2029 (a)(b) | 2,000,000 | 1,991,907 | ||||||||
ConnectOne Bancorp, Inc., 5.200% (3 Month LIBOR USD + 2.840%), 2/1/2028 (a) | 500,000 | 499,973 | ||||||||
ConnectOne Bancorp, Inc., 5.750% (TSFR3M + 5.605%), 6/15/2030 (a)(c) | 2,000,000 | 2,029,366 | ||||||||
Cowen, Inc., 7.250%, 5/6/2024 (b)(c) | 7,000,000 | 7,114,690 | ||||||||
CRB Group, Inc., 6.500% (TSFR3M + 6.380%), 9/1/2030 (a)(b)(c) | 3,750,000 | 3,808,251 | ||||||||
Customers Bancorp, Inc., 2.875% (TSFR3M + 2.350%), 8/15/2031 (a) | 1,000,000 | 917,151 | ||||||||
Customers Bank, 6.125% (3 Month LIBOR USD + 3.443%), 6/26/2029 (a)(b)(c) | 4,500,000 | 4,538,904 | ||||||||
Dime Community Bancshares, Inc., 5.000% (TSFR3M + 2.180%), 5/15/2032 (a) | 1,250,000 | 1,240,888 | ||||||||
Durant Bancorp, Inc., 5.571% (3 Month LIBOR USD + 3.742%), 3/15/2027 (a)(b) | 1,200,000 | 1,199,425 | ||||||||
EF Holdco, Inc. / EF Cayman Holdings Ltd., 5.500%, 9/1/2022 (b) | 4,000,000 | 3,996,117 | ||||||||
EF Holdco, Inc. / EF Cayman Holdings Ltd., 5.875%, 4/1/2027 (b)(c) | 5,000,000 | 4,705,949 | ||||||||
Enterprise Bancorp, Inc., 5.250% (TSFR3M + 5.175%), 7/15/2030 (a) | 3,500,000 | 3,515,058 | ||||||||
Equity Bancshares, Inc., 7.000% (TSFR3M + 6.880%), 6/30/2030 (a)(c) | 9,000,000 | 9,251,113 | ||||||||
Evans Bancorp, Inc., 6.000% (SOFR + 5.900%), 7/15/2030 (a)(c) | 4,000,000 | 4,076,630 | ||||||||
FedNat Holding Co., 7.750%, 3/15/2029 (c) | 7,000,000 | 6,440,000 | ||||||||
Fidelity Bank, 5.875% (3 Month LIBOR USD + 3.630%), 5/31/2030 (a)(c) | 12,000,000 | 12,181,291 | ||||||||
Fidelity Federal Bancorp, 6.000% (TSFR3M + 4.650%), 11/1/2029 (a)(b)(c) | 2,000,000 | 1,998,628 | ||||||||
Fidelity Federal Bancorp, 4.500% (TSFR3M + 3.840%), 3/30/2031 (a)(b)(c) | 1,000,000 | 950,327 | ||||||||
Fidelity Financial Corp., 5.000% (TSFR3M + 2.470%), 4/30/2032 (a)(b) | 5,000,000 | 4,964,434 | ||||||||
Financial Institutions, Inc., 4.375% (TSFR3M + 4.265%), 10/15/2030 (a) | 3,000,000 | 2,937,019 |
Principal Amount | Value | |||||||||
Corporate Obligations – (continued) | ||||||||||
Financial – (continued) | ||||||||||
FineMark Holdings, Inc., 5.875% (3 Month LIBOR USD + 2.970%), 6/30/2028 (a) | $2,000,000 | $2,013,732 | ||||||||
First Bancshares, Inc., 4.250% (TSFR3M + 4.126%), 10/1/2030 (a) | 1,000,000 | 975,616 | ||||||||
First Bank, 5.500% (TSFR3M + 5.380%), 6/1/2030 (a) | 1,500,000 | 1,508,058 | ||||||||
First Business Financial Services, Inc., 5.500% (SOFR + 4.332%), 8/15/2029 (a)(b)(c) | 11,000,000 | 10,938,417 | ||||||||
First Help Financial LLC, 6.000%, 11/15/2026 (b) | 5,000,000 | 4,805,420 | ||||||||
First Internet Bancorp, 6.000% (3 Month LIBOR USD + 4.114%), 6/30/2029 (a)(d) | 7,427,800 | 7,398,089 | ||||||||
First Midwest Capital Trust, 6.950%, 12/1/2033 | 1,761,000 | 1,743,390 | ||||||||
First Northwest Bancorp, 3.750% (SOFR + 3.000%), 3/30/2031 (a) | 1,000,000 | 949,436 | ||||||||
First Paragould Bankshares, Inc., 5.250% (3 Month LIBOR USD + 3.095%), 12/15/2027 (a)(b) | 2,250,000 | 2,246,585 | ||||||||
First Southwest Corp., 6.350% (3 Month LIBOR USD + 4.080%), 6/1/2029 (a)(b) | 7,000,000 | 6,978,485 | ||||||||
FirstBank, 4.500% (SOFR + 4.390%), 9/1/2030 (a)(c) | 4,500,000 | 4,424,928 | ||||||||
Firstsun Capital Bancorp, 6.000% (TSFR3M + 5.890%), 7/1/2030 (a)(b)(c) | 6,500,000 | 6,595,741 | ||||||||
Flagstar Bancorp, Inc., 4.125% (SOFR + 3.910%), 11/1/2030 (a)(c) | 2,000,000 | 1,943,888 | ||||||||
Flushing Financial Corp., 3.125% (TSFR3M + 2.035%), 12/1/2031 (a) | 2,000,000 | 1,842,625 | ||||||||
Georgia Banking Co., Inc., 4.125% (TSFR3M + 3.400%), 6/15/2031 (a)(b) | 1,000,000 | 943,013 | ||||||||
Golden Pear Funding HoldCo LLC, 6.375%, 12/22/2026 | 5,000,000 | 4,870,537 | ||||||||
Golden State Bancorp, 4.500% (TSFR3M + 3.350%), 12/15/2031 (a)(b) | 1,000,000 | 942,255 | ||||||||
Hallmark Financial Services, Inc., 6.250%, 8/15/2029 | 9,382,000 | 8,490,710 | ||||||||
Hanmi Financial Corp., 3.750% (TSFR3M + 3.100%), 9/1/2031 (a) | 3,500,000 | 3,319,809 | ||||||||
Happy Bancshares, Inc., 5.500% (TSFR3M + 5.345%), 7/31/2030 (a)(b) | 4,500,000 | 4,549,977 | ||||||||
HBT Financial, Inc., 4.500% (TSFR3M + 4.370%), 9/15/2030 (a)(b)(c) | 3,000,000 | 2,924,069 | ||||||||
Hilltop Holdings, Inc., 6.125% (TSFR3M + 5.800%), 5/15/2035 (a) | 250,000 | 264,911 | ||||||||
HomeStreet, Inc., 3.500% (TSFR3M + 2.150%), 1/30/2032 (a)(c) | 3,000,000 | 2,800,711 | ||||||||
Horizon Bancorp, Inc., 5.625% (TSFR3M + 5.490%), 7/1/2030 (a) | 2,000,000 | 2,020,495 | ||||||||
Independent Bank Corp., 5.950% (TSFR3M + 5.825%), 5/31/2030 (a)(b) | 1,000,000 | 1,017,045 | ||||||||
Independent Bank Group, Inc., 4.000% (TSFR3M + 3.885%), 9/15/2030 (a)(c) | 3,000,000 | 2,990,404 | ||||||||
Investar Holding Corp., 5.125% (SOFR + 3.752%), 12/30/2029 (a)(b) | 4,000,000 | 3,955,212 | ||||||||
Kingstone Cos, Inc., 5.500%, 12/30/2022 | 5,195,000 | 5,127,660 | ||||||||
Level One Bancorp, Inc., 4.750% (TSFR3M + 3.110%), 12/18/2029 (a) | 2,000,000 | 1,969,683 | ||||||||
Limestone Bancorp, Inc., 5.750% (3 Month LIBOR USD + 3.950%), 7/31/2029 (a)(b) | 5,000,000 | 4,982,125 | ||||||||
Luther Burbank Corp., 6.500%, 9/30/2024 (b)(c) | 5,000,000 | 4,954,931 | ||||||||
Malvern Bancorp, Inc., 5.556% (12 Month LIBOR USD + 4.145%), 2/15/2027 (a) | 1,250,000 | 1,249,864 | ||||||||
Maple Financial Holdings, Inc., 5.000% (TSFR3M + 4.670%), 2/15/2031 (a)(b) | 2,000,000 | 1,920,378 | ||||||||
Marble Point Loan Financing Ltd. / MPLF Funding I LLC, 7.500%, 10/16/2025 (b)(c) | 1,500,000 | 1,550,588 | ||||||||
Mercantile Bank Corp., 3.250% (SOFR + 2.120%), 1/30/2032 (a) | 1,500,000 | 1,385,994 | ||||||||
Meridian Corp., 5.375% (TSFR3M + 3.950%), 12/30/2029 (a)(c) | 4,000,000 | 3,920,998 | ||||||||
MidWestOne Financial Group, Inc., 5.750% (TSFR3M + 5.680%), 7/30/2030 (a)(c) | 5,000,000 | 5,076,719 | ||||||||
Millennium Consolidated Holdings LLC, 7.500%, 6/30/2023 (b) | 2,000,000 | 2,001,371 | ||||||||
Nano Financial Holdings, Inc., 7.000%, 7/1/2024 (b) | 5,000,000 | 4,957,740 | ||||||||
National Bank of Indianapolis Corp., 5.500% (3 Month LIBOR USD + 4.209%), 9/15/2029 (a)(b) | 7,000,000 | 6,958,996 | ||||||||
NexBank Capital, Inc., 4.000% (TSFR3M + 3.390%), 8/15/2031 (a)(b) | 2,000,000 | 1,897,800 | ||||||||
NexBank Capital, Inc., 6.000%, 7/15/2032 (b) | 1,500,000 | 1,534,437 | ||||||||
Northern Bancorp, Inc., 4.750% (TSFR3M + 3.275%), 12/30/2029 (a)(b) | 4,000,000 | 3,939,234 | ||||||||
Northpointe Bancshares, Inc., 6.000% (TSFR3M + 4.905%), 9/30/2029 (a)(b)(c) | 4,000,000 | 3,997,468 | ||||||||
Northwest Bancshares, Inc., 4.000% (TSFR3M + 3.890%), 9/15/2030 (a) | 1,000,000 | 958,173 | ||||||||
Oakstar Bancshares, Inc., 4.250% (TSFR3M + 3.516%), 4/15/2031 (a)(b) | 1,000,000 | 949,541 | ||||||||
Obsidian Insurance Holdings, Inc., 6.500%, 12/30/2025 (b)(c) | 5,000,000 | 4,900,000 | ||||||||
Ohio National Financial Services, Inc., 6.625%, 5/1/2031 (b)(c) | 6,000,000 | 6,192,129 |
Principal Amount | Value | |||||||||
Corporate Obligations – (continued) | ||||||||||
Financial – (continued) | ||||||||||
Olney Bancshares of Texas, Inc., 4.000% (TSFR3M + 3.320%), 3/15/2031 (a)(b) | $1,000,000 | $942,379 | ||||||||
Origin Bank, 4.250% (3 Month LIBOR USD + 2.820%), 2/15/2030 (a) | 2,500,000 | 2,467,920 | ||||||||
Pacific Premier Bancorp, Inc., 5.375% (TSFR3M + 5.170%), 6/15/2030 (a)(c) | 5,000,000 | 5,030,619 | ||||||||
Pacific Western Bank, 3.250% (TSFR3M + 2.520%), 5/1/2031 (a) | 2,000,000 | 1,865,500 | ||||||||
PCAP Holdings LP, 6.500%, 7/15/2028 (b)(c)(e) | 2,000,000 | 1,860,000 | ||||||||
PhenixFIN Corp., 5.250%, 11/1/2028 (d) | 1,750,000 | 1,638,000 | ||||||||
Piedmont Bancorp, Inc., 5.750% (TSFR3M + 5.615%), 9/1/2030 (a)(b) | 2,500,000 | 2,472,831 | ||||||||
Preferred Bank, 3.375% (TSFR3M + 2.780%), 6/15/2031 (a) | 2,500,000 | 2,297,918 | ||||||||
Premia Holdings Ltd., 6.900%, 9/23/2030 (b)(e) | 9,000,000 | 9,090,000 | ||||||||
Primis Financial Corp., 5.400% (TSFR3M + 5.310%), 9/1/2030 (a)(c) | 2,000,000 | 2,006,068 | ||||||||
Queensborough Co., 6.000% (TSFR3M + 5.880%), 10/15/2030 (a)(b) | 3,000,000 | 3,042,960 | ||||||||
RBB Bancorp, 4.000% (TSFR3M + 3.290%), 4/1/2031 (a) | 1,500,000 | 1,412,323 | ||||||||
Ready Capital Corp., 6.200%, 7/30/2026 (d) | 5,491,700 | 5,304,982 | ||||||||
Ready Capital Corp., 5.750%, 2/15/2026 (d) | 2,000,000 | 1,910,400 | ||||||||
Reliant Bancorp, Inc., 5.125% (TSFR3M + 3.765%), 12/15/2029 (a) | 1,000,000 | 988,900 | ||||||||
River Financial Corp., 4.000% (TSFR3M + 3.420%), 3/15/2031 (a)(b) | 1,000,000 | 942,382 | ||||||||
Salisbury Bancorp, Inc., 3.500% (SOFR + 2.800%), 3/31/2031 (a) | 1,000,000 | 944,713 | ||||||||
SCRE Intermediate Holdco LLC, 6.500%, 2/15/2027 (b) | 2,000,000 | 1,876,304 | ||||||||
Signature Bank, 4.125% (3 Month LIBOR USD + 2.559%), 11/1/2029 (a) | 250,000 | 244,198 | ||||||||
Silver Queen Financial Services, Inc., 5.500% (3 Month LIBOR USD + 3.338%), 12/1/2027 (a)(b)(c) | 3,800,000 | 3,795,713 | ||||||||
SmartFinancial, Inc., 5.625% (3 Month LIBOR USD + 2.550%), 10/2/2028 (a)(b)(c) | 2,190,000 | 2,199,871 | ||||||||
South Street Securities Funding LLC, 6.250%, 12/30/2026 (b) | 6,000,000 | 5,816,618 | ||||||||
Southern Financial Corp., 4.875% (TSFR3M + 3.930%), 10/20/2031 (a)(b) | 1,500,000 | 1,436,640 | ||||||||
Spirit of Texas Bancshares, Inc., 6.000% (TSFR3M + 5.920%), 7/31/2030 (a)(b) | 5,000,000 | 5,069,056 | ||||||||
Sterling Bancorp, 3.875% (TSFR3M + 3.690%), 11/1/2030 (a)(c) | 1,000,000 | 987,315 | ||||||||
Sterling Bancorp, Inc., 8.332% (3 Month LIBOR USD + 5.820%), 4/15/2026 (a)(b) | 2,700,000 | 2,700,837 | ||||||||
Sterling Bancorp, Inc., 4.000% (TSFR3M + 2.530%), 12/30/2029 (a) | 200,000 | 194,526 | ||||||||
Summit Financial Group, Inc., 3.250% (TSFR3M + 2.300%), 12/1/2031 (a) | 2,000,000 | 1,852,427 | ||||||||
Texas State Bankshares, Inc., 5.750% (3 Month LIBOR USD + 3.550%), 6/15/2029 (a)(b) | 4,000,000 | 3,986,850 | ||||||||
Transverse Insurance Group LLC, 6.000%, 12/15/2026 (b) | 5,000,000 | 4,705,717 | ||||||||
Trinitas Capital Management LLC, 6.000%, 7/30/2026 (b) | 6,000,000 | 5,727,090 | ||||||||
Trinity Capital, Inc., 7.000%, 1/16/2025 (d) | 7,500,000 | 7,350,000 | ||||||||
Triumph Bancorp, Inc., 4.875% (SOFR + 3.592%), 11/27/2029 (a)(c) | 11,000,000 | 10,921,670 | ||||||||
Tulsa Valley Bancshares Corp., 5.000% (TSFR3M + 4.210%), 4/15/2031 (a)(b) | 1,250,000 | 1,198,064 | ||||||||
United Insurance Holdings Corp., 6.250%, 12/15/2027 | 6,170,000 | 6,027,909 | ||||||||
Universal Insurance Holdings, Inc., 5.625%, 11/30/2026 | 7,000,000 | 6,766,990 | ||||||||
US Metro Bancorp, Inc., 5.650% (TSFR3M + 5.430%), 11/1/2030 (a)(b)(c) | 3,000,000 | 2,942,903 | ||||||||
VCT Holdings LLC, 6.000%, 12/30/2026 (b) | 5,000,000 | 4,743,559 | ||||||||
Velocity Commercial Capital LLC, 7.125%, 3/15/2027 (b) | 3,000,000 | 2,846,268 | ||||||||
Veritex Holdings, Inc., 4.750% (TSFR3M + 3.470%), 11/15/2029 (a) | 1,750,000 | 1,724,643 | ||||||||
Volunteer State Bancshares, Inc., 5.750% (TSFR3M + 4.365%), 11/15/2029 (a)(b) | 2,000,000 | 2,015,055 | ||||||||
VyStar Credit Union, 4.250%, 3/15/2032 (b) | 3,000,000 | 2,886,740 | ||||||||
White River Bancshares Co., 5.875% (TSFR3M + 4.420%), 12/31/2029 (a)(b) | 5,000,000 | 4,981,910 | ||||||||
Wintrust Financial Corp., 4.850%, 6/6/2029 | 5,000,000 | 4,985,779 | ||||||||
WT Holdings, Inc., 7.000%, 4/30/2023 (b) | 2,700,000 | 2,676,712 | ||||||||
Zais Group LLC, 7.000%, 11/15/2023 (b) | 402,800 | 395,578 | ||||||||
TOTAL CORPORATE OBLIGATIONS (Cost – $556,414,187) | $547,723,921 | |||||||||
Preferred Stocks – 6.73% | Shares | Value | ||||||||
Financial – 3.56% | ||||||||||
Atlantic Union Bankshares Corp., 6.875% | 20,000 | $511,800 | ||||||||
B. Riley Financial, Inc., 7.375% | 40,000 | 1,032,800 | ||||||||
Clear Street Group, Inc., 7.000% (b)(e)(f) | 80,000 | 1,880,000 | ||||||||
CNB Financial Corp., 7.125% | 40,000 | 1,046,800 | ||||||||
Dime Community Bancshares, Inc., 5.500% | 25,000 | 522,750 | ||||||||
First Citizens BancShares, Inc., 5.375% | 140,000 | 3,207,400 | ||||||||
First Merchants Corp., 7.500% | 40,000 | 1,046,000 | ||||||||
Northpointe Bancshares, Inc., 8.250% (SOFR + 7.990%) (a)(b) | 80,000 | 1,941,200 | ||||||||
OceanFirst Financial Corp., 7.000% (SOFR + 6.845%) (a) | 19,500 | 504,075 | ||||||||
PacWest Bancorp, 7.750% (H15T5Y + 4.820%) (a) | 20,000 | 518,000 | ||||||||
Raymond James Financial, Inc., 6.750% (3 Month LIBOR USD + 3.985%) (a) | 37,374 | 956,774 | ||||||||
United Community Banks, Inc., 6.875% | 20,000 | 520,000 | ||||||||
United Fidelity Bank, 7.000% (b)(e) | 1,000 | 892,000 | ||||||||
14,579,599 | ||||||||||
Real Estate Investment Trust – 3.17% | ||||||||||
AGNC Investment Corp., 7.000% (3 Month LIBOR + 5.111%) (a) | 40,000 | 968,400 | ||||||||
Annaly Capital Management, Inc., 6.950% (3 Month LIBOR + 4.993%) (a) | 40,000 | 967,600 | ||||||||
Arbor Realty Trust, Inc., 6.250% | 40,000 | 840,800 | ||||||||
Dynex Capital, Inc., 6.900% (3 Month LIBOR + 5.461%) (a) | 40,000 | 910,400 | ||||||||
Ellington Financial, Inc., 6.250% (H15T5Y + 4.990%) (a) | 80,000 | 1,620,800 | ||||||||
Ellington Financial, Inc., 6.750% (3 Month LIBOR + 5.196%) (a) | 20,000 | 427,400 | ||||||||
Inpoint Commercial Real Estate Income, Inc., 6.750% | 80,000 | 1,386,792 | ||||||||
Lument Finance Trust, Inc., 7.875% | 40,000 | 846,968 | ||||||||
New Residential Investment Corp., 7.000% (H15T5Y + 6.223%) (a) | 200,000 | 4,438,000 | ||||||||
TPG RE Finance Trust, Inc., 6.250% | 30,000 | 567,000 | ||||||||
12,974,160 | ||||||||||
TOTAL PREFERRED STOCKS (Cost – $29,786,082) | $27,553,759 | |||||||||
Short-Term Investments – 0.36% | ||||||||||
Money Market Funds – 0.36% | ||||||||||
First American Government Obligations Fund, Class U, 1.459% (g) | 1,489,064 | 1,489,064 | ||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost – $1,489,064) | $1,489,064 | |||||||||
TOTAL INVESTMENTS – 142.12% (Cost – $593,306,277) | $581,786,495 | |||||||||
Liabilities in Excess of Other Assets – (42.12%) | (172,437,718 | ) | ||||||||
NET ASSETS – 100.00% | $409,348,777 | |||||||||
(a) | Variable or floating rate security based on a reference index and spread. Certain securities are fixed to variable and currently in the fixed phase. Rate disclosed is the rate in effect as of July 31, 2022. |
(b) | Security exempt from registration under Rule 144A or Section 4(a)(2) of the Securities Act of 1933. The security may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities are determined to be liquid by the Adviser, under the procedures established by the Fund’s Board of Trustees, unless otherwise denoted. At July 31, 2022, the value of these securities amounted to $310,359,926 or 75.82% of net assets. |
(c) | All or a portion of the security has been pledged as collateral in connection with open reverse repurchase agreements. At July 31, 2022, the value of securities pledged amounted to $217,163,001. |
(d) | Security issued as a “Baby Bond”, with a par value of $25 per bond. The principal balance disclosed above represents the issuer’s outstanding principal that corresponds to the bonds held in the Fund. |
(e) | As of July 31, 2022, the Fund has fair valued these securities under the procedures established by the Fund’s Board of Trustees. The value of these securities amounted to $13,722,000 or 3.35% of net assets. Value determined using significant unobservable inputs. |
(f) | Variable rate security. The coupon is based on an underlying pool of assets. Rate disclosed is the rate in effect as of July 31, 2022. |
(g) | Rate disclosed is the seven day yield as of July 31, 2022. |
Counterparty | Interest Rate | Trade Date | Maturity Date | Net Closing Amount | Face Value | |||||||||||||||
Lucid Management and Capital Partners LP | 3.221 | % | 7/14/2022 | 8/11/2022 | $ | 38,814,008 | $ | 38,717,000 | ||||||||||||
Lucid Management and Capital Partners LP | 3.406 | % | 7/15/2022 | 8/11/2022 | 829,112 | 827,000 | ||||||||||||||
Lucid Management and Capital Partners LP | 3.502 | % | 7/26/2022 | 8/11/2022 | 3,141,883 | 3,137,000 | ||||||||||||||
Lucid Management and Capital Partners LP | 3.733 | % | 7/14/2022 | 10/13/2022 | 42,095,508 | 41,702,000 | ||||||||||||||
Lucid Management and Capital Partners LP | 3.933 | % | 7/14/2022 | 10/13/2022 | 9,905,509 | 9,808,000 | ||||||||||||||
$ | 94,191,000 | |||||||||||||||||||
Ticker | Investment Objective | Commencement of Operations | ||
FINS | Current Income & Total Return | 05/31/19 |
Pre- Reorganzation Net Assets | Pre- Reorganzation Shares Outstanding | Pre- Reorganzation Net Asset Value | Post- Reorganzation Net Asset Value | Post- Reorganzation Shares Outstanding | Exchange Ratio | |||||||||||||||||||
FINS | $331,647,740 | 20,305,331 | $16.3330 | $409,348,777 | 25,062,638 | 1.17319 | ||||||||||||||||||
DYFN | $77,701,037 | 4,055,000 | $19.1618 | — | — | — |
• | Level 1: quoted prices in active markets for identical securities |
• | Level 2: other significant observable inputs (including, but not limited to, quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3: significant unobservable inputs (including the Fund’s own assumptions in determining fair value of investments based on the best information available) |
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||
Bank Loans | $– | $2,434,134 | $– | $2,434,134 | ||||||||||||
Common Stocks | 1,745,617 | – | – | 1,745,617 | ||||||||||||
Convertible Obligations | – | 840,000 | – | 840,000 | ||||||||||||
Corporate Obligations | – | 536,773,921 | 10,950,000 | 547,723,921 | ||||||||||||
Preferred Stocks | 22,336,484 | 2,445,275 | 2,772,000 | 27,553,759 | ||||||||||||
Short-Term Investments | 1,489,064 | – | – | 1,489,064 | ||||||||||||
Total | $25,571,165 | $542,493,330 | $13,722,000 | $581,786,495 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Liabilities | ||||||||||||||||
Reverse Repurchase Agreements | $– | $94,191,000 | $– | $94,191,000 |
Balance as of 01/31/22 | Amortization/ Accretion/ Distributions | Net Realized Gain (Loss) | Change in Net Unrealized Appreciation (Depreciation) | Purchases | Sales | Transfers Into Level 3 | Transfers Out of Level 3 | Balance as of 07/31/22 | ||||||||||
Corporate Obligations | $11,097,500 | ($4,789) | $– | ($452,179) | $5,053,027 | $– | $– | ($4,743,559) | $10,950,000 | |||||||||
Preferred Stocks | $2,000,000 | $– | $– | ($228,000) | $1,000,000 | $– | $– | $– | $2,772,000 |
Fair Value as of 07/31/22 | Valuation Techniques | Unobservable Input | Range | Weighted Average Unobservable Input | ||||||||||
Corporate Obligations | $ | 10,950,000 | Broker Quote | Third party | $93.00-$101.00 | $99.55 | ||||||||
Preferred Stocks | $2,772,000 | Consensus Pricing | Trading colors of comparable securities and other deals with similar coupons and characteristics | $23.50-$892.00 | $ | 93.86 |
Paid-in capital | Distributable earnings (accumulated deficit) | |
($49,501) | $49,501 |
Reverse Repurchase Agreements | Overnight and Continuous | Up to 30 Days | 30-90 Days | Greater than 90 Days | Total | |||||||||||||||
Corporate Obligations | $ | – | $ | 42,681,000 | $ | 51,510,000 | $ | – | $ | 94,191,000 | ||||||||||
Total | $ | – | $ | 42,681,000 | $ | 51,510,000 | $ | – | $ | 94,191,000 | ||||||||||
Gross amount of reverse repurchase agreements in Balance Sheet Offsetting Information Table | $ | 94,191,000 | ||||||||||||||||||
Amounts related to agreements not included in offsetting disclosure in Balance Sheet Offsetting Information Table | $– |
Gross Amounts Not Offset in Statement of Assets and Liabilities | ||||||||||||
Gross Amounts of Recognized Liabilities | Gross Amounts Offset in Statement of Assets and Liabilities | Net Amounts of Liabilities Presented in Statement of Assets and Liabilities | Financial Instruments | Cash Collateral Pledged | Net Amount | |||||||
Reverse Repurchase Agreements | $94,191,000 | $– | $94,191,000 | $94,191,000 | $– | $– |
Purchases | Sales | |
$23,802,125 | $13,736,970 |
Security Name | Value as of February 1, 2022 | Purchases | Sales/Return of Capital | Net Change in Unrealized Appreciation (Depreciation) on Investments in Affiliates | Value as of July 31, 2022 | Share Balance | Dividend Income | Net Realized Gain (Loss) on Investments in Affiliates | ||||||||
DYFN | $352,296 | $– | ($295,072) | ($1,790) | $– | – | $10,438 | ($55,434) |
2022 | 2021 | |||
Distributions paid from: | ||||
Ordinary Income | $12,621,982 | $11,280,742 | ||
Net Long-Term Capital Gain | – | – | ||
Return of Capital | 8,858,520 | 6,149,847 | ||
Total | $21,480,502 | $17,430,589 |
Tax Cost of Investments | $478,256,963 | |
Unrealized Appreciation* | 12,110,099 | |
Unrealized Depreciation* | (2,444,034) | |
Net Unrealized Appreciation (Depreciation)* | $9,666,065 | |
Undistributed Ordinary Income | – | |
Undistributed Long-Term Gain (Loss) | – | |
Accumulated Gain (Loss) | $– | |
Other Accumulated Gain (Loss) | (11,657,032) | |
Distributable Earnings (Accumulated Deficit) | ($1,990,967) |
* | Represents aggregated amounts of investments and reverse repurchase agreements in the Fund. |
No expiration short-term | $11,635,837 | |
No expiration long-term | $– | |
Total | $11,635,837 |
Series | Principal Outstanding July 31, 2022 | Payment Frequency | Unamortized Offering Costs | Estimated Fair Value July 31, 2022 | Fixed Interest Rate | Maturity Date | ||||||
A | $40,000,000 | Semi-Annual | $412,111 | $36,608,378 | 2.35% | July 8, 2026 | ||||||
B | $45,000,000 | Semi-Annual | $464,720 | $40,552,772 | 2.80% | July 8, 2028 |
Layoff/Expiration Date | Shares of Common Stock Issued | Subscription Price | Offering Costs | |||
October 6, 2021 | 410,000 | $16.15 | $37,920 | |||
October 11, 2021 | 300,000 | $16.10 | $27,746 | |||
October 14, 2021 | 4,366,333 | $16.06 | $403,834 |
For | Against | Abstain | ||||||||||
To Elect Andrea N. Mullins | 14,417,075 | 998,518 | 109,441 | |||||||||
To Elect Keith M. Schappert | 14,427,256 | 984,349 | 113,431 |
For | Against | Abstain | ||||||||||
To Approve Share Issuance | 14,634,788 | 768,832 | 106,573 |
For | Against | Abstain | ||||||||||
To Approve Term Extension | 2,108,670 | 5,793,768 | 57,939 |
Name and Year of Birth | Position with the Fund | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex (1) Overseen by Trustee | Other Directorships Held During the Past 5 Years | |||||
Independent Trustees (2) | ||||||||||
Ira P. Cohen 1959 | Independent Trustee, Chair (Class III) | Trustee since 2018, Chair since 2019; 3 year term | Executive Vice President, Recognos Financial (investment industry data analysis provider) (2015-2021); Independent financial services consultant (since 2005). | 11 | Trustee, Valued Advisers Trust (since 2010); Trustee, Griffin Institutional Access Credit Fund (since 2017); Trustee, Griffin Institutional Access Real Estate Fund (since 2014); Trustee, Angel Oak Funds Trust (since 2014); Trustee, Angel Oak Strategic Credit Fund (since 2017); Trustee, Angel Oak Dynamic Financial Strategies Income Term Trust (since 2019); Trustee, U.S. Fixed Income Trust (since 2019); Angel Oak Credit Opportunities Term Trust (since 2021). | |||||
Alvin R. Albe, Jr. 1953 | Independent Trustee (Class I) | Since 2018; 3 year term | Retired. | 11 | Trustee, Angel Oak Funds Trust (since 2014); Trustee, Angel Oak Strategic Credit Fund (since 2017); Trustee, Angel Oak Dynamic Financial Strategies Income Term Trust (since 2019); Angel Oak Credit Opportunities Term Trust (since 2021). |
Name and Year of Birth | Position with the Fund | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex (1) Overseen by Trustee | Other Directorships Held During the Past 5 Years | |||||
Keith M. Schappert 1951 | Independent Trustee (Class II) | Since 2018; 3 year term | President, Schappert Consulting LLC (investment industry consulting) (since 2008). | 11 | Trustee, Mirae Asset Discovery Funds (since 2010); Director, Commonfund Capital, Inc. (since 2015); Director, The Commonfund (since 2012); Director, Calamos Asset Management, Inc. (2012-2017); Trustee, Angel Oak Funds Trust (since 2014); Trustee, Angel Oak Strategic Credit Fund (since 2017); Trustee, Angel Oak Dynamic Financial Strategies Income Term Trust (since 2019); Angel Oak Credit Opportunities Term Trust (since 2021). | |||||
Andrea N. Mullins 1967 | Independent Trustee (Class II) | Since 2019; 3 year term | Private Investor; Independent Contractor, SWM Advisors (since 2014). | 11 | Trustee, Valued Advisors Trust (since 2013, Chair since 2017); Trustee, Angel Oak Funds Trust (since 2019); Trustee, Angel Oak Strategic Credit Fund (since 2019); Trustee, Angel Oak Dynamic Financial Strategies Income Term Trust (since 2019); Angel Oak Credit Opportunities Term Trust (since 2021); Trustee and Audit Committee Chair, Cushing Mutual Funds Trust (since 2021); Trustee and Audit Committee Chair, Cushing MLP & Infrastructure Fund (since 2021); Trustee and Audit Committee Chair, Cushing Nextgen Infrastructure Income Fund (since 2021). |
Name and Year of Birth | Position with the Fund | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex (1) Overseen by Trustee | Other Directorships Held During the Past 5 Years | |||||
Interested Trustees | ||||||||||
Samuel R. Dunlap, III 1979 | Interested Trustee (Class I) | Since 2022; 3 year term | Chief Investment Officer-Public Strategies, Angel Oak Capital Advisors, LLC (investment management) (since 2009). | 11 | Trustee, Angel Oak Funds Trust (since 2019); Trustee, Angel Oak Strategic Credit Fund (since 2019); Trustee, Angel Oak Dynamic Financial Strategies Income Term Trust (since 2019); Trustee, Angel Oak Credit Opportunities Term Trust (since 2021). |
(1) | The Fund Complex includes the Fund, each series of Angel Oak Funds Trust, Angel Oak Strategic Credit Fund, Angel Oak Dynamic Financial Strategies Income Term Trust, and Angel Oak Credit Opportunities Term Trust. |
(2) | The Trustees of the Fund who are not “interested persons” of the Fund as defined in the 1940 Act (“Independent Trustees”). |
Name and Year of Birth | Position with the Fund | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | |||
Officers | ||||||
Dory S. Black, Esq. 1975 | President | Since 2019; indefinite term | General Counsel, Angel Oak Companies (since 2014). | |||
Adam Langley 1967 | Chief Compliance Officer | Since 2019; indefinite term | Chief Compliance Officer, Angel Oak Capital Advisors, LLC (since 2015); Chief Compliance Officer, Buckhead One Financial Opportunities, LLC (since 2015); Chief Compliance Officer, Angel Oak Capital Partners II, LLC (since 2016); Chief Compliance Officer of Falcons I, LLC (since 2018); Chief Compliance Officer, Hawks I, LLC (since 2018); Chief Compliance Officer, Angel Oak Commercial Real Estate Solutions (2021-2022); Chief Compliance Officer, Angel Oak Funds Trust (since 2015); Chief Compliance Officer, Angel Oak Strategic Credit Fund (since 2017); Chief Compliance Officer, Angel Oak Dynamic Financial Strategies Income Term Trust (since 2019); Chief Compliance Officer, Angel Oak Credit Opportunities Fund (since 2021); Chief Operating Officer, Angel Oak Capital Advisors, LLC (since 2021). | |||
Kevin Sluss 1982 | Secretary | Since 2022; indefinite term | Chief Risk Officer, Angel Oak Capital Advisors, LLC (since 2022), Quantitative Analytics and Model Development Manager, PNC Bank (2019-2022); Quantitative Analytics and Model Development Analyst, PNC Bank (2016-2019). | |||
Daniel Fazioli 1981 | Treasurer | Since 2019; indefinite term | Chief Accounting Officer, Angel Oak Capital Advisors, LLC (since 2015). |
(b) Not applicable.
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Investments.
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
There were no purchases made by or on behalf of the Registrant or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended, of shares of the Registrant’s equity securities that are registered by the Registrant pursuant to Section 12 of the Exchange Act made in the period covered by this report.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees.
1
Item 11. Controls and Procedures.
(a) | The Registrant’s Principal Executive Officer and Principal Financial Officer have reviewed the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider. |
(b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
The registrant did not engage in securities lending activities during the fiscal period reported on this Form N-CSR.
Item 13. Exhibits.
(a) | (1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Not Applicable. |
(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable.
(4) Change in the registrant’s independent public accountant. There was no change in the registrant’s independent public accountant for the period covered by this report.
(b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith. |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | Angel Oak Financial Strategies Income Term Trust |
By (Signature and Title)* | /s/ Dory S. Black | |||
Dory S. Black, President (Principal Executive Officer) |
Date | September 26, 2022 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ Dory S. Black | |||
Dory S. Black, President (Principal Executive Officer) |
Date | September 26, 2022 |
By (Signature and Title)* | /s/ Daniel Fazioli | |||
Daniel Fazioli, Treasurer (Principal Financial Officer) |
Date | September 26, 2022 |
* | Print the name and title of each signing officer under his or her signature. |