ArrowMark Financial Corp.

Quarterly gross income was approximately $5.3 million, or $0.75 per share, and total expenses were $2.0 million, or $0.29 per share, resulting in net investment income of $3.3 million, or $0.46 per share. Net realized capital gains were approximately $4.7 million, or $0.65 per share, while net unrealized depreciation on investments and foreign currency transactions was approximately $6.6 million, or $0.92 per share. NAV ended the quarter at $20.74 per share, down $0.20 from the prior quarter; the regular cash distribution was $0.39 per share. Management did not give next-quarter earnings guidance, but said the dividend declaration in December may include annual tax distributions and that the final amount will depend on fourth-quarter performance. They also noted year-to-date net investment income was up approximately 17% versus the same period in 2021.

Sanjai Bhonsle framed the quarter as evidence that the portfolio is built to handle volatility and benefit from rising rates. He emphasized risk mitigation, ongoing monitoring, and the decision to reduce exposure to a borrower that shifted away from the original investment thesis, selling that position close to par. His tone was confident and defensive of the portfolio structure, arguing that stable NAV, floating-rate exposure, and ArrowMark’s research resources position the company well through a potential slowdown.

Patrick Farrell walked through the quarter’s NAV bridge and financial components in detail. He cited gross income of about $5.3 million, expenses of $2.0 million, net investment income of $3.3 million, realized gains of $4.7 million, and unrealized depreciation of $6.6 million, with NAV finishing at $20.74 per share versus $20.94 at the start of the quarter. He also noted total assets of $212.3 million, investments of $193.2 million, cash and receivables of about $19.1 million, and credit facility borrowings of $62.3 million, or 29% of total assets, while pointing out the stock’s dividend yield was about 9.2% as of the call date.

There was no analyst Q&A in the transcript, so no external questions or management responses were presented. The closest thing to a question addressed proactively was management’s discussion of how much additional rate hikes could add to earnings and how the December dividend could include annual tax distributions or potentially capital gains distributions. Management also repeatedly addressed concerns about volatility, NAV stability, and liquidity in the secondary market.