Angel Oak Financial Strategies Income Term Trust Declares February 2025 Distribution

The Angel Oak Financial Strategies Income Term Trust (the Fund) has declared its February 2025 distribution, providing investors with an update on the Fund's performance and income generation. The Fund, managed by Angel Oak Capital Advisors, LLC, focuses on the financial sector, with key overweights to community bank debt and nonbank financials debt.

The Fund returned 8.77% based on market price and 4.56% based on net asset value (NAV) for the six-month period ending July 31, 2024. This performance outpaced the Bloomberg U.S. Aggregate Bond Index, the Fund's benchmark, by 688 basis points (bps) based on market price and 267 bps based on NAV. The benchmark returned 1.89% over the same period.

The Fund's management attributed the strong performance to the recovery in sentiment around the banking sector and pricing on the underlying bonds. Second-quarter 2024 bank earnings showed continued resilience, with deposit costs stabilizing, deposit durations shortening, securities portfolios being repositioned, capital levels improving, and leading indicators for credit decelerating. Community bank debt primary market issuance has also resumed.

The declared distribution rate for the Fund as of July 31, 2024, is 4.81% based on market price and 4.12% based on net asset value (NAV). To compare this to previous distributions, we can look at the distribution rates from the semi-annual report of July 31, 2021, which were 7.16% based on market price and 6.81% based on NAV.

The distribution rate has decreased from 7.16% to 4.81% based on market price, and from 6.81% to 4.12% based on NAV. This decrease can be attributed to several factors, including market conditions, Fund performance, and changes in the Fund's portfolio composition. The Fund's management plans to maintain its investment strategy and risk management approach following the distribution by continuing to focus on the financial sector, with key overweights to community bank debt and nonbank financials debt. The Fund's investment objective remains to seek current income with a secondary objective of total return.