ArrowMark Financial Corp. - 1578987

ArrowMark Financial Corp. - 1578987 - 2026

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-22853

ArrowMark Financial Corp.

(Exact name of registrant as specified in charter)

100 Fillmore Street, Suite 325
Denver, CO 80206
(Address of principal executive offices) (Zip code)

Sanjai Bhonsle, CEO
ArrowMark Asset Management, LLC
100 Fillmore Street, Suite 325

Denver, CO 80206
(Name and address of agent for service)

Copies of Communications to:

John M. Ford, Esq.

Troutman Pepper Locke

3000 Two Logan Square / Eighteenth and Arch Streets

Philadelphia, PA 19103-2799

(215) 981-4659

Registrant's telephone number, including area code: (303) 398-2929

Date of fiscal year end: December 31

Date of reporting period: June 30, 2026

Item 1. Reports to Stockholders.

(a)

The Report to Shareholders is attached herewith.

Semi-Annual Report

June 30, 2026

(unaudited)

ARROWMARK FINANCIAL CORP.

Table of Contents

	Page

Consolidated Schedule of Investments	1

Consolidated Statement of Assets and Liabilities	6

Consolidated Statement of Operations	7

Consolidated Statements of Changes In Net Assets	8

Consolidated Statement of Cash Flows	9

Consolidated Financial Highlights	10

Notes to Consolidated Financial Statements	12

Dividends and Distributions	27

Tax Information	29

Additional Information	29

Results of Meeting of Stockholders	30

Management	31

Shareholder Information	35

Privacy Notice	43

As of June 30, 2026

Company⁽¹⁾	Investment	# of Shares/Par Amount⁽²⁾		Fair Value⁽³⁾
Term Loans – 3.8%
Banking – 3.8%
EverBank Financial Corp.	Subordinated Term Loan, 7.50%, 9/01/2035, 144A⁽⁴⁾⁽⁵⁾	$	2,000,000	$	2,045,000
F.N.B.C. of La Grange, Inc.	Subordinated Term Loan, 6.38%, 1/01/2030⁽⁵⁾⁽⁶⁾	$	700,000		640,500
TransPecos Financial Corp.	Senior Term Loan, 9.00%, 10/01/2028⁽⁵⁾	$	4,000,000		3,520,000
Tulsa Valley Bancshares	Subordinated Term Loan, 6.38%, 12/31/2028⁽⁵⁾⁽⁶⁾	$	1,700,000		1,576,750
	Total Term Loans (Cost $8,400,000)				7,782,250
Structured Debt Securities – 7.2%
Banking – 7.2%
Community Funding 2018, LLC.	Preferred Shares (Estimated effective yield 10.67%), 144A⁽⁴⁾⁽⁷⁾	$	14,860,000		11,757,975
TCW CLO 2025-1 LTD	Preferred Shares, 9.58%, 4/20/2038⁽⁵⁾⁽⁸⁾	$	3,000,000		2,913,912
	Total Structured Debt Securities (Cost $17,701,118)				14,671,887
Regulatory Capital Relief Securities – 102.6%
Banking – 102.6%
Absolute	Credit Linked Note, 16.84%, 10/10/2027⁽⁹⁾**	$	531,869		445,846
Algonquin	Credit Linked Note, 3.65%, 11/01/2027^(5)(8)+	$	485,471		485,471
Algonquin	Credit Linked Note, 13.90%, 11/01/2028⁽⁸⁾⁺	$	1,965,343		1,929,395
Algonquin	Guarantee Linked Note, 3.65%, 05/01/2027^(5)(8)+	$	481,081		457,027
AMF Ireland Finance 1 - Series 1	Profit Participating Note, 17.14%, 06/30/2031⁽⁵⁾⁽⁸⁾	$	6,962,108		7,272,653
AMF Ireland Finance 1 - Series 2	Profit Participating Note, 10.88%, 12/15/2029⁽⁵⁾⁽⁹⁾	$	387,763		390,261
AMF Ireland Finance 1 - Series 3	Profit Participating Note, 11.12%, 05/31/2033⁽⁵⁾⁽⁸⁾	$	3,000,000		2,986,692
AMF Ireland Finance 1 - Series 4	Profit Participating Note, 9.75%, 08/20/2029^(5)(10)	€	1,700,000		1,945,396
AMF Ireland Finance 2 - Series 2	Profit Participating Note, 14.42%, 04/19/2032⁽⁵⁾⁽⁸⁾	$	3,000,000		3,166,619
AMF Ireland Finance 2 - Series 3	Profit Participating Note, 9.83%, 05/09/2033^(5)(10)	€	5,000,000		5,778,368
AMF Ireland Finance 2 - Series 4	Profit Participating Note, 11.14%, 11/30/2031⁽⁵⁾⁽⁸⁾	$	4,000,000		4,005,608
AMF Ireland Finance 2 - Series 5	Profit Participating Note, 9.14%, 08/10/2034^(5)(10)**	€	4,500,000		5,141,700
AMF Ireland Finance 3 - Series 1	Profit Participating Note, 10.13%, 06/30/2030⁽⁵⁾⁽⁹⁾**	$	1,348,708		1,349,912
AMF Ireland Finance 3 - Series 2	Profit Participating Note, 10.42%, 12/31/2034^(5)(10)**	€	2,013,614		2,310,860
AMF Ireland Finance 3 - Series 3	Profit Participating Note, 13.29%, 07/08/2032⁽⁵⁾⁽⁸⁾	$	2,000,000		1,912,972
AMF Ireland Finance 3 - Series 4	Profit Participating Note, 8.15%, 09/30/2039^(5)(10)	€	4,700,000		5,372,844
AMF Ireland Finance 4 - Series 1	Profit Participating Note, 12.14%, 10/10/2030⁽⁵⁾⁽⁸⁾**	$	2,500,000		2,468,750

See Notes to financial statements.

Semi-Annual Report | ArrowMark Financial Corp. 1

Company⁽¹⁾	Investment	# of Shares/Par Amount⁽²⁾		Fair Value⁽³⁾
Regulatory Capital Relief Securities (continued)
Banking (continued)
AMF Ireland Finance 4 - Series 2	Profit Participating Note, 9.14%, 12/12/2033^(5)(10)	€	1,022,511	$	1,165,401
AMF Ireland Finance 4 - Series 3	Profit Participating Note, 10.93%, 06/30/2033^(5)(11)	£	2,500,000		3,345,466
AMF Ireland Finance 4 - Series 4	Profit Participating Note, 8.82%, 11/28/2039^(5)(10)**	€	1,078,002		1,238,136
AMF Ireland Finance 4 - Series 5	Profit Participating Note, 10.16%, 02/15/2030⁽⁵⁾⁽⁸⁾	$	3,000,000		2,979,576
AMF Ireland Finance 4 - Series 6	Profit Participating Note, 9.56%, 06/02/2034^(5)(12)**	€	2,250,000		2,558,510
AMF Ireland Finance 5 - Series 1	Profit Participating Note, 11.17%, 10/21/2034⁽⁵⁾⁽⁸⁾	$	10,000,000		10,130,649
AMF Ireland Finance 5 - Series 2	Profit Participating Note, 9.73%, 12/15/2029⁽⁵⁾⁽⁹⁾	$	5,000,000		4,988,500
AMF Ireland Finance 5 - Series 3	Profit Participating Note, 11.09%, 05/28/2032⁽⁵⁾⁽⁸⁾	$	8,200,000		8,200,000
AMF Ireland Finance 6 - Series 1	Profit Participating Note, 11.41%, 8/15/2030⁽⁵⁾⁽⁸⁾	$	7,000,000		6,978,300
AMF Ireland Finance 6 - Series 2	Profit Participating Note, 10.68%, 4/21/2032⁽⁵⁾⁽⁸⁾	$	10,000,000		10,075,920
Auto ABS Synthetic French Loans	Credit Linked Note, 14.71%, 12/27/2030⁽¹²⁾**	€	642,582		736,900
Boa Vista	Credit Linked Note, 11.35%, 05/02/2043⁽¹⁰⁾**	€	827,610		947,991
Cedar	Credit Linked Note, 12.70%, 12/15/2027⁽¹⁰⁾**	€	2,079,484		2,402,877
Cedar	Credit Linked Note, 13.20%, 03/30/2030^(5)(10)**	€	2,612,639		3,051,804
CHAKRA	Credit Linked Note, 13.06%, 11/21/2027^(5)(8)+	$	1,724,148		1,596,477
Colonnade	Credit Linked Note, 15.81%, 04/30/2028⁽⁵⁾⁽⁸⁾	$	5,083,365		5,204,517
Colonnade	Credit Linked Note, 15.53%, 11/30/2029⁽⁵⁾⁽⁸⁾	$	6,900,719		7,259,639
Colonnade	Credit Linked Note, 16.33%, 12/15/2029⁽⁵⁾⁽⁸⁾	$	4,590,913		4,644,905
Colonnade	Credit Linked Note, 15.67%, 04/30/2030⁽⁵⁾⁽⁸⁾	$	9,154,241		9,525,601
CRAFT	Credit Linked Note, 0.00%, 04/30/2028, 144A^(4)(5)(13)	$	270,544		257,016
CRAFT	Credit Linked Note, 15.39%, 11/28/2030, 144A^(4)(5)(8)	$	3,774,211		4,294,574
CRAFT	Credit Linked Note, 12.40%, 02/21/2031, 144A^(4)(5)(13)	$	2,478,103		2,860,671
CRAFT	Credit Linked Note, 12.90%, 11/21/2031, 144A^(4)(5)(8)	$	10,000,000		10,476,870
CRAFT	Credit Linked Note, 10.92%, 1/21/2035, 144A^(4)(5)(8)	$	5,000,000		5,049,780
CRAFT	Credit Linked Note, 10.92%, 1/21/2035, 144A^(4)(5)(8)**	$	5,000,000		5,049,780
FCT Colisee	Credit Linked Note, 10.15%, 07/07/2033⁽¹⁰⁾⁺	€	925,466		1,053,499
Future Ready Chakra	Credit Linked Note, 11.64%, 12/15/2029⁽⁸⁾⁺	$	4,466,667		4,413,625
LOFT	Credit Linked Note, 11.14%, 02/28/2030, 144A^(4)(5)(8)	$	2,726,486		2,865,133
LOFT	Credit Linked Note, 22.64%, 02/28/2030, 144A^(4)(5)(8)	$	5,154,136		6,426,203
Mespil	Credit Linked Note, 13.67%, 12/08/2031⁽⁵⁾⁽⁸⁾**	$	1,483,809		507,908
Muskoka	Credit Linked Note, 3.66%, 11/01/2027^(5)(8)+	$	15,438		14,666
Nansa	Credit Linked Note, 2.17%, 04/05/2026^(5)(10)**	€	307,685		127,792
Nightingale LF	Credit Linked Note, 14.48%, 04/01/2028^(5)(11)**	£	2,000,000		2,652,900
Pymes Magdalena	Credit Linked Note, 2.31%, 03/20/2050⁽¹⁰⁾**	€	828,161		933,341
Salisbury	Credit Linked Note, 14.23%, 06/16/2027⁽¹¹⁾⁺	£	5,021,855		6,553,527
Salisbury	Credit Linked Note, 8.48%, 6/16/2027^(5)(11)+	£	7,000,000		9,390,629
Salisbury	Credit Linked Note, 8.48%, 4/17/2028^(5)(11)+	£	2,570,579		3,467,301

2 ArrowMark Financial Corp. | Semi-Annual Report

See Notes to financial statements.

Company⁽¹⁾	Investment	# of Shares/Par Amount⁽²⁾		Fair Value⁽³⁾
Regulatory Capital Relief Securities (continued)
Banking (continued)
Salisbury	Credit Linked Note, 13.48%, 03/20/2028^(5)(11)+	£	596,480	$	822,105
Salisbury	Credit Linked Note, 13.73%, 04/17/2028^(5)(11)+	£	3,605,186		5,056,735
Salisbury	Credit Linked Note, 3.73%, 04/17/2028^(5)(11)+	£	10,847		12,949
Terra	Credit Linked Note, 11.54%, 09/25/2029⁽⁸⁾**	$	2,019,149		2,001,279
	Total Regulatory Capital Relief Securities (Cost $204,252,672)				208,739,826
Trust Preferred and Preferred Securities – 0.9%
Banking – 0.9%
Fidelity Federal Bancorp	Fixed Rate Cumulative Perpetual Preferred Stock, Series A - 9%^(5)(14)(15)	$	2,789,000		1,673,400
Fidelity Federal Bancorp	Fixed Rate Cumulative Perpetual Preferred Stock, Series B - 9%^(5)(15)(16)	$	200,000		120,000
	Total Trust Preferred and Preferred Securities (Cost $3,004,203)				1,793,400
Common Stocks – 4.3%
Banking – 4.3%
U.S. Bancorp.	Common Stock	$	104,100		6,287,640
Wells Fargo & Co.	Common Stock	$	30,000		2,479,200
	Total Common Stocks (Cost $7,211,393)				8,766,840
	Total Long-Term Investments (Cost $240,569,386)				241,754,203
Money Market Fund – 0.3%
Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio	Institutional Share Class - Money Market Mutual Fund (MSUXX) 3.51%⁽¹⁷⁾	$	554,429		554,429
	Total Money Market Fund (Cost $554,429)				554,429
	Total Investments (Cost $241,123,815)^(18)(19) — 119.1%				242,308,632
	Other Assets and Liabilities, Net — (19.1)%⁽²⁰⁾				(38,814,406	)
	Total Net Assets — 100.0%*			$	203,494,226

Company⁽¹⁾	Investment	# of Contracts⁽²⁾	Fair Value⁽³⁾
Call Options Written – (1.5%)
Banking – (1.5%)
U.S. Bancorp.	U.S. Bancorp., Notional amount $3,903,750, Expires 1/15/2027, Strike Price $37.50	1,041	$	(2,352,660)
Wells Fargo & Co.	Wells Fargo & Co., Notional amount $1,800,000, Expires 6/17/2027, Strike Price $60.00	300		(751,500)
	Total Call Options Written (Premiums received $1,813,197)		$	(3,104,160)

See Notes to financial statements.

Semi-Annual Report | ArrowMark Financial Corp. 3

⁽¹⁾	Except with respect to Community Funding 2018, LLC ("CF 2018"), we do not "control" and are not an "affiliate" of any of our investments, as such terms are defined under the Investment Company Act of 1940 (the "1940 Act"). We may be deemed to control and be an affiliate of CF 2018 because we are the sole member of such entity.
⁽²⁾	Par Value in USD, GBP, or EUR.
⁽³⁾	Fair Value is determined in good faith in accordance with the Company’s valuation policy and is reviewed and accepted by the Company’s Board of Directors. All amounts are in USD.
⁽⁴⁾	Securities are exempt from registration under Rule 144A of the Securities Act of 1933.
⁽⁵⁾	Investments determined using significant unobservable inputs (Level 3). The value of such securities is $ 199,811,108 or 98.19% of net assets.
⁽⁶⁾	The estimated effective yield including structuring fees paid annually through maturity of 2030 and 2028, respectively, is 9.60%.
⁽⁷⁾	The preferred shares are considered an equity position. Equity investments are entitled to recurring distributions which are generally equal to the remaining cash flow of the payments made by the underlying company’s securities less contractual payments to debt holders and company expenses. The estimated effective yield indicated is based upon a current projection of the amount and timing of these recurring distributions and the estimated amount of repayment of principal upon termination. Such projections are periodically reviewed and adjusted as needed. The estimated effective yield may ultimately not be realized.
⁽⁸⁾	Floating rate note: 90 Day Average SOFR + minimum of 0.00%
⁽⁹⁾	Floating rate note: 30 Day Average SOFR + minimum of 6.10%
⁽¹⁰⁾	Floating rate note: 3M EURIBOR (Floored at 0%) + minimum of 0.00%
⁽¹¹⁾	Floating rate note: SONIA + minimum of 0.00%
⁽¹²⁾	Floating rate note: 1M EURIBOR + minimum of 7.28%
⁽¹³⁾	Floating rate note: 3M SOFR + minimum of 0.00%
⁽¹⁴⁾	As of June 30, 2026, this investment has deferred, undeclared and compounding dividends of $759,219 that will be recognized by ArrowMark Financial Corp. once they are declared by Fidelity Federal Bancorp.
⁽¹⁵⁾	Non-income producing securities
⁽¹⁶⁾	As of June 30, 2026, this investment has deferred, undeclared and compounding dividends of $54,444 that will be recognized by ArrowMark Financial Corp. once they are declared by Fidelity Federal Bancorp.
⁽¹⁷⁾	Current annualized 7-day yield as of June 30, 2026.
⁽¹⁸⁾	As of June 30, 2026, the tax cost basis of investment securities was $241,123,815. The gross unrealized appreciation over tax cost was $8,507,716 and gross unrealized depreciation under tax cost was $7,322,899. Net unrealized appreciation of tax cost under value was $1,184,817.
⁽¹⁹⁾	Cost values reflect accretion of original issue discount or market discount, and amortization of premium.
⁽²⁰⁾	Includes $40,800,000 in bank loans from Texas Capital Bank.
*	Substantially all of the Company's portfolio assets are pledged in respect of the credit facility (see note 7).
**	Held in Marshall Holdings Limited II.
⁺	Held in Marshall Holdings Limited III.

ABS	Asset-Backed Security
CLO	Collateralized Loan Obligation
EUR	Euro
EURIBOR	Euro London Interbank Offered Rate
GBP	British Pound
SOFR	Secured Overnight Financing Rate
SONIA	Sterling Overnight Interbank Average Rate
USD	United States Dollar

4 ArrowMark Financial Corp. | Semi-Annual Report

See Notes to financial statements.

Affiliated Investments

Investments in and advances to Affiliates (as per 210.12-14) for Period Ended 06/30/2026	Shares/Principal Amount*	Net Realized Gain (Loss) for Period	Net Increase (Decrease) in Unrealized Appreciation (Depreciation)	Interest Received	06/30/2026 Value
Security Name
Community Funding 2018, LLC., Preferred Shares, 10.67%*	$14,860,000	$-	$147,265	$644,549	$11,757,975

* The balance at the beginning of the period was $14,860,000. During the period the Fund made no additions or sales of the position and received no paydowns.

Additional Information

The following is a listing of the underlying unsecured loans that were made by Community Funding 2018, LLC.

Bank Name	Principal Amount		State
Big Poppy Holdings, Inc.	$	9,000,000	California
Delmar Bancorp		4,500,000	Maryland
Fidelity Federal Bancorp		8,000,000	Indiana
First Bancshares, Inc.		10,000,000	Mississippi
Vintage Bancorp		1,150,000	Kansas
Total	$	32,650,000

See Notes to financial statements.

Semi-Annual Report | ArrowMark Financial Corp. 5

Consolidated Statement of Assets and Liabilities As of June 30, 2026 (unaudited)

Assets
Unaffiliated investments in securities, at fair value (Cost $226,348,047)	$	230,550,657
Affiliated investments in securities, at fair value (Cost $14,775,768)		11,757,975
Cash		1,249,619
Foreign Cash (Cost $472,293)		472,372
Interest and dividends receivable		3,911,691
Prepaid assets		893,807
Total assets		248,836,121

Liabilities
Options written, at value (Premiums received $1,813,197)		3,104,160
Loan payable (Note 7)		40,800,000
Investment advisory fees payable		1,072,125
Loan interest payable		67,152
Taxes payable (Note 5)		39,780
Accrued expenses payable		258,678
Total liabilities		45,341,895

Net Assets	$	203,494,226

Net assets consist of:
Common stock, at par ($0.001 per share)	$	9,689
Paid-in capital		206,001,467
Total distributable earnings (loss)		(2,516,930	)
Net Assets	$	203,494,226

Net asset value per share
Common Stock Shares Outstanding		9,688,983
Net asset value per common share	$	21.00
Market price per share	$	19.55
Market price discount to net asset value per share		(6.90	)%

ArrowMark Financial Corp.| Semi-Annual Report

See Notes to financial statements.

Consolidated Statement of Operations For the Six Months Ended June 30, 2026 (unaudited)

This Statement of Operations summarizes the Company’s investment income earned and expenses incurred in operating the Company. It also shows net gains (losses) for the period stated.

Investment Income
Interest from unaffiliated investments	$	12,426,578
Interest from affiliated investments		644,549
Dividends		128,994
Origination fee income (Note 9)		64,104
Other income (Note 9)		54,077
Total investment income		13,318,302

Expenses
Investment advisory fee		2,024,934
Interest expense		1,182,849
Professional fees		654,254
Delaware franchise tax		297,338
Transfer agent, custodian fees and administrator fees		151,102
Bank fees		129,736
Directors' fees		126,762
Investor relations fees		104,351
Valuation service fees		93,970
Insurance expense		26,049
Miscellaneous fees (proxy, etc.)		162,838
Total expenses		4,954,183
Waivers and/or reimbursements		(455,669	)
Net expenses		4,498,514
Net investment income		8,819,788

Realized and Unrealized Gain/(Loss) on Investments, Written Options and Foreign Currency Translations
Net realized loss on investments		(1,624,669	)
Net realized gain from forward foreign currency contracts		58
Net realized gain from foreign currency translations		13,032
Net change in unrealized depreciation on unaffiliated investments		(810,060	)
Net change in unrealized appreciation on affiliated investments		147,265
Net change in unrealized depreciation on written options		(678,848	)
Net change in unrealized depreciation on foreign currency translations		(21,631	)
Net realized and unrealized gain/(loss) on investments, written options and forward foreign translations		(2,974,853	)

Net Increase in Net Assets Resulting From Operations	$	5,844,935

See Notes to financial statements.

Semi-Annual Report | ArrowMark Financial Corp.

Consolidated Statements of Changes In Net Assets

These statements of changes in net assets show how the value of the Company’s net assets has changed during the last two periods stated. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Company share transactions.

	For the Six months Ended June 30, 2026 (unaudited)			For the Year Ended December 31, 2025
Increase (Decrease) in Net Assets
From Operations
Net investment income	$	8,819,788		$	16,335,779
Net realized gain/(loss) on investments, forward foreign currency contracts and foreign currency translations		(1,611,579	)		(9,350,964	)
Net change in unrealized appreciation/(depreciation) on investments, forward foreign currency contracts and foreign currency translations		(1,363,274	)		10,903,283

Net increase in net assets resulting from operations		5,844,935			17,888,098

Distributions to shareholders
From total distributable earnings		(8,936,954	)		(16,700,279	)
Total distributions		(8,936,954	)		(16,700,279	)

From Company share transactions
Proceeds from sales		34,877,336			15,012,896
Reinvestment of distributions		166,514			241,887
Increase in net assets resulting from Company share transactions		35,043,850			15,254,783

Total increase		31,951,831			16,442,602

Net assets
Beginning of period		171,542,395			155,099,793
End of period	$	203,494,226		$	171,542,395
Shares outstanding
Beginning of period		7,810,362			7,120,782
Proceeds from sales		1,870,317			677,880
Reinvestment of distributions		8,304			11,700
End of period		9,688,983			7,810,362

ArrowMark Financial Corp.| Semi-Annual Report

See Notes to financial statements.

Consolidated Statement of Cash Flow

This Statement of Cash Flows shows cash flow from operating and financing activities for the year stated.

	For the Six Months Ended June 30, 2026 (unaudited)
Cash flows from operating activities
Net increase in net assets from operations	$	5,844,935

Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities:
Purchase of investments securities		(66,755,236	)
Proceeds from sales and redemptions of investment securities		18,089,157
Net sales of short-term investments		478,077
Proceeds from written options, net		594,361
Net realized loss on investments		1,624,669
Net change in net unrealized depreciation on investments		662,795
Net change in unrealized depreciation on written options		678,848
Net accretion of discount		11,197
Increase in prepaid expenses		(25,417	)
Decrease in receivable for investments sold		846,747
Increase in interest receivable and dividends receivable		(483,359	)
Increase in advisory fees payable		181,188
Decrease in loan interest payable		(102,031	)
Decrease in directors’ fees payable		(53,965	)
Decrease in excise tax payable		(194,701	)
Decrease in accrued fees payable		(118,400	)
Net cash used for operating activities		(38,721,135	)
Cash flows from financing activities
Cash contributions by shareholders, net of issuance costs ($748,229)		34,877,336
Increase in loan payable		15,600,000
Cash distributions to shareholders		(12,285,116	)
Net cash provided by financing activities		38,192,220
Net decrease in cash		(528,915	)
Cash and Foreign Cash:
Beginning of period		2,250,906
End of period	$	1,721,991

Supplemental disclosure of cash flow information
Cash paid for interest	$	1,284,880
Distributions reinvested	$	166,514

See Notes to financial statements.

Semi-Annual Report | ArrowMark Financial Corp.

The financial highlights show how the Company’s net asset value for a common stock share has changed during the period.

	For the Six Months Ended June 30, 2026 (unaudited)			For the Year Ended December 31, 2025			For the Year Ended December 31, 2024			For the Year Ended December 31, 2023			For the Year Ended December 31, 2022			For the Year Ended December 31, 2021
Per share operating performance
Net Asset value, beginning of period	$	21.96		$	21.78		$	21.43		$	20.79		$	21.70		$	21.44
Net investment income¹		0.97			2.29			2.65			2.63			1.84			1.60
Net realized and unrealized gain/(loss) on investments¹		(0.93	)		0.18			(0.30	)		0.21			(1.09	)		0.28
Total from investment operations		0.04			2.47			2.35			2.84			0.75			1.88
Less distributions to shareholders
From net investment income		(1.00	)		(2.30	)		(2.00	)		(1.78	)		(1.66	)		(1.62	)
From net realized capital gains		—			—			—			(0.42	)		—			—
Total distributions		(1.00	)		(2.30	)		(2.00	)		(2.20	)		(1.66	)		(1.62	)
Anti-dilutive effect of registered direct offering	$	—		$	0.01		$	—		$	—		$	—		$	—
Net asset value, end of period	$	21.00		$	21.96		$	21.78		$	21.43		$	20.79		$	21.70
Per share market value, end of period	$	19.55		$	21.82		$	20.98		$	18.16		$	17.04		$	21.97
Total investment return based on market value²		(5.73	)%*		15.93	%		27.89	%		20.89	%		(15.16	)%		23.19	%
Total investment return based on net asset value²		0.61	%*		12.39	%		12.51	%		16.93	%		4.80	%		9.25	%
Ratios and supplemental data
Net assets end of period (in millions)	$	203.5		$	171.5		$	155.1		$	152.4		$	147.7		$	153.5
Ratios (as a percentage of average net assets):
Expenses before waivers and/or recoupment, if any³		5.16	%**		6.53	%		6.96	%		6.72	%		5.64	%		4.47	%
Expenses after waivers and/or recoupment, if any^4,5		4.69	%**		6.43	%		6.90	%		6.67	%		5.64	%		4.41	%
Net investment income⁶		9.19	%**		10.30	%		12.33	%		12.43	%		8.72	%		7.46	%
Portfolio turnover rate		8	%*		24	%		17	%		16	%		29	%		20	%
Revolving credit agreement
Total revolving credit agreement outstanding (000s)	$	40,800		$	25,200		$	46,800		$	45,000		$	55,600		$	60,000
Asset Coverage per $1,000 for revolving credit agreement		5,988			7,807			4,314			4,387			3,656			3,558

1	The net investment income and unrealized gain/(loss) on investments per share were calculated using the average shares outstanding method.
2	Investment return based on net asset value includes management fee and all other expenses paid by the Fund. Dividends are reinvested in accordance with Fund's Dividend Reinvestment Plan. Investment return based on market value is based on share market price and reinvestment of distributions at the price obtained under the Dividend Reinvestment Plan. Total return does not include sales load and offering expenses.
3	Ratio of expenses before waivers or recoupment, if any, to managed assets equals 4.46%, 4.93%, 5.16%, 5.13%, 4.08%, 3.34%, 3.49%, 3.55%, 3.83%, 3.67% and 3.58% for the period ended June 30, 2026 and for the years ended December 31, 2025, 2024, 2023, 2022, 2021, 2020, 2019, 2018, 2017 and 2016, respectively.
4	Excluding interest expense, net operating expenses would have been 3.45%, 4.21%, 4.29%, 4.31%, 4.09%, 3.53%, 3.61%, 3.40%, 3.61%, 3.75% and 3.74% for the period ended June 30, 2026 and for the years ended December 31, 2025, 2024, 2023, 2022, 2021, 2020, 2019, 2018, 2017 and 2016, respectively.
5	Ratio of expenses after waivers or recoupment, if any, to managed assets equals 4.05%, 4.86%, 5.12%, 5.09%, 4.08%, 3.38%, 3.49%, 3.55%, 3.78%, 3.73% and 3.52% for the period ended June 30, 2026 and for the years ended December 31, 2025, 2024, 2023, 2022, 2021, 2020, 2019, 2018, 2017 and 2016, respectively.
6	Ratio of net investment income to managed assets equals 7.94%, 7.78%, 9.15%, 9.48%, 6.31%, 5.65%, 6.77%, 5.75%, 5.74%, 5.51% and 5.23% for the period ended June 30, 2026 and for the years ended December 31, 2025, 2024, 2023, 2022, 2021, 2020, 2019, 2018, 2017 and 2016, respectively.
*	Not-annualized.
**	Annualized.

ArrowMark Financial Corp.| Semi-Annual Report

See Notes to financial statements.

The financial highlights show how the Company’s net asset value for a common stock share has changed during the period.

	For the Year Ended December 31, 2020			For the Year Ended December 31, 2019			For the Year Ended December 31, 2018			For the Year Ended December 31, 2017			For the Year Ended December 31, 2016
Per share operating performance
Net Asset value, beginning of year	$	21.83		$	21.43		$	21.56		$	21.22		$	21.62
Net investment income		1.68			1.54			1.63			1.58			1.56
Net realized and unrealized gain/(loss) on investments		(0.50	)		0.38			(0.10	)		0.26			(0.50	)
Total from investment operations		1.18			1.92			1.53			1.84			1.06
Less distributions to shareholders
From net investment income		(1.57	)		(1.52	)		(1.66	)		(1.50	)		(1.46	)
Total distributions		(1.57	)		(1.52	)		(1.66	)		(1.50	)		(1.46	)
Net asset value, end of year	$	21.44		$	21.83		$	21.43		$	21.56		$	21.22
Per share market value, end of period/year	$	19.25		$	22.30		$	19.30		$	20.13		$	18.69
Total investment return based on market value		(5.76	)%		24.00	%		3.84	%		16.21	%		24.45	%
Total investment return based on net asset value		7.22	%		9.32	%		7.65	%		9.62	%		6.53	%
Ratios and supplemental data
Net assets end of period (in millions)	$	140.8		$	143.2		$	140.4		$	141.0		$	138.6
Ratios (as a percentage of average net assets):
Expenses before waivers and/or recoupment, if any		4.17	%		4.39	%		5.01	%		4.93	%		5.02	%
Expenses after waivers and/or recoupment, if any		4.17	%		4.39	%		4.95	%		5.01	%		4.94	%
Net investment income		8.10	%		7.11	%		7.52	%		7.39	%		7.33	%
Portfolio turnover rate		60	%		13	%		30	%		16	%		34	%
Revolving credit agreement
Total revolving credit agreement outstanding (000s)	$	43,000		$	17,700		$	51,000		$	25,750		$	61,500
Asset Coverage per $1,000 for revolving credit agreement		4,274			9,090			3,753			6,478			3,253

See Notes to financial statements.

Semi-Annual Report | ArrowMark Financial Corp.

Note 1 — Organization

ArrowMark Financial Corp. (“AMFC” or the “Company”) is a Delaware corporation registered as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended, (the “Investment Company Act”) which commenced investment operations on November 13, 2013. In addition, AMFC has elected to be treated for tax purposes as a regulated investment company (‘‘RIC’’) under Subchapter M of the Internal Revenue Code of 1986, as amended (the ‘‘Code’’).As an investment company, the Company follows the accounting and reporting guidance of the Financial Accounting Standards Board and the Accounting Standards Codification Topic 946 “Financial Services — Investment Companies.”

Investment Objectives — ArrowMark Financial Corp.’s primary investment objective is to provide stockholders with current income, and to a lesser extent, capital appreciation. There can be no assurance that the Company will achieve the investment objectives.

Investment Strategies — The Company is focused on income generation, capital preservation, and providing risk-adjusted rates of return. The Company attempts to achieve its investment objective through investment in preferred equity, debt and subordinated debt, structured notes and securities, convertible securities, regulatory capital securities and common equity issued or structured by banks and financial institutions including community banks, larger regional, national and money center banks domiciled in the United States and foreign and global money center banks. (“banking-related securities”). The Company makes investments that will generally be expected to pay the Company dividends and interest on a current basis and generate capital gains over time. The Company may seek to enhance the Company’s returns through the use of warrants, options and other equity conversion features. The Company has a policy to invest, under normal circumstances, at least 80% of the value of its net assets plus the amount of any borrowings for investment purposes in such banking-related securities.

The Company focuses its portfolio on making long-term, passive, non-control investments in the banking sector, including “regulatory capital securities” which are securities issued or structured by banks seeking capital that is treated more favorably under banking regulations than other types of capital, acquisitions and other refinancing activities regulatory capital securities are issued or structured by a bank to maintain or reduce its regulatory capital requirements by transferring certain credit risks to investors. Regulatory capital securities may be structured in a variety of ways and are highly bespoke to the needs of the bank or other deposit-taking institution involved. Regulatory capital securities may be in the form of structured notes (e.g., credit-linked notes), contingent convertible securities, and other structured products or transactions. The Company intends to continue to direct investments in numerous issuers differentiated by asset size, business models and geographies. The Company also may invest in an option strategy that will normally consist of writing (selling) call options on bank equity securities in the Company’s portfolio (“covered calls”). The Company invests in foreign securities and the Company is not limited in the amount of assets the Company may invest in such foreign securities.

The Company indirectly invests in securities issued or structured by banks through structured securities and credit derivatives, including collateralized loan obligations (CLOs) and credit-linked notes. The Company currently invests in credit-linked notes for which the performance and payment of principal and interest is tied to a reference asset such as a pool of loans originated by a bank and held on its

ArrowMark Financial Corp.| Semi-Annual Report

balance sheet. The Company also invests in equity and junior debt tranches of CLOs, and other debt securitizations, that are collateralized by a portfolio consisting primarily of unsecured, subordinated loans made to (and, to a lesser extent, unsecured, subordinated debentures and notes issued by) community banks or savings institutions or their respective holding companies. The Company may also invest in other securities and instruments that are related to these investments or that the Advisor believes are consistent with the Company’s investment objectives, including senior debt tranches of CLOs and loan accumulation facilities. These indirect investments provide exposure to and focus on the same types of direct investments that the Company makes in banking companies and, accordingly, the Company’s investments in structured securities (such as credit-linked notes and CLOs) and credit derivatives that provide exposure to the banking industry are considered an investment in banking securities. The loans or other assets pledged as collateral in these securitizations may not be publicly rated by any rating agency, and may have greater credit and liquidity risks than investment-grade corporate obligations that are publicly rated. The Company believes that the use of such instruments complements the Company’s overall strategy and enhance the diversity of the Company’s holdings.

The Company may also incur additional leverage to the extent permitted by the Investment Company Act. Although the Company normally seeks to invest substantially all of the Company’s assets in banking-related securities, the Company reserves the ability to invest up to 20% of the Company’s assets in other types of securities and instruments.

Additionally, the Company may take temporary defensive positions that are inconsistent with the Company’s investment strategy in attempting to respond to adverse market, economic, political or other conditions. If the Company does so, the Company may not achieve the Company’s investment objective. The Company may also choose not to take defensive positions.

Consolidation of Disregarded Entities — The Company makes certain investments in securities through Marshall Holdings II, Limited and Marshall Holdings III, Limited, both organized under the laws of the Cayman Islands (the “Disregarded Entities”). The consolidated financial statements of the Company include all assets and liabilities of the Disregarded Entities. All inter-company accounts and transactions have been eliminated. As of June 30, 2026, the net assets of the Disregarded Entities were $69,179,692, which represented 34.00% of the Fund’s net assets.

Note 2 — Significant accounting policies

The following is a summary of significant accounting policies consistently followed by AMFC in the preparation of its financial statements. The preparation of the financial statements is in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") and requires the Board of Directors, inclusive of the sub-committees, and ArrowMark Asset Management, LLC (the "Advisor") to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents — AMFC considers domestic and foreign highly liquid debt instruments with a maturity of three months or less at the time of purchase to be cash equivalents.

Investment Valuation– The most significant estimates made in the preparation of the financial statements of ArrowMark Financial Corp (“AMFC” or the “Company”). are the valuation of equity and debt investments and the effective yield calculation with respect to certain debt securities, as well as the related amounts of unrealized appreciation and depreciation of investments recorded. The Company believes that there is no single definitive method for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments that AMFC makes. The Company is required to specifically fair value each individual investment on a quarterly basis.

Semi-Annual Report | ArrowMark Financial Corp.

The Company complies with ASC 820-10, Fair Value Measurements and Disclosure, which establishes a three-level valuation hierarchy for disclosure of fair value measurements. ASC 820-10 clarified the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date. ASC 820-10 also establishes the following three-tier fair value hierarchy:

•

Level 1— Quoted prices in active markets for identical securities;

•

Level 2 — Other significant observable inputs. These inputs may include quoted prices for the identical instrument on an active market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data; and

•

Level 3 — Significant unobservable inputs, including the Company’s own determinations about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.

To the extent securities owned by the Company are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy. Securities traded on inactive markets or valued by reference to similar instruments are generally categorized in Level 2 of the fair value hierarchy.

The availability of valuation techniques and observable inputs can vary from security to security and is affected by a wide variety of factors including the type of security, whether the security is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgement. Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the securities existed. Accordingly, the degree of judgment exercised by AMFC in determining fair value is greatest for securities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls, is determined based on the lowest level input that is significant to the fair value measurement. The valuation levels are not necessarily an indication of the risk associated with investing in those securities.

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, AMFC’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. AMFC uses prices and inputs that are current as of the measurement date, including periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many securities. This condition could cause a security to be reclassified to a lower level within the fair value hierarchy.

AMFC will determine fair value of its assets and liabilities in accordance with valuation procedures adopted by its Board of Directors. The Company may utilize the services of one or more regionally or nationally recognized independent valuation firms to help it determine the value of each investment for which a market price is not available. AMFC’s Board of Directors will also review valuations of such investments provided by the Advisor. To the extent AMFC invests in securities for which market quotations are readily available, such market value will be used to value those securities. If a market

ArrowMark Financial Corp.| Semi-Annual Report

value cannot be obtained or if the Advisor determines that the value of a security as so obtained does not represent a fair value as of the measurement date (due to a significant development subsequent to the time its price is determined or otherwise), fair value shall be determined pursuant to the methodologies established by the Board of Directors. In making these determinations, the Company may engage an independent valuation firm from time to time to assist in determining the fair value of our investments. The methods for valuing these investments may include fundamental analysis, discounts from market prices of similar securities, purchase price of securities, subsequent private transactions in the security or related securities, or discounts applied to the nature and duration of restrictions on the disposition of the securities, as well as a combination of these and other factors.

Structured Debt Securities– AMFC may acquire equity or preferred equity in structured debt securities or other structured financings. In valuing such investments, AMFC attempts to obtain a minimum of two marks provided by recognized industry brokers as a primary source, supplemented by actual trades executed in the market at or around period-end, as well as the marks provided by the broker who arranges transactions in such investment vehicles. Any event adversely affecting the value of such structured debt securities and other structured financings, including events that impact the value of the underlying collateral held by such vehicles, would be magnified to the extent leverage is utilized. AMFC’s investment in structured debt securities and other structured financings that utilize leverage may make it more likely that substantial changes in the Company’s net asset value (“NAV”) will occur.

The fair value of the structured debt securities is determined using market price quotations (where observable) and other observable market inputs. When using market price quotations from brokers, fair value is calculated using the average of two or more indicative broker quotes obtained as of the valuation date. When quotations are unobservable, internal valuation models (typically including discounted cash flow analysis and comparable analysis) are employed. Structured debt securities are generally categorized as Level 2 or 3 in the fair value hierarchy, depending on the availability of broker quotes and observable inputs. At June 30, 2026, AMFC’s investment in Community Funding 2018, LLC was valued on the basis of the average of two broker quotes.

Service fees are paid to StoneCastle Investment Management, LLC, (“The Servicer”). The Servicer rebates the entire service fee to AMFC quarterly. For the six months ended June 30, 2026 this amounted to $54,077 relating to Community Funding 2018, LLC.

Regulatory Capital Relief Securities. Regulatory capital relief securities are senior unsecured debt obligations that are credit linked to the performance of a reference portfolio of certain loan related claims on corporate and similar entities. The fair value of regulatory capital relief securities is generally based on broker quotes. Regulatory capital relief securities are generally categorized as Level 2 or 3 in the fair value hierarchy, depending on the availability of broker quotes.

Preferred and Trust Preferred Securities. The fair value of preferred securities and trust preferred securities is generally determined using market price quotations (where observable) and other observable market inputs (including recently executed transactions). When using market price quotations from brokers, fair value is calculated using the average of two or more indicative broker quotes obtained as of the valuation date. When quotations are unobservable, internal valuation models (typically including discounted cash flow analysis and comparable analysis) are employed. Perpetual preferred and trust preferred securities are generally categorized as Level 2 or 3 in the fair value hierarchy, depending on the availability of observable inputs.

Debt Securities. Under procedures established by the Board of Directors, we value secured debt, unsecured debt, senior term loans, subordinated term loans and other debt securities, for which market quotations are readily available, at such market quotations (unless they are deemed not to represent fair value). We attempt to obtain market quotations from at least two brokers if available. If not available

Semi-Annual Report | ArrowMark Financial Corp.

or when market quotations are deemed not to represent fair value, we typically utilize independent third party valuation firms to assist us in determining fair value. Our independent valuation firms consider observable market inputs together with significant unobservable inputs in arriving at their valuation recommendations for such Level 2 and Level 3 categorized assets. Investments that are not publicly traded or whose market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of the Board of Directors. Such determination of fair value may involve subjective judgments and estimates.

Equity Securities. AMFC may invest in equity securities (including exchange traded funds) for which bid and ask prices can be observed in the marketplace. Bid prices reflect the highest price that the marketplace participants are willing to pay for an asset. Ask prices represent the lowest price that the marketplace participants are willing to accept for an asset. The Company’s policy for listed securities for which no sale was reported on that date is generally to value the security using the last reported “bid” price if held long, and last reported “ask” price if sold short. Equity securities are generally categorized as Level 1 or 2 in the fair value hierarchy, depending on trading volume levels.

The Company’s assets measured at fair value subject to the disclosure requirements of ASC 820-10-35 at June 30, 2026, were as follows:

	TOTAL FAIR VALUE AT 6-30-26		LEVEL 1 QUOTED PRICE		LEVEL 2 SIGNIFICANT OBSERVABLE INPUTS		LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS
Assets

Term Loans	$	7,782,250	$	—	$	—	$	7,782,250