Trevor Montano Votes Against Two Class II Trustee Nominees at Angel Oak Financial Strategies Income Term Trust Annual Meeting

On September 25, 2026, shareholders of Angel Oak Financial Strategies Income Term Trust (NYSE: FINS) are set to convene for the annual meeting, where a shareholder, Trevor Montano, intends to vote against two Class II Trustee nominees, Keith M. Schappert and Andrea N. Mullins. Montano's decision stems from concerns over governance and performance issues within the fund.

Montano cites several reasons for his opposition. He points out that Schappert and Mullins, despite not being elected by the shareholders at the 2025 Annual Meeting, have served as holdover trustees since June 2025. The Fund's Board had the opportunity to place these trustees on the ballot at a special meeting held in September 2025, but they were not included, leading to the holdover.

Another concern is the lack of independent trustee refreshment. All four independent trustees have served since the Fund's inception in 2019, raising questions about board rotation and oversight. Montano also highlights the Fund's governing documents, which contain numerous entrenchment provisions. These include a classified board structure, a majority-vote standard in contested elections with no resignation requirement, a 75% supermajority vote requirement in certain circumstances, and the inability of shareholders to amend the by-laws.

Additionally, Montano draws attention to a recent issuance of preferred shares. In May 2026, the Fund issued preferred shares at a 5.864% dividend rate, exceeding the 5.364% rate on senior notes issued the same day. This issuance, under Section 18(a)(2)(C) of the Investment Company Act of 1940, allows the holders of these preferred shares to elect two trustees, thus removing two of the Fund's five board seats from shareholder election and placing them with a single investor.

Lastly, Montano criticizes the Fund's performance, noting that the common shares have closed at a discount to net asset value every trading day since February 27, 2020, a period spanning more than six years. He emphasizes that addressing this discount is the responsibility of the Board.

Trevor Montano, a private investor with 25 years of experience in the financial services industry and formerly the Chief Investment Officer at the U.S. Department of the Treasury, has expressed his concerns in a statement. "The Fund's governance structure and performance issues necessitate a closer look," Montano said. "Shareholders should carefully review the proxy statement to make informed decisions."

Montano advises shareholders not to send their proxy cards to him and clarifies that he is not soliciting proxies. "I am not asking for your proxy card and will not accept any if sent," he stated. "I am not able to vote your proxy, nor is this communication intended to do so."

The Fund's common shareholders are encouraged to read the proxy statement and form their own opinions before the meeting.