Trinity Capital Posts Record Income as Portfolio Expands
Quarterly investment funding more than doubled to $618.7 million as new commitments reached $709 million.
Trinity Capital (TRIN), a business-development company, reported record net investment income of $46.0 million as its portfolio expanded and credit performance improved.
The quarter marked an acceleration in deployment alongside heavier repayments and exits. Trinity funded $618.7 million of investments, up from about $306 million in the first quarter, while repayments and exits increased to $378.3 million from about $238 million.
Total investment income rose 25.5% from a year earlier to $87.2 million, though it declined 3.3% from the first quarter. Net investment income increased 32.1% year over year and 3.4% sequentially. NII per share fell to $0.51 from $0.53 in both comparison periods as weighted-average shares climbed to 90.5 million from 83.6 million in the first quarter and 65.9 million a year earlier.
Lower operating costs helped offset pressure from funding expenses and portfolio yields. Operating expenses declined 9.8% sequentially to $41.2 million as compensation and benefits fell to $12.4 million from $17.3 million. Interest expense rose to $24.8 million from $18.0 million a year earlier, while the effective portfolio yield narrowed 70 basis points to 15.0%.
The investment portfolio grew 10.0% from the first quarter to $2.73 billion at fair value. Default and workout investments declined to $18.7 million, or 0.8% of debt investments, from $24.4 million, or 1.1%, while watch-rated exposure increased to $37.1 million from $31.7 million.
Net realized investment losses narrowed to $0.8 million from $9.9 million in the first quarter, and net unrealized depreciation declined to $0.8 million from $4.7 million. Net assets generated from operations rebounded to $44.4 million, or $0.49 a share, from $29.8 million, or $0.36 a share. Net asset value recovered to $13.47 a share from $13.27.
Trinity kept its regular quarterly dividend at $0.51 a share for a 27th consecutive quarter, leaving NII coverage at 100% after the decline in per-share earnings. Net leverage increased to 118% from 115% even as the company raised $99.5 million through accretive share sales during the quarter.