Group 1 - Hercules Capital (NYSE: HTGC) is currently trading at a significant premium to its book value, indicating strong market confidence in the company [1] - The anticipated cuts to the Fed funds rate are expected to increase investor focus on dividend safety, which may benefit companies with reliable income streams [1] - Pacifica Yield is focused on long-term wealth creation by targeting undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

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Core Viewpoint - Hercules Capital, Inc. (HTGC) has received an affirmation of its investment grade credit and corporate ratings of BBB+ with a stable outlook from Kroll Bond Rating Agency, Inc. (KBRA) [1][10] Group 1: Rating Affirmation Rationale - The stable outlook reflects Hercules Capital's diverse investment portfolio, focusing on senior secured first lien venture debt investments in technology and life sciences sectors [2] - Strong operating performance and appropriate leverage metrics contribute to the company's credit quality [2] - Robust risk management and an experienced investment team in the venture capital space further support the ratings [2] Group 2: Financial Performance and Market Position - Hercules Capital has demonstrated proven access to capital markets and a diverse funding mix, which enhances protection for noteholders [3] - The company's shares have increased by 4.9% over the past year, contrasting with a 0.8% decline in the industry [6] - HTGC currently holds a Zacks Rank of 3 (Hold) [7] Group 3: Peer Comparison - Main Street Capital Corp. (MAIN) and Bain Capital Specialty Finance, Inc. (BCSF) are notable peers, with MAIN's shares gaining 4.8% over the past six months and a Zacks Rank of 2 (Buy) [8] - BCSF's earnings estimate has been revised upward by 3.4%, but its shares have declined by 17.3% over the past six months, currently holding a Zacks Rank of 1 (Strong Buy) [9]

Group 1 - The article highlights Hercules as a notable investment opportunity within a portfolio that has an aggregate yield of 9.9% [1] - It raises concerns about opportunity cost for income-focused investors, who may be overly concentrated in lower-growth sectors or distressed companies for higher yields [1] - The author manages long-term growth and dynamic high-income strategies through an independent investment management company [2] Group 2 - The article expresses a beneficial long position in HTGC shares, indicating a personal investment interest [3] - It clarifies that the opinions expressed are personal and not influenced by compensation or business relationships with mentioned companies [3]

Industry Overview - The Zacks SBIC & Commercial Finance industry provides financing to small and mid-sized privately held firms, often underserved by traditional banks, focusing on customized financing solutions such as senior debt and equity capital [3] - The industry is currently facing challenges due to persistent high interest rates and tariff impacts, which are expected to reduce financing demand and slow investment income growth [1][5] Current Economic Environment - The Federal Reserve has maintained interest rates at 4.25–4.5%, with a cautious approach to potential rate cuts due to economic uncertainties [4] - Elevated rates and tariff effects are likely to dampen demand for financing solutions, limiting transaction activity and growth in total investment income [5] Asset Quality Concerns - Following the COVID-19 pandemic, asset quality concerns arose as borrowers struggled to repay debts, although government stimulus and economic recovery helped mitigate delinquency rates [6] - Prolonged high interest rates may lead to further asset quality deterioration as portfolio companies face challenges in servicing their debt [7] Regulatory Changes - The 2018 SBCAA relaxed leverage limits for SBIC companies, allowing a debt-to-equity ratio increase from 1:1 to 2:1, providing funding flexibility and growth opportunities [8] Industry Performance Metrics - The Zacks SBIC & Commercial Finance industry ranks 144 out of over 250 Zacks industries, indicating underperformance in the near term [9][10] - The industry's earnings estimates for 2025 have been revised down by 10% over the past year, reflecting a declining confidence in growth potential [11] Stock Market Performance - Over the past year, the industry has gained only 3.9%, significantly underperforming the S&P 500 composite and the Zacks Finance sector, which increased by 20.8% and 21.8%, respectively [13] Valuation Analysis - The industry has a trailing 12-month price-to-tangible book (P/TB) ratio of 0.94X, significantly lower than the S&P 500's 12.86X, indicating a substantial discount compared to the broader market [16][18] Key Companies to Watch - **Ares Capital Corporation (ARCC)**: A specialty finance firm focusing on U.S. middle-market companies, with a market cap of $15.8 billion and a debt of $14.1 billion as of June 30, 2025 [22][21] - **Main Street Capital Corporation (MAIN)**: A private equity firm with a market cap of $5.7 billion, specializing in lower-middle-market companies, holding total investments valued at $5.1 billion [25][27] - **Hercules Capital, Inc. (HTGC)**: A specialty finance company providing venture capital, with a market cap of $3.4 billion and a total investment portfolio valued at $4.2 billion as of June 30, 2025 [31][32]

Core Insights - Mr. Mavroudis is a professional portfolio manager with a focus on risk management and in-depth financial market analysis [1] - He has successfully navigated major crises, including the COVID-19 pandemic and the PSI [1] - Mr. Mavroudis is the CEO of FAST FINANCE Investment Services, a registered Greek company [1] Company Profile - FAST FINANCE Investment Services is registered with the Hellenic Capital Market Commission [1] - The company specializes in managing institutional and private portfolios globally across various financial instruments [1] Professional Background - Mr. Mavroudis holds multiple degrees, including an MSc in Financial and Banking Management, an LLM in Law, and a BSc in Economics, graduating as valedictorian [1] - He is certified in various financial disciplines, including portfolio management and derivatives [1] - He has published three books on investments and contributes articles to reputable financial media [1] Engagement and Community - By writing on Seeking Alpha, the company aims to engage with a community of investors and market enthusiasts [1] - The goal is to foster mutual growth and knowledge sharing within the investment community [1]

Key Takeaways HTGC's Q2 net investment income of 50 cents per share beat the estimate of 47 cents but fell 2% y/y.Total investment income rose 10% y/y to $137.5M, driven by a larger average debt investment portfolio.Gross new commitments hit $1B in Q2, whereas gross new funding totaled $709.1M in the quarter.Hercules Capital Inc.’s (HTGC) shares gained 1.3% in the after-market hours on better-than-expected quarterly results. The second-quarter 2025 net investment income of 50 cents per share surpassed the Z ...

Earnings Performance - Hercules Capital reported quarterly earnings of $0.5 per share, exceeding the Zacks Consensus Estimate of $0.47 per share, but down from $0.51 per share a year ago, representing an earnings surprise of +6.38% [1] - The company posted revenues of $137.46 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 8.94%, compared to year-ago revenues of $125.01 million [2] Market Performance - Hercules Capital shares have declined approximately 5.9% since the beginning of the year, while the S&P 500 has gained 8.2% [3] - The current Zacks Rank for Hercules Capital is 4 (Sell), indicating expected underperformance in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.48 on revenues of $131.21 million, and for the current fiscal year, it is $1.91 on revenues of $509.49 million [7] - The Financial - SBIC & Commercial Industry, to which Hercules Capital belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Exhibit 99.1 Hercules Capital Reports Second Quarter 2025 Financial Results Q2 2025 Total Gross Debt and Equity Commitments of $1.0 Billion Record Q2 2025 Total Gross Fundings of $709.1 Million Record 1H 2025 Total Debt and Equity Commitments of $2.02 Billion Record 1H 2025 Total Gross Fundings of $1.25 Billion Record Q2 2025 Net Investment Income "NII" of $88.7 Million Q2 2025 NII of $0.50 per Share provides 125% Coverage of the Base Cash Distribution Closed Upsized Offering of $350.0 Million of 6.000% Uns ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 _________________________________________________ FORM 10-Q _________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarterly Period Ended June 30, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 814-00702 _________________________________________________ HERCULES ...