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Trinity Capital (TRIN) - 2025 Q1 - Quarterly Results

Q1 2025 Highlights & Operating Performance Trinity Capital reported a strong start to 2025 with a 29.5% year-over-year increase in total investment income to $65.4 million. Net investment income (NII) reached $32.4 million, although NII per share slightly decreased to $0.52 from $0.54 year-over-year due to a higher share count. The company achieved a 15.5% Return on Average Equity. Both operating and interest expenses increased, driven by business growth and higher borrowing rates Q1 2025 Key Financial Metrics | Metric | Value | Growth (YoY) | | :--- | :--- | :--- | | Total Investment Income | $65.4 million | 29.5% | | Net Investment Income (NII) | $32.4 million | N/A | | NII per Basic Share | $0.52 | N/A | | Net Increase in Net Assets | $27.1 million | N/A | | Return on Average Equity (ROAE) | 15.5% | N/A | | Net Asset Value (NAV) | $833.4 million | N/A | Operating Results Comparison (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Investment Income | $65.4 million | $50.5 million | | Net Investment Income (NII) | $32.4 million | $25.2 million | | NII per Basic Share | $0.52 | $0.54 | | Net Increase in Net Assets | $27.1 million | $14.5 million | - Operating expenses (excluding interest) rose to $15.3 million from $13.2 million YoY, primarily due to higher compensation, professional fees, and G&A expenses5 - Interest expense increased to $17.7 million from $12.1 million YoY, attributed to a higher amount of weighted average debt outstanding and increased borrowing rates7 - The company recorded a net realized loss of approximately $2.2 million and net unrealized depreciation of $3.1 million during the quarter9 Net Asset Value (NAV) Total net assets grew by 1.3% to a new high of $833.4 million compared to the previous quarter, driven by net investment income and accretive stock offerings. However, NAV per share decreased from $13.35 to $13.05, primarily due to the early extinguishment of the company's 6% Convertible Notes NAV Comparison (Q1 2025 vs. Q4 2024) | Metric | March 31, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Net Assets | $833.4 million | $823.0 million | +1.3% | | NAV per Share | $13.05 | $13.35 | -2.2% | - The increase in total net assets was primarily due to net investment income exceeding the dividend declared and accretive ATM offerings11 - The decrease in NAV per share was mainly attributed to the early extinguishment of the Company's 6% Convertible Notes due 202511 Portfolio and Investment Activity As of Q1 2025, the investment portfolio's fair value reached approximately $1.8 billion across 155 companies, with a significant portion in first-lien secured loans. The company was highly active, funding $220.4 million in new and existing companies and receiving $157.1 million in repayments. The portfolio's credit quality remained stable, with a weighted average risk rating of 2.9, and non-accrual loans constituting only 0.9% of the debt portfolio's fair value - The portfolio's fair value was $1,792.7 million, comprised of $1,330.4 million in secured loans, $336.7 million in equipment financings, and $125.6 million in equity/warrants12 - The debt portfolio consists of 77.9% first-lien loans, and 76.9% of the debt portfolio is at floating rates12 Q1 2025 Investment Activity | Activity | Amount | | :--- | :--- | | Total New Commitments | $185.9 million | | Gross Investments Funded | $220.4 million | | - To New Portfolio Companies | $94.8 million | | - To Existing Portfolio Companies | $125.6 million | | Total Exits and Repayments | $157.1 million | - As of quarter-end, loans to five portfolio companies were on non-accrual status, with a total fair value of $15.2 million, representing 0.9% of the debt investment portfolio15 - The weighted average risk rating of the loan and equipment financing portfolio was 2.9, consistent with the prior quarter16 Liquidity and Capital Resources The company maintained strong liquidity with $216.4 million available at quarter-end. The debt-to-equity ratio increased to 116% from 108% in the prior quarter. During Q1, Trinity actively managed its capital by repaying matured notes, handling the conversion of its Convertible Notes, and raising $30.5 million in net proceeds from its equity ATM program and $3.7 million from its new debt ATM program - As of March 31, 2025, the Company had approximately $216.4 million in available liquidity, including $8.4 million in cash and $208.0 million in available borrowing capacity17 - The company's leverage (debt-to-equity ratio) was approximately 116% as of March 31, 2025, up from 108% at the end of 202420 - During the quarter, the company raised $30.5 million in net proceeds from selling 1.98 million shares through its equity ATM program and launched a debt ATM program, issuing $3.7 million in notes2021 - The 2025 Notes matured and were repaid in full, and the Convertible Notes were fully converted, with the company paying $66.2 million in cash to satisfy the principal obligation1819 Distributions Trinity Capital's Board of Directors declared a regular quarterly dividend of $0.51 per share for the first quarter of 2025, marking the 21st consecutive quarter of a consistent or increased regular dividend - A dividend of $0.51 per share for Q1 2025 was declared on March 19, 2025, and paid on April 15, 202522 - This represents the 21st consecutive quarter of a consistent or increased regular dividend6 Recent Developments Subsequent to the quarter's end, from April 1 to May 5, 2025, Trinity continued to utilize its ATM programs, raising an additional $10.5 million in net proceeds from common stock sales and $0.5 million from debt issuance - Between April 1 and May 5, 2025, the company raised $10.5 million of net proceeds by selling 752,845 shares of common stock under its ATM Program23 - During the same period, the company also raised $0.5 million in net proceeds from its debt ATM program23 Financial Statements The consolidated financial statements detail the company's financial position and performance. The balance sheet shows growth in total assets to $1.86 billion, driven by an expanded investment portfolio, and a corresponding rise in liabilities. The income statement highlights a 29.5% year-over-year increase in total investment income and a 28.7% rise in net investment income Consolidated Statements of Assets and Liabilities Total assets increased to $1.86 billion as of March 31, 2025, from $1.77 billion at year-end 2024, primarily due to growth in the investment portfolio. Total liabilities also grew to $1.02 billion from $951 million, largely from increased borrowings on the KeyBank Credit Facility. Consequently, total net assets rose modestly to $833.4 million Key Balance Sheet Items (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Investments (at fair value) | $1,792,689 | $1,725,570 | | Total Assets | $1,857,276 | $1,774,241 | | Total Liabilities | $1,023,881 | $951,259 | | Total Net Assets | $833,395 | $822,982 | - Borrowings under the KeyBank Credit Facility significantly increased to $392.0 million from $113.0 million, while Unsecured Notes decreased to $567.0 million (net) from $764.7 million (net)30 Consolidated Statements of Operations For the three months ended March 31, 2025, total investment income was $65.4 million, a significant increase from $50.5 million in the prior-year period. Net investment income rose to $32.4 million from $25.2 million year-over-year. The net increase in net assets from operations was $27.1 million, a substantial improvement from $14.5 million in Q1 2024, despite a net realized loss and net unrealized depreciation on investments during the quarter Key Income Statement Items (in thousands) | Account | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Total Investment Income | $65,385 | $50,453 | | Total Net Expenses | $32,386 | $24,657 | | Net Investment Income | $32,383 | $25,157 | | Net Increase in Net Assets | $27,087 | $14,508 | Per Share Data Comparison | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | NII per Share - Basic | $0.52 | $0.54 | | Net Change in Net Assets per Share - Basic | $0.43 | $0.31 |