Financial Data and Key Metrics Changes - The company reported stable core earnings of $0.50 per share, consistent with the prior quarter, representing an annualized return on equity of 10% [9] - GAAP net income per share was $0.52 for the quarter, compared to $0.36 in the prior quarter and $0.52 in the same quarter last year [18] - The total portfolio at fair value increased to $27.9 billion from $27.1 billion at the end of the previous quarter and up from $25 billion a year ago [19][26] Business Line Data and Key Metrics Changes - The company originated over $2.5 billion of new investment commitments, with incumbent borrowers accounting for 74% of commitments [25] - Net fundings of $644 million were more than double the prior quarter's level, contributing to a 3% quarter-over-quarter increase in the overall size of the portfolio at fair value [26] - The weighted average LTM EBITDA growth of portfolio companies was 13%, up from 12% last quarter [28] Market Data and Key Metrics Changes - The second quarter saw a temporary slowdown in transaction activity due to policy-driven volatility, but activity began to normalize later in the quarter [10][11] - Nearly three-quarters of gross commitments were from incumbent relationships, indicating a stabilizing force in the market [11] - The company is seeing transaction activity recovering to pre-tariff levels, with a healthy backlog of $2.6 billion as of July 24, 2025 [29] Company Strategy and Development Direction - The company aims to maintain its position as a valuable partner in varying market conditions, focusing on expanding commitments with existing borrowers while also exploring new opportunities [12][15] - The strategy includes being active across lower, core, and upper middle markets, with a notable focus on larger borrowers amid market uncertainty [13][14] - The company emphasizes portfolio diversification to mitigate risks from negative credit events [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate evolving market conditions and capitalize on emerging opportunities, despite a modest uptick in non-accruals [16][29] - The company is optimistic about the potential for increased transaction activity in the second half of the year, supported by a growing number of opportunities reviewed [12][29] - Management noted that the health of the portfolio remains strong, with borrower leverage levels below the five-year average [16][28] Other Important Information - The company declared a third-quarter dividend of $0.48 per share, marking the sixteenth consecutive year of stable or increasing regular dividends [23] - The company has a significant amount of dry powder, with liquidity totaling nearly $6.5 billion, positioning it well for future investments [22] Q&A Session Summary Question: Can you talk about any improvement in terms spreads and upfront fees? - Management noted that while there was some volatility in terms, spreads have stabilized over the last few quarters, with a mix of activity seen in the market [33][34] Question: Can you discuss the off-balance sheet vehicles and their growth potential? - Management indicated that both vehicles are strategically important and may grow from current levels [36][37] Question: How are you balancing leverage versus issuing new equity? - Management emphasized the importance of maintaining flexibility and noted that current leverage levels provide room to capitalize on market opportunities [41][42] Question: Can you provide insights on the increase in non-accruals? - Management acknowledged a slight increase in non-accruals but stated that it is not indicative of broader economic trends, attributing it to idiosyncratic factors [46][49] Question: What is the impact of tariffs on portfolio companies? - Management reported improved sentiment regarding the ability of portfolio companies to mitigate tariff impacts, with exposure now at a low single-digit percentage [80][82]