Financial Data and Key Metrics Changes - Trinity Capital achieved record net investment income of $144 million or $2.08 per share in 2025, with a 15% increase in Q4 net investment income to $40 million compared to the previous year [3][4] - The company's net asset value (NAV) grew 10% quarter-over-quarter to a record $1.1 billion, and total assets under management (AUM) increased to over $2.8 billion, up 38% year-over-year [4][5] - The return on equity was reported at 15.3%, among the highest in the BDC space, with a weighted average effective portfolio yield of 15.2% [15][16] Business Line Data and Key Metrics Changes - The funding breakdown in Q4 was as follows: 27% to sponsor finance, 25% to equipment financing, 20% to life sciences, 15% to tech lending, and 13% to asset-backed lending [20] - The managed funds business saw significant growth, with several co-investment vehicles established, contributing approximately $3.1 million or $0.04 per share of incremental net investment income in Q4 [4][17] Market Data and Key Metrics Changes - The company maintained strong credit quality, with non-accruals at less than 1% of the portfolio at fair value, and over 99% of debt investments performing at fair value [4][19] - Portfolio companies collectively raised more than $7.8 billion in equity during 2025, indicating strong access to capital [20] Company Strategy and Development Direction - Trinity Capital is focused on building a diversified platform with five complementary verticals, including sponsor finance, equipment finance, tech lending, asset-based lending, and life sciences, to drive growth and value creation [13][14] - The company is strategically positioned to capitalize on opportunities in the market, particularly in the software sector, by being opportunistic in its lending practices [6][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current market volatility, emphasizing the importance of maintaining liquidity to seize opportunities [35][40] - The management team believes that the best days are still ahead for Trinity Capital, supported by a diversified pipeline and disciplined underwriting [15][14] Other Important Information - The company transitioned to a monthly dividend of $0.17 per share starting January 2026, maintaining the same aggregate quarterly payout [15] - Estimated undistributed taxable income is approximately $69 million, or $0.84 per share, which will be reinvested for shareholder benefit [15] Q&A Session Summary Question: Opportunities in Software Loans - Management acknowledged the potential to capitalize on turmoil in the software sector, indicating a willingness to convert some loans to equipment finance loans for better risk-adjusted returns [23][25] Question: Portfolio Concerns - Management stated that they focus on industries with disruptive technology and strong capital backing, and they continue to adapt their investment philosophy based on market trends [30][31] Question: Strategic Opportunities Amid Volatility - Management confirmed that they are open to exploring strategic opportunities if market conditions remain favorable, emphasizing their strong liquidity position [35][36] Question: Fund Management Business Growth - Management noted increased interest and inflows into their fund management business, viewing current market volatility as an opportunity to differentiate from larger players [40][41] Question: Portfolio Breakdown and Credit Quality - Management provided insights into the portfolio's credit quality, noting that non-accruals remain low and that they are actively working with legacy borrowers facing challenges [50][51]

Group 1: Bank of America Initiatives - Bank of America (BofA) has committed $25 billion of its own funds towards private-credit investments, enhancing its direct-lending activities [1] - BofA plans to source these transactions through its capital-markets unit within its investment-banking division [1] - Anand Melvani has been promoted to head of private credit for the global capital market division while retaining his role as head of Americas leveraged finance [1] Group 2: Market Context and Competition - BofA is among the latest Wall Street banks to challenge non-bank lenders amid growing concerns about credit quality and market liquidity [2] - Other banks, including Citigroup, have also committed capital to the private credit sector, with Citigroup entering a strategic partnership with Apollo Global Management to launch a $25 billion private credit and direct lending program [4] - The $1.7 trillion private credit market is facing pressures from higher interest rates and exposure to struggling sectors like enterprise software [4] Group 3: Redemption Issues in Private Credit - Blue Owl Capital announced a change in its method for providing redemptions, which has raised concerns in the market [2] - CEO Craig Packer of Blue Owl Capital clarified that the firm has been tendering 5% of the shares in its private credit fund for eight years and is now accelerating redemptions instead of resuming the previous 5% [3]

Financial Data and Key Metrics Changes - In Q4 2025, adjusted net investment income (NII) per share was $0.36, consistent with the previous quarter, resulting in a return on equity (ROE) of 9.7% [11] - Net asset value (NAV) per share decreased to $14.81 from $14.89 in the prior quarter, primarily due to write-downs on a few watchlist names, partially offset by share repurchases [24] - The company repurchased $148 million of stock, the largest repurchase in its history, which was accretive to NAV per share by approximately $0.05 [24] Business Line Data and Key Metrics Changes - OBDC had fundings of $820 million against $1.4 billion of repayments, resulting in lower net leverage at 1.19x [14] - The portfolio is broadly diversified across 30 industries, with average position sizes of approximately 40 basis points [16] - Revenue and EBITDA growth for borrowers in the software portfolio was 10% and 16% respectively in Q4, outpacing other sectors [17] Market Data and Key Metrics Changes - The company executed asset sales totaling $1.4 billion, including $400 million from OBDC, at book value and an average price of 99.7% [8] - Interest coverage ratios remained healthy at approximately 2x, with a non-accrual rate decreasing to 1.1% at fair value [19] - The company received a Moody's upgrade to Baa2, reflecting strong portfolio and liability management capabilities [25] Company Strategy and Development Direction - The company terminated the proposed merger with OBDC II and opted for a significant asset sale to provide liquidity to shareholders [7] - The strategy remains focused on disciplined capital allocation, with a buy-and-hold approach to lending [10] - The company aims to leverage its diversified lending strategy to create value for shareholders, with a focus on maintaining credit quality [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's credit quality, stating that losses remain low and borrower fundamentals are strong [27] - The company anticipates that lower base rates and tighter spreads will impact future earnings, but does not expect broad-based credit issues [28] - Management highlighted the importance of maintaining a stable dividend while evaluating the impact of market conditions on future payouts [29] Other Important Information - The board declared a first-quarter base dividend of $0.37, to be paid on April 15, 2026 [23] - The company has approximately $4 billion in total cash and capacity on its facilities, exceeding unfunded commitments [25] - The new share repurchase program of up to $300 million was authorized, replacing the previous $200 million plan [24] Q&A Session Summary Question: Is OBDC II halting redemptions permanently? - Management clarified that they are not halting redemptions but accelerating them, returning 30% of capital at book value to investors [34][35] Question: What is the most accretive use of capital today? - Management indicated that they are evaluating both stock buybacks and capital deployment into the market, given the stock price is trading below book value [40][42] Question: Why not sell all of OBDC II? - Management opted for a quick transaction to return capital to investors while maintaining a diversified and liquid remaining portfolio [64][66] Question: What is the appetite for new software loan purchases? - Management expressed confidence in their software investments and indicated a cautious approach to new purchases, focusing on high-quality companies [69][70] Question: How does the mark received on the loan sales compare with previous fair value marks? - Management stated that the loans were sold at their marks, consistent with previous valuations, reinforcing the integrity of their valuation process [86][88]