Return on Average Equity reaches 15.2% in Q2
Quarterly Net Investment Income climbs to a record $46.0 million, or $0.51 per share
Q2 2026 Total Investment Income grows 25.5% year-over-year
PHOENIX, Aug. 5, 2026 /PRNewswire/ -- Trinity Capital Inc. (NYSE: TRIN) ("the Company"), a leading international alternative asset manager, today announced its financial results for the second quarter ended June 30, 2026.
Second Quarter 2026 Highlights
-- Total investment income of $87.2 million, an increase of 25.5%
year-over-year.
-- Net investment income ("NII") of $46.0 million, or $0.51 per basic share.
NII grew 32.1% year-over-year.
-- Net increase in net assets resulting from operations of $44.4 million, or
$0.49 per basic share.
-- 15.2% Return on Average Equity "ROAE" (NII/Average Equity).
-- 6.9% Return on Average Assets "ROAA" (NII/Average Assets).
-- Net Asset Value ("NAV") of $1.3 billion, or $13.47 per share at the end
of Q2.
-- Total gross investment commitments of $709.0 million.
-- Total gross investments funded of $618.7 million, which was comprised of
$296.3 million to 11 new portfolio companies, $301.0 million to 25
existing portfolio companies and $21.4 million to multi-sector holdings.
-- Total gross investment exits and repayments of $378.3 million, which was
comprised of $220.2 million from early debt repayments and refinancings,
$58.3 million from scheduled/amortizing debt payments, $93.0 million from
investments sold and $6.8 million from warrant and equity sales.
-- The Company announced $0.17 monthly distributions for each of July,
August and September 2026, totaling $0.51 for the third quarter and
marking the 27th consecutive quarter of a consistent regular dividend.
"Our Q2 results reflect years of investment in building a platform that can perform across cycles -- directly originated, diversified across five verticals, a growing managed funds platform, and backed by an internally managed team that has a real stake in the outcome," Trinity Capital CEO Kyle Brown said. "That is not a new story for Trinity Capital, but this quarter gave us another opportunity to demonstrate it."
"In a quarter where many parts of the market faced real pressure, Trinity's structure and disciplined underwriting produced results we are genuinely proud of. We funded $619 million and originated $709 million in new commitments -- not by chasing yield, but by focusing on what we have always done: sourcing our own deals, setting our own terms, and staying selective. Against a backdrop that tested credit quality and origination discipline across the sector, we delivered strong results because our interests are aligned with our shareholders."
Second Quarter 2026 Operating Results
For the three months ended June 30, 2026, total investment income was $87.2 million, compared to $69.5 million for the three months ended June 30, 2025. The effective yield on the average debt investments at cost was 15.0% for the second quarter of 2026, compared to 15.7% for the second quarter of 2025. Effective yields generally include the effects of fees and income accelerations attributed to early loan repayments and other one-time events, and may also fluctuate quarter-to-quarter depending on the amount of prepayment activity.
Total operating expenses and excise taxes, excluding interest expense, for the second quarter of 2026 were $16.4 million, compared to $16.6 million during the second quarter of 2025. The decrease was primarily attributable to lower professional fees and higher allocated expenses to the Company's registered investment adviser subsidiary partially offset by an increase in general and administrative expenses.
Interest expense for the second quarter of 2026 was $24.8 million, compared to $18.0 million during the second quarter of 2025. The increase was primarily attributable to the increase in weighted average debt outstanding.
Net investment income was approximately $46.0 million, or $0.51 per share based on 90.5 million basic weighted average shares outstanding for the second quarter of 2026, compared to $34.8 million or $0.53 per share for the second quarter of 2025 based on 65.9 million basic weighted average shares outstanding.
During the three months ended June 30, 2026, the Company's net unrealized depreciation totaled approximately $0.8 million, which included net unrealized depreciation of $10.6 million from its debt investments, appreciation of $8.5 million from its warrant investments, and appreciation of $1.0 million from its equity investments. Additionally, there was $0.3 million net unrealized appreciation attributable to foreign currency forward contracts.
Net realized loss on investments was approximately $0.8 million, primarily due to the expiration of one warrant position.
Net increase in net assets resulting from operations was $44.4 million, or $0.49 per share, based on 90.5 million basic weighted average shares outstanding. This compares to a net increase in net assets resulting from operations of $41.4 million, or $0.63 per share, based on 65.9 million basic weighted average shares outstanding for the second quarter of 2025.
Net Asset Value
Total net assets at the end of the second quarter of 2026 increased by 8.6% to $1.3 billion, compared to $1.2 billion at the end of the first quarter of 2025. The increase in total net assets was primarily due to accretive ATM issuances, partially offset by net portfolio performance. NAV per share increased to $13.47 per share in the second quarter from $13.27 per share as of March 31, 2026.
Portfolio and Investment Activity
As of June 30, 2026, the Company's investment portfolio had an aggregate fair value of approximately $2.7 billion and was comprised of approximately $2.0 billion in secured loans, $390.4 million in equipment financings, and $295.0 million in equity and warrants, across 190 portfolio companies. The Company's debt portfolio is comprised of 89.3% first-lien loans and 10.7% second-lien loans, with 81.5% of the debt portfolio at floating rates based on principal outstanding.
During the second quarter, the Company originated approximately $709.0 million of total new commitments. Second quarter gross investments funded totaled approximately $618.7 million, which was comprised of $296.3 million of investments in 11 new portfolio companies, $301.0 million of investments in 25 existing portfolio companies and $21.4 million to multi-sector holdings. Gross investment fundings during the quarter for secured loans totaled $471.9 million, equipment financings totaled $108.6 million and warrant and equity investments totaled $38.2 million.
Gross proceeds received from exits and repayments of the Company's investments during the second quarter totaled approximately $378.3 million, which included $220.2 million from early debt repayments and refinancings, $58.3 million from scheduled/amortizing debt payments, $93.0 million from investments sold and $6.8 million from warrant and equity sales. Gross funding and repayment activity is inclusive of 115.6 million of refinancings. The investment portfolio increased by $249.8 million on a cost basis, an increase of 10.1%, and $248.7 million on a fair value basis, an increase of 10.0%, each as compared to March 31, 2026.
As of the end of the second quarter, loans to four portfolio companies and equipment financing to one portfolio company were on non-accrual status with a total fair value of approximately $18.7 million, or 0.8% of the Company's debt investment portfolio at fair value.
The following table shows the distribution of the Company's loan and equipment financing investments on the 1 to 5 investment risk rating scale at fair value as of June 30, 2026 and March 31, 2026 (dollars in thousands):
June 30, 2026 March 31, 2026
--------------------------- ------------------------
Investment Investments Investments Percentage
Risk Rating at Percentage of at of
Total Total
Scale Range Designation Fair Value Portfolio Fair Value Portfolio
------------- ---------------- ------------ ------------- ------------ ----------
Very Strong
4.0 - 5.0 Performance $ 123,311 5.1% $ 96,282 4.3%
Strong
3.0 - 3.9 Performance 1,165,201 47.8% 917,118 41.1%
2.0 - 2.9 Performing 1,080,131 44.3% 1,147,127 51.5%
1.6 - 1.9 Watch 37,069 1.5% 31,708 1.4%
1.0 - 1.5 Default/Workout 18,728 0.8% 24,393 1.1%
----------- ------------- ----------- ----------
Total Debt Investments excluding
Senior Credit Corp 2022 LLC 2,424,440 99.5% 2,216,628 99.4%
Senior Credit
Corp 2022 LLC
. (1) 12,885 0.5% 12,885 0.6%
----------- ------------- ----------- ----------
Total Debt Investments $ 2,437,325 100.0% $ 2,229,513 100.0%
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(1) An investment risk rating is not applied to Senior Credit Corp 2022 LLC.
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