Hercules Capital Inc (HTGC) Reports Record Q3 2023 Financial Results
Record Q3 2023 total investment income of $116.7 million, a 38.6% increase year-over-year.
Net Investment Income (NII) for Q3 2023 reached $76.8 million, a 53.6% increase year-over-year.
Year-to-date ending Q3 2023 total gross fundings of $1.29 billion, a 17.7% increase year-over-year.
Assets Under Management (AUM) increased by 19.4% year-over-year to approximately $4.1 billion.
On November 2, 2023, Hercules Capital Inc (NYSE:HTGC) announced its financial results for the third quarter ended September 30, 2023. The company reported a record total investment income of $116.7 million, marking a 38.6% increase year-over-year. The Net Investment Income (NII) for Q3 2023 was $76.8 million, or $0.52 per share, a significant increase of 53.6% year-over-year. The company also reported record year-to-date ending Q3 2023 total gross fundings of $1.29 billion, a 17.7% increase year-over-year.
Financial Highlights
Scott Bluestein, CEO and CIO of Hercules, stated,
Our strong financial performance and business momentum continued in Q3 with earnings at historic highs and return on average equity above 20% for the second consecutive quarter. We delivered record total investment income and net investment income for the third quarter, up over 38% and 53% year-over-year, respectively."
The company's total investment portfolio, at cost and fair value, increased by $194.6 million during the third quarter. The total investment income increased to $116.7 million for Q3 2023, compared to $84.2 million in Q3 2022. The increase is primarily attributable to a higher weighted average debt investment portfolio, an increase in core yields, and elevated fee income from early payoffs between periods.
Portfolio Asset Quality and Non-Accruals
As of September 30, 2023, the weighted average grade of the debt investment portfolio, at cost, was 2.28 compared to 2.24 as of June 30, 2023. The number of loans on non-accrual increased by one quarter-over-quarter. As of September 30, 2023, the Company had two debt investments on non-accrual with an investment cost and fair value of approximately $88.1 million and $24.6 million, respectively.
Liquidity and Capital Resources
The Company ended Q3 2023 with $598.0 million in available liquidity, including $32.0 million in unrestricted cash and cash equivalents, and $566.0 million in available credit facilities, subject to existing terms, advance rates, regulatory and covenant requirements.
Outlook
After closing $692.7 million in new debt and equity commitments in Q3 2023, Hercules has pending commitments of $290.0 million in signed non-binding term sheets outstanding as of October 31, 2023. Since the close of Q3 2023 and as of October 31, 2023, Hercules has closed new gross debt and equity commitments of $34.0 million and funded $42.7 million.
Explore the complete 8-K earnings release (here) from Hercules Capital Inc for further details.
This article first appeared on GuruFocus.
