In This Article:
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Net Investment Income (NII) per Share: $0.37 for the March quarter.
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GAAP Net Income per Share: $0.32 for the quarter.
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Annualized Return on Equity (ROE): 9.8% based on NII and 8.7% based on net income.
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NAV per Share: $14.93 at the end of March, down $0.05.
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New Commitments: $376 million during the March quarter.
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Total Investment Income: Approximately $78.7 million for the March quarter.
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Net Expenses: $44.4 million for the quarter.
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Portfolio Fair Value: $3.19 billion at the end of March.
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Net Leverage: 1.31 times at the end of March.
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Dividend Declared: $0.38 per share for shareholders of record as of June 10, 2025.
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Share Repurchases: Approximately 477,000 shares at a weighted average price of $12.75, totaling $6.1 million.
Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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MFIC reported solid first quarter results with a net investment income per share of $0.37, corresponding to an annualized return on equity of 9.8%.
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The company observed stable credit quality trends, with a decline in investments on nonaccrual status and a decrease in the weighted average leverage of borrowers.
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MFIC's portfolio is well-diversified, with 99% of the direct origination portfolio being first lien and invested in less cyclical industries.
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The company made $376 million of new commitments during the quarter, with a slight decline in net leverage on new commitments, resulting in an attractive spread per unit of leverage.
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MFIC benefits from its affiliation with MidCap Financial, providing a significant deal sourcing advantage and access to a large volume of commitments.
Negative Points
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Net asset value (NAV) per share decreased by $0.05 to $14.93 at the end of March.
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The company faces potential challenges from trade tariffs, although these are expected to be relatively limited.
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Total investment income for the March quarter was down 4.2% compared to the prior quarter, primarily due to lower fee and prepayment income.
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The weighted average yield at cost of the direct originated portfolio declined due to lower base rates.
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MFIC's exposure to Merx, which has ongoing legal and insurance claims related to aircraft in Russia, represents 5.8% of the total portfolio.
Q & A Highlights
Q: Could you discuss the strong fundings in Q2 despite the cautious market commentary? What opportunities are driving this, and how do spreads compare to Q1? A: Tanner Powell, CEO: The strong deployment in Q1, with $376 million in new commitments, reflects activity initiated before the recent market volatility. The strong Q2 fundings are a continuation of this pipeline. Spreads in Q1 declined to 513 basis points, but we've seen stabilization recently. The market's muted M&A environment may lead to fewer credit creation opportunities, but we expect some stabilization in spreads.