Capitala Finance Corp. reports results for the first quarter of 2021

Capitala Finance Corp.  reports results for the first quarter of 2021

First Quarter 2021 Financial Results In describing the Company’s first quarter activities, Joseph B. Alala, III, Chairman and Chief Executive Officer, stated, “We are pleased to report a significant increase in NAV per share, driven by improved performance of our portfolio of investments and some recent realized exits. Current liquidity, coupled with recent and anticipated repayments, will allow us to continue to reduce our total debt-to-equity ratio, currently at 1.6x as of March 31, 2021. Subsequent to quarter end, we announced a strategic partnership whereby Mount Logan Management, LLC will serve as investment advisor for the Company, subject to shareholder approval. We think this is the optimal time for the Company to attach to a larger credit platform as Capitala continues to focus on the management of its various private funds focused on equity returns with yields.” Total investment income was $4.9 million for the first quarter of 2021, compared to $7.1 million in the first quarter of 2020. The decline was attributable to lower interest and fee income, resulting primarily from a decrease in our debt portfolio.

Total debt-to-equity of 1.62:1 at March 31, 2021, compared to 1.98:1 at December 31, 2020, regulatory debt-to-equity 1.03:1 at March 31, 2021 Repaid $20.0 million of SBA-guaranteed debentures

Management Commentary Net asset value per share of $44.74 at March 31, 2021, an increase of 11.3% from December 31, 2020

Net unrealized appreciation totaled $27.2 million, or $10.02 per share, for the first quarter of 2021, compared to net unrealized depreciation of $43.4 million for the first quarter of 2020. The net increase in net assets resulting from operations was $12.4 million, or $4.56 per share, for the first quarter of 2021, compared to a net decrease of $42.4 million, or $15.70 per share, for the same period in 2020. Net realized losses totaled $14.0 million, or $5.17 per share, for the first quarter of 2021, compared to net realized gains of $1.0 million, for the same period in 2020. During the first quarter of 2021, the Company realized a $14.2 million loss on its investment in Currency Capital, LLC; however, the loss did not have an impact on net asset value as the realized amount was in line with our previous valuation.

Story continues Total expenses for the first quarter of 2021 were $5.7 million, compared to $7.1 million for the first quarter of 2020. Interest and financing expenses declined by $0.8 million, base management fees declined by $0.4 million, and general and administrative expenses declined by $0.2 million.

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