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CEO Thomas Majewski responded that while lower energy costs would improve company fundamentals and likely reduce default risk, it would not directly increase cash flows to the CLO equity. The underlying companies are only obligated to pay the stated floating interest rate on their loans. He reiterated that the primary drivers for increasing recurring cash flow for ECC are limiting loan spread compression and actively reducing CLO liability costs through resets and refinancings.

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Richard Allorto, CFO & Treasurer, explained that while some of the cash will be used for the JV, the high balance was also a result of strong collections at quarter-end, representing a normal part of working capital management. Art Penn, Founder and Managing Partner, added that while the company hopes for an opportunity to expand loan spreads with increased deal flow, their constitutional focus remains on securing excellent credit quality first, even if it means accepting slightly lower spreads.

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Chief Credit Officer Adam Zausmer confirmed the Portland asset was acquired through the Mosaic merger. CEO Thomas Capasse stated that the company will have less reliance on M&A in the near term unless a deal is highly accretive. He affirmed that they would continue to allocate capital to the high-ROE small business segment to support growth and agreed that the influx of private equity capital into multifamily is 'unequivocally a cyclical play' to acquire assets cheaply.

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Executive Andrew Ahlborn stated that the decision on further buybacks would be re-evaluated post-earnings, reiterating that liquidity is healthy. He explained that collapsing CLOs causes a slight uptick in leverage as advance rates increase on warehouse lines but generates significant liquidity. Chief Credit Officer Adam Zausmer attributed the CLO stress to elevated interest rates impacting property NOIs, which has led to a higher degree of loan modifications.

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Chief Credit Officer Adam Zausmer responded that the UDF portfolio is fully performing, and due to its accrued interest structure and maturities through 2028, no delinquencies are expected. Regarding repurchases, Executive Andrew Ahlborn stated that while the company will maintain a higher cash level, it expects to be active in the repurchase program throughout the year. The pace will depend on liquidity generated from events like CLO collapses and non-core asset sales, which are expected to significantly boost cash reserves.

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CEO Thomas Capasse confirmed that they believe the CRE market is stabilizing, mirroring macro data, suggesting the worst is over. He also clarified that coverage ratios are calculated after taxes and reserves. Executive Andrew Ahlborn stated that with the core distributable ROE in the mid-8% range and the strong, sustainable profitability of the small business segment, the company is on a path to 'march towards that 10% target' as the CRE business recovers.

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CEO Stuart Aronson clarified that the American Crafts investment was resolved through a sale of the remaining company piece with minimal proceeds, eliminating further downside. CFO Joyson Thomas stated that the reinvestment period for the new CLO runs through May 25, 2029.

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CEO Stuart Aronson confirmed that American Crafts was resolved through a sale with minimal proceeds, eliminating further downside. CFO Joyson Thomas specified that the reinvestment period for the new CLO term debt securitization runs through May 25, 2029.

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President Logan Nicholson clarified that the JV will target a diversified pool of leases, though he noted growing, chunky opportunities in areas like data centers and healthcare equipment due to bank pullbacks. He explicitly stated that accelerated depreciation tax changes were not a factor in the decision to launch the strategy.

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CEO Kyle Brown confirmed that tax changes like accelerated depreciation are contributing to a significant uptick in equipment financing demand, though the portfolio allocation is expected to remain around 25%. He also noted that the ABL vertical already provides revolving facilities. CFO Michael Testa clarified the investment grade rating is for the current platform, and any new vehicle like a non-traded BDC would require its own rating, though it would benefit from the initial validation.

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CFO Michael Testa stated that capital is only raised when accretive and that they model all liquidity levers, including the RIA. CEO Kyle Brown added that managed accounts provide additional income streams to grow overall EPS. Regarding valuations, Michael Testa noted that while equity marks could be affected by market multiples, they do not currently anticipate a broad adjustment to the discount rate for the performing debt portfolio due to tariffs.

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CFO Michael Testa and CEO Kyle Brown stated that while they anticipate dividends from the RIA in 2025, they have not provided specific forward-looking guidance, framing 2025 as an "execution year" for the RIA. CEO Kyle Brown sees no immediate political impact on their life sciences portfolio, as it focuses on post-FDA approved medical devices. Chief Credit Officer Ron Kundich confirmed the debt ATM is for existing unsecured notes (TRINL and TRINZ) and provides an efficient capital-raising alternative.

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CFO Michael Testa clarified the realized loss was from the previously marked-down Nexi position, resulting in a neutral NAV impact. He attributed higher operating expenses to strategic hiring to build out the five verticals and indicated the Q3 level is a stable run rate. He also noted that off-balance sheet vehicle returns are expected to mirror those of the BDC.

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Bob Marcotte, President, confirmed the 81% leverage figure and noted that predicting offsetting prepayments is difficult. Regarding the 2026 maturity, he stated that while the credit line provides a backup, the company is actively evaluating various refinancing options but has been disappointed with current market pricing for new term debt for companies of its size. A concrete plan will be determined over the coming quarters.

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EVP & CFO Anthony Cutrone clarified that a recent $53 million loan sale involved core recreational loans, not strategic partnership loans, and that similar sales are expected opportunistically in the future. He explained that strategic partnership loans are held for only about five days on average. Cutrone confirmed the gain on the loan sale was the only notable non-recurring item and detailed that the recent preferred stock offering significantly boosted capital to support future growth, while reserve levels are managed based on economic and portfolio performance.

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Executive Andrew Murstein confirmed that the company has flexibility to apply qualitative judgment to its loan loss provisions, as it did in Q1 by increasing consumer reserves by $1.4 million. He anticipates one or two more significant gains from equity investment exits this year but noted the timing is unpredictable. Murstein also clarified that these gains occur within the SBIC, Medallion Capital, and therefore do not affect the bank's capital ratios.

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Anthony Cutrone, an executive, confirmed that the reserve ratio is determined by CECL, which relies on historical loss data to project future experience. He explained that while Fed easing is not a direct input, it could indirectly benefit reserves by improving consumers' financial health and reducing delinquencies. Mr. Cutrone also stated that loan yields are not expected to decline, as new originations in both the recreation and home improvement segments are being written at rates significantly higher than the current portfolio's average coupon.

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CFO Erik Cuellar stated that TCPC will continue to execute share repurchases when they are accretive, actively monitoring the stock's trading price. Chairman, Co-CIO & CEO Philip Tseng added that the vast majority of portfolio companies are sponsor-backed. He noted that while sponsor support has been mixed three years into a higher-rate environment, most sponsors continue to provide support, and TCPC is prepared to enforce its rights when necessary.

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CFO Erik Cuellar affirmed the company's focus on maintaining its investment-grade rating ahead of the 2026 maturity and stated they have no reason to believe it is at risk. CEO Philip Tseng attributed the NAV decline to broad macro factors, including the rapid rise in interest rates impacting highly levered borrowers from the pre-rate-hike era, combined with a slower growth environment.

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President Philip Tseng stated his primary focus is on managing non-accruals to optimize outcomes, leveraging the team's long track record. To address stability concerns, he highlighted the long tenure of the core management team and the company's 50-quarter history of meeting or exceeding its dividend. Regarding the dividend, he noted it's a board decision but emphasized the company's history of out-earning it and pointed to the existing fee waiver agreement from the BCIC merger as evidence of BlackRock's support.

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CEO & CIO Scott Bluestein strongly disagreed with the premise, asserting that Hercules has experienced 'tremendous momentum' since March 2023, with higher volumes and deal quality. He cited robust VC investment data for 2024 and Q1 2025. While acknowledging that VC fundraising has slowed due to a muted exit environment, he maintained an optimistic outlook on the overall venture ecosystem.

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CFO Seth Meyer clarified that leverage is managed to provide a good return to investors and that they have significant room to increase it, but it is not specifically targeted to cover the supplemental dividend. CEO Scott Bluestein added that the base dividend is covered by NII, while the supplemental is paid from the large spillover. On the AFFE rule, Seth Meyer stated there was no progress to report at this time.

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CFO Seth Meyer stated that a tax on unrealized gains would affect Hercules similarly to other investment firms and noted the company's status as a pass-through RIC is a key factor. CEO Scott Bluestein identified changing the 'ineligible asset restrictions' as their top regulatory priority, stating it negatively impacts their business. Meyer also mentioned the industry-wide desire to resolve the AFFE (Acquired Fund Fees and Expenses) issue for improved investor disclosure.

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CEO Scott Bluestein stated that the tech activity is broad-based, focusing on overall credit quality rather than specific sub-sectors. CFO Seth Meyer confirmed that the projected $0.03 annual NII impact from a rate cut could indeed be offset by portfolio growth over time.

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CIO/CFO George Haas explained that while banks are present in the market, their buying has not been sufficient to offset deleveraging from money managers and hedge funds. Executive Robert Cauley added that forced selling in early April overwhelmed any bank bid. On insurance, Cauley attributed the lack of new private capital to extremely high reinsurance costs and risks associated with climate events, suggesting that any significant new capacity would likely need to come from government sources.

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Executive Robert Cauley explained that the board focuses on relative total return and understood the previous aggressive strategy was to gain scale ahead of an anticipated easing cycle. He noted the company is now shifting to a more defensive posture. Executive George Haas stated they no longer provide the specific adjusted economic EPS metric as it tended to cause confusion, but it may be available in the 10-Q.

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Gordon Harper, an executive, confirmed the current book value was $16.56 as of April 23, post-dividend accrual. Scott Ulm, an executive, stated that while book value is a factor, the company focuses on medium-term stability and available returns, and is comfortable with the current dividend. Sergey Losyev, an executive, noted that bank demand for MBS was strong in Q1 but has been quieter amid recent volatility, though he expects it to return. Scott Ulm declined to give forward guidance on distributable EPS.

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Executive Gordon Harper confirmed the book value was $16.56 as of April 23, post-dividend accrual. Executive Scott Ulm stated that while a declining book value could eventually impact the dividend, the company focuses on the medium term and attractive returns. Executive Sergey Losyev noted that bank demand for MBS was strong in early Q1 but has since quieted amid volatility. Scott Ulm declined to provide forward-looking guidance on distributable EPS.

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Desmond Macauley confirmed the $136.2 million ATM raise was a net figure. Sergey Losyev explained that while the company is still positioned for more Fed rate cuts, the most attractive ROE is currently in higher coupon 5.5% and 6% MBS, and they have been actively investing in that part of the coupon stack.

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