Executive Summary

Q4 2024 total investment income was $5.4M, up sequentially from $5.1M, and net investment income (NII) rose to $1.5M ($0.56 per share), driven by nonrecurring other income and lower financing costs; NAV per share declined modestly to $32.04 due to net unrealized depreciation .
Against publicly available Wall Street previews, LRFC delivered a significant beat: NII per share $0.56 vs consensus $0.37 and total investment income $5.4M vs $5.0M; S&P Global consensus was unavailable via our tool, so we reference Seeking Alpha/MSN previews and note the limitation .
The Board maintained the dividend at $0.36/share for Q1 2025 (up 13% vs Q1 2024), and management highlighted the pending all-stock merger with Portman Ridge (PTMN) at a fixed exchange ratio of 1.500 PTMN shares per LRFC share as a scale/liquidity catalyst .
Liquidity improved (cash $15.0M; $26.2M of unused borrowing capacity), while non-accruals remained stable at three companies; management continued to rotate out of legacy equity positions, including the post-quarter exit of GA Communications .

What Went Well and What Went Wrong

What Went Well

NII per share increased to $0.56 (from $0.37 in Q3), with CFO citing $0.3M of nonrecurring other income and reduced KeyBank facility spread as drivers; total expenses fell $0.3M quarter-over-quarter .
Portfolio de-risking continued: LRFC exited its largest equity position (Nth Degree) in Q3 for $17.5M above prior fair value, and subsequently exited GA Communications in Q1 2025, reducing non-yielding equity exposure .
Balance sheet flexibility improved: cash rose to $15.0M and unused borrowing capacity reached $26.2M, supporting selective deployment and merger integration plans .

Management quote: “2024 was a profoundly transformative year… record levels of total investment income… and the sale of our largest equity position, Nth Degree… paving the way for the combination with Portman Ridge Finance Corporation” — Ted Goldthorpe (CEO) .

What Went Wrong

NAV per share declined to $32.04 (from $32.31 in Q3 and $33.34 in Q4 2023), primarily from net unrealized depreciation despite stronger NII .
Debt investment portfolio yield moderated to ~10.7% at 12/31/2024 (vs ~11.1% a year earlier), reflecting lower spreads and market dynamics; fixed-rate exposure decreased to 12.1% .
Non-accruals remained notable: three portfolio companies on non-accrual with $17.2M amortized cost and $7.9M fair value (9.0% of cost, 4.6% of fair value), though stable vs Q3 .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Total Investment Income ($USD Millions)	$4.4	$5.1	$5.4
Net Investment Income ($USD Millions)	$0.6	$1.0	$1.5
NII per Share ($USD)	$0.22	$0.37	$0.56
NAV per Share ($USD)	$33.34	$32.31	$32.04
NII Margin (% of TII)	13.6% (0.6/4.4)	19.6% (1.0/5.1)	27.8% (1.5/5.4)

Estimates vs Actual (Q4 2024):

Metric	Consensus	Actual	Surprise
EPS/NII per Share ($USD)	$0.37	$0.56	+$0.19 (Beat)
Total Investment Income ($USD Millions)	$5.0	$5.4	+$0.4M (Beat)

Segment/Portfolio Composition (Fair Value):

Segment ($USD Millions; % of total)	12/31/2023	12/31/2024
First Lien Debt	$124.0 (65.4%)	$111.5 (64.7%)
Second Lien Debt	$7.9 (4.2%)	$9.1 (5.3%)
Subordinated Debt	$23.5 (12.4%)	$22.9 (13.3%)
CLOs	$1.6 (0.8%)	$0.9 (0.5%)
Joint Venture	$0.5 (0.2%)	$4.2 (2.4%)
Equity	$32.1 (17.0%)	$23.8 (13.8%)
Total Portfolio	$189.7 (100%)	$172.3 (100%)

Key KPIs

KPI	Q4 2023	Q3 2024	Q4 2024
Debt Portfolio Yield (WA annualized, excl. non-accruals & CLOs)	~11.1%	~12.3%	~10.7%
Fixed-Rate % of Debt Portfolio (Fair Value)	13.6%	10.6%	12.1%
Floating-Rate % of Debt Portfolio (Fair Value)	—	88.6%	87.9%
Non-Accruals (Amortized Cost / Fair Value; % of portfolio cost/FV)	$17.2M / $12.8M; 8.7% / 6.8%	$17.2M / $8.2M; 8.8% / 4.6%	$17.2M / $7.9M; 9.0% / 4.6%
Asset Coverage Ratio	—	186%	179%
Cash & Cash Equivalents ($M)	$3.9	$5.0	$15.0
Unused Borrowing Capacity ($M)	—	$35.9	$26.2
Share Repurchases (Quarter/FY)	—	3,697 shares; ~$0.1M	16,598 shares; ~$0.4M (Q4); FY24 total 41,162 shares; ~$1.0M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per Share	Q1 2025	$0.36 (Q4 2024 distribution)	$0.36 (Q1 2025)	Maintained QoQ; +13% YoY (vs $0.32 in Q1 2024)
Merger Exchange Ratio	Closing (Expected 2Q 2025)	N/A	1.500 PTMN shares per LRFC share	New Transaction Terms
Operating Expense Efficiencies (Combined Co.)	Post-merger	N/A	~$2.8M annual savings	New
Incentive Fee Waiver	Post-merger	N/A	Up to $1.5M over 8 quarters (conditional)	New
Tax Distribution (Pre-close)	At closing	N/A	~$1.0–$1.5M of undistributed 2024 NII (subject to conditions)	New

No explicit quantitative revenue/EPS guidance was provided for standalone LRFC; management’s focus remains on portfolio rotation, financing flexibility, and merger execution .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Rotation out of legacy equity portfolio	Pursuing exits; Nth Degree exit expected/achieved; optimism for additional equity monetizations	Exited GA Communications in Q1 2025; equity % down; continue to reduce equity exposures post-close	Improving (equity reduced)
Credit facility & financing costs	Amended KeyBank facility in Aug 2024; margin reductions; extended maturities	Full-quarter benefit of spread reduction lowered expenses; added flexibility	Positive (lower cost, more flexibility)
Non-accruals / credit quality	Stable; 4 debt investments across 3 companies; monitoring specific names	Stable at 3 companies; cost $17.2M, FV $7.9M	Stable
Deployment pipeline	Selective deployment; net repayments due to equity exit	~$26.1M investments; ~$29.5M repayments; net -$3.4M; healthy pipeline	Active but disciplined
Merger with Portman Ridge	Strategic alignment discussed; stars aligning	Boards approved; 1.500 exchange ratio; expected accretion to NAV/NII; shareholder vote upcoming	Execution phase
Share repurchases	Modest buybacks in Q3; program size constrained by 10b5 timing	16,598 shares repurchased in Q4; ~$0.04/share NAV accretion	Continued, potential to adjust size

Management Commentary

“We believe this combination [with PTMN] has the potential to provide greater scale, enhanced liquidity, and improved operational efficiencies, thus enhancing our ability to further drive shareholder value.” — Ted Goldthorpe (CEO) .
“For the quarter… investment income increased primarily due to $0.3M of nonrecurring other income and higher JV distributions… total expenses decreased by $0.3M from lower average debt and the spread reduction.” — Brandon Satoren (CFO) .
On equity reduction and merger integration: “We would prefer to reduce those [equity] as much as possible… intention is to blend the portfolios together.” — Patrick Schafer (CIO) .

Q&A Highlights

Portfolio integration and equity exposure: Management expects a straightforward merger with portfolios blended; continued focus on reducing equity positions post-close .
Board overlap and governance: Logan Board members are fully overlapping with Portman’s, streamlining governance post-merger .
Compensation alignment: Constraints under the 1940 Act limit paying executives in stock; Board stock compensation would need legal review .
Buybacks: Prior 10b5 program placed before Nth Degree exit limited Q3 repurchases; programs are reset quarterly and may adjust given current leverage/liquidity .

Estimates Context

S&P Global consensus was unavailable via our estimates tool for LRFC (mapping error). Publicly available previews indicated consensus EPS/NII per share of $0.37 and total investment income of $5.0M; LRFC delivered $0.56 and $5.4M respectively, representing clear beats .
Implication: Street models should reflect higher NII run-rate driven by lower financing costs and episodic other income, while recognizing NAV sensitivity to unrealized marks and equity rotation timing .

Key Takeaways for Investors

The quarter delivered a material beat on NII per share and investment income versus publicly available consensus, aided by lower financing costs and one-time other income; watch sustainability as nonrecurring items normalize .
NAV drift remains the key watch item; ongoing equity exits and portfolio mix shifts should mitigate volatility over time, but marks can pressure book value .
Merger with PTMN is the main near-term catalyst: accretive to NAV/NII, improved liquidity/scale, expense synergies, and fee waiver support; monitor N-14 effectiveness and shareholder vote timing .
Liquidity and borrowing capacity are adequate to pursue selective deployment at attractive ROE, even as ROA may compress with market spreads; $15.0M cash and $26.2M availability support near-term activity .
Dividend maintained at $0.36/share; combined entity aims for improved earnings power—near-term distributions seen as stable pending merger close and tax distribution mechanics .
Non-accruals steady but still meaningful; credit resolution and equity monetization pace remain central to the medium-term thesis .
Trading setup: Positive skew near merger milestones and potential research coverage expansion; be mindful of book value sensitivity and deal timing risks outlined in forward-looking statements .

S&P Global consensus disclaimer: S&P Global (Capital IQ) consensus values were unavailable for LRFC via our tool at this time; consensus comparisons reference publicly available previews as cited above.

Logan Ridge Finance Corp. (LRFC)·Q4 2024 Earnings Summary