Executive Summary

Q4 2024 net investment income (NII) was $23.8M ($0.44/share), covering the $0.41/share distribution; NAV/share held at $18.20, flat vs Q3, up from $18.09 a year ago .
Comprehensive portfolio yield rose to 12.1% (from 11.8% in Q3) as mix tilted toward specialty finance; 96.4% first-lien, with only one non‑accrual and 99.6%/99.4% of the portfolio performing on FV/cost basis, respectively .
Leverage decreased to 1.03x (from 1.10x in Q3; 1.16x in Q2); added $49M 2027 notes at 6.24% and, post‑Q4, $50M 2028 notes at 6.14% to refinance maturities; unsecured debt ~41% of funded debt pro forma .
Management highlighted a strong ABL/equipment finance pipeline amid regional bank retrenchment; specialty finance comprised ~79% of the portfolio; NII “flat year‑over‑year” and continues to cover the dividend, reinforcing stability into 2025 .

What Went Well and What Went Wrong

What Went Well

Specialty finance drove yield expansion and resilient income: comprehensive portfolio yield increased to 12.1% vs 11.8% in Q3; 94% of Q4 originations were specialty finance, supporting higher risk‑adjusted returns than sponsor finance .
Asset quality remained strong: only one non‑accrual; 99.6% (FV) and 99.4% (cost) of portfolio performing; internal ratings skewed to lowest risk (ratings 1–2 >99% of total) .
Funding actions de‑risked maturities: issued $49M 2027 notes at 6.24%; post‑Q4, $50M 2028 notes at 6.14%; leverage moved to 1.03x, with >$900M available capital across SLRC, SSLP, and specialty finance companies .

Notable quotes:

“Our specialty finance investments account for over 79% of the total portfolio…We believe this defensive portfolio construction positions us well” .
“NII…covered our $0.41 per share distribution during the period” .
“SLRC had over $900 million of available capital to deploy” .

What Went Wrong

Lower base rates and tight sponsor finance spreads pressured cash‑flow loan yields (down to 10.6% from 11.1% in Q3); SLRC let certain refinancings go as risk/return fell short .
Total investment income declined sequentially to $55.6M from $59.8M in Q3, driven by lower interest income; net expenses also fell, partially offsetting .
ABL repayments were elevated ($205M), partly idiosyncratic maturities (avg duration ~4 years) and revolver usage dynamics; management expects flow to ebb/flow with structures .

Financial Results

Income Statement Snapshot (Quarterly)

Metric	Q2 2024	Q3 2024	Q4 2024
Total Investment Income ($M)	$59.0	$59.8	$55.6
Net Expenses ($M)	$34.7	$35.4	$31.8
Net Investment Income ($M)	$24.3	$24.3	$23.8
NII per Share ($)	$0.45	$0.45	$0.44
Net Realized & Unrealized Gain/(Loss) ($M)	$(1.1)	$(2.3)	$(1.2)
EPS (Basic & Diluted) ($)	$0.43	$0.40	$0.41
Quarterly Distribution Declared ($/share)	$0.41	$0.41	$0.41 (Q1’25 dividend declared)

Notes: Management stated Q4 NII was “flat year‑over‑year” (lack of line‑item Q4’23 quarterly comp) .

Segment Income Contribution ($M)

Asset Class	Q2 2024	Q3 2024	Q4 2024
Sponsor Finance	$22.5	$21.4	$18.7
Asset‑Based Lending	$14.6	$15.4	$18.1
Equipment Finance	$9.4	$7.8	$8.8
Life Science Finance	$12.5	$15.2	$10.0
Total	$59.0	$59.8	$55.6

KPIs and Portfolio Mix

KPI	Q2 2024	Q3 2024	Q4 2024
NAV/Share ($)	$18.20	$18.20	$18.20
Net Debt / Equity (x)	1.16x	1.10x	1.03x
On‑Balance Portfolio FV ($B)	$2.1	$2.1	$2.0
Comprehensive Portfolio FV ($B)	$3.12	$3.19	$3.08
Weighted Avg Asset Yield (%)	11.7%	11.8%	12.1%
Performing (% FV / cost)	99.6% / 99.4%	99.6% / 99.4%	99.6% / 99.4%
First Lien (% of comprehensive loans)	97.7%	96.8%	96.4%
Non‑accruals (count)	1	1	1

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly Dividend	Q4’24 declared; Q1’25 declared	$0.41/share (Q2 & Q3’24)	$0.41/share (Q4’24 declared 2/25 for Q1’25 pay)	Maintained
Target Net Debt/Equity	Ongoing	0.9x–1.25x	0.9x–1.25x; “migrate toward middle”	Maintained (directional)
Revenue/EPS/OpEx/OI&E/Tax	N/A	None provided	None provided	N/A

No formal quantitative guidance beyond dividend and capital/leverage framework was provided in Q4 materials .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
Specialty finance pivot / ABL pipeline	Multi‑strategy resilience; stable NAV; building across sponsor + specialty finance	ABL originations active; acquisition of factoring business; comprehensive portfolio growth	ABL/equipment drive 94% of originations; yield 12.1%; ABL pipeline robust as regional banks retrench	Positive / expanding
Sponsor finance market	Mix benefit from both sponsor/specialty niches	Stable; but more competition	Tight spreads, looser terms; yield down to 10.6%; selective, letting refinancings go	Cautious / selective
Equipment finance	Portfolio ~33% of comp. portfolio; yields 8.1%	33.4% of comp. port.; 9.4% yield	37% of comp. port.; 10.7% yield; well matched liabilities; inflation supports lease extensions	Improving yield/scale
Life sciences	11% of comp. port.; 13.0% yield	7.5% of comp. port.; 12.6% yield	~8% of port.; >87% with 12+ months runway; ~12% yield; pipeline “green shoots”	Stabilizing / early improvement
Asset quality / non‑accruals	1 non‑accrual; 99.6%/99.4% performing	Same strong metrics	Same; internal ratings skew to 1–2; tariffs risk minimal	Strong / stable
Capital & leverage	Net debt/equity 1.16x; 41% fixed unsecured	1.10x; extended revolver to 2029	1.03x; issued 2027 notes 6.24% and post‑Q4 2028 notes 6.14%; >$900M available capital	De‑risking maturities

Management Commentary

“Our specialty finance investments account for over 79% of the total portfolio…We believe this defensive portfolio construction positions us well” (Bruce Spohler) .
“Despite the meaningful decline in base rates…our solid finish to the year contributed to full year NII per share of $1.77, representing a 5% increase over 2023” (Michael Gross) .
“Accordingly, the company’s NII…totaled $23.8 million or $0.44 per average share…[and] covered our $0.41 per share distribution” (Shiraz Kajee) .
“At year‑end, weighted average yield on this [sponsor finance] portfolio was 10.6%, down from 11.1% in the prior quarter…we remain highly selective” (Bruce Spohler) .
“We earned $1.9 million [from SSLP], representing a 15.6% annualized yield, consistent with the prior quarter” (Bruce Spohler) .

Q&A Highlights

Portfolio/teams M&A: SLRC reviewed several specialty finance portfolio/team opportunities, passed where underwriting standards fell short; maintains a dedicated sourcing effort post regional bank disruption (expect contribution in 2025) .
Sponsor finance structure/returns: Spreads/terms stabilized but at unattractive levels vs ABL; new platforms at ~9–9.5% all‑in; sponsor book yield fell to 10.6% (from 11.1%) .
Equipment finance liability matching: Business is “reasonably well matched”; inflation supports lease extensions and profitability; rate dynamics balanced via debt/equity mix .
ABL repayments/yield dynamics: $205M repayments in Q4 were idiosyncratic (avg. duration ~4 years); revolver usage creates temporary outstandings fluctuations; yields stable .
SSLP placement capacity: Continuing to place lower‑spread cash‑flow loans into SSLP; portfolio near full optimization .
Dividend income mix/run‑rate: Elevated Q4 dividend income is largely ABL (e.g., full‑quarter Webster portfolio impact) with mid‑teens returns; seen as run‑rate, subject to macro .

Estimates Context

S&P Global consensus for Q4 2024 EPS/revenue and related metrics was unavailable due to access limits at the time of analysis. As a result, we cannot provide beat/miss vs Wall Street for Q4 2024 at this time. Values would normally be retrieved from S&P Global; please advise if you’d like us to re‑query later today or tomorrow to finalize estimate comparisons.

Key Takeaways for Investors

Dividend coverage intact: NII of $0.44 covered the $0.41 dividend; NAV stable at $18.20—supporting income stability and book value preservation into 2025 .
Mix shift is the story: Specialty finance dominance (ABL/equipment) and first‑lien orientation continue to insulate yields and credit, while sponsor finance remains selectively downshifted amid tight spreads .
Capital readiness: Reduced leverage (1.03x) and fresh unsecured issuance provide runway to deploy into dislocations (ABL pipelines, potential portfolio/team bolt‑ons) without stressing the balance sheet .
Credit discipline: One non‑accrual, strong internal ratings, minimal PIK—risk controls remain a differentiator vs some BDC peers .
Watch ABL/equipment velocity: Elevated ABL repayments and revolver dynamics can produce quarterly noise, but management underscores stability in asset‑level yields and opportunity set .
Sponsor finance optionality: Selectivity persists; upside exists if M&A normalizes and spreads/terms improve, but near‑term growth skew remains toward specialty finance .
SSLP steady contributor: Consistent mid‑teens yield on SSLP equity underscores diversified income streams within the platform .

Citations:

Q4 2024 8-K press release and financials
Q4 2024 earnings call transcript
Q3 2024 8-K press release
Q2 2024 8-K press release
Q4 2024 earnings date press release

SLR Investment Corp. (SLRC)·Q4 2024 Earnings Summary