Market Overview

Hercules Announces First Quarter 2017 Financial Results and a $0.31 per Share Quarterly Distribution


Capital, Inc.
(NYSE:HTGC) ("Hercules" or the "Company"), the
leading specialty financing provider to innovative venture growth stage
companies backed by leading venture capital firms, today announced its
financial results for the first quarter ended March 31, 2017.

The Company also announced that its Board of Directors has declared a
first quarter cash distribution of $0.31 per share, that will be payable
on May 22, 2017, to shareholders of record as of May 15, 2017.

"Our first quarter results represent a solid start to 2017 for Hercules
Capital as we originated more than $190 million in new commitments and
over $153 million in gross fundings, with eight new innovative venture
growth companies added to the portfolio," said Manuel A. Henriquez,
founder, chairman and chief executive officer of Hercules. "During the
quarter, we increased total investment income and net investment income
by 19.1% and 12.8% year-over-year, respectively, benefitting from our
corporate investments and record-setting performance in 2016. We are
maintaining our guardedly optimistic outlook for 2017, as evidenced by
our strong liquidity position of $343 million in total available
liquidity, which positions us well to manage and grow our high-quality
credit investment portfolio, while continuing to maintain our
disciplined slow and steady growth strategy, and remaining very
selective in our underwriting as we cautiously navigate through
tightening credit markets and the early stages of the new Trump

Q1 2017 Review and Operating Results

Growth of Debt Investment Portfolio

Hercules had a solid Q1 2017, having successfully extended debt and
equity commitments to thirteen (13) companies including eight (8) new
and five (5) existing companies, totaling $191.0 million, and gross
fundings of $153.3 million.

During the quarter, Hercules realized unscheduled early principal
repayments of $100.3 million, along with normal scheduled amortization
of $37.5 million, or $137.8 million in total debt repayments.

Net debt investment portfolio growth during the first quarter, on a cost
basis, was $14.3 million, and on a fair value basis, the portfolio
declined modestly by approximately $16.9 million or 1.3%, driven by net
unrealized depreciation on our debt investments.

The Company's total investment portfolio, (at cost and fair value) by
category, quarter-over-quarter is highlighted below:

Total Investment Portfolio: Q4 2016 to
Q1 2017

(in millions)   Debt   Equity   Warrants   Total Portfolio
Balances at Cost at 12/31/16 $ 1,384.9   $ 81.6   $ 45.0   $ 1,511.5  
New fundings(a) 147.7 3.9 1.7 153.3
Warrants not related to Q1 2017 fundings - - 0.4 0.4
Early payoffs(b) (100.3 ) - - (100.3 )
Principal payments received on investments (37.5 ) - - (37.5 )
Net changes attributed to conversions, liquidations, and fees   4.4     (6.3 )   (0.4 )   (2.3 )
Net activity during Q1 2017   14.3     (2.4 )   1.7     13.6  
Balances at Cost at 3/31/17 $ 1,399.2   $ 79.2   $ 46.7   $ 1,525.1  
Balances at Value at 12/31/16 $ 1,328.8   $ 67.6   $ 27.5   $ 1,423.9  
Net activity during Q1 2017 14.3 (2.4 ) 1.7 13.6
Net change in unrealized appreciation / (depreciation)   (31.2 )   (2.8 )   2.8     (31.2 )
Balances at Value at 3/31/17 $ 1,311.9   $ 62.4   $ 32.0   $ 1,406.3  
(a)New fundings amount includes $4.8 million total new
fundings associated with revolver loans during Q1 2017.
(b)Unscheduled paydowns include $1.5 million paydown on
revolvers during Q1 2017.

Debt Investment Portfolio Balance

(in m
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