Hercules Capital reported higher third-quarter investment income and net investment income, alongside a year-to-date increase in lending commitments and fundings. The specialty finance company also declared a third-quarter cash distribution of $0.47 per share, payable in November.
The results show continued growth in investment activity, while early loan repayments fell sharply from the prior quarter. Hercules reported more than $500 million of available liquidity on its own, and more than $1 billion when funds managed by its adviser are included.
Third-quarter results and activity
- Total investment income was $140.1 million, up 1.5% from a year earlier. Net investment income (NII) was $87.3 million, or $0.47 per share.
- Hercules made $701.0 million of new debt and equity commitments during the quarter. Net commitments were $557.6 million.
- Total fundings were $572.9 million; net fundings were $438.3 million.
- Early principal repayments totaled $148.3 million, down 74.1% from $572.1 million in the second quarter.
- Return on average equity, measured as NII divided by average equity, was 15.4%.
- The company said quarterly NII covered its base cash distribution by 118%. The announced total distribution is $0.47 per share; the release’s coverage figure specifically refers to the base portion.
Year-to-date performance
- Through September, total debt and equity commitments reached a record $3.44 billion, up 20.0% year over year.
- Year-to-date fundings reached a record $1.93 billion, up 9.9%.
- Investment income totaled a record $430.8 million, up 9.0%, while NII reached a record $268.4 million, up 5.4%.
Capital, liquidity and managed assets
- Hercules reported net GAAP leverage of 109.0% and net regulatory leverage of 94.0%.
- Available liquidity was $506.6 million at quarter-end, subject to existing terms and covenants. Including funds advised by Hercules Adviser, the company said available liquidity exceeded $1.0 billion.
- Undistributed earnings, or spillover, stood at $167.8 million, equal to $0.88 per ending share.
- Assets under management were approximately $6.5 billion, up 17.7% from a year earlier.
Distribution
- The board declared a third-quarter cash distribution of $0.47 per share.
- The ex-dividend and record date is November 10, 2026, and payment is scheduled for November 17, 2026.
The distribution is the cash payment to shareholders; the company’s separate 118% coverage statement applies to the base distribution, not necessarily the full $0.47 total.