Trinity Capital equipment finance portfolio up 43%

Trinity Capital increased its equipment finance portfolio outstandings in the first quarter as equipment financing was the largest funding area for the capital market financing firm. 

State of play

More than one-third of Phoenix-based Trinity Capital’s gross funding in the first quarter was equipment financing as the company continued to grow that segment, Chief Operating Officer Gerry Harder said during today’s first-quarter earnings call. 

“We have seen within Q1 and carrying into Q2 pretty significant uptick in CapEx spend for companies that manufacture in the U.S,” he said. “Our equipment business is poised to benefit from that. You saw that with nearly a third of our deployments in Q1 were equipment, over a third, and I don’t think that’s going to slow down, so that’s a great differentiator for us as a lender.” 

Gross funding investments in Q1 totaled $220.4 million, down 9.2% year over year, according to Trinity’s earnings release today.  

The company’s investments broke down as follows, according to Harder:  

• 38% equipment financing; 

• 29% life sciences; 

• 18% sponsor financing; 

• 10% tech lending; and  

• 5% asset-based lending. 

On a cost basis at the end of the quarter, he said, Trinity’s total portfolio consisted of approximately: 

• 75% secured loans; 

• 19% equipment financing; 

• 4% equity; and  

• 2% warrants. 

By the numbers

Trinity Capital increased its equipment finance originations while overall investment declined in Q1. Trinity also reported:  

• Equipment finance investments landed at $71.4 million, up 42.5% YoY; 

• Equipment finance outstandings totaled $336.7 million in aggregate fair value, up 21.3% YoY; 

• Total investment outstandings at aggregate fair value reached $1.8 billion, up 28.6% YoY; 

• Total portfolio weighted average risk rating score inched up to 2.9, compared with 2.7 as of March 31, 2024. 

Meanwhile, the company continues to monitor the status of U.S. tariffs to ensure little to no risk on client portfolios, Trinity Capital Chief Executive Kyle Brown said on the earnings call. 

“We’ve been closely monitoring the recent tariff announcements and have been in discussions with all of our portfolio companies to determine the potential impact on their operational performance,” he said. “The portfolio management team is actively engaged with every single one of our portfolio companies to analyze the effects of tariffs, quantify the potential impact across all our risk factors and safeguard the health of our investments.” 

MARKET REACTION: Shares of Trinity Capital (NASDAQ: TRIN) were down 27 cents or 1.91% from market open to $13.83 as of market close today. Trinity Capital has a market capitalization of $885.92 million.  

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