Trinity Capital Inc. (NASDAQ:TRIN) Q1 2024 Results Conference Call May 1, 2024 12:00 PM ET
Company Participants
Ben Malcolmson – Head of Investor Relations
Kyle Brown – Executive Officer
Michael Testa – Chief Financial Officer
Gerry Harder – Chief Operating Officer
Ron Kundich – Chief Credit Officer
Sarah Stanton – Chief Compliance Officer and General Counsel
Conference Call Participants
Bryce Rowe – B. Riley
Kyle Joseph – Jefferies
Vilas Abraham – UBS
Paul Johnson – KBW
Casey Alexander – Compass Point
Finian O’Shea – Wells Fargo
Christopher Nolan – Landenburg Thalmann
Operator
Good afternoon. My name is Jamie, and I will be your conference operator today. At this time, I would like to welcome everyone to Trinity Capital’s First Quarter 2024 Earnings Conference Call. This call is being recorded and will be available for replay beginning at approximately 3 p.m. Eastern Time. The replay dial number is 1-800-839-2389, and no conference ID is required for access. [Operator Instructions]
It is now my pleasure to turn the call over to Ben Malcolmson, Head of Investor Relations for Trinity Capital. Please go ahead.
Ben Malcolmson
Thank you, Jamie, and welcome to Trinity Capital’s earnings conference call for the first quarter 2024. Today, we are joined by Kyle Brown, Chief Executive Officer; Michael Testa, Chief Financial Officer; and Gerry Harder, Chief Operating Officer. Also joining us for the Q&A portion of the call are Ron Kundich, Chief Credit Officer; and Sarah Stanton, Chief Compliance Officer and General Counsel.
Trinity’s financial results were released earlier today and can be accessed from our Investor Relations website at ir.trinitycap.com. A replay of the call will be available on our website or by using the telephone number provided in today’s earnings release.
Before we begin, I would like to remind everyone that certain statements that are not based on historical facts made during this call, including any statements relating to financial guidance, may be deemed forward-looking statements under federal securities laws. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements.
We encourage you to refer to our most recent SEC filings for information on some of these risk factors. Trinity Capital assumes no obligation or responsibility to update any forward-looking statements. Please note that the information reported on this call speaks only as of today, May 1, 2024. Therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading.
Now please allow me to turn the call over to Trinity Capital’s CEO, Kyle Brown.
Kyle Brown
Thank you, Ben. Thanks, everyone, for joining us today.
First quarter was a strong start to the year for Trinity. We remain opportunistic in the current market by investing in our platform as we continue to scale and deliver value to our shareholders. Notable highlights during the quarter include $243 million of gross fundings across 8 new portfolio companies and 12 existing portfolio companies.
Platform AUM growth of 38% year-over-year, pushing our assets under management to $1.6 billion. Record net investment income of $25.2 million, a 30% increase versus Q1 of last year and return of equity of 16.1%. Our performance allowed us to increase our quarterly dividend to $0.51 per share in the first quarter, making this the 13th consecutive quarter we’ve increased our dividend.
Credit underwriting and portfolio management continue to remain fundamental to our success. We maintain regular standards and origination diligence and portfolio management to position us to effectively navigate a dynamic market.
Our team of nearly 80 professionals is the cornerstone of Trinity’s track record and is a key to our trajectory going forward. We’re committed to creating a unique culture here of excellence that is built around 6 pillars: humility, integrity, trust, uncommon care, continuous learning and an entrepreneurial spirit, all of which creates a differentiated lending platform that we built here at Trinity.
We strive to provide value above and beyond expectations to every part of the Trinity platform, whether that’s employees, clients or investors. And as an internally managed BDC, our employees and management own the same shares as our investors. Shareholders own a pool of assets as well as a management company, which maximizes returns and maintain strong alignment of interest with our shareholders.
Our commitment to expanding the platform is highlighted by our investments in strategic growth initiatives across the platform. In the first quarter, Trinity solidified its position as a diversified lender by further growing our 4 distinct business verticals, equipment financing, life sciences, warehouse lending and tech lending, each with their originations, their own originations, credit and portfolio management teams.
Our exceptional relationships with portfolio companies and industry partners have also been pivotal in achieving our strong performance. In the first quarter, an aggregate of $1.2 billion of equity was raised by 21 of our portfolio companies, demonstrating that our portfolio companies are able to secure the funding may seek.
We ended the quarter with a strong investment pipeline, including $405 million of unfunded commitments, leaving us well positioned for continued growth in 2024. As a reminder, all of Trinity’s unfunded commitments are subject to ongoing diligence and approval by our investment committee.
Turning to the macro environment. Activity is picking up in the bench capital and private equity worlds. Exceptional levels of dry powder remain in BDCs and nonbank lenders continue to be vehicles of choice for sponsor-backed companies. With this high demand for capital, we maintain our selective approach with new opportunities.
As a direct lender, we own our pipeline and have originators strategically located in major markets around the country to further build deep relationships with sponsors, banks and operators. We pride ourselves on 3 core principles here at Trinity, exhibiting uncommon care for our employees and our partners. Serving our clients by being partners rather than just money and providing outsized returns for our shareholders.
We’re bullish about the future. We plan to continue to invest in our teams and systems, diversifying our investments to mold a best-in-class direct lending platform. We’re just getting started. We look forward to extending this momentum in the quarters to come as we continue to grow and maximize value for our shareholders.
And with that, I’ll turn the call over to Michael Testa, our CFO, to discuss financial results in more detail. Mike?
Michael Testa
Thank you, Kyle.
In Q1, we achieved record total investment income of $50.5 million, a 21.5% increase over the same period in 2023. Our effective yield on the portfolio for Q1 was once again strong at 15.8%. Our core yield, which excludes fee and prepayment income was 18.3%, mostly consistent with the prior quarter.
Net investment income for the first quarter was $25.2 million or $0.54 per basic share, an increase of 30% compared to $19.3 million or $0.55 per basic share in the same period of the prior year. Our net investment income represents 106% coverage of our quarterly distribution, and our undistributed income is approximately $55 million or $1.33 per share.
Our platform continues to generate strong returns for our shareholders with ROAE based on net investment income over average equity 16.1%, and ROAA based on net investment income over average assets of 7.5%. As of March 31, 2024, our NAV was $626 million, which increased from $611 million as of December 31, 2023.
Our corresponding NAV per share was $12.88 per share at the end of Q1, which decreased from $13.19 per share as of December 31, 2023. The decrease in NAV per share this quarter was primarily attributable to issuance of restricted stock award that enable us to continue to grow our platform as well as net unrealized depreciation that Gerry will discuss in more detail later in the call.
Under our ATM program in Q1, we raised approximately $24.3 million in proceeds, all at an accretive premium to NAV to fund our ongoing portfolio growth. As of March 31, 2024, we had total liquidity of $172 million, comprised of $160 million of undrawn capacity under our credit facility and $12 million in unrestricted cash and cash flow.
We continue to realize the benefits of our co-investment joint venture, which in Q1 provided $1.3 million or $0.03 per share of interest, dividend and fee income to the BDC. During the quarter, the joint venture also expanded its revolving credit facility. And as of March 31, 2024, have more than $200 million of assets under management. This off-balance sheet vehicle provides incremental capital for growth and accretive returns to our shareholders.
At the end of the quarter, we raised $115 million of unsecured notes that mature in 2029, further enhancing our balance sheet and liquidity position and extending our maturity ladder. We believe our current debt funding mix, which is currently 74% unsecured debt, is appropriate, and we remain consistent with managing the right side of the balance sheet.
We intend to repay $30 million over $225 million in May. Our weighted average cost of debt was in line with prior quarter at 7.4%, and we continue to benefit from low fixed rate debt having access to unsecured market during a period of lower interest rate.
Our net leverage ratio, which represents principal debt outstanding less cash on hand, was 1.16x as of March 31, both our strong liquidity position and the fact they were operating within our targeted leverage range provides Trinity with the flexibility to manage a strong pipeline and be opportunistic in the marketplace.
I’ll now turn the call over to our COO, Gerry Harder, to discuss our portfolio performance and platform in more detail. Gerry?
Gerry Harder
Thank you, Michael.
At the end of Q1, on a cost basis, our total portfolio consisted of 74.3% secured loans, 19.7% equipment financing, 3.7% equity and 2.3% warrants. The composition of our portfolio remained consistent with prior quarters with diversification across investment type, transaction size, industry and geography. Our portfolio is segmented across 21 industry categories with our largest industry exposure, finance and insurance, representing 13.3% of the portfolio at cost.
Growth in this industry sector was driven by investments in three new portfolio companies in the quarter. Our next largest industry concentrations or green technology and space technology, representing 10.5% and 8.7% of the portfolio at cost, respectively.
Life sciences related industries, including health care tech, medical devices, biotechnology and diagnostics and tools collectively made up 18.2% of our total portfolio on a cost basis. As of the end of Q1, our largest debt financing is to Rocket Lab, USA, Inc. and represents 3.9% of our debt portfolio and 3.6% of our total portfolio on a cost basis. Our 10 largest debt investments collectively represent 25.8% of our total portfolio on a cost basis.
Moving on to credit. The credit quality of our portfolio companies remained stable with approximately 97.6% of our portfolio performing on a fair value basis. Our average internal credit rating for the first quarter stood at 2.7% based on our 1:5 rating system with 5 indicating very strong performance. This rating is in line with our average credit rating in each of the last 4 quarters and reinforces Trinity’s track record of low loss rates.
The total number of credits in our lowest two credit tiers did not change from Q4 to Q1, but was reduced on both a cost and a fair value basis. Quarter-over-quarter, we remain consistent with 5 portfolio companies on nonaccrual. Core Scientific was removed from nonaccrual in Q1 following its emergence from bankruptcy and our election to receive shares of its common stock in lieu of our debt investment. However, one additional credit was added to nonaccrual status.
As Michael mentioned earlier in his prepared remarks, our decrease in net asset value per share in Q1 was a function of expenses related to growth of the platform as well as unrealized depreciation in the portfolio. Out of approximately $12 million in unrealized depreciation within the portfolio, approximately $9 million is due to the single credit mentioned above.
Additionally, approximately $5 million of unrealized depreciation was due to a decrease in the publicly traded share price for our common shareholdings in Core Scientific. Outside of these 2 positions, the fair value of the balance of our debt and equity portfolio was slightly up for the quarter.
At the end of Q1, our nonaccrual credits had a total fair value of approximately $30.4 million, representing 2.4% of the total debt portfolio. At quarter end, 75% of our total principal outstanding was backed by first position leans on enterprise equipment or both. The weighted average loan-to-value of our entire portfolio sits at just under 19%, demonstrating that our portfolio companies are generally not over levered and are in a healthy position to service the debt, even if our loan is not in first position.
In closing, I’d like to remind our investors that our team has made up of dozens of veteran investment professionals who are solely focused on portfolio management and asset quality. They continue to take a vigilant approach to the overall health of our portfolio companies. And when necessary, work tirelessly to find resolutions that benefit both the portfolio company and Trinity shareholders.
At this time, we’d like to open the question — open the line for questions. Operator?
Question-and-Answer Session
Operator
[Operator Instructions] We’ll take our first question from Bryce Rowe with B. Riley.
Bryce Rowe
Maybe I wanted to start with just from the comments you made about activity picking up. You’ve seen your unfunded levels kind of go up as well as we’ve progressed here over the last, I don’t know, a couple of years or so. Is that a function of just again, the market picking up? Or the — I guess, the broader capabilities that you’ve been working on there at Trinity over the last year or so?
Kyle Brown
Yes. So I just got back last night from an off-site with our sales team in our San Diego office, 25 professionals covering 4 different business verticals, life science, equipment financing, tech lending, warehouse lending. And these are people that we’ve recruited over multiple years. The seasoned veterans 20-plus years of experience, most of them, they’re fired up. I wouldn’t want to be competing against them. They’re out there building the business, very excited, tons of opportunities.
And — yes. It is exactly what you said. It’s a lot of great people who are very good at what they do. And then it also speaks to the diversification of our business. We have continued to grow above and beyond just doing technology venture loans. We have multiple businesses, multiple products, and we are seeing growth in those different business verticals. So yes, it’s very active right now. This is the most robust pipeline we’ve ever had, and it’s looking really exciting going forward.
Bryce Rowe
And Kyle, if you think about — against that backdrop, there’s a lot of planning that needs to go on the kind of the right side of the balance sheet. You’ve taken some steps with equity being raised, you’ve got the JVs and RIA that I would assume is kind of getting up to speed and you’ve raised some debt here.
How do you think about kind of managing the right side of the balance sheet, especially with interest rates being a little bit higher? And I guess that markets are a bit open at this point. Are you going to try to take advantage and lock in some debt financing for the right side of the balance sheet?
Kyle Brown
Right. So we’re going to be opportunistic, and we’re going to raise debt and equity as it makes sense to the most fan. I think that you saw that with the bond deal we did recently — you see that with the ATM. It’s a really efficient way to raise capital. But we start each one of those conversations with is this growth going to be accretive for investors. Again, we have to — it should not be a mystery on what we’re trying to do at this point.
We are 17 quarters now, a public reporting company of steady and growing returns for shareholders, increasing the dividend 13 straight times. I don’t need to predict the future for you here. We have laid out what we’re doing and where we’re going and how we’re doing it. So we’re not raising capital for the stake of AUM growth.
That has not — it makes zero sense as an internally managed BDC. I don’t want to see my shares diluted, which is the same shares that your investors have. It makes no sense. So we’re going to build the balance sheet in a way that’s accretive and good for investors. We’re going to raise equity opportunistically. We’re going to raise debt opportunistically.
If our team has the ability to grow and build and continue to take market share, then we’re going to deploy that capital. And to the extent it’s — it makes sense to raise equity or debt, and it’s good, and we can put it to work and raise returns for investors. We’re going to keep doing that.
Operator
We’ll go next to Kyle Joseph with Jefferies.
Kyle Joseph
Just given where we are in the year, if we’re thinking back to where we were last year at this point and given your expertise in venture. But just give us kind of an update on the competitive environment now that we’re kind of year out from, call it, the regional bank fall out?
Kyle Brown
So I think there’s been less competition. If you’re talking about our venture business, it’s been less competition. You’ve seen returns. You’ve seen equity dollars start to flow from venture firms. I think you’re back to 2019 levels, which were at the time, historic levels, right, from a deployment standpoint. We are top of funnel, seeing more deal flow. We’ve tied up — we’ve actually seen the amount of deals from a percentage standpoint, top of funnel, the funding go down. It’s just a testament to our underwriting, making sure we’re funding the right deals.
We’ve seen the runway of those venture-backed companies continue to increase in the barrier and threshold for us to fund companies. We’ve gotten tighter there on making sure they have the equity support. But the investments that we’re making right now. These are companies that are growing in the face of headwinds. These are great investments at much lower valuations than they saw a couple of years ago. So we are seeing growth.
We are seeing some competition, I’d say, a little bit less competition, particularly from the banks. I think they’re pulling back a little bit, creating more opportunities for us. Swim upstream and even have some higher quality credits that might have been able to get bank financing before that are now open to the idea of kind of alternative bank financing, like Trinity.
Kyle Joseph
Got it. Very helpful. And then just shifting to credit all the metrics you highlighted seems like things are relatively stable companies have adapted to the rate environment. But give us a sense for kind of the growth rates you guys track and where those are trending versus, I don’t know, cost 6 months ago versus a year ago?
Kyle Brown
I think you’re talking about our core yields that were you talking about?
Kyle Joseph
No, I apologize. I was talking about broadly. You guys mentioned it’s stable but just want to get a sense for growth rates at that portfolio companies and how that compares to, call it, 6 months ago or a year ago?
Kyle Brown
Okay. Sorry, Kyle. Yes. Ron, do you want to touch on that?
Ron Kundich
Sure. Kyle, Ron Kundich here. As Kyle mentioned in his answer just now, I mean, the top of the funnel is very active. We’re seeing companies of all shapes and sizes. We’re focused on the companies that are growing growth stage companies. The companies that we’re lending to are growing at a — still at a relatively healthy clip. We’re not focused on flat to non-growth companies. So broadly speaking, the industry is mixed, but we’re focused on the growth stage.
Kyle Brown
Yes. The majority of our portfolio is now made up of investments made post that banking volatility. So you’re looking at companies that have figured out a way to grow and perform wins, and those are the investments in the companies we’re putting capital into. So things haven’t changed really for a lot of those investments since we made them.
Operator
We’ll go next to Vilas Abraham with UBS.
Vilas Abraham
Just in terms of the pipeline you mentioned, I was just wondering on mix. We look at Q1, it looks like about $118 million venture loans, $50 million equipment finance. Is that the kind of mix we should think about throughout this year? Or is it going to be kind of more opportunistic quarter-by-quarter?
Kyle Brown
So I’ll let Gerry give some more specifics, but I’ll — maybe I’ll just start high level. We’ve got an AOP that we are sticking to. We plan this out well in advance. We’re very strategic about each of those verticals, how much they’re going to deploy, annually, quarterly, what that pipeline needs to look like to achieve it. We feel like we’re on plan for the year.
And so it’s not just opportunistic. Now it’s we — each of these business verticals has their own contribution margin they’re focused on. I mean they know exactly what they need to deploy. They know exactly what they can spend. We’re not just winging it. We’re not just being opportunistic. Do you want to add to that, Gerry?
Gerry Harder
Yes. I mean, at a high level, we’re looking at somewhere between 40% to 45% of the deployment across the year ought to be in the tech lending and then 25% to 30% in life sciences and equipment, and maybe 10% or so in asset-based or warehouse. So this is on the annual level. It is blocky, right?
And so in a given quarter, you can get the wrong signal of percentages based on what we happen to close just within that quarter versus what pushes. But at a high level annually, you will see tech lending be our largest deployments, but life sciences and equipment also posting very strong.
Vilas Abraham
Okay. And then on the venture lending side, do you have a line of sight into healthy companies that may or may not — may not have come to the market over the last couple of years that you may be eyeing later on in this year as potential opportunities? Like is there anything there that kind of gives you a sense of optimism as to the quality of investment on that side of your deployment that you’ll be able to do?
Kyle Brown
Do you mean for potential investments?
Vilas Abraham
Potential investments, yes.
Kyle Brown
Yes. Well, I think particularly because we do a lot — on the venture debt side, we’re doing mostly later-stage companies, right? And so I think what you’re seeing there is a lot of companies who have remained private hoping for that IPO or exit type opportunity. They’re seeing that window start to open up. We’re having different conversations with companies internally, externally about financings kind of leading up to it. So I think that what you’re seeing is a new exit opportunity, which is creating new investment opportunities kind of leading towards that, which is new for 2024.
Vilas Abraham
Okay. Makes sense. And just one more on credit in your prepared remarks, you mentioned a new nonaccrual, I think you were alluding to next car. I was just wondering if there was any kind of commentary you could give there on what you’re seeing, given it seems like the market you have there about 50% of cost is a bit more cautious than one of your peers that’s looking at the same company. So is there any color you can provide there on how to think about that?
Gerry Harder
Yes. I mean the — we try to be very rigorous and process-oriented in our valuation methodology, right? And so we repeat this quarter-on-quarter. We follow a rigorous methodology. We use third-party collaboration. We happen to have third-party collaboration of our mark to next car just this quarter. And for a scenario like this, we’re very often going to do profitability weighted outcome analysis.
And we’re going to lean heavily on the experience of our portfolio management staff in doing that. And I can tell you that account is managed by our most senior portfolio manager with 25, 30 years’ experience in the banking industry. So he’s going to call it as he sees it. We’re getting third-party collaboration, and we’re going to be very consistent in following that process quarter-on-quarter.
Operator
[Operator Instructions] We’ll go next to Paul Johnson with KBW.
Paul Johnson
In terms of like when you guys are making loans on the platform, whether it be from any of the verticals that you have warehousing, equipment leasing. During the quarter, whether it’s intra-quarter or going over reporting periods. I mean, how much — do you have any kind of limit or I guess, any sort of limit on what sort of hold sizes you’re willing to take for any given loan in the BDC? Or like how much credit I guess you’re essentially kind of willing to extend to any single borrower?
Kyle Brown
So I think historically, we’ve tried to stay below that 4% of total assets. I think average, we’re significantly lower than that. But that’s kind of the — the threshold. Those, we don’t want any one deal to cause too much volatility for Trinity. And so we’re going to continue to have a really very granular portfolio diversified across the verticals and then diversified within the verticals with no one company having the ability to take us down or — you can add to that Gerry.
Gerry Harder
Yes. I’d further add, as we look to grow and expand the platform at Trinity, we’re going to do this very thoughtfully, but by providing additional value products to our growth stage companies and not by increasing our hold sizes, right? That’s not the approach we intend to take. So Kyle mentioned that 4% line. I think over time, you can see that drop, right, as our platform continues to expand. And that’s at the BDC level when we talk about that 4%, not at the total aggregated holdings across the balance sheet.
Paul Johnson
Got it. Appreciate that. And then as you guys continue to grow, you’re building out the platform with the JV and the RIA eventually. You’re building up underwriting teams, distinct underwriting teams under each of these verticals of the business. Obviously, headcount has been growing pretty fast since you guys have come into the space. And I was just curious, is there a point kind of where headcount or maybe AUM gets to a certain point where you think you’ve kind of fully built out the business and maybe you start to kind of build some scale from there?
Kyle Brown
So I mean, I think you ended with what we’re trying to do, which is build and scale. The internally managed BDC has not reached efficiencies, right? We are going to continue to get to scale. And as we do so, you’ll start seeing some efficiencies in some of our cost ratios, expense ratios. We have a long ways to go before we hit a ceiling on what we can deliver for shareholders just at the internally managed BDC. That does not include our off-balance sheet activity.
And again, I said it before, it should not be a misread at this point about how we’re — what we’re doing and how we’re going to do it. We now own an RIA. We now manage money off balance sheet. We have been for multiple quarters now generating fee income, and we are intending to generate more fee income off balance sheet above and beyond the interest we can generate off our loans and equipment financings, et cetera. And so at what scale can we get this to? The number significantly past where we are right now.
We’re going to see team what is capable of. We’re not going to grow for the sake of growth. We have a 5-year plan that we are very honed in on that we think is very achievable growth in a way that’s accretive and good for investors. And then further diversify. And not just from a return standpoint. I think that, that model I just talked about with generating fee income above beyond our loans.
That’s great for generating new income. But we also have the ability to grow and diversify the portfolio across multiple verticals, which creates further diversification of the portfolio, which I think is a way to mitigate risk, right? And so I don’t — that’s not a specific answer with some numbers for you, but we have our eye on the ball. And as a public company, we are going — we’re going to do it in a way that’s really good and accretive for investors.
Operator
We’ll go next to Casey Alexander with Compass Point.
Casey Alexander
Just wondering any update on the launch and funding of the RIA?
Kyle Brown
So we’ve been talking about deploying capital in Q2, and that is still the target, Casey.
Operator
We’ll go now to Finian O’Shea with Wells Fargo.
Finian O’Shea
Question as you — there’s a lot of discussion of scaling and growth to new heights for the business. Can you talk about your expected loss rate on the portfolio, understanding your originating or lending out at 10% over SOFR or whatnot? But earnings net income have been consistently pretty well below NII. So seeing what you have updated thoughts there in today’s market? And how we should think of the portfolio loss rate going forward?
Kyle Brown
Okay. Well, I think — and Mike, maybe you can pull up the exact loss rate it’s been very consistent for 16 years. 4 of those, of course, have been as a publicly reporting company 32 basis points. I mean the loss rate in our world is…
Michael Testa
26 basis points.
Kyle Brown
26 basis points. Okay. Sorry. It’s less than what I thought. We have consistently been able to keep that loss rate low. The upside that we get in our investments via warrants and those realized gains, they offset those losses and deliver a little upside for investors. We’ve seen that play out for 16 years. We intend to just keep doing what we’ve been doing. So I do not see for any reason why that loss rate should increase.
Our underwriting and our thesis on how we invest has not evolved or changed. And so I think that should stay steady, Fin. And over time, and particularly with this season right now with valuations dramatically increasing, that creates some really interesting upside potential on our warrants. And so I think there’s some upside that we’re starting to see and hopefully baking into the long-term plan here with the investments we’re making today.
Operator
We’ll go next to Christopher Nolan with Landenburg Thalmann.
Christopher Nolan
I appreciate the comments on mitigating risks and so forth. I’d like to turn that around a little bit. And I’d like to get a better understanding how you’re mitigating risk in your funding base, particularly your debt funding? You got a number of maturities in 2025 to 2026 of a credit facility accounts for 26% of total borrowings for my calculation. With a single bank, which — but my estimate is roughly 70% of its loans in commercial-related investments. And that’s a risk profile for the company, which no one is talking about like let’s get your thoughts on that?
Michael Testa
Michael here. I just wanted to talk a bit about why we went into the unsecured market. I think in the past quarter, we were pleased with the execution on that deal and that size. And that again, it was really a consistent approach of laddering out our maturities. We’re going to continue to tap the market, whether it’s secured or unsecured. And in our revolver with KeyBanc, we have 10 other banks in there.
So we’re happy having that diversified across that. Also, the liquidity through a joint venture and we upsized the facility across two additional banks in the JV facility. So we look at that as a risk mitigant to diversify our funding sources. And then long-term, vehicles under the RIA adding to that flexibility of multiple funding sources, debt and equity.
Christopher Nolan
Great. Is the plan to replace these maturing notes with secured borrowings mature?
Michael Testa
Sorry, can you repeat the question?
Christopher Nolan
Yes. Are you going to use more secured funding as these unsecured notes mature?
Michael Testa
Yes, that’s definitely an opportunity for us. We’ve been in discussions. We’ve seen a lot of our peers use a CLO structure for securitizing and increasing our leverage. I think we have room with our current leverage range that we’re operating in. But again, I think diversifying our lending — our borrowing sources is important. And I think having the ability across 10 different banks currently in our syndicate and in discussions expanding that through the current revolver or additional revolvers in the future.
Kyle Brown
The other key point there, I think, Chris, you had mentioned before about having exposure to one bank. We’ve actually — we have 10 banks in that syndicate. It’s growing. We’ve got close relationships with all of those banks and that was strategic. We want that to be diversified across multiple banks.
Operator
And it appears that we have no additional questions at this time.
Kyle Brown
Okay. Well, listen, we’re really proud of our first quarter results, and we look forward to updating you on our next call in August. We look — like to just thank everybody for participating in the call today. Appreciate your interest and investment in Trinity Capital. Have a great rest of your day.
