Michael Sarner: Sure. So a portion of the assets that are being assigned to each of our balance sheets will come over at cost and fair value, the amount of losses or gains that have been incurred in the portfolio of companies that have already exited that will just get reclassified from unrealized equity to retained earnings.
Robert Dodd: Got it. Thank you. And then — sorry, go ahead.
Michael Sarner: No, go ahead, I apologize.
Robert Dodd: Yes. The last one is kind on housekeeping, the dividend income was quite like. It looks like there was maybe a $2 million non-recurring maybe to do with one of the portfolio company sales, or is it going to be anything. Can you give us any color — I mean, was it a one-time kind of $2 million or has something changed in one of the performance — you get the highly performing portfolio companies where it’s going to start paying your consistent dividend, or was that one-off?
Michael Sarner: No. So yes. So this quarter, we had one portfolio company. It’s probably one of our most successful portfolio companies that had essentially levered less than one time to the dividend recap. We have an equity position with significant appreciation on the company. And so we participated in that dividend to the tune of $2.3 million, and that’s a one-time occurrence.
Robert Dodd: Got it. Thank you.
Operator: Thank you. We’ll standby for our next question. Our next question comes from the line of Kyle Joseph with Jefferies. Your line is open.
Kyle Joseph: Hey, good morning guys. Thanks for taking my questions. Most have been answered, but just — I know the Q is coming out, but just do you mind running through any inflows or outflows to non-accrual. I know you mentioned there was a restructuring there and on a fair value basis, I think it ticked up 20 basis points or whatever, but just help us out in terms of the inflows and outflows.
Michael Sarner: Yeah. So for the non-accruals, we had one portfolio company that came-off, and I think we noted earlier, the portfolio company that was restructured that had the realized loss, that portion came off. And then we had a term loan A, another portfolio company that — where the B is already on non-accrual. I think Bowen mentioned it earlier. It went on non-accrual. So, I think it was $15 million at a cost basis coming off and $12 million coming on. So, a slight reduction on the cost basis and then the fair value was slightly higher.
Kyle Joseph: Got it. And then as you’re thinking about the dividend going forward, obviously, the forward curve has adjusted pretty dramatically since the last time we spoke. But — and I know you guys are have strong coverage, especially over the run rate dividend, but how you’re thinking about the dividend from here?
Michael Sarner: Yeah. So obviously, we bifurcated between the regular dividend and the supplemental dividend. So on the regular dividend, obviously, we had $0.72 this quarter, which we would tell you the run rate absent that dividend, cash dividend was really like $0.69. So we compare that $0.69 to $0.57 we pay. So it’s still significant coverage there. You noted we’re still kind of in a wait-and-see approach to see what the Fed does, to see the pace of rate reductions. We feel comfortable that, if the rates come down to a neutral — a neutral spot in the next 18 months to 24 months, we would expect that our NII would trough in the low 60s, so there’s still plenty of room for growth on the regular dividend. And having said that, we will wait to just see how things play out.
On the supplemental dividend, we continue to bank UTI by over-earning our dividend. We have $0.90 of unrealized depreciation on the balance sheet that we would hope to exit a portion of either something between $0.24 or beyond. And so that, coupled with the $0.52 of UTI we have, currently, we feel very comfortable that this program will continue into the future at $0.06 today that may vacillate up or down, but we feel comfortable about that program going forward.
Kyle Joseph: Got it. Helpful. And then last one for me. We talked about credit. We talked about the ratings. But just in terms of classified with revenue or EBITDA growth and any sort of changes in, since we last spoke?
Bowen Diehl: Yeah. I mean, as I noted in our remarks, we had across the portfolio, we had revenue growth quarter-over-quarter at 3% and EBITDA growth quarter-over-quarter of 7%. So the portfolios feel pretty good about some of the portfolio’s general performance for sure.
Kyle Joseph: Got it. That’s for me. Thanks for answering my questions.
Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Bryce Rowe with B. Riley. Your line is open.
Bryce Rowe: Hi. Thanks. Good morning. Maybe, Bowen, wanted to start on some of the exit activity. You’ve got, I guess, a couple of equity investment stubs that remain after those exits. What’s the plan there? Is the plan to stay in those equity investments, or are those potential exit opportunities here over the near term?
Bowen Diehl: Yeah. Thanks for the question. I mean, as a general matter, obviously, there are companies, the vast majority of them are owned by private equity firms. And so the obviously sell the company, then we don’t have an equity stuff. So the equity stuffs are ones that we’ve been refinanced out of. And so just — it’s pretty much the rule that we will ride the liquidity curve, if you will, with the private equity firm. So private equity firms, as we all know, don’t really get paid their carry until they exit. And so they’re looking to maximize value and then looking to exit when it’s prudent to exit and we kind of ride that train with them. So long-winded answer to, yes. I mean, those are equity stubs or potential future exits.
