Good morning, and welcome to the OFS Capital Corporation First Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Steve Altebrando. Please go ahead.

Good morning, everyone, and thank you for joining us. Also on the call today are Bilal Rashid, our Chairman and Chief Executive Officer; and Jeff Cerny, the company’s Chief Financial Officer and Treasurer. Before we begin, please note that the statements made on this call and webcast may constitute forward-looking statements as defined under applicable securities laws. Such statements reflect various assumptions, expectations and opinions by OFS Capital management concerning anticipated results are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from such statements. The uncertainties and other factors are in some way beyond management’s control, including the risk factors described from time to time in our filings with the SEC. Although, we believe these assumptions are reasonable, any of those assumptions could prove inaccurate, and as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. OFS Capital undertakes no duty to update any forward-looking statements made herein, and all forward-looking statements speak only as of the date of this call. With that, I’ll turn the call over to Chairman and Chief Executive Officer, Bilal Rashid.

Thank you, Steve. Good morning. Since our last call just two months ago, we are pleased to report another increase in our quarterly net investment income. We continue to see the benefits of our balance sheet positioning in this rising interest rate environment with the vast majority of our loan portfolio being floating rate and the majority of our debt being fixed rate. Earlier this morning, we announced a quarterly distribution of $0.33 per share. Our net investment income increased to $0.37 per share in the first quarter up from $0.35 per share in the fourth quarter of last year. This increase was largely due to a dividend payment from our investment in Pfanstiehl. Such payments are at the discretion of the company and are not expected to be received on a recurring quarterly basis. Our net asset value remained relatively flat decreasing by less than 0.5% to $13.42 per share. This slight decline from last quarter was primarily due to unrealized depreciation on investments. We believe that the overall credit quality of our portfolio companies remain solid. As you would expect, we maintain regular contact with our portfolio companies and we continue to believe that the cost of borrowing remains manageable in this slow growth and rising interest rate environment. As part of our longstanding investment discipline, we limit investing in highly cyclical industries. Our well diversified portfolio is defensively positioned with our largest sector exposures and manufacturing, healthcare, business services, and technology. Although M&A activity remains subdued, we expected to pick up in the second half of the year. In the meantime, we remain deliberate in putting capital to work. Our financing continues to provide us with operational flexibility. At the end of the first quarter, approximately 85% of our outstanding debt matures in 2026 or later and…

Thanks, Bilal. Good morning, everyone. As Bilal mentioned, we posted net investment income of $0.37 per share for the quarter. This compares favorably to our prior quarter’s net investment income of $0.35 per share. We also announced a quarterly distribution of $0.33 per share. Comparing net investment income quarter-over-quarter, we are up almost 6% with stable interest income and higher dividend income. This increase was largely due to a $546,000 dividend payment from our investment in Pfanstiehl. As Bilal noted, such payments are at the discretion of the company and are not expected to be received on a recurring quarterly basis. Our net asset value per share decreased by less than 0.5% to $13.42. Despite the modest decline, our March 31 net asset value remains approximately 8% above its pre-pandemic level at the end of 2019. The decline this quarter was primarily due to some unrealized depreciation on our investment portfolio. Credit trends in our portfolio remained relatively stable. At fair value, we currently have just 2.3% of our total investments on non-accrual status. Turning to the income statement, total investment income was up 2% to $14.3 million. As I previously mentioned, this was primarily due to an increase in dividend income. Total expenses of $9.3 million were up slightly primarily due to an increase in the variable interest rate on our BNP credit facility. As I mentioned earlier, net investment income was $0.37 per share for the first quarter. This is a meaningful increase compared to last quarter’s net investment income of $0.35 per share. The increase was largely related to a dividend payment from Pfanstiehl, we continue to believe that net investment income will remain solid given the vast majority of our loan portfolios floating rate while 68% of our liabilities are fixed rate, which are at rates…

Thank you, Jeff. In closing, we are proud to have continued to grow net investment income once again this quarter. Our balance sheet positioning has served us well, but the vast majority of our known portfolio being floating rate and 68% of our outstanding debt being fixed rate. We believe we will continue to benefit from our focus on capital preservation with nearly 100% of our loan portfolio at fair value being senior secured and we remain confident in the overall quality and fundamentals of our portfolio. Our financing is primarily long-term with approximately 85% of our outstanding debt maturing in 2026 and beyond. We will continue to rely upon our longstanding experience and investment discipline to guide us through this period of economic uncertainty. Our track record illustrates that since the beginning of 2011, OFS has invested more than $1.9 billion with accumulative net realized loss of just 1.9% over the last 12 years while generating attractive risk adjusted returns on our portfolio. Lastly, we believe our business is especially equipped to navigate this market successfully due to the size, experience, and reputation of our advisor. With a $4.1 billion corporate credit platform affiliated with a more than $30 billion asset management group, our advisor has broad expertise including longstanding banking and capital markets relationships. Our corporate credit platform has gone through multiple credit cycles over the last 25-plus years. Our advisor is also strongly aligned with shareholders as it maintains a 22% ownership stake in the BDC. With that, operator, please open up the call for questions.

Thank you. We will now begin our question-and-answer session. [Operator Instructions] Ladies and gentlemen, as I’m showing no questions at this time. This concludes our question-and-answer session and thus concludes today’s call. We thank you for joining OFS Capital Corporation’s first quarter 2023 earnings call and at this time you may now disconnect. Take care.