Trinity Capital Inc (TRIN) 2021 Q4 法說會逐字稿

Good afternoon. My name is Leo and I will be your conference operator today. At this time, I'd like to welcome everyone to Trinity Capital's Fourth Quarter and Full-Year 2021 Earnings Conference Call. Our host for today's call are Steve Brown, Chairman and Chief Executive Officer; Kyle Brown, President and Chief Investment Officer; David Lund, Chief Financial Officer and Sarah Stanton, General Counsel; Gerry Harder, Chief Credit Officer; Michael Testa, Chief Accounting Officer and Ron Kundich, Senior Managing Director are also present.

Today's call is being recorded and will be available for replay beginning at 8:00 p.m. Eastern Time. A replay of the webcast is available on Trinity Capital's Investor Relations website. It is now my pleasure to turn the call over to Sarah Stanton. Please go ahead.

Thank you, Leo and welcome everyone to Trinity Capital's earnings conference call for the fourth quarter and full year of 2021. Trinity's fourth quarter and full-year 2021 financial results were released today after market close and can be accessed from Trinity's Investor Relations website at ir.trinitycap.com. A replay of the call is available at Trinity's web page 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 fact 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, March 3rd, 2022. Therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading.

With that, allow me to introduce Trinity Capital's Chairman and CEO, Steve Brown.

Thank you, Sarah and thank you to everyone joining us today. I want to take just a moment at the top of this call and mention that we have been watching as the tragic events in Eastern Europe have unfolded and our thoughts are with those people who have been affected by these events. While we continue to monitor the events, we're not aware of any of our portfolio companies that are currently affected by this situation.

Now turning to Trinity's exciting performance this past year. 2021 was a transformational year for Trinity Capital. Since our IPO early in the year, we have driven exceptional portfolio growth and generated record new commitments. In the fourth quarter, we built upon our already strong performance, as we continue to execute successfully against our business strategy, doing what we said we would do and delivering on key financial and operating metrics.

Trinity continues to benefit from a favorable VC operating environment, as we are seeing a large volume of strong credit opportunities. The deal flow in the growth market has been very active, which has fueled originations and record net portfolio growth for Trinity since entering the public markets. The venture capital ecosystem was exceptional this past year with record funding and strong fundraising activity.

Our business model and strategy at Trinity ensures that we are built for any economic cycle, the steps we have taken in 2021 to optimize our capital structure, while continuing our rigorous and conservative underwriting process will ensure that we have the right portfolio companies in our book to weather any potential down cycle.

We continue to build an industry-leading unique venture lending and equipment finance platform that sets us apart and meets the evolving needs of our portfolio companies and prospective partners. Our extensive network in both the VC and equipment finance industry, combined with our technology and operational expertise solidifies our leading market position. While the team will go into greater detail on the quarter and year-end results, I wanted to share just a few of the key performance highlights.

Our growing portfolio contributed to the strong operating performance in Q4, allowing us to declare a dividend of $0.36 per share, an increase of 9.1% above the prior quarter and in line with our goal of increasing our dividend as we grow our platform. We have now increased our dividend for 4 straight quarters.

We delivered a record year in both commitments and deployments, nearly doubling our 2020 deployments with just under $560 million funded for the year. We also grew the portfolio net of payoffs each quarter with our highest net portfolio gain coming in Q4 at over $150 million. Q4 net investment income was $10.6 million or $0.39 per share, exceeding our declared dividend by $0.03 per share.

Our credit quality in the portfolio remained strong with 98.3% of our net investments at cost performing. A major goal for 2021 was to strengthen our balance sheet and increase our funding capabilities to manage the growth that we are currently experiencing, while also positioning the company for continued growth in 2022.

To that end, we made several moves in Q4, including issuing $75 million of 4.25% notes due in December 2026, adding our KeyBank credit facility and initiating an ATM program. Collectively, these moves will drive our cost of capital down, while increasing our capacity to fuel our growth.

Additionally, we announced the appointment of 2 new members to our Board of Directors effective December 7. Both bring highly relevant experience and will be an immediate value in guiding Trinity as we execute on our strategic plan.

With regards to the RIA progress, as we have stated previously, in Q3 2021, we filed an application with the SEC for exemptive release to form a registered investment adviser. If approved, we believe the RIA will provide financial flexibility for synergistic investment opportunities and create additive earnings to our public internally managed BDC. We do not have a set time line and we'll continue working with the SEC on our application.

Trinity is off to a historic start in 2022. Last month, we announced the sale of our equity investments in Lucid Group and Matterport, where we booked over $50 million in realized gains. To put this number in perspective, our record financial results for 2021 produced $52 million in combined net investment income and net realized gains. These sales bolster our ability to scale our venture lending capacity in alignment with our long-term capital structure strategy.

These transactions have set the stage for a strong 2022 financially for Trinity and we are equally excited to be able to share this historic gain with our shareholders. As we said in February, our Board is evaluating our dividend distribution plan for 2022 and we plan to offer an update on that front later this month.

Before I hand the call over to Kyle, I would like to reiterate what a great year it has been for our business, our team and our portfolio companies. Trinity's unique business model and asset class have established Trinity as a leader in our market. The momentum we have generated will fuel our continued growth as a public company. And finally, most importantly, we pride ourselves on being a people and culture focused organization.

As a result, it is clear that Trinity is now a destination for top talent in the space and we will continue to add the best people in the industry as we scale the platform. We are excited to execute on our strategic objectives for this year and we will maintain a deliberate and disciplined approach to offering capital solutions to growth stage companies across our industry.

With that, I'll now turn the call over to Kyle Brown, our President and Chief Investment Officer, for some further thoughts on our progress and more detail on the market. Kyle?

Thanks, Steve, and good afternoon everyone. 2021 was an exceptional year in terms of growth and foundational in terms of the path we've laid in the quarters and years to come. I want to dig into some 2021 highlights, which include consecutive quarters of meaningful portfolio growth, enhancements to our operations through team expansion and fortifying our balance sheet through several strategic net raises and subsequent capital deployment, as well as establishing consistency and maximizing our returns to shareholders through our quarterly dividend.

Our impressive performance is largely attributable to our people here at Trinity and our credible team and their commitment to fostering and maintaining long-standing relationships in the VC space has been critical -- been a critical driver for our business. Investing in our team continues to be a priority as we make new hires, expanding our team and coverage across the country. Trinity now have boots on the ground in Austin, the Bay Area and Boston deepening our relationships in these regions. And as a result, opportunities have subsequently continued to grow, which is a leading indicator for future fundings.

Our outstanding results were highlighted by a record $757 million in new commitments for 2021, with $247.9 million in new commitments originated in Q4 alone. In 2021, we funded total gross investments of $558 million, an increase of 115% year-over-year. During the quarter, the company originated approximately $197.5 million in gross fundings, leading to net portfolio growth on a cost basis, $159.1 million and expanding our investment portfolio to $797 million on a cost basis.

At year-end, our portfolio had a fair value of $873.5 million, an increase of 76.9% year-over-year. The composition of our portfolio remained relatively consistent throughout 2021 with manufacturing once again, making up over one quarter of our total portfolio. Professional, scientific and technical services made up 18.5%, followed by information, making up 12.3%.

Diving deeper into our portfolio composition at fair value approximately 63.2% of our debt portfolio or $551.9 million is comprised of secured loans and 21.1% or $184.1 million is invested in equipment financing. Equipment financing remains a growth lever for us, demonstrated by our sequential increase in Q4, up 68.4% on a cost basis compared to Q3 of '21. The balance of our portfolio approximately $137.5 million is comprised of equity and warrants.

Structurally, gross deployments during the quarter were $197.5 million across 25 portfolio companies. This included $121 million in gross deployments across 11 new portfolio companies and $76.5 million in gross deployments to 14 existing portfolio companies. Gross deployments were partially offset by $41.7 million in principal repayments, of which $24.6 million was from early repayments and $17.1 million was from normal amortization.

We received an additional $8.3 million in proceeds from the liquidation of several equity and warrant positions and we finished the year with a backlog of $243 million that provides us with visibility in the potential funding opportunities in 2022. Our listings continue to dominate the VC exit market and some of our portfolio companies took advantage of this trend. In Q4 and subsequent to quarter end, one portfolio completed a traditional IPO and 4 companies entered into definitive agreements to go public via SPAC.

On November 10, Presto Inc. announced a planned business combination with Ventoux CCM Acquisition Corp. On November 11, BackBlaze, Inc. completed its initial public offering and began trading its common stock under the NASDAQ -- under the stock symbol BLZE. On December 13, Footprint International Holding, Inc. announced a planned business accommodation with Gores Holding [VIII]. On February 3, subsequent to the end of the quarter, GreenLight Biosciences, Inc. announced the completion of its de-SPAC merger with Environmental Impact Acquisition Corp. and began trading on the NASDAQ under the stock symbol GRNA.

Finally, on March 2, subsequent to the end of the quarter, Rigetti & Co. announced the completion of its de-SPAC merger with Supernova Partners Acquisition Company II and began trading on the NASDAQ under the stock symbol RGTI. In February, we exited our positions in Lucid and Matterport. These positions represented a combined investment at a cost of approximately $9 million. The aggregate net proceeds from these sales were approximately $59.8 million. We are thrilled with this result, as we feel it points to the overall quality of the companies we partner with.

Lucid and Matterport represent our ability to find and source investments that are great for our portfolio companies and great for us, while also showing potential upside that's possible through our warrant portfolio. This capital will fuel our long-term strategy and most importantly, enhance our ability to maximize returns to shareholders. Trinity thrives in a competitive and fast-paced environment, making the vibrant VC industry the perfect catalyst for our success.

2021 was a record-breaking year for the VC industry, a fundraising topping $100 billion in 2021 for the first time ever and over 17,000 deals closed. While I can't predict what the future will bring, I do know that our team will remain committed to doing what we do best, creating long-term value for our shareholders.

Now with that, I'll turn the call over to David Lund, our Chief Investment -- Chief Financial Officer to discuss our financial performance in more detail. David?

Thank you, Kyle and thank you to everyone for joining us today. As Steve and Kyle emphasized, we had a very busy and successful year at Trinity. Not only did we break records quarter-after-quarter in terms of commitments and fundings, but we've also taken the opportunity to strengthen our team, enhance our balance sheet and build a strong and resilient venture lending platform as we enter 2022.

I will take this opportunity to walk you through our financial results for the fourth quarter of 2021, as well as highlighting certain key operating results for the year. Kyle provided an overview with the portfolio earlier, but I wanted to briefly touch on our loan composition. Approximately 74% of our secured loan portfolio is in floating rate securities as compared to 37% at the end of 2020.

Over the course of 2021, we strategically repositioned our secured loan portfolio to focus on floating rate securities, leaving us prepared for the expected rise in interest rates in 2022. As a reminder, our equipment financings are generally structured as fixed rate loans.

Turning to our operating results. During Q4, we recorded total investment income of $23.6 million, an increase of $1.8 million or 8.3% over the $21.8 million of total investment income recorded during the third quarter. The increase was attributable to higher interest income of $2.5 million on a larger loan portfolio and $1 million of higher onetime fees, offset by approximately $1.7 million of lower accelerated income, as early payoffs were $49 million lower as compared to Q3.

Income from early repayments will fluctuate quarter-to-quarter based on the amount of principal repayments and the vintage of the loans repaid. Our effective yield on the portfolio for Q4 was 15.2%, which was a decrease from Q3 primarily driven by the lower accelerated income from early payoffs. While core yields, which includes -- excludes fees and accelerated income from early repayments, increased slightly to 13.2%.

Comparing 2021 with 2020, total investment income increased by 49.5% to $82.2 million in 2021, with $55 million in 2020. Our record year of originations help drive the significant increase, while we maintained a consistently high effective yield across the portfolio. We incurred a total of $6.2 million of interest expense and amortization of deferred financing cost on our various debt facilities as compared to $5.1 million in Q3.

The increase was attributed to the higher expense from our August 2026 notes, our December 2026 notes and higher borrowings under our credit facilities. For Q4, our weighted average cost of debt including interest and fee amortization was 6.7%, which was a 40 basis point decrease from 7.1% in the previous quarter. The decrease was primarily driven by the lower cost of our debt under our 4.375% August 2026 notes and 4.25% December 2026 notes.

Our SG&A expenses were approximately $6.8 million during Q4 as compared to approximately $5.6 million during Q3. The increase of approximately $1.2 million or 21.4% was primarily driven by a full quarter of expenses related to restricted stock grants and an excise tax expense. As a result of this operating activity, net investment income for the fourth quarter was $10.6 million or $0.39 basic share, as compared to $11.1 million or $0.42 per basic share in the preceding quarter.

For the full-year 2021, we recorded net investment income of $39 million, representing NII of $1.50 per basic share or $1.33 per share on a diluted basis. This compares with $23.4 million in NII for 2020 or NII of $1.29 per share on both a basic and diluted basis. We recorded net unrealized appreciation of $37.1 million attributed to $36.5 million of unrealized depreciation in our equity and warrant portfolio and $0.6 million in our debt portfolio.

We recognized net realized gains at $7.5 million in Q4, split between $2.7 million from our equity portfolio and $4.8 million from our warrant portfolio. We will continue to prudently realize gains from our investments in 2022 as demonstrated by the $50.8 million in net realized gains from the sale of our equity investments in Lucid and Matterport, which Kyle provided color on earlier in this call.

Net assets increased by approximately 11.9% to $446.5 million or an NAV of $16.40 per share, compared to Q3 net assets of $399 million or an NAV of $14.70 per share. The quarter-over-quarter increase of $1.70 per share in NAV was primarily the result of unrealized depreciation, as well as net investment income that exceeded our declared dividend by $0.03 per share.

Our Q4 2021 NAV per share also compares very favorably to the $13.03 per share reported at the end of 2020. As Steve mentioned, the strong performance of our investment portfolio continued in the fourth quarter, with over 98.3% of our portfolio performing at cost. We currently have 2 portfolio companies on nonaccrual, with a carrying cost of $12.9 million and a fair value of $5.1 million, representing just 0.7% of the fair value of the debt investment portfolio.

Moving to liquidity, available liquidity as of December 31st, 2021 was approximately $255 million, including approximately $32 million in unrestricted cash and cash equivalents and a borrowing capacity of approximately $223 million under our credit facilities, subject to existing terms and conditions.

Regarding our credit facilities, the credit facility with Credit Suisse matured on January 8th, 2022 and certain investments pledged as collateral under that credit facility will be pledged as collateral under the KeyBank credit facility, effectively increasing available borrowing capacity under the KeyBank facility.

Our leverage increased to approximately 104% from 78% in the prior quarter, driven by our additional borrowings during the fourth quarter. And as a reminder, we target a long-term leverage ratio ranging between 115% and 135%.

Finally, regarding our dividend, on December 16th, 2021, we declared a cash dividend of $0.36 per share for the fourth quarter of 2021 that was paid on January 14, 2022 and which generated coverage of 108.3% for our GAAP NII earnings for the quarter. We anticipate declaring a dividend for the first quarter of 2022 later this month, subject to approval by our Board of Directors.

As we have highlighted throughout this call, 2021 was an exciting year for Trinity Capital. Active capital markets combined with a thoughtful and strategic scaling of our venture lending capacity contributed to the most successful year in our history. We have built a resilient, high-yielding portfolio and have a strong balance sheet as we turn our focus to 2022.

With that, I will open the call for questions. Operator?

(Operator Instructions) We'll take our first question from Ryan Lynch of KBW.

Congrats on the nice quarter and more importantly, congrats on the really nice 2021. The first question that I wanted to dig into to make sure that I'm understanding the math correctly on the exit of matter and Matterport and Lucid. If I look at the combined fair value of those 2 investments as of 12/31, I get like a $79 million fair value. You guys talked about your exit price in Q1 of around $60 million. So does that mean that we should expect basically a $19 million decrease in the fair value upon exit given kind of the sell-off some of those investments in the first quarter?

Yes, Ryan, this is Steve. That is correct. And I'll maybe have Gerry sort of just comment on how we value that at the end of the quarter and then subsequently what happened.

Yes, sure. No, the $19.1 million is correct, Ryan. And of course, from a valuation perspective, so publicly traded securities marked with a small discount for lack of marketability, but following standard accounting guidelines there. So you're thinking about it right, it's 19.1 is going to be the difference.

Okay. Just wanted to make sure I was accounting so that correctly, obviously, very successful investments upon exit. The one thing -- the other thing I wanted to touch on too is just, there is very little prepayments in this quarter. I would have thought just from such an active quarter that we would have seen more prepayments in the quarter. And we've heard other BDCs in the past talk about when the market is really active like this, if you're not seeing big levels or strong levels of prepayments, that can be a concern for the quality of that portfolio when everything is transacting pretty freely. So what would you say to something like that if people were concerned by the low level of prepayments in a pretty active market in the fourth quarter?

Yes, Ryan, I think that the prepayments are going to vary quarter-to-quarter. We actually had a fair amount of prepayments. As you'll recall, in Q3, we were able to outpace that with our originations and net add to the portfolio. I think it just worked out that in Q4 we didn't have as many and we also had, obviously, large originations and added meaningful amounts to the portfolio on a net basis.

So no concerns with the quality and the credit quality of the portfolio right now and don't think that, that one quarter event is indicative of anything negative at all.

Yes, Ryan, this is Gerry. I would agree with that and we also talked, Kyle mentioned in his prepared remarks, a small handful of companies that are planning their exit via public offerings. So those things take some time, as you know, to get through the SEC approval and de-SPAC process. So prepayments, we have limited visibility they come and go, I wouldn't read anything negative into it from a credit quality standpoint.

Okay. And then just one last one for me and I'll hop back in the queue. $20 million of net fund of gross fundings over $250 million or $250 million of commitments in the fourth quarter, those are really large numbers, kind of a 2-part question. Can you just talk about kind of the investments in the growth that you've made in the infrastructure of Trini to be able to layer on $200 million of gross fundings in a single quarter. And then I'd love to just hear, there's obviously a lot of things that the market is thinking about right now in terms of interest rates, inflation, geopolitical stuff. I'd just love to hear, if you could provide a little bit of an outlook on what you guys are seeing in terms of capital deployment in the first quarter?

Yes, Kyle, do you want to touch on the growth?

So, we built this team to scale, Ryan. And so we continue to hire kind of ahead of the plan. We continue to do that. We've also -- our system is built for scale. We've talked about how we differentiate ourselves from our peers, not doing kind of the cradle and grave approach, but having teams and systems where we can really file a lot of opportunities through it. So we've hired in advance and this is not a surprise to us. The tide has risen a bit with venture activity in general, but this is not a surprise to us.

We are hiring the best people in the world, are executing on the plan and the system was built to handle that type of volume.

And then any comments on the outlook for Q1?

So we had -- I mentioned in the remarks, so we had record opportunities heading into Q1 and with also record commitments of $247.9 million in Q4. These are trends that lead to fundings typically and we expect that to continue.

We'll take our next question from Finian O'Shea of Wells Fargo.

It's actually Jordan Wathen on line present today. I wanted to ask a question about some new credits this quarter. It looks like you guys have grown about $31 million to some cryptocurrency mining companies. It seems like that could be a vertical where you could almost put as much money into it as you wanted to. So I was just really curious about, how you guys think about sizing those positions relative to the rest of the portfolio? Thanks.

Yes, and good question. This is Steve. We've been thinking a lot about that and talking about that for a long time. And Gerry, you might just touch on sort of how we think about the current portfolio relative to what we funded, more equipment base, but that's -- you want to touch on that?

Sure, happy to. So yes, as Steve mentioned, these are equipment financings and the portfolio companies that we've onboarded, they are leaders in their space, they have very strong balance sheets. And most importantly, very strong equipment and excellent relationships with their equipment providers that we feel is an acceptable credit risk, particularly with our equipment financings, which amortize straight out of gate, as you know. So as you mentioned, yes, you could probably deploy about as much money as you wanted in that space. We're being very selective.

We'll move next to Casey Alexander of Compass Point.

I was just wondering. I know you'd like to get the equipment financing as a percentage of the total portfolio up to a little bit higher number and you did have a successful quarter for deployments there. But we've heard from other folks that are in this business that some of the supply chain restrictions have actually given them problem getting some money to work in that the actual equipment itself cannot be delivered on a timely basis. Have you seen that you have demand for equipment financing, but you're not actually putting the money out because the equipment can't get to the end destination?

I don't know, Casey, if we've really seen our funding to our equipment financings delayed through supply chain issues. Certainly, some of our portfolio companies in the manufacturing space are facing and working through supply chain challenges. And we've got that reflected accordingly in our portfolio risk assessments. So we haven't really seen a slowdown of the funding of equipment though to answer your specific question.

Okay. My next question for David is, the team is being built to scale, so you're kind of bringing the guys in ahead of the actual production that you expect them to produce. So should we expect to see some of the comp expenses move ahead of some of the production that we would expect from those folks that are coming on?

Yes, I think that's a fair assessment, Casey. We will be hiring over the course of the year. We've already started to into this quarter as well in order to be able to do that. But we'll also be using technology to monitor some of the portfolio and the systems and so on as well. But you can't expect compensation expense to be going up during the course of this year.

Okay. Great. I expect -- I would imagine that you'd give us more detail on that at the Analyst Day later on this month?

Yes, we will.

All right. Great. Thank you very much for taking my questions and a really nice move in NAV this quarter. Congratulations.

Thank you.

We'll take our next question from Sarkis Sherbetchyan of B. Riley Securities.

Congrats on the quarter. My question is going to relate to kind of the dividend strategy and also with 1Q '22 dividend that's kind of subject to approval for later this month. Like any changes in strategy are you going to focus on just the recurring kind of regular dividend booster with a special. Just help us understand how you're thinking about that, especially given the recent monetization in the equity portfolio?

Good question, Sarkis. Thanks for that. So we're going to continue to think about our dividend strategy, our normal core dividend strategy the same way we have. We're growing our business, we're scaling our business. We have intended to increase our earnings and our dividend and we plan to continue that. As you know, we typically meet with our Board sort of middle of the last month of the quarter, which is coming up here, we'll do the same. And we will consider both our normal dividend strategy and we'll consider this extraordinary gain that we had and talk about what would be an appropriate level of dividend or distribution and the timing on that.

We're excited to consider that. We'll be talking about that with our Board and we will let the market know as soon as we made that decision sort of middle of the month.

Understood. That's helpful. And we'll wait for that update. And I guess, as we kind of step back and look at the current environment, clearly, public markets have seen a lot of volatility as we speak with folks on the private side, they're saying that the ball hasn't really creeped in there yet. But I guess as you step back and look at the VC ecosystem, are you seeing venture debt become, I suppose more so in the conversation as opposed to kind of the equity as in are companies now kind of coming back and saying, gee, at these valuations, I'd rather talk to the venture debt lenders as opposed to kind of raising equity. What are your thoughts or senses around what's happening here real time?

So I would say the answer would be, yes, we have seen that. There has not been major trends though with that theme in mind. I'd say it's been pretty consistent. We're lending capital to private companies backed by private companies. And typically that growth stage, the valuations are not necessarily directly correlated to the values of the companies we're funding. So we've not seen that -- we've not really seen that yet, although it will come up from time-to-time, it's not something kind of driving the market right now.

(Operator Instructions) We'll move next to Christopher Nolan of Ladenburg Thalmann.

Congratulations on the quarter and congrats on those gains, that's quite impressive. My question turns on capital structure for Trinity. You're already covering the dividend with earnings and your leverage ratio is somewhat low. What's the appetite right now for taking the leverage higher given your growth prospects?

This is Dave. Christian (sic) [Christopher], we are targeting to be about 1.25 on our leverage, we're only at 1 at the end of the year. So obviously, we would like to take advantage because I think we get better returns for our shareholders as we continue to use leverage, so and the investors can anticipate that, that will be our strategy.

David, do you anticipate making -- reaching that leverage threshold this year?

We will -- I would believe we would hit that. Clearly, we have great goals for origination and if that's the case, we're going to have to fund it through debt and equity. So you can anticipate that we would be approaching that target.

Great. And I guess on the dividend, if you're going to take the leverage up like that, then we should assume that the dividend is going to go up along with it, is that part of the strategy here?

That would be a forward-looking statement, but yes, clearly, if we -- we will target to distribute 90% to 100% of our earnings. And as we grow the portfolio, as we did in the fourth quarter and hope to do so in the future, we would anticipate that earnings and distributions would go up.

That's all subject to marketplace.

(Operator Instructions) And as we have no further questions at this time, I'd be happy to return the call to our host for any concluding remarks.

Thank you and thanks for everybody joining us today. We really are excited about Trinity, the year that we had. And I would just say we're most excited about the people and this team that we're building, it is best-in-class. We're very excited about where we're headed at Trinity. Thank you for your support and we'll look forward later this month to give you a great update about things to come. Thanks again.

This does conclude today's program. You may now disconnect your lines and everyone, have a great day.