Slide 1: Investor Presentation September 2008 Triangle Capital Corporation
NASDAQ Global Market Symbol: TCAP www.tcap.com Investor Presentation September 2008 Triangle Capital Corporation
Slide 2: Safe Harbor
Statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements concerning our goals, beliefs, strategies, future operating results and underlying assumptions. Actual results may differ materially from those indicated by these forward-looki
Slide 3: Company & Industry Overview
COMPANY & INDUSTRY OVERVIEW
Slide 4: Company Overview
Pure-play, lower middle market, internally managed BDC Typical investment size = $5MM to $15MM Invest primarily in subordinated debt and equity securities 2Q 2008 annualized dividend = $1.40 per share Run Rate net investment income = $1.69 per share (1) Current assets under management ^ $220MM Compa
Slide 5: Key Investment Considerations
Key Investment Considerations Attractive business model Recurring revenue stream High operating leverage drives net investment income (NII) Seasoned investment team Eight transaction professionals Over 150 years of advising, investing and operating experience Attractive lower middle market focus Les
Slide 6: BDC Industry Overview
BDC Industry Overview Business Development Companies ("BDCs") are uniquely positioned financing vehicles Created by congress to promote investments in privately held companies In 1997 there were 3 BDCs Currently there are 27 BDCs BDCs function as tax-advantaged, pass-through entities Limited corpora
Slide 7: Why We Target the Lower Middle Market
Why We Target the Lower Middle Market Over 65,000 lower middle market companies in the United States with revenues between $10MM and $100MM More than 90% are privately held Significant financing needs Highly fragmented market underserved by commercial & investment banks Offers superior risk-adjusted
Slide 8: Investment Criteria
Investment Criteria Relevant industry experience Management teams with meaningful equity stakes Well positioned for growth opportunities Operate businesses in industries with barriers to entry Competitive advantages - protect market position and profitability $2.0MM to $10MM of LTM EBITDA Do not inv
Slide 9: High Quality, Diversified Portfolio
High Quality, Diversified Portfolio $165MM in commitments across 20 industries and 34 companies As of June 30, 2008, at FMV and excluding cash on hand. Our portfolio contains no sub-prime mortgage exposure, no commercial real estate exposure, and no consumer credit exposure estate exposure, and no c
Slide 10: Significant Events: IPO to Present
Significant Events: IPO to Present Successfully invested 100% of IPO proceeds by December 31, 2007 20 successful transaction closings since IPO Commitments totaling ~ $130MM Average commitment size = $6.6MM Dividend growth pacing well ahead of expectations 3Q 2008 dividend (announced on July 21) of
Slide 11: Current Market Update
Current Market Update Large transactions continue to struggle in the capital markets M&A environment continues to be challenging Banks / investment banks still reluctant to lend / invest capital Enterprise value multiples are contracting The lower middle market, however, remains active Financial spo
Slide 12: Financial Overview
FINANCIAL OVERVIEW 2
Slide 13: Long Term Financial Goals
Long Term Financial Goals Maintain excellent dividend reputation Long term, steadily increasing dividend Harvest capital gains when possible Maintain disciplined cost controls Take advantage of fixed cost operational structure Enable asset growth to outpace SG & A growth Maintain prudent credit prof
Slide 14: TCAP: Proving The BDC Model
Includes accounting, legal, valuation, board, other advisory, Sarbanes-Oxley and other public company expenses. TCAP: Proving The BDC Model Our investment portfolio includes $6.9MM in unrealized equity gains
Slide 15: June 30, 2008 Results & Pro Forma Analysis
June 30, 2008 Results & Pro Forma Analysis At June 30, 2008 At June 30, 2008 At June 30, 2008 At June 30, 2008 At June 30, 2008 ($ in thousands) ($ in thousands) ($ in thousands) ($ in thousands) ($ in thousands) Actual Run Rate (1) Potential (3) Total investment income $5,020 $23,600 $27,200 SBA in
Slide 16: Financial Overview: Capitalization at 2Q 2008
Financial Overview: Capitalization at 2Q 2008 At June 30, 2008 At June 30, 2008 At June 30, 2008 At June 30, 2008 ($ in thousands) ($ in thousands) ($ in thousands) ($ in thousands) Actual Pro forma (1) Pro forma (1) Cash and cash equivalents $18,700 $13,500 Long-term debt $89,100 $93,100 Stockholde
Slide 17: Strong Liquidity Position
Strong Liquidity Position At June 30, 2008 At June 30, 2008 At June 30, 2008 At June 30, 2008 ($ in thousands) ($ in thousands) ($ in thousands) ($ in thousands) Actual Pro Forma (1) Pro Forma (1) Cash $18,700 $13,500 Available SBA Debt 41,500 37,500 Total Liquidity $60,200 $51,000 (1) Pro Forma liq
Slide 18: Attractive Operating Statistics
Attractive Operating Statistics Industry leading yield Investment breakdown: 10% senior debt, 78% sub-debt, 12% equity Excellent credit metrics Significant diversification across multiple sectors Key Portfolio Statistics Total debt yield Median total leverage Weighted average IRRs Non-accrual / work
Slide 19: Steadily Growing, Predictable Dividend
Steadily Growing, Predictable Dividend Estimated dividends based on consensus analyst estimates. Estimated dividends based on consensus analyst estimates.
Slide 20: BDC Industry Yield Analysis
BDC Industry Yield Analysis As of August 25, 2008. Current Yield: 3.8% Current Spread: 12.24% Current Yield: 16.0% The historical spread between the BDC and 10 Year Treasury yield is 3.9%
Slide 21: YTD 2008 Performance
YTD 2008 Performance As of August 25, 2008. 1/1/2008 2/1/2008 3/3/2008 4/1/2008 5/1/2008 6/2/2008 7/1/2008 8/1/2008
Slide 22: Significant Insider Holdings
Significant Insider Holdings Independent directors purchased $3.0MM of stock at IPO Purchases made at market price (no special discounts) Since IPO management team has purchased $0.8MM of stock Purchases have been made during each quarter since IPO Since IPO independent directors have purchased $1.4
Slide 23: Future Growth Drivers
Future Growth Drivers Consistent, proactive marketing efforts Maintain continuous contact with sponsors, bankers, advisors, etc. Maintain healthy transaction pipeline Current period of market volatility is good for us Improved ability to negotiate favorable transaction terms Focus on yield enhancing