MFIC or the BDC, and we will use MidCap Financial to refer to the lender headquartered in Tanner, Maryland. At this time, I'd like to turn the call over to our Chief Executive Officer, Tanner Powell.

Thank you, Elizabeth. Good morning, everyone, and thank you for joining us today. I will begin today's call by highlighting our results for the quarter, and we'll then provide thoughts on the current environment. Following my remarks, Ted will review our investment activity and provide an update on credit quality. Lastly, Greg will review our financial results in detail. We will then open the call to questions. Beginning with our financial results after market close yesterday, we reported a strong March quarter with net investment income per share of $0.45, well above the current $0.38 dividend, benefiting from the positive impact of higher base rates, strong fee and prepayment income, as well as our new fee structure, which became effective during the quarter. As a reminder, fee and prepayment income can fluctuate quarter-to-quarter. At the end of March, net asset value per share was $15.18, an increase of $0.08 or 0.5% from the end of December, primarily due to net investment income in excess of the dividend, as well as a slight net unrealized gain on the portfolio. Regarding investment activity, new corporate lending commitments made during the quarter totaled $110 million, all first lien floating rate and across 15 distinct borrowers, as we continue to emphasize portfolio diversification. As discussed on last quarter's call, Merx executed a significant transaction during the March quarter by selling its interest in a joint venture, which allowed Merx to repay $65 million during the quarter. At the end of March, our investment in Merx totaled $197 million, representing 8.3% of the total portfolio at fair value. We remain focused on reducing our investment in Merx, and while we don't expect paydowns to occur evenly, we do expect to see some additional paydowns in the remainder of 2023, subject to market conditions. Shifting to our perspective on the current environment, the quarter began with a more constructive tone compared to a challenging market in 2022. However, in March, market sentiment shifted as regional banking challenges and renewed fears of a recession contributed to more uncertain financial markets. Even prior to recent issues, we were seeing a more favorable environment for direct lenders with new transactions, pricing with wider spreads, lower leverage, and better terms, although M&A activity in the middle market has declined as the landscape evolves. We believe recent events may cause banks to pull back from lending, which in turn should accelerate the ongoing shift to nonbank lenders and tighter financial conditions. Let me take a moment to compare today's investment opportunities versus a year ago: a typical investment today prices around 650 to 700 basis points with an issue discount of 3 points. A year ago, a typical deal would price at SOFR plus 575 to 600 with an issuance discount of 2 points. In addition to an increase in spreads in OID, base rates have increased significantly. 3-month SOFR was 4.9% at the end of March compared to 0.7% a year ago, an increase of over 400 basis points. Taken together, this translates into unlevered asset yields of around 12.5% today compared to 7.5% a year ago. Moving to the dividend, our Board of Directors declared a dividend of $0.38 per share to shareholders of record as of June 13, 2023, payable on June 29, 2023. A $0.38 dividend represents an annualized dividend yield of 10% on NAV as of March 31. At current base rates, we are well positioned to generate net investment income in excess of this dividend level. The forward rate curve has moved materially lower over the last month or so, and we expect net investment income will continue to exceed the current dividend based on the current forward curve for the foreseeable future. With that, I will turn the call over to Ted.

Thank you, Tanner. Good morning, everyone. Beginning with the portfolio. We believe the quality of our corporate lending portfolio continues to improve, which should allow us to mitigate some of the risks that could arise in a slower economy. We saw improvements on several important metrics during the period. Our average position size decreased, enhancing the diversification of the portfolio. The net leverage of our underlying borrowers decreased and the weighted average attachment point declined. Notably, we realized all of these improvements while also slightly increasing the spread on the portfolio. At the end of March, our investment portfolio had a fair value of $2.39 billion invested in 141 companies across 25 different industries. Corporate lending and other represented 92% of the total portfolio, and Merx represented 8% of the portfolio at fair value. At the end of March, 94% of our corporate lending portfolio was first lien. The average funded corporate loan position was $16.2 million, down from $16.5 million last quarter. The overall weighted average portfolio net leverage declined slightly to 5.45x, down from 5.49x last quarter. The overall weighted average attachment point declined to 0.1x, down from 0.2x last quarter, demonstrating the true first lien nature of our loan book. The weighted average spread across the corporate lending portfolio was 613 basis points, up from 610 basis points last quarter. Despite a slowdown in new issue activity, MidCap Financial was active during the March quarter, closing approximately $3.5 billion in new commitments and $15.6 billion over the last 12 months. In the March quarter, MFIC's new corporate lending commitments totaled $110 million, all first lien across 15 different borrowers for an average new commitment of $7.4 million as we continue to focus on diversification by borrower. As mentioned, all new commitments were first lien floating rate loans with a weighted average spread of 665 basis points or 675 basis points, excluding revolver commitments. The weighted average net leverage of new commitments made during the quarter was 4.2x, down from 4.8x last quarter. Gross fundings, excluding revolvers for the corporate lending portfolio totaled $106 million. Sales and repayments totaled $54 million, and net revolver paydowns totaled $7 million, resulting in net fundings of $44 million. In addition, as Tanner mentioned, we received a $65 million paydown for Merx. In aggregate, MFIC had net repayments for the quarter totaling $20 million. Despite the more challenging macroeconomic environment, our borrowers have proven to be relatively resilient and continue to demonstrate solid fundamental performance. We continue to see positive operating trends among the vast majority of our corporate lending portfolios, which have largely been able to pass along cost increases, thereby limiting the impact on margins. Portfolio company revenue and EBITDA continue to trend positively, which supports the company's ability to service debt. Amendment activity continues to be quite low, although it picked up modestly since the prior quarter. The amendments were normal course in nature. As you know, amendments generally provide additional fee income, incremental spread, tighter terms, and sponsor equity infusions. Importantly, MFIC benefits from MidCap Financial's large dedicated portfolio management team of nearly 60 investment professionals, which helps identify and address issues early to maximize value. Moving to interest coverage, the weighted average interest coverage ratio was 2.3x, down from 2.5x last quarter. These weighted average interest coverage ratios are based on company data for the last 12 months through December; if we utilize December 31 base rates and LTM earnings, you would see interest coverage decline to 1.7x. Given the significant increase in base rates, we're focused on current and future interest coverage and fixed charge coverage ratios across the portfolio as a component of an active risk management process. No investments were placed on nonaccrual status during the quarter. At the end of March, investments on nonaccrual status totaled $8.7 million or 0.4% of the total portfolio at fair value. As we discussed many times in the past, starting in 2016, we have shifted the BDC's portfolio into first lien corporate loans, primarily sourced by MidCap Financial, one of the world's leading middle market lenders with a proven track record. MidCap Financial is one of the largest direct lending teams in the United States with close to 200 investment professionals. In mid-2016, concurrent with the receipt of our co-investment order, MFIC shifted its strategic focus to leverage Apollo Global's relationship with MidCap Financial. Based on data since mid-2016, which is the approximate date upon which we began utilizing our co-investment order, our annualized net realized and unrealized loss rate remains around 2 basis points on loans sourced by MidCap Financial. We think this performance data shows how well the strategy has performed. With that, I will now turn the call over to Greg to discuss our financial results in detail.

Thank you, Ted, and good morning. Beginning with our financial results, net investment income per share for the March quarter was $0.45. Net investment income benefited from higher base rates on our floating rate assets, strong fee and prepayment income, and our new fee structure. Prepayment income was $2.6 million, essentially flat quarter-over-quarter. Fee income was approximately $2.2 million compared to $700,000 last quarter, driven by a slight pickup in amendment activity. There was a nominal amount of dividend income earned during the quarter. Payment in kind or PIK income remains very low, representing less than 1.2% of our total income for the quarter. All else equal, the new fee structure increased NII per share by approximately $0.065 for the quarter. The yield at cost of our corporate lending portfolio was 11.3% on average for the quarter compared to 10.3% last quarter driven by higher base rates. This yield figure is an average of the beginning and end of the quarter. As of the end of March, the yield on the corporate lending portfolio at cost was 11.5%, up from 11% at the end of December. NAV per share at the end of March was $15.18, an increase of $0.08 or 0.5% quarter-over-quarter. The increase was driven by $0.07 of net investment income of $0.45 relative to the $0.38 distribution recorded during the quarter. There was also a $0.01 per share increase due to net unrealized gains on the portfolio. Additional details on net gains and losses are shown on Page 16 in the earnings supplement. Total expenses for the quarter were $38.3 million, up from $35.3 million last quarter, primarily due to higher interest expense and higher incentive fees, partially offset by lower management fees. Gross management fees totaled $4.3 million compared to $8.8 million last quarter, a decrease of $4.5 million or approximately 50%. As a reminder, MFIC's base management fee was reduced to 1.75 on equity beginning January 1, 2023. Among listed BDCs, MFIC's management fee is now the lowest, and we are the only one to charge the management fee on equity, which we believe provides greater alignment and focus on net asset value. Gross incentive fees totaled $6.2 million, an increase of approximately $6 million from last quarter. Recall that MFIC's incentive fees on income includes a total return hurdle with a rolling 12-quarter look back. The total return fee, net losses, unrealized or realized against pre-incentive net investment income over a trailing 12-quarter period. For March 2023, the look-back period used to calculate the incentive fee was a 12-quarter period between June 2020 and March 2023; the net loss recorded during the March 2020 quarter, which reflected the initial impact of the pandemic, fell out of the look-back period. As a result, the incentive fee cap resulted in a full 17.5% incentive fee for the March quarter. While this can create some volatility within our incentive fee, we believe this provides strong alignment of interest with our stakeholders. Recall the incentive fee rate on income was permanently reduced from 20% to 17.5% beginning this quarter. Moving on, from a balance sheet perspective, our net leverage ratio stood at 1.4x at the end of March. As previously disclosed, in April, we were pleased to extend the maturity of our senior secured revolving credit facility by over 2 years to April 2028. We greatly appreciate the support from our lending partners. The primary benchmark rate was changed from LIBOR to SOFR. The spread under the facility was reduced from 2% to 1.95%. The remaining material terms of the facility were unchanged. Our investment portfolio continues to transition from LIBOR to SOFR. At the end of March, 65% of our corporate lending portfolio utilized SOFR. Shifting gears a bit, in light of the recent banking crisis, we wanted to make a few comments from MFIC's perspective regarding MIC's exposure, or lack thereof, to the regional banks that have failed. MFIC did not hold any cash deposits or securities at the failed banks and did not have any creditor or debt exposure to the failed banks. We also reviewed the exposure at our portfolio companies. Only a few of our portfolio companies had cash balances at the failed banks, and those are generally held in security accounts with the banks' broker/dealer. That said, all depositors at the banks are being made whole. We continue to believe there is a disconnect between how our stock currently trades considering the repositioning of the portfolio into mostly first lien corporate loans sourced by MidCap Financial, which has a long and outstanding track record. We believe MFIC presents an attractive investment opportunity. This concludes our remarks, and we'd like to open it up for questions.

We'll take our first question from Mark Hughes from Truist Securities.

You mentioned how the revenue and EBITDA growth within the portfolio was sustained through Q1. I wonder if you saw any kind of deceleration there? And if that leads to any conclusions about how the economy is performing here recently, particularly around the bank crisis. Just any thoughts on that topic would be great.

Yes, sure. We did see a slight deceleration relative to the last few quarters. Revenue growth was in the double digits, although just barely, and EBITDA growth was in the single digits, high single digits. What we do continue to see is that margins are not growing as fast as revenue. And as we look out across the spectrum, and we think about the impact of what the banking crisis would be. I think it's kind of a double-edged sword. You've got, on one hand, from an economic standpoint, you're going to have continued pressure on consumers, small businesses, and their ability to obtain credit and continue to spend. And then on the other side of the coin, you have private lenders like ourselves who will be able to take advantage of opportunities that pop up and continue to drive good pricing and, importantly, good terms in terms of covenants and low advance rates in terms of leverage.

And then just to add to that, that data is mostly as of December, and then it's not consistent across the portfolio who actually reports monthly. But when we looked at those numbers and rolled forward since December, that'd be a continuation of the trend of a slight moderation, but still healthy overall fundamentals.

Understood. And then with the economy perhaps absorbing the banking crisis, are you seeing any kind of truly signs of a bit of a recovery? You said the first quarter started to show signs of life and then slowed down as the news emerged. Are you seeing any inflection here recently?

Obviously, the quarter started off with a kind of more benign, more constructive environment. And then we had the events with the regional banking issues emerge. And I think the way we look at it, Mark, is certainly, as we look forward, I think the volatility of outcomes has probably been enhanced from here. We are experiencing a market that was arguably very compelling from a private debt standpoint even prior to the regional banking stress. And we think over the longer term, we are encouraged by the opportunities that could help the nice secular trends that are benefiting private credit, but are absolutely taking into account that increased potential for volatility of outcomes given the regional banking stress.

Yes. And just to add on how we approach that from an underwriting perspective, we have always done stressed underwriting. We run stress cases about how rates, costs, or other parts of the economy could adversely impact the companies. So we do not underwrite to an upward trajectory in terms of our approach to credit. And so while we do hope that there will be some rebound from an underwriting standpoint, it's kind of hope for the best, but we always plan for the worst and are very diligent in those stressed underwriting approaches.

Our next question comes from Kenneth Leon from RBC Capital Markets.

Just one on Merx. I think in the prepared remarks, you mentioned that you could expect some payments this year. I just wanted to see if you could just further expand upon that, some details on that.

Yes. Thanks, Ken. And as we mentioned in the prepared remarks, we were very pleased to report, as we did last quarter, a significant paydown to take us down to roughly 8%. And I think the emphasis from here is we have assets in all stages of the disposition process. That will be market contingent and obviously, also depending on the underlying financing arrangements. And so from here, while payments and repayments and reducing the exposure of MFIC's investment in Merx will continue, it won't be linear, and it will be dictated by those dynamics. From an industry perspective, we do remain encouraged by the fundamentals within the aviation space and aircraft leasing, in particular, in terms of good supply dynamics with all the canceled orders during COVID and demand that's approaching 90% of pre-COVID levels, and then, more recently, the opening up of China and better traffic volumes in Asia. And so while we believe that those dynamics should help to reduce our exposure to Merx, the emphasis, though, as I started with, is it's not going to be linear, but as we've mentioned in recent quarters, we are very focused on doing everything we can to pull the exposure down.

Got you. Very helpful there. And then one follow-up, if I may. I wonder if there's any updated thoughts around leverage targets in the near term, just given the current macro backdrop?

Yes. We are not amending our leverage guidance. We ended at the lower end of it. Our approach in this market is obviously balancing our liquidity with what is likely to continue to be a very good vintage for private credit. So I would expect we're not amending our leverage target. Again, Ken, I would emphasize that our new fee structure has changed, and we're only charging fees on equity. So increases in leverage do not affect the manager. And so we're very comfortable with our range. And again, the area where we operate in terms of leverage will be a balance of the very attractive environment and then operating within that range.

The next question comes from Kyle Joseph from Jefferies.

Just kind of a follow-up there in terms of the deal environment versus, I think you guys referenced kind of your undervalued stock and how you're thinking about capital into new deals versus buybacks weighing leverage at the same time.

Yes. Thanks, Kyle. I think we're balancing the opportunity that we see in the marketplace versus keeping our leverage at the lower end of our target range at this point. So I think we'll continue to evaluate it as we move forward.

Okay. And then a quick modeling question for Greg. Probably in terms of interest, dividend, and other income, is this kind of the run rate we should expect going forward? Or were there any sort of one-time items in terms of dividend income being well?

Well, no, there aren't any. I mean, I think you can look at our recurring interest income and pro forma that out. And obviously, the fee income and prepayment income does bounce around quarter-to-quarter.

Yes, and I would just, without going into the specifics, Kyle, broadly speaking, dividends have historically correlated with some of our noncore investments, and those have come down; we would expect dividend income to come down. As it relates to our current earnings, and we did call this out in our script, there was enhanced prepayment income, and that's a line item that, as you know and we know, can be volatile quarter-to-quarter depending on transaction activity, which is sometimes beyond our control.

Our next question comes from Sean-Paul Adams from Raymond James.

Regarding your interest coverage, the portfolio average kind of sits at 1.7x right now. Some portion of that had to be significantly lower, but your PICC didn't rise. So have you guys had any discussions with sponsors regarding amendments by them or any incremental support from sponsors?

Yes, this is Howard. Our PICC has not risen, and we do not expect it to rise either. It is generally not part of our usual operations to provide that information. If a loan is on nonaccrual, it may not be paying or may have been paid. Typically, if a first lien loan is performing well, it is likely not on nonaccrual. There has been no increase in that regard. As interest coverage becomes tighter, more companies may face challenges. However, as Ted mentioned, we have not seen a significant increase in amendment activities, and there is still EBITDA growth and sufficient coverage. This does not mean we are not in contact with loans that are underperforming, as that has been the case prior to the current environment. In summary, we have seen very little increase in nonaccruals, do not expect a rise, and aim for nonaccruals to remain less of an issue compared to the market and our competitors due to the quality of our portfolio. We do not anticipate our PICC to increase, at least regarding what is reflected in our net interest income.

We'll take our next question from Paul Johnson from KBW.

Just taking on Kyle's question a little bit. I'm just trying to get a sense of, obviously, fee income a little bit higher. It sounds like this quarter, a little bit of prepayment income in there as well. Maybe just balancing that out a little bit with, obviously, the expected increase from higher base rates. How do you guys, I guess, really look at this quarter's earnings run rate level based on this quarter? I mean, are you looking at this as kind of a pre-secured level of earnings that you think you can kind of generate into the future as far as this year is concerned or are we looking at sort of a peak level again, based on this Q1?

We previously mentioned that we anticipate prepayment and fee income to be approximately $3 million per quarter on average. This figure may vary slightly depending on timing, but it is not a highly volatile component of our earnings or a significant percentage, unlike some business development companies that take transaction fees on closed deals as they originate. We do not operate that way; our fee income is not influenced by origination but is rather based on amendments, one-time events, or exits. Over the past three to four years, it has been fairly consistent, ranging from $12 million to $14 million annually. Aside from that, we expect our net income to increase slightly due to rising interest rates and the gradual redeployment of under-earning capital. Therefore, in the current interest rate environment and even in a slightly more favorable one, we anticipate being able to maintain coverage. Those fees can vary from around $0.01 to $0.05 per share in a given quarter.

Got it. That's very helpful. Last question, just kind of bigger picture, but you talked about it, obviously, a little bit on the call here, but just the broader corporate lending world at this point. I'm just trying to get a sense of, I guess, what the sponsor appetite really is, I guess, for deal activity today? We're talking about EBITDA growth that's still in place for a lot of these portfolio companies. But obviously, the cost of financing is going up as the risk in general. So what are sponsors doing at this point? Is it mainly just sitting tight, waiting to see what happens with the company? Or is there just a very wide disparity between valuations between buyers and sellers, kind of getting a sense of what the appetite is for corporate activity?

Thank you, Paul. I have two comments regarding the current environment. The sponsor community is working to understand the effects of higher rates on valuations. In Q1, we saw M&A activity decline by about 10%, and compared to peak levels, it's down as much as 30%. This highlights the challenge of adapting to changing capital costs. In this landscape, private credit is gaining traction, while the leverage loan market has remained relatively subdued, impacting the size and quality of deals needed to access that market, which has created more opportunities for private credit lenders. Regarding our business and what sponsors are focusing on, this aligns with a recurring theme we've discussed: the strength of established relationships. Although initiating new leveraged buyouts (LBOs) is challenging, there is significant activity among sponsors looking at add-ons. This includes delayed draws for existing companies and seeking additional commitments, which is one of the advantages provided by the over 500 borrowers in our mid-cap MFIC system, especially in this more subdued M&A environment with higher capital costs and sponsors adjusting their valuation expectations.

Our next question comes from Melissa Wedel from JPMorgan.

I wanted to discuss your declared dividend, which remains at $0.38 a share. Considering your previous comment about anticipating to exceed this amount in the foreseeable future, based on the forward rate curve and your current portfolio positioning, should we expect this to continue? Also, would you consider using any excess earnings to support NAV in light of potential volatility we may encounter moving forward?

We do not anticipate paying taxes, so we will distribute special dividends at a level that aligns with that, whether it's 90% or 98% remains to be seen. It's a mix of factors. If we consistently achieve our expected earnings, we anticipate that special dividends will occur, but they may not happen quarterly. We will allocate some funds to support that. At this earnings level, we expect to pay special dividends as well.

Okay. In terms of timing, I understand that it won't be a quarterly consideration, but should we expect something around the year-end planning process that you will approach?

Yes, that makes sense. That probably from a timing point of view makes sense, yes.

Next question comes from John from Wells Fargo.

So in recent quarters, you've had kind of more of a tilt towards Life Sciences. This quarter, we don't really see much in new originations. Should we be reading anything into that?

No, no. I think we're very lucky to have the various origination channels, and what presents itself can modulate. Obviously, in Life Sciences, MidCap has a tremendous franchise there and quite a bit of opportunity we would expect over the next several years, but I wouldn't take from that anything thematic or indicative of a trend. We show no further comments at this time.

I will now turn it back to management for closing remarks. Thank you, operator.

Thank you, everyone, for listening to today's call. On behalf of the entire team, we thank you for your time today. Please feel free to reach out to us if you have any other questions, and have a good day.

Thank you, ladies and gentlemen. This concludes today's conference. You may now disconnect.