Hello, and welcome to the Gladstone Capital Third Quarter Earnings Conference Call and Webcast. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to CEO, David Gladstone. Please go ahead.
Well, thank you, Kevin. Nice introduction and this is the quarterly earnings call that we do at the end of each quarter. Gladstone Capital's 3rd quarter ends June 30, 2021. Thank you all for calling in. We're always happy to talk with shareholders and and welcome to the opportunity to provide an update for this company and its investment portfolio.
We always start with our General Counsel, Michael LiCalsi. He'll make some statements regarding certain forward looking statements. Michael?
Thanks, David. Good morning, everybody. Today's report may include forward looking statements under the Securities Act of 1933 in the Securities Exchange Act of 1934, including those regarding our future performance. These forward looking statements involve certain risks and are based on our current plans, which we believe to be reasonable and that many factors may cause our actual results to be materially different from any future results expressed or implied by these forward looking statements, including all risk factors listed in our Forms 10Q, 10 ks and other documents that we file with the SEC, and you will find them on the Investor page of our website at www.gladstonecapital.com, where you can also sign up for our e mail notification service, or you can find them on the SEC's website, which is www.sec.gov. And we undertake no obligation to publicly update or revise in any of these forward looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Today's call is an overview of our results, so we ask that you review our press release and Form 10 Q both issued yesterday for more detailed information. Again, can find them on the Investors page of our website. Now with that, I'll turn the call over to Gladstone Capital's President, Bob Marcotte. Bob?
Thank you, Michael. Good morning and thank you all for dialing in this morning to discuss the results for Gladstone Capital for the quarter ended June 30. Let's get into it. Originations for the quarter were strong, totaling $53,000,000 including 3 proprietary investments and add ons to existing investments. However, as anticipated, we had 3 exits, which contributed to lifting prepayments and exits to $54,000,000 for the period.
Interest income rose 7.2 percent to $12,700,000 over the prior quarter, driven by the collection of $600,000 of past due interest on a non earning credit. Other income fell slightly. However, total investment income rose to $13,700,000 Borrowing costs increased $200,000 with the full quarter of the $50,000,000 add on to our senior notes and an increase in unused fees paid on a line of credit, which we expect to abate as our floating rate borrowings rise with asset growth and the potential redemption of our higher cost senior notes are due in 2024 later this year. Administrative costs and expenses rose $200,000 with professional fees associated the renewal and extension of our bank line of credit in the quarter. And net management fees on the quarter increased with the incentive fees.
However, net investment income rose to $6,600,000 or $0.195 a share. Net assets from operations came in at $18,000,000 or $0.53 a share, which included $6,500,000 of realized gains and $4,800,000 of unrealized portfolio appreciation on the quarter. As a result, for the period, NAV rose to 0.41 dollars rose $0.41 a share or 5.1 percent to $8.52 per share as of June 30. With respect to the portfolio, our portfolio continues to perform well and for the quarter we did not experience any payment defaults and our one non accrual investment has continued to recover, which supported the collection of most of the accumulated past due interest and that credit now has been moved to are in the range of 2 seasons 2nd lien and equity co investments last quarter associated with Ag Trucking and ATRG, which generated $6,400,000 of after tax gains. For the quarter, the bulk of the portfolio appreciation was driven by 6 equity investment positions in a variety of industries, most of which are experiencing strong operating performance and in total they easily outpaced the few decliners and generated net appreciation of $13,000,000 Based on the portfolio performance and loan market recovery, the cumulative gains and portfolio appreciation of the past 4 quarters have exceeded the COVID related markdowns of the March 2020 quarter by 32% and contributed to the 5.4% increase in NAV since December 31, 2019.
The asset mix as of the end of the quarter continued to shift in favor of 1st lien loans as the private equity community has continued to favor the flexibility and certainty of unitranche loans and the majority of the repayments were 2nd lien or equity exits. As a result, 1st lien assets rose to 66 percent of the portfolio cost, while second lien exposure declined to 25% of the portfolio cost. And despite this shift in asset mix, we have been able to maintain an average yield on our loan portfolio of 10.5%. Looking forward, last quarter was active for originations and we absorbed most of the expected repayments and we expect much the same in the near term as the private market liquidity is driving an elevated level of refinancing and recapitalization activity. As we've reiterated in the past couple of quarters, we continue to target a one to 1 debt to equity leverage.
However, based on the magnitude of the portfolio appreciation last quarter and the pace of repayments, our leverage continues to be below our target range at 70 are in the range of 6% debt to equity. Despite the modest leverage, we are pleased to report that our cumulative return on equity for the 2020 'twenty one period inclusive of the challenging COVID markdowns in 2020 has approached 11.3%. Based on our modest leverage position and our reduced secured line borrowings, we have an unprecedented level of debt capacity to take on additional yielding assets to further enhance our earnings and diverge coverage in the coming quarters. And now I'd like to turn the call over to Nicole Scholten Brown, the CFO for Gladstone Capital to provide some more details on the Fund's financial performance. Nicole?
Thanks, Bob. Good morning, everyone. During the June quarter, total interest income increased $900,000 or 7.2 percent entered to $12,700,000 with the collection of $600,000 of past due interest. Additionally, the investment portfolio weighted average balance increased by $9,500,000 or 2.1 percent to $463,600,000 compared to the March 31, 2021 quarter, are also contributing to the interest increase in interest income. The weighted average yield on our interest bearing portfolio declined by 10 basis points to 10.5% compared to the prior quarter, are associated with the increased population of 1st lien loans in our portfolio.
Other income fell by $79,000 compared to last With these items, total investment income for the quarter increased to $13,700,000 Total expenses rose by $600,000 quarter driven by the increase in interest expense, professional fees, including mainly legal fees and net management fees. Net investment income for the quarter ended June 30 was $6,600,000 which is an increase of $200,000 compared to the prior quarter are in the range of $0.195 per share and covered 100% of our shareholder distribution. The net increase in net assets resulting from operations were $18,000,000 or $0.53 per share for the quarter ended June 30, compared to $21,300,000 or $0.65 per share for the quarter ended March 31, 2021. The current quarter increase was driven by after tax gains of 6,500,000 as well as $4,800,000 of net unrealized portfolio appreciation. Moving over to the balance sheet.
As of June 30, total assets rose are in the range of $514,000,000 consisting of $506,000,000 in investments at fair value and $8,000,000 in cash and other assets. Liabilities declined to $222,000,000 as of June 30 and consisted primarily of $150,000,000 of newly issued 5.08 senior notes due 2026, dollars 38,800,000 of 5 and 3 senior notes due 2024 and as of the end of the quarter, the advances under our line of credit were only $23,000,000 Net assets rose by $21,500,000 from the prior quarter end with $11,400,000 of net realized and unrealized portfolio appreciation are in the issuance of approximately 908,000 common shares under our ATM program, which generated net proceeds of $10,100,000 for the quarter and 2 $7,000,000 in excess NAV or $0.08 of appreciation. NAV rose 5.1 percent from 8.11 are in the range of $0.01 per share as of March 31 to $8.52 per share as of June 30, 2021. Our leverage as of the end of the quarter are in line with the increase in NAV from the prior quarter end at 76% of net assets. We currently have in excess of 130 are in the range of $1,000,000 of borrowing availability under our recently renewed line of credit.
As part of the line of credit amendment, we successfully extended their revolving period to October 31, 2023. With respect to distribution, Gladstone Capital has remained committed to paying its stockholders a cash distribution. And in July, our Board of Directors declared monthly distributions to our common stockholders of $0.65 per common share per month for July, August September, which is an annual rate of $0.78 per share. The Board will meet in October to determine the monthly will be conducting a reconciliation of our common stock and with the common stock price at about $11.50 were shared yesterday. The distribution run rate is now producing a yield of about 6.8%, which continues to be attractive relative to the extraordinary low yields generally available in the market today.
And now, I'll turn it back to David to conclude.
Thank you, Nicole. You and Bob and Michael all did a great job of bringing people along in terms of analysis of our good company. If you take what you've said today and add it to the 10 Q that was filed, and you can read that 10 Q at www.gladstone Gladstone.com. So we've got a strong opportunity here to continue to grow. We had a solid quarter for the period ending June 30, we're off to a good start where we are today.
Solid originations in the past of 53,000,000 are very attractively priced investments. We've generated net investment income to cover the current dividend, so we're not are supporting that some other way between realized gains, appreciation and accretive stock issuance lifted the net asset value are at 0.41 dollars that's up about 5.1% for the last quarter and enhanced the ability and stability of the company to make sure we pay those dividends every quarter. That's our goal in life here at this company. So in summary, the company continues to invest in growth are in the middle market businesses with good management. Many of these investments are supported by midsized private equity funds to fund good relationships in the market, good interest paying loans to support our ongoing commitment to pay cash distributions to stockholders.
It was a very good quarter. Now we'll have some questions. So operator, if you'll come on and tell the callers how they can ask some questions. Okay, folks, you need to ask your questions or we'll hang up and wait for next quarter.
If there are no questions at this time, do you have any further closing comments, sir?
No, that's We had a great quarter. I'm not surprised that we don't have a lot of questions. It was a great quarter with not many differences that aren't shown up in our in all of our filings. So thank you very much everybody for calling in and see you next quarter.
Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.