Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Saratoga Investment Corp.'s fiscal second quarter 2022 financial results conference call. Please note that today's call is being recorded. During today's presentation, all parties will be in a listen-only mode. Following management's prepared remarks, we will open the line for questions. At this time, I would like to turn the call over to Saratoga Investment Corp. Chief Financial and Compliance Officer, Mr. Henri Steenkamp. Sir, please go ahead.
Thank you. I would like to welcome everyone to Saratoga Investment Corp's fiscal second quarter 2022 earnings conference call. Today's conference call includes forward-looking statements and projections. We ask you to refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these forward-looking statements and projections. We do not undertake to update our forward-looking statements unless required to do so by law. Today, we will be referencing a presentation during our call. You can find our fiscal second quarter 2022 shareholder presentation in the events and presentation section of our investor relations website. A link to our IR page is in the earnings press release distributed last night. A replay of this conference call will also be available from 1:00 P.M. today through October 13th. Please refer to our earnings press release for details.
I would now like to turn the call over to our Chairman and Chief Executive Officer, Christian Oberbeck, who will be making a few introductory remarks.
Thank you, Henri, and welcome everyone. As we reflect on the second quarter, we continue to be pleased with the strength and resilience of our financial position and portfolio companies. Despite the unprecedented global impact and continuance of COVID-19, we feel very fortunate to have overcome its challenges thus far and to be in a position where we can leverage the upside of the ongoing recovery and substantial ramp-up in market activity. Existing portfolio companies continue to perform well, and our current business development activities allow us to find and evaluate a healthy level of new investments. Our AUM contracted slightly this quarter to $666 million. We originated $116 million in new platforms or follow-on investments, almost matching our record Q1 quarter.
This was offset by a record number of repayments, with $135 million redeemed, including the recognition of a $6.4 million realized gain on our Passageways equity investment. We have often discussed how our long-term growth in assets can be accompanied temporarily by lumpy, substantial repayments, of which this quarter was an example. We continue to bring new platform investments into the portfolio, with four added this fiscal quarter, and all originations were made while maintaining the extremely high credit quality bar we've set for our investments. The performance of our existing portfolio also grew our NAV per share by 1% this quarter to $28.97. Again, a historical record for us, with this quarter increase being the 14th increase in the past 17 quarters. Our latest 12 months return on equity as of this quarter was 14.4%. To briefly recap the past quarter on slide two.
First, we continue to strengthen our financial foundation in Q2 by maintaining a high level of investment credit quality, with over 93% of our loan investments retaining our highest credit rating at quarter end. Generating a return on equity of 14.4% on a trailing 12-month basis. Registering a gross unlevered IRR of 12.7% on our total unrealized portfolio, with our current fair value 4% above the total cost of our portfolio. A gross unlevered IRR of 16.1% on total realizations of $698 million. Our assets under management decreased slightly to $666 million this quarter, a 2% decrease from $678 million as of last quarter, due to record repayments. A 31% increase from $508 million as of the same time last year, and a 20% increase from $554 million as of year-end.
Despite this net reduction, our new originations included four new portfolio company investments, as well as six follow-on investments, and our current pipeline remains robust. Third, despite improving economic conditions, balance sheet strength, liquidity, and NAV preservation remain paramount for us. Our current capital structure at quarter end was strong. $324 million of mark-to-market equity supports $238 million of long-term covenant-free non-SBIC debt and $172 million of long-term covenant-free SBIC debentures. Our quarter-end regulatory leverage of 236% substantially exceeds our 150% requirement. We have $221 million of liquidity at quarter end available to support our portfolio companies with $111 million of the total dedicated to new opportunities in our SBIC II fund. The all-in cost of this new SBIC II debt is currently less than 2%, and the total committed undrawn lending commitments outstanding to existing portfolio companies are $16 million.
In July, we issued an additional $125 million five-year unsecured bonds with an effective yield of 4.125%. It strengthens both our capital and liquidity position. In August, we paid our existing $60 million, 6.25% SAF baby bonds, which importantly reduces our current cost of non-SBIC capital by more than 200 basis points. Just this week, we closed a new $50 million facility with Encina Lender Finance, reducing our existing facilities cost of capital by 100 basis points. Finally, reflecting on our recent note issuance and improved liquidity and the overall portfolio and financial performance, the board of directors increased our quarterly dividend by $0.08- $0.52 per share for the quarter ended August 31st, 2021, paid on September 28th, 2021. We will continue to reassess the amount of our dividends on a quarterly basis as we gain better visibility on the economy and fundamental business performance.
This quarter saw strong performance with our key performance indicators as compared to the quarters ended August 31st, 2020 and May 31st, 2021. Our adjusted NII is $7 million this quarter, up 27.5% versus $5.5 million last year, up 11.6% versus $6.3 million last quarter. Our adjusted NII per share is $0.63 this quarter, up from $0.49 last year, up from $0.56 last quarter. Latest 12 months return on equity is 14.4%, up from 14.3% last year, down from 19.4% last quarter. Our NAV per share is $28.97, up 9% from $26.68 last year, up 1% from $28.70 last quarter. This is the highest NAV per share for Saratoga Investment since inception of our management in 2010. We will provide more detail later.
As you can see on slide three, our assets under management has steadily and consistently risen since we took over the BDC more than 11 years ago. The quality of our credits remain high, with no non-accruals currently. We are currently working diligently to continue this positive trend as we deploy our available capital into our growing pipeline, while at the same time being appropriately cautious in this evolving credit environment. With that, I would like to now turn the call back over to Henri to review our financial results, as well as the composition and performance of our portfolio.
Thank you, Chris. Slide four highlights our key performance metrics for the quarter ended August 31st, 2021. When adjusting for the incentive fee accrual related to net capital gains in the second incentive fee calculation and the interest on the redeemed SAF baby bonds during the call period. Adjusted NII of $7.0 million was up 11.6% from $6.3 million last quarter, and up 27.5% from $5.5 million as compared to last year's Q2. Adjusted NII per share was $0.63, up $0.14 from $0.49 per share last year, and up $0.07 from $0.56 per share last quarter. Across the three quarters, weighted average common shares outstanding remained largely unchanged at 11.2 million shares for each quarter. The increase in adjusted NII from last year primarily reflects the higher level of investments and resultant higher interest and other income, with AUM up 31% from last year.
The increase from Q1 was primarily due to the full period impact of originations made during Q1, as well as the recognition of a $0.6 million interest reserve release to interest income related to our Taco Mac investment that has been removed from non-accrual this quarter. Adjusted NII yield was 8.7%. This yield is up 70 basis points from 8.0% last year, and up 110 basis points from 7.6% last quarter. For the second quarter, we experienced a net gain on investments of $3.1 million, or $0.28 per weighted average share, and a $1.6 million realized loss on the extinguishment of our SAF baby bonds and SBIC I debentures, or $0.14 per weighted average share, resulting in a total increase in net assets from operations of $7.9 million or $0.71 per share.
The $3.1 million net gain on investments was comprised of $1.5 million in net realized gains and $3.4 million in net unrealized appreciation on investments, offset by $0.4 million of income tax expense on realized gains and $1.3 million net deferred tax expense on unrealized appreciation in our blocker subsidiaries. The $1.5 million net realized gain primarily comprises a $6.4 million realized gain on the sale of the company's Passageways investment, offset by the recognition of a $4.9 million realized loss on the final write-down of the company's My Alarm Center investment. The $3.4 million unrealized appreciation reflects, one, the $6.5 million reversal of previously recognized appreciation and the $4.9 million reversal of previously recognized depreciation on the Passageways realization and the My Alarm Center write-off respectively.
Two, a 1.1% increase in the total value of the remaining portfolio, primarily related to improvements in market spreads, EBITDA multiples, and/or revised portfolio company performance. All of the net reduction in the value of the non-CLO portfolio in the first quarter of last year has been more than reversed, and the overall portfolio fair value is now 3.8% above cost. Return on equity remains an important performance indicator for us, which includes both realized and unrealized gains. Our return on equity was 14.4% for the last 12 months. Total expenses, excluding interest and debt financing expenses, base management fees and incentive management fees, and income taxes, increased from $1.4 million as of the quarter ended August 31st, 2020, to $1.8 million this quarter. This represents 1.1% of average total assets, unchanged over these same periods.
We have also, again, added the KPI slide, starting from Slides 26 through 29 in the appendix at the end of the presentation, that shows our income statement and balance sheet metrics for the past nine quarters, and the upward trends we have maintained. Of particular note is Slide 29, highlighting how our net interest margin run rate has almost quadrupled since Saratoga took over management of the BDC, has increased by 8% the past 12 months, and has continued to increase in Q2. Moving on to Slide five. NAV was $324.1 million as of this quarter end, a $3.8 million increase from last quarter, and a $25.9 million increase from the same quarter last year, primarily driven by realized and unrealized gains.
During Q2, 9,623 shares were repurchased at a cost of $0.2 million at an average price of $25.85 per share, while 5,441 shares were sold for net proceeds of $0.2 million at an average price of $28.86. NAV per share was $28.97 as of quarter end, up from $28.70 as of last quarter and from $26.68 as of 12 months ago. NAV per share has increased 14 of the past 17 quarters. Our net asset value has steadily increased since 2011, and this growth has been accretive, as demonstrated by the increase in NAV per share. We continue to benefit from our history of consistent, realized, and unrealized gains. On Slide six, you will see a simple reconciliation of the major changes in NII and NAV per share on a sequential quarterly basis.
Starting at the top, adjusted NII per share increased from $0.56 per share last quarter to $0.63 per share this quarter. A $0.06 increase in non-CLO net interest income, a $0.01 increase in both CLO interest income and other income, and a $0.01 benefit from lower operating expenses were partially offset by a $0.02 decrease due to higher base management fees. Moving on to the lower half of the slide. This reconciles the $0.27 NAV per share increase for the quarter. The $0.57 of GAAP NII and $0.44 of net realized gains and unrealized appreciation on investments were partially offset by a $0.16 net expense related to income and deferred taxes on gains, the $0.44 dividend paid in Q2, and a $0.14 realized loss on extinguishment of debt.
Slide seven outlines the dry powder available to us as of quarter end, which totaled $229.3 million. This was spread between our available cash, undrawn SBA debentures, and undrawn secured credit facility. This quarter-end level of available liquidity allows us to grow our assets by an additional 54% without the need for external financing, with $73 million of it being cash, and thus fully accretive to NII when deployed, and $111 million of it SBA debentures with an all-in cost of less than 2%, also very accretive.