Ladies and gentlemen, and thank you for standing by. At this time, I would like to welcome everyone to the Stellus Capital Investment Corporation fourth quarter 2021 results conference call. At this time, all participants have been placed on a listen-only mode. The call will be open for a question-and-answer session following the speaker's remarks. This conference is being recorded today, Wednesday, March 2, 2022. It is now my pleasure to turn the call over to Mr. Robert Ladd, Chief Executive Officer of Stellus Capital Investment Corporation. Mr. Ladd, you may begin your conference.
Okay, very good. Thank you, Paula. Good morning, everyone, and thank you for joining the call. Welcome to our conference call covering the fourth quarter and year ended December 31, 2021. Joining me this morning is Todd Huskinson, our Chief Financial Officer, who will cover important information about forward-looking statements as well as an overview of our financial information.
Thank you, Rob. I'd like to remind everyone that today's call is being recorded. Please note that this call is the property of Stellus Capital Investment Corporation, and that any unauthorized broadcast of this call in any form is strictly prohibited. Audio replay of the call will be available by using the telephone number and PIN provided in our press release announcing this call. I'd also like to call your attention to the customary safe harbor disclosure in our press release regarding forward-looking information. Today's conference call may also include forward-looking statements and projections, and we ask that you refer to our most recent filing with the SEC for important factors that could cause actual results to differ materially from these projections. We will not update our forward-looking statements unless required by law.
To obtain copies of our latest SEC filings, please visit our website at www.stelluscapital.com under the Public Investors link, or call us at 713-292-5400. This time, I'd like to turn the call back over to our Chief Executive Officer, Rob Ladd.
Thank you, Todd. We'll begin by discussing our operating results, followed by a review of the portfolio, which will include asset quality and an outlook. Todd will cover operating results first.
Thank you, Rob. We had solid results in the fourth quarter and for fiscal year 2021. First, I'll cover our annual results. For fiscal year 2021, we more than covered the dividend of $1.14 per share with realized income of $2.08 per share, which included $20.8 million of net realized gains after taxes or $1.06 per share. Core net investment income was $1.22 per share, and GAAP net investment income was $1.01 per share. Core net investment income excludes $2.9 million of capital gains incentive fees accrued on realized and unrealized gains, which are not included in net investment income, and $1.1 million of estimated income taxes.
Net asset value increased $11.8 million from $273.4 million to $285.1 million year-over-year, due primarily to the realized gains. On a per share basis, net asset value increased from $14.03 to $14.61 per share year-over-year. Turning to the fourth quarter, our distributions of $0.28 per share, which were declared in the third quarter, were covered through core net investment income of $0.33 per share and realized core income per share of $1.10. On a GAAP basis, net investment income was $0.26 per share and realized income was $1.02 per share. During the quarter, we generated $14.8 million of realized gains after tax or $0.76 per share.
In addition, our board declared an additional dividend of $0.06 per share in the aggregate to be paid in February, March, and April of 2022. Net asset value per share increased $0.46 during the quarter from $14.15- $14.61 due to the early declaration of the fourth quarter dividend and the realized gains from our equity portfolio. Finally, we increased our bank facility in December from $230 million to $250 million in order to enable us to participate in investment opportunities in anticipation of coming repayments while maintaining adequate liquidity to cover our unfunded commitments. With that, I'll turn it back over to Rob.
Okay, thank you, Todd. I'd like to now cover the following areas, a life-to-date review, portfolio and asset quality, dividends, and then outlook. Life-to-date review. Since our IPO in November 2012, we've invested approximately $2 billion in over 160 companies and received approximately $1.3 billion of repayments and equity gains while maintaining a stable asset quality. Life-to-date, we paid over $181 million of dividends to our investors, which represents $12.05 per share to an investor in our IPO in November 2012. Relative to portfolio and asset quality, we ended the portfolio with an investment portfolio at fair value of $772.9 million across 73 portfolio companies. This is up from $653.4 million across 66 companies a year earlier.
During 2021, we invested $389.4 million in 27 new and 37 existing portfolio companies and received $266.1 million of repayments and gains, which results in a net portfolio growth at cost of $126.4 million for the year of 2021. With respect to the fourth quarter, we were very busy. We invested $144 million in 9 new and 13 existing portfolio companies and received repayments and gains of $147 million. Our portfolio continues to be weighted towards secured lending at floating rates. At December 31, 99% of our loans were secured and 96% were priced at floating rates. This move has coincided with greater first lien and unitranche lending, as we have reported in the past.
We continue to maintain good diversification with the largest industry sector at 23% of the total. The average loan per company is $12.2 million, and our largest overall investment is $20.5 million, both at fair value. Sixty-nine of the 73 portfolio companies are backed by a private equity firm. Overall, our asset quality is stable at 2.09 on our investment rating system. Eight percent of our portfolio is rated a one or ahead of plan, and 16% of the portfolio is marked at an investment category of three or below. In total, we have three loans on non-accrual, which comprise 0.8% of fair value of the total loan portfolio. Now turning to dividends.
During 2021, we increased our regular dividend, which we pay monthly from $0.25 per share per quarter in the aggregate to $0.28 per share per quarter. In addition, we declared additional dividends of $0.03 and $0.06 per share, which were paid in the third quarter of 2021 and what remains of the first quarter of 2022, respectively. These additional dividends are based on the significant realized gains we are generating from our equity portfolio. As a reminder, an important part of our strategy has been to invest in the equity of our portfolio companies in a modest way in order to generate realized gains sufficient to offset possible credit losses over time. As our business has matured over the last 9 years, we've begun to see somewhat regular realized gains from our portfolio.
To this end, during 2021, we generated $20.8 million of net realized gains after taxes, and we expect more to come this year. In fact, we received an additional equity gain yesterday of $3.2 million or $0.16 per share. I would also like to point out this strategy in part has also allowed us to generate an accumulated undistributed surplus to date, which you'll see in the equity section of the balance sheet in the amount of $10.5 million. This represents realized and unrealized retained earnings since inception. This is significant as it demonstrates our ability to cover dividends and grow net asset value. Now looking forward, we expect to continue this $0.06 additional dividend each quarter for the foreseeable future.
When combined with the current dividend of $0.28 per quarter and the additional six cents per quarter, our shareholders are receiving an aggregate of $0.34 per quarter of dividends or $1.36 in the aggregate annually. Subject to board approval, of course, this will return us to our historic dividend payment rate of $1.36 per share per year. As a reminder, this is 9% return on our IPO price of $15. Now to turn to outlook. Across our platform, 2021 was an historic year for originations. In addition, we were able to fund many of these investments through our SBIC subsidiaries, which, as you know, are a source of long-term, low-cost capital. Our pipeline remains robust, and we're off to a good start in the first quarter.
I'd like to share with you that we benefit from our larger platform, Stellus Capital Management, which includes a number of private institutional funds that co-invest alongside SCM. Since January of last year, we have raised in excess of $800 million in these vehicles. Today, total assets under management across our entire platform are approximately $2.4 billion. This additional capital allows us to invest in larger transactions, remain active in the market when SCM may have limited capital, and build all portfolios in a diversified manner. Since year-end, we have funded $42 million at par in six new portfolio companies. We've identified likely fundings of approximately 20 over the balance of the quarter. For repayments, also, we are looking at approximately $20 million of potential payoffs all during the quarter.
Therefore, from here, we expect the portfolio to be relatively flat as we get to March 31. This is, of course, in addition to $3.2 million of capital gains proceeds I mentioned earlier. With that, we'll open it up for questions. Thank you. Paula, please, we'll begin the Q&A session now.
Thank you. To signal for a question, please press star one on your telephone keypad. Also, if you are using a speakerphone, please make sure that your mute button is turned off to allow your signal to reach our equipment. Once again, it is star one at this time for questions, and we'll pause to give everyone the opportunity to signal. Our first question will come from Christopher Nolan with Ladenburg Thalmann.
Hey, guys.
Good morning, Chris.
Hey, Rob. Hey, Tom, Todd. Hey, Todd, in your comments, did I hear you correctly when you said core EPS is $0.26?
Core EPS was $0.33. GAAP is $0.26.
Great. Okay. Thank you. I guess the congratulations on the quarter. Congratulations on the dividend supplements. As we look ahead and given the prospects of Fed hikes, what do you think that will do to the outlook for realized gains going forward?
You know, so overall, our view of interest rates would be that they'll likely rise but not materially. We would not expect that to have a material impact on both realizations, new originations and repayments. Again, based on the forecast of increasing but not too high, we don't expect a material change. What really drives the equity gains, as you know, is our portfolio companies being sold by their private equity owners. We think that continued realization will occur. Also, as we know that, the middle market private equity world has significant dry powder to invest, which in turn ends up being, in some cases, the purchaser of these businesses that we finance and have an equity co-investment in.
Great. Okay, thank you. That's it for me.
Okay. Thank you, Chris.
Moving on, we'll go to Matt Hajdun with Raymond James.
Yeah. Good morning, Matt.
Hey, good morning, guys. Thanks for taking my questions. Todd, maybe first one's for you. In 2021, I know you guys were taking dividends out of NAV based on the declaration date, which is maybe a little bit different than some of your peers. Do you expect that to continue in 2022 or maybe take it out of NAV based on the ex-div date?
Yeah, Matt. Thank you, thank you. At this point, you know, we know that it's acceptable to do it both ways. At this point, we don't have an intention to change it, that we'll continue to take it out on the declaration date. It's been. You know, we could change it, but my guess is we'll keep it where it is and certainly would, you know, would highlight it if we decide to change that treatment.
Got it. You know, as a follow-up, Rob, maybe for you, the $3.2 million realized gain that just occurred a couple days ago. Any chance you could give us a sense how that compares to kinda marks at 12/31 and if we should expect any impact to NAV?
Sure. Good question, Matt. It's roughly $700,000 higher than the market at 12/31. NAV would increase by that amount, whereas the overall gain would be the larger amount of $3.2 million. Total proceeds-
Got it.
Roughly, total proceeds are just under $3.7 million.
Got it. That's helpful. Last one for me. Rob, maybe sticking with you. You know, I'd be interested how hard it is right now to get equity positions in some of your portfolio companies relative to historic levels.
You know, Matt, as I've said earlier, and you know it's a core part of our business and our strategy, and although we don't always receive them, we ask on all companies, all situations. I wouldn't see a meaningful change in that. We continue to receive them and don't expect that to change.
Got it. That's it for me. I appreciate the time this morning, guys.
Yeah. Thank you, Matt.
Moving on, we'll go to Ryan Lynch with KBW.
Yeah. Good morning, Ryan.
Hey, good morning. Thanks for taking my questions. First one, can you maybe clarify your comment on activity you guys expect in Q1 2022? It looks like you guys had, like, $41 million of investments kind of quarter to date. It looks like you're talking maybe about $20 million in additional fundings and then $20 million of repayments, so then you said maybe flat. Can you just clarify exactly, you know, what were you thinking for Q1 of activity? Again, it's hard to predict and subject to change.
Yes. Best we can tell at this point, we would be therefore up about $40 million over Q4, and so the portfolio would be roughly $820 million, which is where we are today.
Okay. Okay. Just from, you know, kind of, an environment portfolio activity outlook, you know, obviously, you know, you've done pretty well in Q1, it looks like, so far. As valuations, you know, have come down, at least in the public market, I would think some of that would trickle over to some of the private market valuations coming lower. There's also, you know, the potential for interest rates to rise. Have you seen any, you know, slowdown in potential for deal activity kind of as we get out of Q1 and kind of looking forward? Have you seen sponsors less willing to do deals or anything like that?
Yes, Ryan. I'd say overall, as you can tell from the pace in Q1, assuming we fund the remaining $20 million, that would be a pace of roughly $60 million, annualized of $240 million, and that would be lower than last year. The first quarter is certainly slower than the third and fourth quarters of 2021. We do have a lot of activity today, so we really haven't seen, probably just a lull after the year-end, but we haven't seen a slowdown in opportunities in front of us. I will say this, though, that to kind of go back to some of the observations you've made, that as you know, we mark our equity portfolio off of you know, the earnings of the companies, but also we use you know, public markets as proxies.
In which, you know, the equity markets are off right now. Relative to debt positions, our models use credit spreads that you can observe, and they have widened since 12/31. I think as a general matter, the industry, you know, could have a slightly lower valuation on a portfolio basis, just based on the public markets, although we don't expect it to be material for us. Going back to your original question, we haven't seen this phenomenon in the impact on the opportunity flow, though.
That's helpful color both on the market activity as well as kind of, you know, internally, you know, how you guys mark stuff, you know, relative to market conditions that are in the environment today. That's helpful, and I appreciate the time this morning.
Okay. Thank you very much, Ryan.
That does conclude our question and answer session. I'd like to turn it back to Mr. Ladd for any additional or closing comments.
Okay. Thank you, Paula. First, thank everyone for joining the call and also for your support over the last year, and for many of you, since we started this company in November of 2012. We look forward to speaking with everyone in early May as we report the first quarter. Thanks again.
Thank you. This does conclude today's call. We'd like to thank everyone for their participation. You may now disconnect.