Farmington financier Horizon Technology Finance Corp. posted lower third-quarter net amid mounting headwinds in its pursuit of secured-lending to venture startups in the technology, health services, life-sciences and clean-tech industries.
For three months ended Sept. 30, Horizon said Wednesday it netted $3.2 million, or 33 cents a share, down from $3.5 million, or 36 cents a share, netted the same quarter in 2013.
Third-quarter investment income also slipped to $7.7 million from $8.7 million a year ago.
Its loan portfolio at quarterend dropped to $204.7 million vs. $241.3 million last year.
“Our performance in the quarter was characterized by strong prepayments that produced good portfolio income and yield, but resulted in a reduction in our portfolio at the end of the quarter,” Horizon Chairman and CEO Robert D. Pomeroy Jr said. “While venture capital investment remains robust … the industry is facing increased competition for new loans. We are using our favorable liquidity position to compete for attractive opportunities, but will not chase pricing and structures that we do not believe provide adequate risk adjusted returns.”
Pomeroy said Horizon recently got a “green light” from the U.S. Small Business Administration, on its license application to become a Small Business Investment Corp. lender, which would further widen its lending opportunities.
Separately, Horizon announced it will distribute three monthly cash payouts to stockholders of 11 ½ cents for each common share, totaling 34 ½ cents, in January, February and March 2015.