Hello everyone, and thank you for joining us during the Lytham Partners 2024 Investor Select Conference. My name is Roger Weiss. I'm the V ice President at Lytham Partners. During this fireside chat webcast, we welcome Capital Southwest, NASDAQ ticker symbol CSWC. Joining us today from the company are Bowen Diehl, President and Chief Executive Officer, and Michael Sarner, Chief Financial Officer. Also joining us today is Bryce Rowe, Senior Research Analyst with B. Riley Securities, whom we've asked to moderate today's fireside chat. A 20-year-plus veteran financial services analyst, Bryce has followed both banks and BDCs over his career and currently covers a wide array of business development companies at Riley, including Capital Southwest. Before I turn it over to Bryce, I want to remind everyone that management is available for one-on-one meetings throughout the conference. If you've not already signed up and would like to schedule a one-on-one, please send me an email at weiss@lythampartners.com or visit lythampartners.com/select2024. From there, you can click on the investor registration to make your one-on-one selections. Also, please note that Bryce and I webcasted an analyst roundtable on the BDC group earlier today. A replay link is available on the conference homepage. Again, that's at lythampartners.com/select2024, and then click on Presentations in the top left corner. With that said, Bryce, the floor is yours. Thanks, Roger. Bowen and Michael, glad to be with you guys today, and excited to do this fireside chat. Got a list of questions here to go through, and figured we might just start with Capital Southwest, your investment approach, the size of companies in which you invest, competitive landscape, the mix of debt investments versus equity investments within the portfolio. Just anything from a kind of an investment strategy perspective that would be helpful for viewers here. You bet, Bryce and Roger, both of you all, thanks for having us. We appreciate it. Appreciate the opportunity to talk about what we're doing here. Yeah, so Capital Southwest, you know, I'll just state the big picture. You know, we have a market cap over $1 billion. We have about $1.4 billion of investable cap or actual assets, more than that on investable capital. We are a business development company, internally managed, we'll talk about that, I think, later, and what that means. And we're a first lien, top-of-the-capital-stack lender to the lower middle market. And the vast majority of what we do are private equity-backed companies, private equity funds buying family-owned and family business, family-owned and founder businesses. And so, in fact, 93% or so of our portfolio are first lien loans backed by funded private equity firms. And essentially, the lower middle market is largely fueled by the aging demographic, as you hear about more in the context of healthcare, but the aging demographic is true with respect to business owners. And there are a lot of business owners out there that don't necessarily want to sell their company to a large strategic and take cash and go play golf. They want to stay involved. And so private equity, we've all heard how much liquidity and funding there is out in the private equity world. It's a very robust market from a private funding, equity funding perspective. And you have private equity funds, that's what they do. They go and buy 50-60% of a founder's business and institutionalize the company, allow the founder to focus on what they're good at, and not necessarily worry about all the other aspects of the business that they do just 'cause they own the business. And then they get to go maybe buy 3 or 4 of their competitors, which is something that a lot of them really enjoy. So that's basically our world. Again, first lien lending, and then we get the opportunity in our market to write a minority equity check most of the time, pari passu with that private equity firm, to then have equity upside for our shareholders in the growing, those lower middle market growing businesses. There's a lot of, you know, smaller companies, you know, typically $5-$20 million of EBITDA, and they're growing. They're growing, and there's not an opportunity to buy competitors and buy and build. And so having that equity piece when we like the equity story, which is a lot of times, you know... So our goal from a macro perspective is to kind of have 90% of our assets, around 90% of our assets in credit. You know, 96% or the vast majority of that credit, again, is first lien, and then having, you know, around 10%, 9%-10% of our portfolio in equity co-investments across a broad swath of those lower middle market companies. So today we've got, you know, 95 or so portfolio companies, and I'd say probably about 60% of those, maybe two-thirds of those, we also have an equity co-investment with in, alongside that PE firm. Then ultimately, we ride the liquidity, the desire for those PE firms. They don't get paid their carry until they sell the company, so they want to grow it and sell it. And so we ride that, we ride that train with them from an equity perspective. By the way, our EBITDA, the size of our companies are about $3 million-$15 million of EBITDA. That's the definition that for our lower middle market targets. Our average size is about $15 million, you know, of debt in each check, alongside usually, you know, maybe $1 million-$1.5 million of equity. So a typical size of a deal. Okay. And can you guys just speak to the competitive landscape? Who are you going up against when you're trying to, you know, land a deal? Yeah, so it's, I mean, the lower middle market's competitive. It's not near as competitive as the larger market. There's a lot more capital out there that likes companies that are, you know, above 20 million of EBITDA, right, than there are ones below 20 million of EBITDA. We have competitors. A lot of them are private debt funds. You know, some other BDCs, you know, definitely see other BDCs in the space, but, but it's certainly the minority of BDCs out there, in the lower middle market. But we've got, you know, private debt funds on the small end. You know, we also see competition from SBICs. We have an SBIC license, which we're happy to talk about. Here at Capital Southwest, we use it as a funding vehicle for companies that qualify for SBA funding. It's a really, really nice capital source for us and a really nice program for what we do in the lower middle market. So- And also some of the competitors, Bryce, that we see, we also share deals with. So if we don't win a deal, we may be partnering with another BDC or fund, 'cause we, you know... I think another metric we'd probably throw out there is our granularity. So the average size as a percentage of our assets is 1.2%, so rather granular. So when we see a deal that's $20 million-$40 million, we may only be, you know, taking down half of that and sharing the other if we win the deal, and vice versa for some other firms that want to utilize our capital as well. Okay. Helpful. All right, so with that, that context, and I think this is super important in your case, maybe give us a quick history lesson on Capital Southwest, and then how long have the two of you all been with the firm? Yeah, so it's an interesting question. It's an interesting story, and I'll be brief 'cause it can be a lengthy story. But you know, Michael and I, first and foremost, worked together for 15 years or so at our former firm, American Capital, which is now part of Ares. I ran the debt business, and Michael was the treasurer, and so ran all the, you know, right side of the balance sheet, financing, structured vehicles, all the things that we did at American Capital. So I have a very—I've been a credit guy for a long time, understand asset strategy, portfolio management, all that. Michael's, you know, very smart, so he gets all that, but he can finance a BDC and build a capital structure in his sleep. We were, you know, had a relationship for a lot, a lot of years at our former firm. I had the opportunity, I got recruited away to join the former CEO of Capital Southwest to be the Chief Investment Officer here in 2014. Capital Southwest went public back in 1961, so it's an old firm, was originally an SBIC, public, raised $16 million back in 1961 in an IPO. And then set off to really be solely an equity investor and kind of a mini Berkshire Hathaway. So they would buy equity businesses, most of the time 100% ownership, and own them for decades. You roll forward 50+ years, and they were, you know, solely an equity portfolio, had two companies that were half the assets on the balance sheet, which as a BDC, that's. You know, you can't really have concentrations like that. You know, those companies were just tremendously successful; that's how they got there. They're in the kind of the 2012-2014 timeframe. It's all equity. We were trading at a 55% discount to book value, paying no dividend, among, you know, 50 or so BDCs that were all paying dividends and were mainly credit-focused, primarily, which is really the primary purpose of these vehicles. So anyway, it was kind of struggling. They had a large shareholder that had gotten after them, wrote a nasty gram to the board, and so it shook the board up, and they decided, the board decided to find new management. So, found a CEO, lawyer, visionary-type guy that joined in late 2013. He and I met over breakfast in, I don't know, 8 or 9 different meetings. He convinced me to leave to be his CIO, right-hand guy, to kind of help unlock the puzzle, which was a really nice asset base, some good companies, but the asset, you know, the asset class and the mixture was really off. And so we set off to unlock that. So we, in December 2014, we announced that we would basically split the firm in half. He would leave to be the CEO of CSW Industrials, and that's his company, CSW Industrials today. And that I would become CEO of the business and basically relaunch the firm as a middle-market lending firm. And so about that time, I needed a CFO and was able to rekindle, you know, or call Michael, and he was a treasurer at American Capital, and convinced him to move down to Dallas to be my partner and, you know, and build this business with the seed capital we had. So, you know, and so then the rest is history. You know, 8.5 years ago, you know, you know, we went from trading at a 50% discount to book, no dividend, to today, we, you know, we've got, you know... And we had $250 million in assets or so, no debt, to today, we've, you know, got $1.5 billion or so of assets and you know paying, you know, 11% dividend, I think all in, and you know and trading at a 50% premium to book. So, so it's been a... You know, we've, we've built a model we believe that works. It's we treat it as an engine, an ongoing engine, going concern. We built the capital structure and both the capital structure and the asset strategy together, and because they work together, and we built it in a way that would have, you know, we'll talk about this on this call more, but, like, that, that would really work in all economic cycles, and it would have a very consistent ability to raise capital in kind of a, just an ongoing, bit by bit way through our ATM program, which we'll talk about. But, so we built an engine that we believe works, and a lot of it was because we, Michael and I, kind of set the strategy up front, and it's kind of worked out exactly, like we, we kind of planned it. So... Yep, that's a good synopsis, Bowen, and it's been a, it's been a fun, fun story to watch over the last, let's call it 8-9 years, for sure. So, you know, you guys, like, as you mentioned, you are internally managed. There are only four, what I would call prominent BDCs that are internally managed. You know, the bulk of them are externally managed. Can you just quickly talk about, you know, the difference between the two structures, and maybe the importance of the internal versus external? Yeah. So fundamentally, an externally managed vehicle, as most people know, but, you know, it's a private entity that's managing a public pool of capital. So and it's being compensated to manage that public pool of capital. So the shareholders in the public pool own the assets, but they don't own the manager. It's separate. So in an internally managed vehicle, simplistically, our shareholders own the manager, so they own all of it. So they own the assets, and they own the manager and everything that goes on here. So Michael and I and our team, we don't get management fees that we're being compensated to manage the assets. We're compensated, of course, with salary and bonus and all that, but most of our compensation comes from equity in the business. And so, you know, roll forward, I mean, I'll just speak for myself, my largest personal asset is by a long shot my ownership in Capital Southwest. And so, you know, as we think about going forward, all our decisions are essentially managing our own money in the sense that, you know, that is our, you know, our nut, if you will. And so, you know, we make money by building an engine that can be a going concern, that can thrive in all environments, that can raise capital regularly, that has multiple sources of capital. And ultimately, we make money by increasing our dividend, maintaining and growing our net asset value, and ultimately supporting the best, most optimal, highest stock price that the market will bear. And so if you think about that, that's exactly what our shareholders want. So, it's very aligned, and we're all kind of playing the same game. And so we're not, you know, we double assets, that's interesting, but it's not interesting for... We're not getting management fees, so we didn't double our management fees. It's only interesting if we actually created value. And the metric I would throw out there, Bowen, is that, you know, when we started this, you know, our operating leverage, right? Our expenses over our assets was, you know, 5%+. Obviously, you know, we had limited assets to work, and we still had some level of employees. Today, our operating leverage is 1.8%, which is the second best in all the BDC space, by actually, you know, the difference between the second or us and the next is a fairly large drop off. Whereas, you know, for the externals, you know, they average somewhere in the 3.5%-6% operating leverage. And, you know, in this time of rising rate environments, their leverage has gone up, right? Because they're going to be taking home more compensation as rates rise, whereas ours has continued to drop because our assets are growing, and we don't actually, it's not variable, our compensation, the way theirs is. Yeah, that's a really important point because as most people on this phone are managing assets, you can get real operating leverage. You know, you can grow assets under management faster than you have to grow your inherent cost to manage the capital. So we've increased our overhead, you know, quite a bit in the last eight years, but we've done it slower, significantly slower than we've grown assets under management. So the shareholders benefit from that. So, you know, for the non-BDC people in the room, it's, you know, operating leverage is essentially our operating cost divided by our assets, which is basically the load or the burden that the shareholders pay to have the assets managed. As that percentage comes down from 5% to 1.5% or 2%, then that's less burden from the shareholder's perspective to manage the assets, while also being very effective. We have, you know, we, we can, we have plenty of room to invest in people and infrastructure, but at the same time, have that fixed cost leverage effect, really, really, the shareholders benefit from it, as opposed to a sliding scale of management fees that goes up with assets. We're also obviously not incented to grow, right? Relative to an external who, you know, they're going to see their compensation grow exponentially with their growth. We don't have that, so it, you know, I think it's sort of been said, but we definitely are aligned with our shareholders- Yep ... from that perspective. Yeah. Yeah. And so we're, we're really incentivized to create an engine that works in all markets, and then the growth will take care of itself. I mean, if we find good credits, and we do good underwriting, and we create a model that works, the capital markets come to you. I mean, there's banks, we can talk about our bank credit facility with the, you know, 10 or 11 banks, you know, our different bond deals, you know, our ATM program. I mean, and then the growth just takes care of itself, as opposed to the number one goal is to scale. That's our - that's the result of creating the business model that works, not our number one goal. And then the growth takes care of itself, which has obviously happened over the last eight years. Yep, yep. Okay, helpful. All right, let's talk a little bit about the investing process and the portfolio. How do you source your lower middle market investments? And has that kind of changed over the last 8.5-9 years? Yeah, so the strategy has not changed over the last 8.5 years. It takes a while to build the franchise, to be able to have where we are today. So we cover the entire country. Our deals and our sponsors, you know, are pretty evenly weighted across the country. So it's truly a national network. You know, we see 800-900 deals a year. You know, we close 20-30 a year. We have 92 or 93 different sponsors in our portfolio. 15 or so, 15 plus, sponsors we've done multiple deals with. And so we cover every markets. You know, we've got people that cover the markets. There, you know, markets are rated kind of A, B, C, based on activity, quality of sponsors, et cetera... and they're just out actively, you know, calling on those sponsors. Obviously, as you've been doing this a while, you know, we develop and have developed a brand, a presence in the market. So, you know, we do a lot to kind of maintain the relationships, but the phone rings quite a bit. And so it's, but it's a private equity-funded centric, fund-centric kind of origination strategy with some non-sponsored deals kind of peppered in there. But it's mainly funded sponsors that are out trying to invest their money and find deals and, you know, we run alongside them, so. From the investment process, I mean, as our obviously as our assets has grown, we've grown the organization. You know, we started with 13 people, I think back in 2015, and today we have around 31 people, with, you know, a few coming on board. We've grown the talent internally as well. We've been able to take people that were analysts and, you know, associates and grown them up to principals and MDs. And so we built a pretty strong platform of people that have really grown within our construct, which we believe, you know, is, you know, we're pretty intense on the due diligence side. So we're kind of helping them understand the way we do the business, and we invest in the business. I think it's been a really strong story and has provided opportunities for a lot of young professionals. All right, so, you all are talking about the operating leverage associated with the internally managed model, and that can lead to better profitability, you know, as measured by return on equity. You know, that's one metric that I look at, from a fundamental perspective, a primary metric. The other one is NAV per share growth. And by my math, adjusting for the supplemental dividends you've paid and an original outsized investment that you held when you launched this credit strategy, I'm showing NAV per share up 18%. Michael, correct me if I'm wrong, but would love to kind of get your opinion on, you know, what has supported such strong NAV per share growth? Yeah, well, first of all, you know, it starts with good credit, so minimizing losses, certainly because the majority of the portfolio is in credit. But the equity co-investment strategy is important. I mean, it's, you know, it's, it's, you know, the winners, we want to make money on the winners. Obviously, we want it to be a net positive to NAV per share, so it's more than covering the losses, but it does. It creates something in the portfolio that the winners can cover an inevitable credit losses. I mean, I'm a perfectionist by nature, and so I hate losses, but, you know, we're in a world where losses are very, very seldom zero. And it's kind of a cost of doing business at a certain level, but you need something else in the portfolio where winners can cover losers. Now, we're first lien lenders, and so losses, too, you know, recoveries tend to be strong because you're top of the stack. But having that equity co-investment strategy is important, and we think kind of 10% is kind of optimal. You can have too much equity in the portfolio, and you can have too little, but that's a piece of it. I think also, you know, as, as we—if we can, and we have built, and we keep using the analogy of an engine, but we, we've created a business model, an engine, which has to do with the assets that we invest in, the capital structure that we've put together, the fact we're an internally managed vehicle and can get the operating leverage and all that. The fact that our shareholders own the manager, that allows us in most every market, vast majority of markets, we should trade above book. So unless something's really going wrong, we should trade above book. Because inherently, our net asset value includes the assets, but it doesn't include the, the, net, the asset manager. So there's value in excess of the assets for what we do every day. So if we can create the right optimal risk profile, we should trade above book in every market. Now, it's whether we're in a 10% premium or a 50% premium, you know, is market dependent. But that's super important because it allows us to raise that capital on a just kind of an ongoing basis, in virtually all markets. Yep, and to that point, since, you know, when we first traded above book was in 2018, and since then, so the last five years, we've only traded below book since then, during COVID, for a stretch of about a month. So for the last five years, we've raised about $480 million off our ATM program, and then another $60 million off of a secondary offering. So that certainly, with that price, to Bowen's point, raising that equity above book has also obviously enhanced NAV over the time. Part of the business model, the ability to do that consistently over long periods of time is the nature of a BDC business model if it's managed right, certainly an internally managed one. And then we pay, you know, we pay a 1.5% kind of commission effectively for shares sold in our ATM program. So versus a typical overnight offering that might have an 8% or 9% spread to it. So it's a very inexpensive way, and then just do it in dribs and drabs, kind of just in time, you know, kind of consistent with us putting it to work. And so it's a pretty, pretty efficient way to raise capital and increase NAV over time. So it's part of the engine, for sure. Certainly important to kind of note that not all BDCs, nor most, don't really trade above NAV, and when they do, it's not consistently above NAV. So, a massive competitive advantage for the internally managed BDCs. Yeah, and on that price, because of that fact, very few are able to utilize an ATM program, which is, you know, just in time to us, which, you know, so it's not wasted capital. Many, many of the externals that they raise money in, in a large sum. When they poke their head above book at one time, they'll get to 1.05, and they'll, you know, knock out $100 million, and that capital will pay down their debt. We'll have significantly unused fees. It's, you know, it's not efficient. For us, the ability to use that ATM program and only raise what we need it and put it to capital to work almost immediately, certainly makes us a more efficient vehicle. Yeah. All right, I mean, around that, around that topic, let's kind of talk about capital structure and balance sheet leverage. You know, Roger and I talked about, you know, kind of the regulation that governs the amount of leverage a BDC can use, on that analyst roundtable. I'm kind of curious, you know, where you sit right now from a balance sheet leverage perspective, and understand that you're a little bit lower than most BDCs, and you've actually seen it go down in the recent past. Can you talk about that trend, and then just talk a little bit about your various sources of financing? Yeah. So I would say we made a concerted effort, probably around 18 months ago or so, Bowen and I, you know, with potential market volatility in the rearview mirror, or I should say, in front of us, to bring down leverage. I think our regulatory leverage at the time was close to 1x, and our economic leverage was probably 1.25x or so. Today, our leverage is, from a regulatory perspective, which is obviously excluding the SBIC, was 0.92x at the previous 9/30 quarter, and our economic leverage was just a tad above 1x. You know, our viewpoint is going into potential cycles, you know, we're best from a flexibility perspective, to be low levered with the, you know, possibility of seeing, you know, some level of market volatility. You know, some of that stuff is when you might see volatility in your assets and some depreciation on a very temporary basis, and the notion is you don't want to be in a position where you're going to become over-levered, going into a cycle. That gives us... You know, that certainly would shut off the, the ability to raise capital, either equity capital or it can be spook, you know, spook your lenders, etc. So we felt as the conservative approach was to be de-levered. We would tell you on a normal state basis, you know, we still expect to be between 0.8 and 1 times leverage, depending on what the cycles might look like. We think that's both conservative from a practical standpoint, and then there's the other, you know, from a, you know, we're rated by both Moody's and Fitch as investment grade, and, you know, their parameters, but also, you know, prefer to see their BDCs and other companies levered in a conservative manner, which is something, you know, 1x or less. So those are sort of the benchmarks that have kind of given us the strategy to apply our leverage where it is today. Yeah, you know, our job is to make sure the company's performing optimally all the time. I mean, we didn't then, and we really don't now, really see any meaningful economic effect on the portfolio. But, you know, we all know rates have gone up, and history would suggest that that results in some level of recession, and we could debate all day as whether it's light recession, heavy recession, or recession at all. I mean, like, you know... But our job is to prepare the firm for all things. And, you know, and if the market gets super choppy, it's harder to raise capital, but it's also, those same effects make the investing economics on the, on the asset side, the things we invest in, be more attractive. And so when you think about it, what do we want to do in a tough recession? I mean, we don't hope one, we don't see signs of one necessarily, but we don't hope for one. But if we had a tough recession and the market got really choppy, you know, we want to be able to invest capital. If we're not raising equity, that's levering up the BDC, right? So we would want to be able to support our companies. So the economics to our shareholders on support capital for our portfolio company are very much in our favor. So, so, you know, the economics of dollars used to support portfolio companies during a cycle can be egregiously in the lenders' favor, and so that benefits our shareholders. If we're not raising equity, that's also levering up the BDC, right? And if our stock trades, you know, kind of poorly, we want to be able to buy back shares. Well, if we're buying back shares, that's also levering up the BDC. And so all those things, if you're levering up the BDC in a recession, which is probably when you want to lever up a BDC, that means by definition, you have to go into that recession at low leverage. And so that's, it's really as simple as that. And if you take a step back and you look at our earnings, our net investment income divided by our NAV, this BDC is one of the most profitable BDCs in the space, and it's been that way for a while. And so our business model is profitable, very profitable, without, before you start financially engineering. So there's no reason for us to lever the BDC up substantially. And then, of course, Moody's and Fitch saw that and appreciate that, and we were able to get two investment-grade ratings as a result of that. And so, we're pretty excited about having an engine that we can run in all market cycles without overly financially engineering it. That's, you know, speaking as a shareholder, that's super important. We've also increased our unsecured debt as a percentage of our total debt, which we also think is a more conservative stance, you know, looking ahead. And as well as, you know, we've been building up more of cash availability, more dry powder on our balance sheet, and we'll tell you, you know, some of our goals now are continue to stay de-levered, you know, raise equity and for a liquidity perspective, and to continue to grow both our secured and unsecured. Especially when we look down, you know, the path, we have a few bonds that will mature in 2026. You know, we want to have enough availability that if the capital markets aren't there for us, that we're able to take down that debt. On our secured facility, right? If in case the bond markets occasionally shut down for a period of time, the secured a little less. Obviously, the equity markets are quite fickle. So, you know, looking ahead, it's not just delevering, but it's also making certain liquidity is set so that we have flexibility to do some of the things Bowen mentioned and obviously deal with any clip financings. Maybe last topic, let's hit on the dividend, just given a bit of a time constraint here. So, you know, you guys have established a track record of growing the dividend, growing the base dividend, but you've also set up this, you know, dividend construct that features a base and a supplemental. Can you talk about the dividend construct, and then, you know, maybe how you think about the dividend in a potentially lower short-term interest rate environment? Sure. So we think we'd like to match up the regular dividend, which is based off of our net investment income. So that's our run rate of, you know, our operating income on a quarterly basis. And we looked on the, on the other end, our supplemental program is built off of two things: gains off our portfolio over time, as well as the differential between our dividend and the NII. So we essentially under distribute on a quarterly basis, and certainly we've seen a lot of that over the last 12 months as rates have risen. Because the notion is that we are going to structure our regular dividend to where we believe rates will eventually settle back down to. So if it's a neutral rate, that's somewhere, you know, in the 2.5%-3%, we're not going to chase the regular dividend up to where our NII is. We're going to make certain that we're slow and steady on our NII, on our, on our regular dividend, to assure that the shareholders feel comfortable in our regular dividend, knowing it's not going to get cut, it's not going to get turned off. On the supplemental side, you know, we're interested in allowing our shareholders to participate in our gains and our, the amount of earnings that we're so because if we're paying out a regular dividend that's less than our NII, it's not that we're not going to give our shareholders that money, then, it's going to give that money to the distributions over a period of time. So we're looking to build out a base on the UTI that's going to allow for that supplemental program to be able to be paid over a long period of time. So at this point, we have roughly $0.50 of UTI with an eye toward continuing to grow it into the future, and it's currently $0.06 supplemental dividend. That might vacillate as consistent with some other BDCs that have more of a computed distribution on their supplemental. Ours is relatively. We're sharing it around 50%, but that might be ± on a quarterly basis. But we want shareholders, first and foremost, to believe in our regular dividend and understand that that's going to at least be at the level it is today. Looking forward, you know, when we see rates come back down in the next 12-24 months, you know, we believe our current regular dividend of $0.57 still has room to grow. Bowen, do you have anything to add on the dividend or? I would just say, yeah, I would just reiterate, fundamentally, the reason we split it into two parts is the regular dividend. We set, we have a corporate model, Michael and I look at, gosh, every day, probably. You know, the top, you know, four or five years kind of thing, as we think about where we're going. And, you know, we, we set the regular dividend at a level that when rates come back down, our current, you know, where we are today, you know, with, you know, rates coming back down, that regular dividend is not going to change. I mean, like, that's where we set it, you know? And so then but right now, we've got earnings in excess of that, and so that's, you know, that's, that's a supplemental. And on top of that, the supplemental is also fed by our UTI, which is generated from capital gains on our lower middle market portfolio and excess earnings that are being accumulated. So, you know, but the way shareholders, we set it up like that so the shareholders can analyze the regular dividend differently than the supplemental dividend. And we think they should have tremendous confidence in both, but the math is different in both. And so we wanted to have people understand and evaluate those things correctly and separately. Yep, and one thing I'd tell you, Bowen, from just from a market perspective, like our dividend yield, our regular dividend yield is north of 9%, and our total dividend yield is around 10%. You know, as rates come back down, we would anticipate that bogey to drop towards more normal levels, which might be, you know, 7.5% or 8.5%. Maybe that's where we've seen BDCs historically, at least well-performing BDCs. And so our regular dividend, if we're trading off of it, we would expect that to grow still towards, you know, $0.60 or something in that neighborhood, low 60s. As the rates come down, we would expect that there's still a lot of growth in our stock price, quite frankly, as long as we continue to, you know, be strong in our diligence and make good decisions. We would expect that you know our dividend yield is going to support a higher stock price. Excellent. Well, this is, it's been a great overview. Appreciate the time today, and I'm going to turn it over to Roger for closing exit comments. Again, Bryce, Bowen, Michael, thank you all for taking the time to join us today. Clearly, there's a lot of great stuff going on in Capital Southwest. You guys have just done a tremendous job over the last couple of years, and it's very impressive to both hear about and to watch. As we wrap up, two quick reminders. To anyone out there who is not already signed up for a one-on-one, again, please send me an email at weiss@lythampartners.com, or again, visit lythampartners.com/select2024 and click on Enter Conference Site button. And don't forget about the BDC Analyst Roundtable that Bryce and I participated in earlier today. Webcast links are available at the conference homepage at lythampartners.com/select2024, and click on Presentations in the top left corner. I hope you all can join us there. Again, Bryce, Bowen, and Michael, thank you again, and we hope everybody enjoys the conference. Thanks. Thank you, everybody. Thank you for including us. We appreciate it, and we look forward to one-on-ones. We love to talk, talk to each, the people one-on-one. That's great. So thank you all very much. Have a great, great day. Thanks.