Allied Capital

(ALD)

said net income and shareholder equity rose from a year ago as the yield and value of its investment portfolio increased.

Allied Capital is a business development company that makes money through its investment in private companies and real estate. For the latest quarter, net income, which the company also defines as the net increase in net assets resulting from operations, was $78.5 million, or 62 cents a share, compared with net income of $53.4 million, or 51 cents a share. Shareholder equity jumped to $1.9 billion from $1.5 billion a year ago, primarily reflecting an increase in paid-in-capital.

The latest quarter included net realized gains of $24.9 million, or 20 cents a share, and a net unrealized depreciation of $706,000, or 1 cent a share. The year-ago period included net realized losses of $12.1 million, or 11 cents a share, and net unrealized appreciation of $23.1 million, or 22 cents a share. Net investment income was $54.3 million, or 43 cents a share, in the latest quarter compared with net investment income of $42.4 million, or 40 cents a share, last year.

The company's total interest and dividends from its investment portfolio was $76.2 million in the latest quarter compared with $68.8 million a year ago. The overall weighted average yield on its interest-bearing portfolio was 14.7% at the end of the quarter, up from 14.0% a year earlier. Loans and debt securities, which totaled $1.21 billion at Dec. 31, 2003, had a weighted average yield of 15.0%, as compared to 14.4% a year earlier.

Allied's shares closed Tuesday at $30.43 after touching a 52-week high earlier in the session.