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BDC — Q3 2026 Earnings Summary

  • Financial Performance:

    • Total assets increased to $1,168.5 million as of September 30, 2026, from $944.4 million in September 2025.
    • Total net assets rose to $475.1 million in September 2026, compared to $388.7 million in September 2025.
    • Investments at fair value grew to $1,022.3 million in September 2026, up from $789.2 million in December 2025 and $747 million in Q3 2025.
    • Total investment income for the three months ended September 30, 2026, was $24.2 million, compared to $21.8 million in the same period in 2025; for the nine months ended September 30, 2026, it was $71.2 million versus $62.4 million in 2025.
    • Net investment income for the three months ended September 30, 2026, was $9.4 million, up from $9.1 million in 2025; for the nine months ended September 30, 2026, it was $28.7 million versus $26.9 million in 2025.
    • Net increase (decrease) in net assets resulting from operations was a decrease of $13.7 million for the three months ended September 30, 2026, compared to an increase of $5.7 million in 2025; for the nine months ended September 30, 2026, it was a decrease of $5.3 million versus an increase of $25.9 million in 2025.
    • Earnings per share were $(0.40) for the three months ended September 30, 2026, compared to $0.23 in 2025; for the nine months ended September 30, 2026, EPS was $(0.17) versus $1.07 in 2025.
    • Weighted average yield at amortized cost was 10.6% as of September 30, 2026.
    • Net interest margin was 4.7% as of September 30, 2026.
    • Distribution rate was 8.1% as of September 30, 2026, down from 9.4% in September 2025.
    • Shares outstanding increased to 34.4 million as of September 30, 2026, from 26.2 million in September 2025.
    • Net asset value per share was $13.81 as of September 30, 2026, down from $14.81 in December 2025.
    • Total investment income for the three months ended September 30, 2026, included $22.2 million in interest income, $0.6 million in paid-in-kind interest and dividend income, $0.7 million in fee income, and $0.7 million from cash and cash equivalents.
    • Total expenses for the three months ended September 30, 2026, were $14.8 million, including $9.5 million in interest and financing expenses, $2.2 million in management fees, and $1.7 million in incentive fees.
    • Net realized losses on investments were $11.3 million for the three months ended September 30, 2026, compared to a gain of $0.1 million in 2025.
    • Net change in unrealized losses on investments was $9.8 million for the three months ended September 30, 2026, compared to a loss of $3.6 million in 2025.

  • Guidance and Future Outlook:

    • The company has set a "Goal 2030" target to reach 100,000 employees in its portfolio, with 52,700 currently supported (52.7% of target).
    • The company aims for 50% of its portfolio to be non-sponsored, currently at 46.1%.
    • The company targets 50% of its portfolio to be in non-sponsored deals, currently at 46.1%.
    • The company has a target to have 50% of its portfolio in non-sponsored deals, currently at 46.1%.

  • Business Segments and Product Lines:

    • The portfolio consists of 64 companies as of September 30, 2026, an increase of 17 companies from 47 in September 2025.
    • Top industry exposures include Professional Services (11.3%), Hotels, Restaurants & Leisure (9.8%), Health Care Providers & Services (9.1%), and Financial Services (6.0%).
    • Geographic distribution includes the Empire region (31.8% of fair value), Mid-Atlantic (17.1%), Gulf Coast (14.7%), Far West (14.7%), Southeast (11.3%), Great Lakes (6.9%), Northeast (1.0%), Cascade (1.7%), and Four Corners (0.8%).
    • 96.6% of the portfolio is floating rate as of September 30, 2026, up from 85.4% in December 2025.
    • 96.1% of the portfolio is at fair value relative to par.
    • The weighted average number of covenants per portfolio company is 2.1.
    • There is 0% direct SaaS exposure in the portfolio.

  • Market and Competitive Landscape:

    • Institutional ownership is 95%.
    • The company holds a BBB (low) / Stable credit rating trend from Morningstar DBRS.
    • The weighted average asset maturity is 3.0 years, while the weighted average debt maturity is 5.0 years.
    • The asset coverage ratio is 207.4%.

  • Risks and Challenges:

    • Net realized losses on investments were $11.3 million for the three months ended September 30, 2026.
    • Net change in unrealized losses on investments was $9.8 million for the three months ended September 30, 2026.
    • Net change in unrealized losses on interest rate swaps was $2.0 million for the three months ended September 30, 2026.
    • The non-accrual rate at fair value was 2.8% as of September 30, 2026.
    • The watch-listed rate was 1.2% as of September 30, 2026.

  • Management Commentary and Tone:

    • The weighted average interest coverage ratio was 2.8x as of September 30, 2026, up from 2.6x in December 2025.
    • The weighted average net leverage was 3.7x as of September 30, 2026, up from 3.6x in December 2025.
    • The weighted average loan-to-value (LTV) was 54.0% as of September 30, 2026, up from 49.0% in December 2025.
    • The weighted average spread was 6.5% as of September 30, 2026, consistent with December 2025.

  • Other Key Points:

    • Funding sources include a $300.0M ING Revolver at SOFR + 2.67% maturing in 2029, $230.0M in SBA Debentures at a fixed 10-year rate with $350M capacity, and $145.0M in Senior Unsecured Notes at 7.00%–8.25% fixed rates maturing between 2029 and 2031.
    • Total ITD distributions were $101 million.
    • Investments at fair value grew by $275 million, representing a 36.8% increase.
    • Human capital indicators show 53% retirement participation, 33% healthcare participation, and 28% employee turnover (quarterly), compared to national averages.
    • Managerial assistance adoption is at 32%.
    • The average fair value per portfolio company was $16.0 million as of September 30, 2026, up from $14.6 million in December 2025.
    • Dividends declared were $0.28 per share for the three months ended September 30, 2026, down from $0.35 in 2025; for the nine months ended September 30, 2026, dividends were $0.94 per share versus $1.05 in 2025.