Main Street Capital Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net investment income (NII) was $83.8 million ($0.89 per share), a 3% decrease from $86.5 million ($0.97 per share) in Q3 2025.
• Distributable net investment income (DNII) was $89.9 million ($0.96 per share), a 3% decrease from $92.7 million ($1.03 per share) in Q3 2025.
• Distributable net investment income before taxes was $91.7 million ($0.98 per share), a 4% decrease from $95.7 million ($1.07 per share) in Q3 2025.
• Total investment income increased 2% to $142.5 million from $139.8 million in Q3 2025, driven by an 8% increase in interest income to $111.9 million, partially offset by an 18% decrease in dividend income to $25.5 million.
• Net increase in net assets resulting from operations was $117.1 million ($1.25 per share), a 5% decrease from $123.7 million ($1.38 per share) in Q3 2025.
• Return on equity was 14.7% annualized for the quarter, down from 17.0% in Q3 2025.
• Net asset value (NAV) per share was $34.22, representing a 0.9% increase from $33.92 at June 30, 2026, and a 2.7% increase from $33.33 at December 31, 2025.
• Total cash expenses increased 15.2% to $50.9 million from $44.1 million in Q3 2025, primarily due to a $6.4 million increase in interest expense.
• Non-cash compensation expenses decreased $0.1 million to $6.1 million from $6.2 million in Q3 2025.
• Operating Expenses to Assets Ratio was 1.2% annualized for the quarter, down from 1.4% in Q3 2025.
• Net realized loss was $27.6 million, compared to a net realized loss of $19.1 million in Q3 2025.
• Net unrealized appreciation was $68.5 million, compared to $63.0 million in Q3 2025.
• Total assets were $6.04 billion as of September 30, 2026, up from $5.68 billion as of December 31, 2025.
• Total liabilities were $2.84 billion as of September 30, 2026, up from $2.69 billion as of December 31, 2025.
• Total net assets were $3.21 billion as of September 30, 2026, up from $2.99 billion as of December 31, 2025.

Guidance and Future Outlook:

• Management stated that distributable net investment income before taxes per share was in line with expectations and prior guidance.
• The company expects to obtain and subsequently maintain SBIC debentures in the future in an amount up to the regulatory maximum amount allowed.
• Management expressed confidence that diversified lower middle market and private loan investment strategies, combined with cost-efficient operations and a conservative capital structure, will allow for continued superior results.

Business Segments and Product Lines:

• Completed $61.5 million in lower middle market (LMM) portfolio investments, including $39.3 million in a new portfolio company.
• Completed $162.0 million in private loan portfolio investments.
• LMM portfolio fair value was $3.25 billion with 92 portfolio companies; private loan portfolio fair value was $2.11 billion with 86 portfolio companies.
• LMM portfolio weighted-average annual effective yield was 12.7%; private loan portfolio weighted-average annual effective yield was 10.4%.
• The External Investment Manager (MSC Adviser I, LLC) earned $9.3 million in fee income (net of waivers), a decrease of $0.4 million from Q3 2025, with total assets under management of $1.8 billion.
• Other portfolio investments totaled $146.7 million in fair value across 32 entities.
• Middle market portfolio investments totaled $73.5 million in fair value across nine portfolio companies.

Market and Competitive Landscape:

• The company maintains an industry-leading position in cost efficiency with an Operating Expenses to Assets Ratio of 1.2% annualized.
• The company holds investment grade credit ratings of BBB- with a stable outlook from Fitch Ratings and S&P Global Ratings.
• The company operates in the lower middle market (revenues $10M-$150M) and private loan markets (revenues $25M-$500M).

Risks and Challenges:

• Net investment income and distributable net investment income decreased due to increased total cash expenses, specifically higher interest expense.
• Net investment income per share decreased by 8% due to a 4.6% increase in weighted-average shares outstanding from ATM equity issuance, dividend reinvestment, and equity incentive plans.
• Net realized losses were driven by exits and restructures, including a $15.0 million loss on a full LMM exit and an $11.3 million loss on a private loan restructuring.
• Forward-looking statements note risks including adverse economic changes, macroeconomic factors, interest rate fluctuations, regulatory changes, and competitive factors.

Management Commentary and Tone:

• CEO Dwayne L. Hyzak expressed pleasure with the strong operating results, citing an annualized return on equity of 14.7% and an increase in net asset value per share.
• Management highlighted the sustainable strength of the platform, the benefits of diversified investment strategies, and the quality of portfolio companies.
• Management noted the declaration of the twenty-first consecutive quarterly supplemental dividend and 13 increases to regular monthly dividends since Q4 2021.
• Management emphasized maintaining strong liquidity and a conservative leverage profile in the current economic environment.

Other Key Points:

• Declared regular monthly dividends totaling $0.795 per share for Q4 2026 ($0.265 per share monthly), a 3.9% increase from Q4 2025.
• Declared and paid a supplemental dividend of $0.30 per share, bringing total Q3 2026 dividends to $1.095 per share, a 2.8% increase from Q3 2025.
• Received SBA approval to increase SBIC debenture borrowing capacity by $75.0 million to $250.0 million for one fund, providing total access to $425.0 million of the $475.0 million regulatory maximum for affiliated SBIC funds.
• Issued $500.0 million in 6.55% unsecured notes due January 15, 2030, in October 2026.
• Repaid $500.0 million of July 2026 Notes at par in July 2026.
• Aggregate liquidity was $1.218 billion as of September 30, 2026, including $102.4 million in cash, $1.041 billion in unused credit facility capacity, and $75.0 million in available SBIC debenture capacity.
• Outstanding borrowings included $495.0 million under the Corporate Facility and $300.5 million under the SPV Facility.
• Unsecured notes outstanding included $550.0 million (March 2029), $400.0 million (June 2027), $350.0 million (August 2028), and $150.0 million (April 2031).
• SBIC debentures outstanding totaled $350.0 million with a weighted-average annual fixed interest rate of 3.26%.