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 the third quarter of 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 the prior year period.
• DNII before taxes was $91.7 million ($0.98 per share), a 4% decrease from $95.7 million ($1.07 per share) in the prior year period.
• Total investment income increased 2% to $142.5 million from $139.8 million in the prior year, 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 the prior year.
• Return on equity was 14.7% annualized for the quarter, down from 17.0% in the prior year.
• Total cash expenses increased 15.2% to $50.9 million from $44.1 million in the prior year, primarily due to a $6.4 million increase in interest expense.
• Non-cash compensation expenses decreased $0.1 million to $6.1 million.
• Operating Expenses to Assets Ratio was 1.2% on an annualized basis for the quarter, down from 1.4% in the prior year.
• Net asset value (NAV) per share was $34.22, representing a 0.9% increase from $33.92 as of June 30, 2026, and a 2.7% increase from $33.33 as of December 31, 2025.
• Total assets were $6.04 billion as of September 30, 2026, compared to $5.68 billion as of December 31, 2025.
• Total liabilities were $2.84 billion as of September 30, 2026, compared to $2.69 billion as of December 31, 2025.
• Net assets totaled $3.21 billion as of September 30, 2026.

Guidance and Future Outlook

• Management expressed confidence that diversified lower middle market and private loan investment strategies, combined with cost efficiency and a conservative capital structure, will continue to deliver superior results.
• The company expects to obtain and subsequently maintain SBIC debentures in the future up to the regulatory maximum amount allowed.
• Management noted the continued underlying strength and quality of portfolio companies and the sustainable strength of the overall platform.

Business Segments and Product Lines

• Completed $61.5 million in total lower middle market (LMM) portfolio investments; net decrease of $19.4 million in the total cost basis of the LMM portfolio due to repayments, returns, and realized losses.
• Completed $162.0 million in total private loan portfolio investments; net decrease of $1.8 million in the total cost basis of the private loan portfolio due to repayments, returns, and realized losses.
• 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%.
• 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.
• Investment in the External Investment Manager had a fair value of $222.7 million and a cost basis of $29.5 million.
• External Investment Manager earned $9.3 million in net fee income (down $0.4 million from prior year), contributing $8.4 million to NII (down $0.4 million from prior year).
• External Investment Manager ended the quarter with $1.8 billion in assets under management.

Market and Competitive Landscape

• The company maintains an industry-leading position in cost efficiency with an Operating Expenses to Assets Ratio of 1.2% on an annualized basis.
• The company holds investment grade credit ratings of BBB- with a stable outlook from both Fitch Ratings and S&P Global Ratings.
• The LMM portfolio companies have a median net senior debt to EBITDA ratio of 2.6 to 1.0 and a median total EBITDA to senior interest expense ratio of 2.8 to 1.0.
• Investments on non-accrual status comprised 0.9% of the total investment portfolio at fair value and 3.5% at cost.

Risks and Challenges

• The quarter included a net realized loss of $27.6 million, primarily driven by a $15.0 million loss on the full exit of an LMM investment, an $11.3 million loss on a private loan restructuring, and a $6.5 million loss on a private loan partial exit.
• Interest expense increased due to higher average borrowings and an increased weighted-average interest rate on unsecured debt obligations.
• Dividend income decreased by $5.7 million, primarily due to a $6.9 million decrease in dividend income from LMM portfolio companies.
• Forward-looking statements are subject to risks including adverse economic changes, macroeconomic factors, interest rate fluctuations, regulatory changes, and portfolio company performance.

Management Commentary and Tone

• CEO Dwayne L. Hyzak stated the company was pleased with strong operating results, including an annualized return on equity of 14.7% and an increase in NAV per share.
• Management highlighted the 21st consecutive quarterly supplemental dividend and 13 increases to regular monthly dividends since Q4 2021.
• Management emphasized the importance of maintaining strong liquidity and a conservative leverage profile in the current economic environment.
• Management expressed confidence in the company's differentiated and diversified investment strategies.

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, resulting in total dividends paid in Q3 2026 of $1.095 per share, a 2.8% increase from Q3 2025.
• Received SBA approval to increase borrowing capacity for SBIC debentures by $75.0 million to a total of $250.0 million for one fund, providing combined access to $425.0 million of the $475.0 million regulatory maximum for affiliated SBIC funds.
• Issued $500.0 million in aggregate principal amount of 6.55% unsecured notes due January 15, 2030, in October 2026.
• Repaid the entire $500.0 million of July 2026 Notes at par in July 2026.
• Aggregate liquidity as of September 30, 2026, was $1.218 billion, 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 (5.8% interest rate) and $300.5 million under the SPV Facility (5.9% interest rate).
• Unsecured notes outstanding included $550.0 million (March 2029 Notes), $400.0 million (June 2027 Notes), $350.0 million (August 2028 Notes), and $150.0 million (April 2031 Notes).
• SBIC debentures outstanding were $350.0 million with a weighted-average annual fixed interest rate of 3.26%.