MidCap Financial Investment Corporation — Q3 2026 Earnings Summary

Financial Performance:

• Net investment income per share was $0.34 for the quarter ended September 30, 2026, down from $0.40 for the quarter ended June 30, 2026.
• Net asset value (NAV) per share was $12.86 as of September 30, 2026, a 3.8% decrease from $13.37 as of June 30, 2026.
• Net loss on the portfolio drove the NAV decline, attributed to credit-related weakness in a limited number of positions, partially offset by net investment income exceeding the dividend.
• Net investment income totaled $27.6 million for the quarter, compared to $35.3 million in the prior quarter.
• Net realized and change in unrealized gains (losses) were $(44.0) million for the quarter, compared to $(7.9) million in the prior quarter.
• Net increase (decrease) in net assets resulting from operations was $(16.4) million for the quarter, compared to a $27.5 million increase in the prior quarter.
• Earnings per share (basic) were $(0.20) for the quarter, compared to $0.29 in the prior quarter.
• Total assets were $2.65 billion as of September 30, 2026, down from $2.86 billion as of June 30, 2026.
• Investment portfolio (fair value) was $2.55 billion as of September 30, 2026, down from $2.77 billion as of June 30, 2026.
• Debt outstanding was $1.58 billion as of September 30, 2026, down from $1.74 billion as of June 30, 2026.
• Net assets were $1.06 billion as of September 30, 2026, down from $1.10 billion as of June 30, 2026.
• Net leverage ratio was 1.43x as of September 30, 2026, down from 1.54x as of June 30, 2026.
• Debt-to-equity ratio was 1.49x as of September 30, 2026, down from 1.58x as of June 30, 2026.
• For the nine months ended September 30, 2026, net investment income was $94.6 million, down from $106.0 million for the same period in 2025.
• For the nine months ended September 30, 2026, net realized and change in unrealized losses were $(155.4) million, compared to $(30.1) million in 2025.
• For the nine months ended September 30, 2026, earnings per share (basic) were $(0.71), compared to $0.81 in 2025.

Guidance and Future Outlook:

• The Company will not hold a conference call due to the pending Transaction.
• The Company expects to declare one or more distributions prior to the closing of the Transaction to distribute all previously undistributed investment company taxable income, any prior year shortfall, and net capital gain to maintain qualification as a regulated investment company.
• The Transaction is expected to result in the full repayment and termination of the Amended Senior Secured Facility.
• ARCC may request optional redemption notices for the Senior Unsecured Notes conditioned on the closing of the Transaction.

Business Segments and Product Lines:

• New investment commitments made during the quarter totaled $0.9 million to existing borrowers in the direct origination portfolio.
• Gross fundings, excluding revolver fundings, totaled $11 million for the quarter.
• Net repayments, including revolvers, totaled $189 million for the quarter.
• A $28.0 million repayment from Merx reduced the position to 1.7% of the total portfolio as of quarter-end.
• Direct origination revolver fundings totaled $26 million, and revolver repayments totaled $25 million during the quarter.
• Portfolio composition at fair value as of September 30, 2026: 95% first lien secured debt, 2% preferred equity, and 3% common equity/interests and warrants.
• Weighted average yield on the total portfolio at amortized cost was 7.9% as of September 30, 2026, down from 8.1% as of June 30, 2026.
• 100% of the portfolio was floating rate as of September 30, 2026.
• Number of portfolio companies decreased to 221 at the end of the quarter from 229 at the beginning of the quarter.
• The Company made investments in 1 new portfolio company and exited 9 companies during the quarter.

Market and Competitive Landscape:

• The Company primarily invests in directly originated first lien senior secured loans to privately held U.S. middle-market companies.
• ARCC was the largest publicly traded BDC by market capitalization as of September 30, 2026.

Risks and Challenges:

• The NAV decline was driven by credit-related weakness concentrated in a limited number of positions.
• There can be no assurances that the Board will continue to declare a base dividend of $0.31 per share.
• Risks associated with the Transaction include the failure to consummate the deal, regulatory approval delays, competing offers, and potential termination fees.
• Risks include the possibility that actual results may vary materially from forward-looking statements due to economic conditions, interest rate changes, and integration challenges.

Management Commentary and Tone:

• The press release notes that the NAV decline was driven by credit-related weakness in a limited number of positions, partially offset by net investment income in excess of the dividend.
• Management has suspended the share repurchase program and will suspend the dividend reinvestment plan in the near term in connection with the Transaction.

Other Key Points:

• On October 27, 2026, Ares Capital Corporation (ARCC) announced an agreement to acquire MFIC in a stock-and-cash transaction valued at $10.88 per MFIC common share, consisting of $9.67 in ARCC stock and $1.21 in cash.
• On November 4, 2026, the Board declared a quarterly dividend of $0.31 per share payable on December 22, 2026, to stockholders of record as of December 8, 2026.
• The Company did not repurchase any shares during the three months ended September 30, 2026.
• Since the inception of the share repurchase program in August 2015 through November 4, 2026, the Company repurchased 27.0 million shares for a total cost of $375.0 million.
• Outstanding debt obligations totaled $1.6 billion as of September 30, 2026, comprised of $80 million Senior Unsecured Notes, $456 million in MFIC Bethesda CLO 1 LLC, $399 million in MFIC Bethesda CLO 2 LLC, and $648 million under the senior secured revolving credit facility.
• Available remaining capacity under the revolving credit facility was $962 million as of September 30, 2026.