MAIN STREET ANNOUNCES THIRD QUARTER 2025 RESULTS

Third Quarter 2025 Net Investment Income of $0.97 Per Share

Third Quarter 2025 Distributable Net Investment Income⁽¹⁾ of $1.03 Per Share

Net Asset Value of $32.78 Per Share

HOUSTON, Nov. 6, 2025 /PRNewswire/ -- Main Street Capital Corporation (NYSE:MAIN) ("Main Street") is pleased to announce its financial results for the third quarter ended September 30, 2025. Unless otherwise noted or the context otherwise indicates, the terms "we," "us," "our" and "the Company" refer to Main Street and its consolidated subsidiaries.

Third Quarter 2025 Highlights

• Net investment income ("NII"), including excise tax and NII related income taxes, of $86.5 million, or $0.97 per share
• Distributable net investment income ("DNII")⁽¹⁾, including excise tax and NII related income taxes, of $92.7 million, or $1.03 per share
• DNII before taxes⁽²⁾ of $95.7 million, or $1.07 per share
• Total investment income of $139.8 million
• An industry leading position in cost efficiency, with a ratio of total non-interest operating expenses as a percentage of quarterly average total assets ("Operating Expenses to Assets Ratio") of 1.4% on an annualized basis for the quarter and 1.3% for the trailing twelve-month ("TTM") period ended September 30, 2025
• Net increase in net assets resulting from operations of $123.7 million, or $1.38 per share
• Return on equity⁽³⁾ of 17.0% on an annualized basis for the quarter and 19.0% for the TTM period ended September 30, 2025
• Net asset value of $32.78 per share as of September 30, 2025, representing an increase of $0.48 per share, or 1.5%, compared to $32.30 per share as of June 30, 2025 and $1.13 per share, or 3.6%, compared to $31.65 per share as of December 31, 2024
• Declared regular monthly dividends totaling $0.765 per share for the fourth quarter of 2025, or $0.255 per share for each of October, November and December 2025, representing a 4.1% increase from the regular monthly dividends paid in the fourth quarter of 2024
• Declared and paid a supplemental dividend of $0.30 per share, resulting in total dividends paid in the third quarter of 2025 of $1.065 per share and representing a 2.9% increase from the total dividends paid in the third quarter of 2024
• Completed $106.2 million in total lower middle market ("LMM") portfolio investments, including investments totaling $69.0 million in three new LMM portfolio companies, which after aggregate repayments of debt investments, return of invested equity capital and a decrease in cost basis due to realized losses resulted in a net increase of $61.3 million in the total cost basis of the LMM investment portfolio
• Completed $113.3 million in total private loan portfolio investments, which after aggregate repayments of debt investments and a decrease in cost basis due to realized losses resulted in a net decrease of $68.8 million in the total cost basis of the private loan investment portfolio
• Net decrease of $14.8 million in the total cost basis of the middle market investment portfolio
• Further diversified capital structure by issuing $350.0 million of 5.40% unsecured notes due August 15, 2028 (the "August 2028 Notes")

In commenting on the Company's operating results for the third quarter of 2025, Dwayne L. Hyzak, Main Street's Chief Executive Officer, stated, "We are pleased with our performance in the third quarter, which resulted in another quarter of strong operating results highlighted by an annualized return on equity of 17.0%, favorable levels of net investment income per share and distributable net investment income per share and another record for net asset value per share primarily driven by a significant net fair value increase of our existing lower middle market investment portfolio. We believe that these continued strong results demonstrate the sustainable strength of our overall platform, the benefits of our differentiated and diversified investment strategies, the unique contributions of our asset management business and the continued underlying strength and quality of our portfolio companies."

Mr. Hyzak continued, "Our strong third quarter performance resulted in the declaration of another $0.30 per share supplemental dividend to be paid in December 2025, representing our seventeenth consecutive quarterly supplemental dividend, to go with the 11 increases to our regular monthly dividends declared since the fourth quarter of 2021. Additionally, with the continued support from our long-term lender relationships, and the benefits of our recent investment grade notes offering in August 2025, we continue to maintain very strong liquidity and a conservative leverage profile, which we believe is important in the current economic environment. We remain confident that our diversified lower middle market and private loan investment strategies, both of which are generating favorable investment activity in the fourth quarter, together with the benefits of our asset management business, our cost efficient operating structure and conservative capital structure, will allow us to continue to deliver superior results for our shareholders."

Third Quarter 2025 Operating Results

The following table provides a summary of our operating results for the third quarter of 2025:

The $3.0 million increase in total investment income in the third quarter of 2025 from the comparable period of the prior year was principally attributable to (i) an $8.0 million increase in dividend income, primarily due to a $6.6 million increase in dividend income from our LMM portfolio companies, a $0.7 million increase in dividend income from our other portfolio investments and a $0.5 million increase in dividend income from our External Investment Manager (as defined in the External Investment Manager section below) and (ii) a $2.2 million increase in fee income, primarily due to a $1.4 million increase in fees related to increased investment activity and a $0.9 million increase from the refinancing and prepayment of debt investments, with these increases partially offset by a $7.3 million decrease in interest income, principally attributable to a decrease in interest rates, primarily resulting from decreases in benchmark index rates on floating rate debt investments and decreases in interest rate spreads on existing debt investments, and an increase in investments on non-accrual status, partially offset by higher average levels of income producing investment portfolio debt investments. The $3.0 million increase in total investment income in the third quarter of 2025 includes the impact of an increase of $2.1 million in certain income considered less consistent or non-recurring, primarily related to (i) a $0.9 million increase in such fee income, (ii) a $0.6 million increase in such dividend income and (iii) a $0.6 million increase in such interest income from accelerated prepayment, repricing and other activity related to certain investment portfolio debt investments, in each case when compared to the same period in 2024.

Total cash expenses⁽⁵⁾ increased $0.3 million, or 0.7%, to $44.1 million in the third quarter of 2025 from $43.9 million for the same period in 2024. This increase in total cash expenses was principally attributable to a $1.3 million increase in cash compensation expenses,⁽⁵⁾ partially offset by a $1.0 million decrease in interest expense. The increase in cash compensation expenses⁽⁵⁾ is primarily related to (i) increased incentive compensation accruals, (ii) increased base compensation rates and (iii) increased headcount to support our growing investment portfolio and asset management activities. The decrease in interest expense is primarily related to a decreased weighted-average interest rate on our Credit Facilities (as defined in the Liquidity and Capital Resources section below) due to decreases in benchmark index rates and decreases to the applicable margin rates related to the amendments of our Credit Facilities in April 2025, partially offset by an increase in average borrowings outstanding used to fund a portion of the growth of our investment portfolio.

Non-cash compensation expenses⁽⁵⁾ increased $0.8 million in the third quarter of 2025 from the comparable period of the prior year, primarily driven by a $0.6 million increase in share-based compensation.

Our Operating Expenses to Assets Ratio (which includes non-cash compensation expenses⁽⁵⁾) on an annualized basis was 1.4% for the third quarter of 2025, an increase from 1.3% for the third quarter of 2024.

Excise tax expense increased $0.4 million and NII related federal and state income and other tax expenses decreased $0.6 million in the third quarter of 2025 compared to the same period in 2024, resulting in a net decrease in tax expenses included in NII of $0.2 million. The increase in excise tax is due to the increase in undistributed taxable income as of September 30, 2025 and the decrease in NII related federal and state income and other tax expenses is due to a decrease in taxable NII between the relevant periods.

The $2.2 million increase in NII and the $2.9 million increase in DNII⁽¹⁾ in the third quarter of 2025 from the comparable period of the prior year were both principally attributable to the increase in total investment income, partially offset by increased expenses, each as discussed above. NII per share increased by $0.01 per share for the third quarter of 2025 as compared to the third quarter of 2024, to $0.97 per share. DNII⁽¹⁾ per share for the third quarter of 2025 was consistent with the third quarter of 2024, at $1.03 per share for each period. NII and DNII⁽¹⁾ on a per share basis in the third quarter of 2025 include the impact of a 2.5% increase in the weighted-average shares outstanding compared to the third quarter of 2024, primarily due to shares issued since the beginning of the comparable period of the prior year through our (i) at-the-market ("ATM") equity issuance program, (ii) dividend reinvestment plan and (iii) equity incentive plans. NII and DNII⁽¹⁾ on a per share basis in the third quarter of 2025 each include a net increase of $0.02 per share resulting from an increase in investment income considered less consistent or non-recurring in nature compared to the third quarter of 2024, as discussed above.

The $123.7 million net increase in net assets resulting from operations in the third quarter of 2025 represents a $0.3 million decrease from the third quarter of 2024. This decrease was primarily the result of a $4.2 million decrease in the net fair value change of our portfolio investments resulting from the net impact of net realized gains/losses and net unrealized appreciation/depreciation, with the decrease resulting from a net fair value increase of $43.9 million in the third quarter of 2025 compared to a net fair value increase of $48.1 million in the prior year, partially offset by (i) a $2.2 million increase in NII as discussed above and (ii) a $1.8 million decrease in net tax provision on the net fair value change of our portfolio investments resulting from a net tax provision of $6.7 million in the third quarter of 2025 compared to a net tax provision of $8.5 million in the prior year. The $43.9 million net fair value increase in the third quarter of 2025 was the result of net unrealized appreciation (including the reversal of net fair value depreciation in prior periods on the net realized loss in the quarter) of $63.0 million, partially offset by a net realized loss of $19.1 million. The $48.1 million net fair value increase in the third quarter of 2024 was the result of a net realized gain of $26.4 million and net unrealized appreciation of $21.7 million. The $19.1 million net realized loss from investments for the third quarter of 2025 was primarily the result of (i) $15.8 million of realized losses on the restructures of two private loan portfolio investments and (ii) $10.2 million of realized losses on the full exits of two LMM portfolio investments, partially offset by (i) a $6.0 million realized gain on the full exit of a LMM portfolio investment and (ii) a $0.6 million realized gain on the partial exit of an other portfolio investment.

The following table provides a summary of the total net unrealized appreciation of $63.0 million for the third quarter of 2025:

Liquidity and Capital Resources

As of September 30, 2025, we had aggregate liquidity of $1.561 billion, including (i) $30.6 million in cash and cash equivalents and (ii) $1.530 billion of aggregate unused capacity under our corporate revolving credit facility (the "Corporate Facility") and our special purpose vehicle revolving credit facility (the "SPV Facility" and, together with the Corporate Facility, the "Credit Facilities"), which we maintain to support our investment and operating activities.

Several details regarding our capital structure as of September 30, 2025 are as follows:

• The Corporate Facility included $1.145 billion in total commitments from a diversified group of 19 participating lenders, plus an accordion feature that allows us to request an increase in the total commitments under the facility to up to $1.718 billion.
• $135.0 million in outstanding borrowings under the Corporate Facility, with an interest rate of 6.0% based on the applicable Secured Overnight Financing Rate ("SOFR") effective for the contractual reset date of October 1, 2025.
• The SPV Facility included $600.0 million in total commitments from a diversified group of six participating lenders, plus an accordion feature that allows us to request an increase in the total commitments under the facility to up to $800.0 million.
• $76.0 million in outstanding borrowings under the SPV Facility, with an interest rate of 6.1% based on the applicable SOFR effective for the contractual reset date of October 1, 2025.
• $500.0 million of unsecured notes outstanding that bear interest at a rate of 3.00% per year (the "July 2026 Notes"). The July 2026 Notes mature on July 14, 2026 and may be redeemed in whole or in part at any time at our option subject to certain make-whole provisions.
• $400.0 million of unsecured notes outstanding that bear interest at a rate of 6.50% per year with a yield-to-maturity of approximately 6.34% (the "June 2027 Notes"). The June 2027 Notes mature on June 4, 2027 and may be redeemed in whole or in part at any time at our option subject to certain make-whole provisions.
• $350.0 million of August 2028 Notes outstanding that bear interest at a rate of 5.40% per year. The August 2028 Notes mature on August 15, 2028 and may be redeemed in whole or in part at any time at our option subject to certain make-whole provisions.
• $350.0 million of unsecured notes outstanding that bear interest at a rate of 6.95% per year (the "March 2029 Notes"). The March 2029 Notes mature on March 1, 2029 and may be redeemed in whole or in part at any time at our option subject to certain make-whole provisions.
• $350.0 million of outstanding Small Business Investment Company ("SBIC") debentures through our wholly-owned SBIC subsidiaries. These debentures, which are guaranteed by the U.S. Small Business Administration (the "SBA"), had a weighted-average annual fixed interest rate of 3.26% and mature ten years from original issuance. The first maturity related to our existing SBIC debentures occurs in the first quarter of 2027, and the weighted-average remaining duration was 4.9 years.
• In September 2025, we repaid the entire $150.0 million of notes outstanding that bore interest at a weighted-average rate of 7.74% per year (the "December 2025 Notes"), at par value plus the accrued unpaid interest.
• We maintain investment grade credit ratings from each of Fitch Ratings and S&P Global Ratings, both of which have assigned us investment grade credit ratings of BBB- with a stable outlook. S&P Global Ratings reaffirmed its rating during the third quarter of 2025.
• Our net asset value totaled $2.9 billion, or $32.78 per share.

Investment Portfolio Information as of September 30, 2025⁽⁶⁾

The following table provides a summary of the investments in our LMM portfolio and private loan portfolio as of September 30, 2025:

The fair value of our LMM portfolio company equity investments was 204% of the cost of such equity investments, and our LMM portfolio companies had a median net senior debt (senior interest-bearing debt through our debt position less cash and cash equivalents) to EBITDA ratio of 2.7 to 1.0 and a median total EBITDA to senior interest expense ratio of 3.0 to 1.0. Including all debt that is junior in priority to our debt position, these median ratios were 2.7 to 1.0 and 3.0 to 1.0, respectively.⁽⁶⁾⁽⁷⁾

As of September 30, 2025, our investment portfolio also included:

• Other portfolio investments in 32 entities, spread across 12 investment managers, collectively totaling $122.8 million in fair value and $130.9 million in cost basis, which comprised 2.4% and 3.0% of our investment portfolio at fair value and cost, respectively;
• Middle market portfolio investments in 11 portfolio companies, collectively totaling $89.9 million in fair value and $119.8 million in cost basis, which comprised 1.7% and 2.8% of our investment portfolio at fair value and cost, respectively; and
• Our investment in the External Investment Manager, with a fair value of $266.4 million and a cost basis of $29.5 million, which comprised 5.2% and 0.7% of our investment portfolio at fair value and cost, respectively.

As of September 30, 2025, investments on non-accrual status comprised 1.2% of the total investment portfolio at fair value and 3.6% at cost, and our total portfolio investments at fair value were 118% of the related cost basis.

External Investment Manager

MSC Adviser I, LLC is our wholly-owned portfolio company and registered investment adviser that provides investment management services to external parties (the "External Investment Manager"). We share employees with the External Investment Manager and allocate costs related to such shared employees and other operating expenses to the External Investment Manager. The total contribution of the External Investment Manager to our NII consists of the combination of the expenses we allocate to the External Investment Manager and the dividend income we earn from the External Investment Manager. During the third quarter of 2025, the External Investment Manager earned $9.7 million of total fee income, an increase of $1.0 million from the third quarter of 2024. The fee income earned by the External Investment Manager in the third quarter of 2025 included (i) $5.6 million of management fee income, a decrease of $0.5 million from the third quarter of 2024, and (ii) incentive fees of $3.9 million, an increase of $1.5 million from the third quarter of 2024. In addition, we allocated $5.7 million of total expenses to the External Investment Manager, an increase of $0.4 million from the third quarter of 2024. The decrease in management fee income was primarily attributable to a decrease in the base management fees earned resulting from changes in the advisory agreement between the External Investment Manager and its client, MSC Income Fund, Inc., in conjunction with the listing of MSC Income Fund, Inc.'s shares on the New York Stock Exchange in January 2025, partially offset by an increase total assets managed for clients. The increase in incentive fees was attributable to the favorable performance and improved operating results from the assets managed for clients in the third quarter of 2025 relative to the third quarter of 2024. The combination of the dividend income we earned from the External Investment Manager and expenses we allocated to it resulted in a total contribution to our NII of $8.8 million, representing an increase of $0.9 million from the third quarter of 2024.

The External Investment Manager ended the third quarter of 2025 with total assets under management of $1.6 billion.

Third Quarter 2025 Financial Results Conference Call / Webcast

Main Street has scheduled a conference call for Friday, November 7, 2025 at 10:00 a.m. Eastern time to discuss the third quarter 2025 financial results.

You may access the conference call by dialing 412-902-0030 at least 10 minutes prior to the start time. The conference call can also be accessed via a simultaneous webcast by logging into the investor relations section of the Main Street website at https://www.mainstcapital.com.

A telephonic replay of the conference call will be available through Friday, November 14, 2025 and may be accessed by dialing 201-612-7415 and using the passcode 13752817#. An audio archive of the conference call will also be available on the investor relations section of the Company's website at https://www.mainstcapital.com shortly after the call and will be accessible until the date of Main Street's earnings release for the next quarter.

For a more detailed discussion of the financial and other information included in this press release, please refer to the Main Street Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025 to be filed with the U.S. Securities and Exchange Commission (www.sec.gov) and Main Street's Third Quarter 2025 Investor Presentation to be posted on the investor relations section of the Main Street website at https://www.mainstcapital.com.

ABOUT MAIN STREET CAPITAL CORPORATION

Main Street (www.mainstcapital.com) is a principal investment firm that primarily provides customized long-term debt and equity capital solutions to lower middle market companies and debt capital to private companies owned by or in the process of being acquired by a private equity fund. Main Street's portfolio investments are typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in diverse industry sectors. Main Street seeks to partner with entrepreneurs, business owners and management teams and generally provides customized "one-stop" debt and equity financing solutions within its lower middle market investment strategy. Main Street seeks to partner with private equity fund sponsors and primarily invests in secured debt investments in its private loan investment strategy. Main Street's lower middle market portfolio companies generally have annual revenues between $10 million and $150 million. Main Street's private loan portfolio companies generally have annual revenues between $25 million and $500 million.

Main Street, through its wholly-owned portfolio company MSC Adviser I, LLC ("MSC Adviser"), also maintains an asset management business through which it manages investments for external parties. MSC Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, as amended.

FORWARD-LOOKING STATEMENTS

Main Street cautions that statements in this press release which are forward–looking and provide other than historical information, including but not limited to Main Street's ability to successfully source and execute on new portfolio investments and deliver future financial performance and results, are based on current conditions and information available to Main Street as of the date hereof and include statements regarding Main Street's goals, beliefs, strategies and future operating results and cash flows. Although its management believes that the expectations reflected in those forward–looking statements are reasonable, Main Street can give no assurance that those expectations will prove to be correct. Those forward-looking statements are made based on various underlying assumptions and are subject to numerous uncertainties and risks, including, without limitation: Main Street's continued effectiveness in raising, investing and managing capital; adverse changes in the economy generally or in the industries in which Main Street's portfolio companies operate; the impacts of macroeconomic factors on Main Street and its portfolio companies' businesses and operations, liquidity and access to capital, and on the U.S. and global economies, including impacts related to pandemics and other public health crises, global conflicts, risk of recession, tariffs and trade disputes, inflation, supply chain constraints or disruptions and changes in market index interest rates; changes in laws and regulations or business, political and/or regulatory conditions that may adversely impact Main Street's operations or the operations of its portfolio companies; the operating and financial performance of Main Street's portfolio companies and their access to capital; retention of key investment personnel; competitive factors; and such other factors described under the captions "Cautionary Statement Concerning Forward-Looking Statements" and "Risk Factors" included in Main Street's filings with the U.S. Securities and Exchange Commission (www.sec.gov). Main Street undertakes no obligation to update the information contained herein to reflect subsequently occurring events or circumstances, except as required by applicable securities laws and regulations.

 

 

 

MAIN STREET CAPITAL CORPORATION

Endnotes

Contacts:

Main Street Capital Corporation

Dwayne L. Hyzak, CEO, [email protected]

Ryan R. Nelson, CFO, [email protected]

713-350-6000

Dennard Lascar Investor Relations

Ken Dennard / [email protected]

Zach Vaughan / [email protected]

713-529-6600

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SOURCE Main Street Capital Corporation