MSC INCOME FUND ANNOUNCES FIRST QUARTER 2026 RESULTS
Rhea-AI Summary
MSC Income Fund (NYSE:MAIN) reported first quarter 2026 results for the period ended March 31, 2026. Net investment income was $16.2 million, or $0.35 per share; adjusted NII was $15.6 million, or $0.34 per share. Net asset value was $15.87 per share. The Fund declared total dividends of $0.36 per share and repurchased $16.0 million of common stock below NAV, increasing NAV by ~$0.08 per share. The Fund issued $150.0 million of 6.34% notes due May 31, 2029 and expanded regulatory leverage capacity to 150% effective January 29, 2026. Aggregate liquidity was $210.0 million.
AI-generated analysis. Not financial advice.
Positive
- Net investment income of $16.2 million ($0.35 per share)
- Declared total dividends of $0.36 per share for Q1 2026
- Repurchased $16.0 million of common stock below NAV, boosting NAV by ~$0.08 per share
- Issued $150.0 million of 6.34% unsecured notes (due May 31, 2029) and expanded regulatory leverage to 150%
Negative
- Dividend income decreased by 31% versus prior-year quarter
- Net increase in net assets from operations down 17% year-over-year
- Quarter annualized return on equity fell to 7.3%, a 23% decline versus prior-year quarter
- Total expenses increased, including a $0.7 million rise in interest expense
Key Figures
Market Reality Check
Peers on Argus
MAIN was little changed pre-news (-0.05%) while key asset-management peers were mixed: BXSL -1.82%, FSK -1.13%, OBDC -1.67%, AMG -0.41%, JHG +0.15%, pointing to stock-specific rather than broad sector dynamics.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Apr 16 | Prelim Q1 2026 results | Positive | -7.6% | Preliminary Q1 2026 NII, DNII and NAV ranges with modest ROE update. |
| Jan 20 | Prelim Q4 2025 MSC | Positive | -1.3% | Preliminary Q4 2025 NII/ANII ranges, higher NAV and strong ROE metrics. |
| Jan 15 | Prelim Q4 2025 MAIN | Positive | +3.1% | Strong Q4 2025 NII, DNII and NAV growth with high estimated ROE. |
| Nov 13 | Q3 2025 MSC results | Positive | -0.8% | Reported Q3 2025 NII, NAV, unrealized gains and declared dividends. |
| Nov 06 | Q3 2025 MAIN results | Positive | +2.7% | Q3 2025 NII, DNII, NAV growth and new unsecured notes issuance. |
Earnings-related headlines have produced mixed reactions, with three of five past events followed by negative next-day moves despite generally constructive operating updates.
Recent earnings and preliminary results for Main Street and MSC Income show consistent focus on net investment income, distributable NII, NAV stability and return on equity. Past updates, such as Q3 2025 results and multiple preliminary quarters, often highlighted solid returns and portfolio growth, yet share reactions were split: three events saw modest declines while two moved higher. Today’s Q1 2026 MSC Income results, with steady NII and NAV of $15.87 per share, fit into this pattern of fundamentally stable yet market-sensitive earnings releases.
Historical Comparison
Across five prior earnings-related headlines, the average next-day move was about -0.77%, showing that earnings news for MAIN/MSIF has often met with cautious to slightly negative trading responses.
Earnings flow has alternated between preliminary estimates and full quarterly results for both MAIN and MSC Income, with recurring emphasis on NII, distributable NII, NAV stability and strong returns on equity from late 2025 into early 2026.
Market Pulse Summary
This announcement highlights steady Q1 2026 performance for MSC Income, with NII of $0.35 per share, adjusted NII of $0.34 per share, and NAV of $15.87 per share. Total investment income reached $34.1M, supported by an expansive private loan and LMM portfolio. Liquidity of $210.0M and a 0.90x debt-to-equity ratio frame capital flexibility. Investors may focus on trends in ANII, portfolio credit quality, and leverage across future quarters.
Key Terms
net investment income financial
adjusted net investment income financial
return on equity financial
secured overnight financing rate financial
accordion feature technical
unsecured notes financial
ebitda financial
debt-to-equity ratio financial
AI-generated analysis. Not financial advice.
First Quarter 2026 Net Investment Income of
First Quarter 2026 Adjusted Net Investment Income(1) of
First Quarter 2026 Adjusted Net Investment Income Before Taxes(2) of
Net Asset Value of
First Quarter 2026 Highlights
- Net investment income ("NII") of
$16.2 million $0.35 - Adjusted net investment income ("ANII")(1) of
$15.6 million $0.34 - ANII before taxes(2) of
$16.6 million $0.36 - Total investment income of
$34.1 million - Net increase in net assets resulting from operations of
$13.2 million $0.29 - Return on equity(4) of
7.3% on an annualized basis - Net asset value of
$15.87 - Declared a regular quarterly dividend of
$0.35 $0.01 $0.36 - Repurchased
$16.0 million $0.08 - Completed
$54.8 million $17.4 million - Completed
$19.4 million $15.1 million - Previously approved expanded regulatory leverage capacity became effective January 29, 2026, reducing the Fund's minimum regulatory asset coverage requirement from
200% to150% - Further diversified the Fund's capital structure by issuing
$150.0 million 6.34% unsecured notes due May 31, 2029 (the "May 2029 Notes")
In commenting on the Fund's operating results for the first quarter of 2026, Dwayne L. Hyzak, MSC Income's Chief Executive Officer, stated, "We are pleased with the Fund's performance in the first quarter, given the backdrop of significant economic and geopolitical uncertainties. Despite these ongoing uncertainties, we are seeing an improved lending environment and significant opportunities in our private loan investment strategy, and we believe the Fund is well positioned to capitalize on and generate attractive returns on those investments. Based upon the quality of the Fund's existing investment portfolio, together with the favorable liquidity position and expanded regulatory leverage capacity which became effective at the end of January 2026 and the current investment pipeline, we remain excited about our future expectations for the Fund."
First Quarter 2026 Operating Results
The following table provides a summary of the Fund's operating results for the first quarter of 2026:
Three Months Ended March 31, | |||||||
2026 | 2025 | Change | Change (%) | ||||
(dollars in thousands, except per share amounts) | |||||||
Interest income | $ 29,379 | $ 27,424 | $ 1,955 | 7 % | |||
Dividend income | 3,538 | 5,142 | (1,604) | (31) % | |||
Fee income | 1,170 | 661 | 509 | 77 % | |||
Total investment income | $ 34,087 | $ 33,227 | $ 860 | 3 % | |||
Net investment income | $ 16,235 | $ 15,746 | $ 489 | 3 % | |||
Net investment income per share | $ 0.35 | $ 0.35 | $ — | — % | |||
Adjusted net investment income (1) | $ 15,597 | $ 15,746 | $ (149) | (1) % | |||
Adjusted net investment income per share (1) | $ 0.34 | $ 0.35 | $ (0.01) | (3) % | |||
Adjusted net investment income before taxes (2) | $ 16,603 | $ 16,788 | $ (185) | (1) % | |||
Adjusted net investment income before taxes per share (2) | $ 0.36 | $ 0.38 | $ (0.02) | (5) % | |||
Net increase in net assets resulting from operations | $ 13,223 | $ 15,875 | $ (2,652) | (17) % | |||
Net increase in net assets resulting from operations per share | $ 0.29 | $ 0.36 | $ (0.07) | (19) % | |||
Return on equity - quarter annualized (4) | 7.3 % | 9.5 % | (2.2) % | (23) % | |||
The
Total expenses, net of waivers, increased by
The Fund's ratio of total non-interest operating expenses, excluding incentive fees, net of waivers, as a percentage of quarterly average total assets, or the Operating Expenses to Assets Ratio, decreased to
The
The
The per share changes in NII and ANII(1) in the first quarter of 2026 from the comparable period of the prior year include the impact of a
The
The following table provides a summary of the total net unrealized depreciation of
Three Months Ended March 31, 2026 | |||||||||
Private Loan | LMM (a) | Middle Market | Other | Total | |||||
(in millions) | |||||||||
Accounting reversals of net unrealized (appreciation) | $ 0.4 | $ (0.4) | $ — | $ — | $ — | ||||
Net unrealized appreciation (depreciation) relating to portfolio | (7.5) | 5.4 | (0.8) | 0.3 | (2.6) | ||||
Total net unrealized appreciation (depreciation) relating to | $ (7.1) | $ 5.0 | $ (0.8) | $ 0.3 | $ (2.6) | ||||
(a) | Includes unrealized appreciation on 27 LMM portfolio investments and unrealized depreciation on 12 LMM portfolio investments. |
Liquidity and Capital Resources
As of March 31, 2026, the Fund had aggregate liquidity of
Several details regarding the Fund's capital structure as of March 31, 2026 are as follows:
- The SPV Facility included
$300.0 million $450.0 million $267.0 million 5.9% based on the applicable Secured Overnight Financing Rate ("SOFR") effective for the contractual reset date of April 1, 2026.- The Corporate Facility included
$245.0 million $300.0 million $83.0 million 5.7% based on the applicable SOFR effective for the contractual reset date of April 1, 2026.$150.0 million 4.04% per year (the "October 2026 Notes"). The October 2026 Notes mature on October 30, 2026 and may be redeemed in whole or in part at any time at the Fund's option subject to certain make-whole provisions.$150.0 million 6.34% per year. The May 2029 Notes mature on May 31, 2029 and may be redeemed in whole or in part at any time at the Fund's option subject to certain make-whole provisions.- The Fund maintains an investment grade rating from Kroll Bond Rating Agency, LLC ("KBRA") of BBB- with a stable outlook.
- The Fund's net asset value totaled
$719.5 million $15.87 - The Fund's debt-to-equity ratio was 0.90x as of March 31, 2026.
- Effective on January 29, 2026, the Fund's minimum regulatory asset coverage requirement decreased from
200% to150% , increasing the Fund's regulatory leverage capacity.
Investment Portfolio Information as of March 31, 2026(5)
The following table provides a summary of the investments in the Fund's private loan portfolio and LMM portfolio as of March 31, 2026:
March 31, 2026 | ||||
Private Loan | LMM (a) | |||
(dollars in millions) | ||||
Number of portfolio companies | 80 | 55 | ||
Fair value | $ 823.1 | $ 507.6 | ||
Cost | $ 843.1 | $ 399.7 | ||
Debt investments as a % of portfolio (at cost) | 93.1 % | 71.3 % | ||
Equity investments as a % of portfolio (at cost) | 6.9 % | 28.7 % | ||
% of debt investments at cost secured by first priority lien | 99.5 % | 99.9 % | ||
Weighted-average annual effective yield (b) | 10.5 % | 12.6 % | ||
Average EBITDA (c) | $ 30.6 | $ 12.1 | ||
(a) | The Fund had equity ownership in all of its LMM portfolio companies, and the Fund's average fully diluted equity ownership in those portfolio companies was |
(b) | The weighted-average annual effective yields were computed using the effective interest rates for all debt investments as of March 31, 2026, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt investments and any debt investments on non-accrual status, and are weighted based upon the principal amount of each applicable debt investment as of March 31, 2026. |
(c) | The average EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is calculated using a weighted-average for private loan portfolio companies and a simple average for LMM portfolio companies. These calculations exclude certain portfolio companies, including four private loan portfolio companies and three LMM portfolio companies, as EBITDA is not a meaningful valuation metric for the Fund's investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate and those portfolio companies whose primary operations have ceased and only residual value remains. |
The Fund's total investment portfolio at fair value consists of approximately
The fair value of the Fund's LMM portfolio company equity investments was
As of March 31, 2026, the Fund's investment portfolio also included:
- Middle market portfolio investments in eight portfolio companies, collectively totaling
$23.0 million $40.3 million 1.7% and3.1% of the Fund's investment portfolio at fair value and cost, respectively; and - Other portfolio investments in seven entities, spread across four investment managers, collectively totaling
$15.6 million $13.4 million 1.1% and1.0% of the Fund's investment portfolio at fair value and cost, respectively.
As of March 31, 2026, investments on non-accrual status comprised
First Quarter 2026 Financial Results Conference Call / Webcast
MSC Income has scheduled a conference call for Friday, May 8, 2026 at 11:00 a.m. Eastern time to discuss the first quarter 2026 financial results.(7)
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 Fund's website at https://www.mscincomefund.com.
A telephonic replay of the conference call will be available through Friday, May 15, 2026 and may be accessed by dialing 201-612-7415 and using the passcode 13759639#. An audio archive of the conference call will also be available on the investor relations section of the Fund's website at https://www.mscincomefund.com shortly after the call and will be accessible until the date of MSC Income'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 MSC Income Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026 to be filed with the
ABOUT MSC INCOME FUND, INC.
The Fund (www.mscincomefund.com) is a principal investment firm that primarily provides debt capital to private companies owned by or in the process of being acquired by a private equity fund. The Fund's portfolio investments are typically made to support leveraged buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in diverse industry sectors. The Fund seeks to partner with private equity fund sponsors and primarily invests in secured debt investments within its private loan investment strategy. The Fund also maintains a portfolio of customized long-term debt and equity investments in lower middle market companies, and through those investments, the Fund has partnered with entrepreneurs, business owners and management teams in co-investments with Main Street Capital Corporation (NYSE: MAIN) ("Main Street") utilizing the customized "one-stop" debt and equity financing solutions provided in Main Street's lower middle market investment strategy. The Fund's private loan portfolio companies generally have annual revenues between
ABOUT MSC ADVISER I, LLC
MSC Adviser I, LLC (the "Adviser") is a wholly-owned subsidiary of Main Street that is registered as an investment adviser under the Investment Advisers Act of 1940, as amended. The Adviser serves as the investment adviser and administrator of the Fund in addition to several other advisory clients.
FORWARD-LOOKING STATEMENTS
MSC Income cautions that statements in this press release which are forward–looking and provide other than historical information, including but not limited to MSC Income'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 MSC Income as of the date hereof and include statements regarding MSC Income'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, MSC Income 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: MSC Income's continued effectiveness in raising, investing and managing capital; adverse changes in the economy generally or in the industries in which MSC Income's portfolio companies operate; the impacts of macroeconomic factors on MSC Income and its portfolio companies' businesses and operations, liquidity and access to capital, and on the
MSC INCOME FUND, INC. Consolidated Statements of Operations (in thousands, except shares and per share amounts) (Unaudited)
| |||
Three Months Ended March 31, | |||
2026 | 2025 | ||
INVESTMENT INCOME: | |||
Interest, dividend and fee income: | |||
Control investments | $ 1,195 | $ 1,442 | |
Affiliate investments | 9,247 | 9,335 | |
Non–Control/Non–Affiliate investments | 23,645 | 22,450 | |
Total investment income | 34,087 | 33,227 | |
EXPENSES: | |||
Interest | (8,920) | (8,243) | |
Base management fee | (5,225) | (4,972) | |
Incentive fee on income | (3,099) | (2,023) | |
Incentive fee on capital gains | 638 | — | |
General and administrative | (1,039) | (1,027) | |
Internal administrative services expenses | (186) | (174) | |
Total expenses before expense waivers | (17,831) | (16,439) | |
Waiver of incentive fee on income | 985 | — | |
Total expenses, net of expense waivers | (16,846) | (16,439) | |
NET INVESTMENT INCOME BEFORE TAXES | 17,241 | 16,788 | |
Excise tax expense | (50) | (192) | |
Federal and state income and other tax expenses | (956) | (850) | |
NET INVESTMENT INCOME | 16,235 | 15,746 | |
NET REALIZED GAIN (LOSS): | |||
Control investments | — | 9 | |
Affiliate investments | (1,656) | — | |
Non–Control/Non–Affiliate investments | 1,415 | (21,075) | |
Total net realized loss | (241) | (21,066) | |
NET UNREALIZED APPRECIATION (DEPRECIATION): | |||
Control investments | (4,452) | (833) | |
Affiliate investments | 8,423 | 2,836 | |
Non–Control/Non–Affiliate investments | (6,614) | 16,780 | |
Total net unrealized appreciation (depreciation) | (2,643) | 18,783 | |
Income tax benefit (provision) on net realized loss and net unrealized appreciation | (128) | 2,412 | |
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ 13,223 | $ 15,875 | |
NET INVESTMENT INCOME BEFORE TAXES PER SHARE—BASIC AND | $ 0.37 | $ 0.38 | |
NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED | $ 0.35 | $ 0.35 | |
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER | $ 0.29 | $ 0.36 | |
WEIGHTED-AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED | 46,116,898 | 44,680,084 | |
MSC INCOME FUND, INC. Consolidated Balance Sheets (in thousands, except per share amounts)
| ||||
March 31, | December 31, | |||
(Unaudited) | ||||
ASSETS | ||||
Investments at fair value: | ||||
Control investments | $ 53,802 | $ 58,372 | ||
Affiliate investments | 426,618 | 406,771 | ||
Non–Control/Non–Affiliate investments | 888,782 | 870,244 | ||
Total investments | 1,369,202 | 1,335,387 | ||
Cash and cash equivalents | 15,559 | 20,635 | ||
Interest and dividend receivable | 11,942 | 12,273 | ||
Deferred financing costs | 3,128 | 3,190 | ||
Prepaids and other assets | 10,094 | 9,546 | ||
Total assets | $ 1,409,925 | $ 1,381,031 | ||
LIABILITIES | ||||
Credit Facilities | $ 350,000 | $ 453,000 | ||
October 2026 Notes | 149,826 | 149,751 | ||
May 2029 Notes | 149,274 | — | ||
Accounts payable and other liabilities | 4,408 | 3,549 | ||
Interest payable | 7,463 | 5,946 | ||
Dividend payable | 16,324 | 16,772 | ||
Base management and incentive fees payable | 7,340 | 8,388 | ||
Deferred tax liability, net | 5,762 | 4,966 | ||
Total liabilities | 690,397 | 642,372 | ||
NET ASSETS | ||||
Common stock | 45 | 47 | ||
Additional paid–in capital | 765,979 | 782,007 | ||
Total overdistributed earnings | (46,496) | (43,395) | ||
Total net assets | 719,528 | 738,659 | ||
Total liabilities and net assets | $ 1,409,925 | $ 1,381,031 | ||
NET ASSET VALUE PER SHARE | $ 15.87 | $ 15.85 | ||
MSC INCOME FUND, INC. Reconciliation of Adjusted Net Investment Income and Adjusted Net Investment Income Before Taxes (in thousands, except per share amounts) (Unaudited)
| |||
Three Months Ended | |||
March 31, | |||
2026 | 2025 | ||
Net investment income | $ 16,235 | $ 15,746 | |
Incentive fee on capital gains (3) | (638) | — | |
Adjusted net investment income (1) | 15,597 | 15,746 | |
Excise tax expense | 50 | 192 | |
Federal and state income and other tax expenses | 956 | 850 | |
Adjusted net investment income before taxes (2) | $ 16,603 | $ 16,788 | |
Per share amounts: | |||
Net investment income per share - | |||
Basic and diluted | $ 0.35 | $ 0.35 | |
Adjusted net investment income per share - | |||
Basic and diluted (1) | $ 0.34 | $ 0.35 | |
Adjusted net investment income before taxes per share - | |||
Basic and diluted (2) | $ 0.36 | $ 0.38 | |
MSC INCOME FUND, INC. | |
(1) | ANII is NII as determined in accordance with |
(2) | ANII before taxes is NII as determined in accordance with |
(3) | Pursuant to the Amended Advisory Agreement, the incentive fee on capital gains is determined and payable to the Adviser in arrears, if any, as of the end of each calendar year. This fee equals (a) |
(4) | Return on equity equals the net increase in net assets resulting from operations divided by the average quarterly total net assets. |
(5) | Portfolio company financial information has not been independently verified by MSC Income. |
(6) | These credit statistics exclude portfolio companies on non-accrual status and portfolio companies for which EBITDA is not a meaningful metric. |
(7) | No information contained on the Fund's website or disclosed on the May 8, 2026 conference call, including the webcast and the archived versions, is incorporated by reference in this press release or any of the Fund's filings with the SEC, and you should not consider that information to be part of this press release or any other such filing. |
Contacts:
MSC Income Fund, Inc.
Dwayne L. Hyzak, CEO, dhyzak@mainstcapital.com
Cory E. Gilbert, CFO, cgilbert@mainstcapital.com
713-350-6000
Dennard Lascar Investor Relations
Ken Dennard / ken@dennardlascar.com
Zach Vaughan / zvaughan@dennardlascar.com
713-529-6600
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SOURCE MSC Income Fund, Inc.