MSC INCOME FUND ANNOUNCES SECOND QUARTER 2026 RESULTS
Rhea-AI Summary
MSC Income Fund (NYSE: MSIF) reported second quarter 2026 net investment income of $12.0 million, or $0.26 per share, adjusted net investment income (ANII) of $14.9 million, or $0.33 per share, and ANII before taxes of $16.3 million, or $0.36 per share. Total investment income was $35.7 million. Net increase in net assets from operations rose to $29.3 million, or $0.65 per share, driven by $19.0 million of net fair value gains, including an $11.6 million realized gain on the exit of Centre Technologies Holdings.
Net asset value reached $16.51 per share, up $0.64 from March 31, 2026, and return on equity was 15.9% annualized. The fund shifted its regular dividend from quarterly to monthly starting July 2026, declaring $0.33 per share for Q3 plus a $0.03 supplemental dividend. As of June 30, 2026, MSC Income reported $210.5 million of liquidity, a 0.88x debt‑to‑equity ratio, and board authorization for up to $20.0 million of share repurchases, alongside a separate $20.0 million open‑market purchase plan by Main Street Capital.
Positive
- Return on equity 15.9% annualized for Q2 2026, 13.5% trailing twelve months
- NAV per share increased to $16.51, up 4.0% QoQ and 4.2% vs. year-end 2025
- Net increase in net assets from operations $29.3 million, up 80% year over year
- Realized gain of $11.6 million on exit of Centre Technologies Holdings LMM investment
- Liquidity of $210.5 million as of June 30, 2026, plus BBB- KBRA rating with stable outlook
- Capital return: $0.33 per share regular Q3 2026 monthly dividends plus $0.03 supplemental dividend declared
- Capital actions: $20.0 million MSC Income share repurchase authorization and separate $20.0 million Main Street open-market purchase plan
Negative
- Net investment income declined 26% year over year to $12.0 million, or $0.26 per share
- Adjusted net investment income decreased to $14.9 million, or $0.33 per share, down $1.4 million vs. Q2 2025
- Total expenses net of waivers rose 21.8% to $22.3 million, driven by a $2.9 million capital gains incentive fee accrual and higher interest expense
- Dividend income fell $1.1 million year over year, including a $0.9 million decline from LMM portfolio companies
- Debt-to-equity ratio of 0.88x as of June 30, 2026 reflects meaningful use of leverage and higher interest costs
News Explained
The buybacks remain maximum authorizations, while $150.0 million of notes mature on October 30, 2026.
MSC Income Fund authorized up to
Those amounts are ceilings, not committed purchases: the release says neither party is assured of buying shares at any discount level or in any amount. A Rule 10b5-1 plan is a prearranged schedule or formula for trades; because both parties only intend to enter their plans, the disclosure establishes authorization and intended implementation, not completed trading.
As of
The September-to-February purchase window and the October 30 note maturity are the concrete milestones for checking actual share purchases and the debt balance.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jul 16 | Q2 preliminary results | Positive | +4.0% | Preliminary Q2 estimates included higher NAV and annualized return on equity above 18% |
| May 07 | Q1 earnings report | Positive | -4.6% | Q1 results included NII, DNII, NAV, dividends, investments, and expanded financing capacity |
| May 07 | Q1 earnings report | Positive | -4.6% | Q1 MSC Income results included NII, NAV, dividends, repurchases, notes, and liquidity |
| Apr 16 | Q1 preliminary results | Positive | -7.6% | Preliminary Q1 estimates included NII, DNII, NAV growth, return on equity, and non-accrual data |
| Jan 20 | Q4 preliminary results | Positive | -1.3% | Preliminary Q4 estimates included NII, ANII, NAV growth, dividends, and return on equity |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tag-specific earnings events were generally followed by negative price reactions despite predominantly positive operating updates.
Key Terms
net investment income financial
return on equity financial
net asset value financial
non-accrual status financial
sofr financial
rule 10b5-1 regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
Second Quarter 2026 Net Investment Income of
Second Quarter 2026 Adjusted Net Investment Income(1) of
Second Quarter 2026 Adjusted Net Investment Income Before Taxes(2) of
Net Asset Value of
Second Quarter 2026 Highlights
- Net investment income ("NII") of
$12.0 million $0.26 - Adjusted net investment income ("ANII")(1) of
$14.9 million $0.33 - ANII before taxes(2) of
$16.3 million $0.36 - Total investment income of
$35.7 million - Net increase in net assets resulting from operations of
$29.3 million $0.65 - Return on equity(4) of
15.9% on an annualized basis for the quarter and13.5% for the trailing twelve-month period ended June 30, 2026 - Net asset value of
$16.51 $0.64 4.0% , compared to$15.87 $0.66 4.2% , compared to$15.85 - Announced a change to the Fund's regular dividend payment frequency from quarterly to monthly, beginning in July 2026, and declared regular monthly dividends totaling
$0.33 $0.11 - Declared a supplemental dividend of
$0.03 $0.36 - Completed
$62.2 million $9.7 million - Completed
$13.1 million $2.2 million - Realized a gain of
$11.6 million
In commenting on the Fund's operating results for the second quarter of 2026, Dwayne L. Hyzak, MSC Income's Chief Executive Officer, stated, "We are pleased with the Fund's performance in the second quarter, which resulted in an annualized return on equity of
Second Quarter 2026 Operating Results
The following table provides a summary of the Fund's operating results for the second quarter of 2026:
Three Months Ended June 30, | |||||||
2026 | 2025 | Change | Change (%) | ||||
(dollars in thousands, except per share amounts) | |||||||
Interest income | $ 30,040 | $ 29,349 | $ 691 | 2 % | |||
Dividend income | 3,829 | 4,956 | (1,127) | (23) % | |||
Fee income | 1,831 | 1,338 | 493 | 37 % | |||
Total investment income | $ 35,700 | $ 35,643 | $ 57 | — % | |||
Net investment income | $ 11,999 | $ 16,307 | $ (4,308) | (26) % | |||
Net investment income per share | $ 0.26 | $ 0.35 | $ (0.09) | (26) % | |||
Adjusted net investment income (1) | $ 14,948 | $ 16,307 | $ (1,359) | (8) % | |||
Adjusted net investment income per share (1) | $ 0.33 | $ 0.35 | $ (0.02) | (6) % | |||
Adjusted net investment income before taxes (2) | $ 16,323 | $ 17,306 | $ (983) | (6) % | |||
Adjusted net investment income before taxes per share (2) | $ 0.36 | $ 0.37 | $ (0.01) | (3) % | |||
Net increase in net assets resulting from operations | $ 29,272 | $ 16,289 | $ 12,983 | 80 % | |||
Net increase in net assets resulting from operations per share | $ 0.65 | $ 0.35 | $ 0.30 | 86 % | |||
Return on equity - quarter annualized (4) | 15.9 % | 9.0 % | 6.9 % | 77 % | |||
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, was
The
The
The per share changes in NII and ANII(1) in the second 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 appreciation of
Three Months Ended June 30, 2026 | |||||||||
Private Loan | LMM (a) | Middle Market | Other | Total | |||||
(in millions) | |||||||||
Accounting reversals of net unrealized (appreciation) | $ 1.3 | $ (11.9) | $ — | $ — | $ (10.6) | ||||
Net unrealized appreciation (depreciation) relating to portfolio | 11.2 | 10.3 | (1.6) | (0.2) | 19.7 | ||||
Total net unrealized appreciation (depreciation) relating to | $ 12.5 | $ (1.6) | $ (1.6) | $ (0.2) | $ 9.1 | ||||
(a) | Includes unrealized appreciation on 27 LMM portfolio investments and unrealized depreciation on 17 LMM portfolio investments. |
Liquidity and Capital Resources
As of June 30, 2026, the Fund had aggregate liquidity of
Several details regarding the Fund's capital structure as of June 30, 2026 are as follows:
- The SPV Facility included
$300.0 million $450.0 million $249.0 million 5.9% based on the applicable Secured Overnight Financing Rate ("SOFR") effective for the contractual reset date of July 1, 2026.- The Corporate Facility included
$245.0 million $300.0 million $113.0 million 5.7% based on the applicable SOFR effective for the contractual reset date of July 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
$748.8 million $16.51 - The Fund's debt-to-equity ratio was 0.88x as of June 30, 2026.
Share Purchase Plan
In August 2026, the Fund's board of directors authorized a share repurchase plan pursuant to which the Fund may repurchase up to
In August 2026, Main Street Capital Corporation (NYSE: MAIN) ("Main Street"), parent company of the Adviser, authorized a plan pursuant to which Main Street may purchase up to
The terms and conditions of the Fund Rule 10b5-1 Stock Repurchase Plan and of the Main Street Rule 10b5-1 Purchase Plan will be substantially similar. Subject to the limitations under Rule 10b-18 under the Exchange Act and market conditions, the Fund expects that the aggregate amount of shares (i) repurchased under the Fund Rule 10b5-1 Stock Repurchase Plan and (ii) purchased under the Main Street Rule 10b5-1 Purchase Plan on any single trading day will be split among the Fund and Main Street on a pro rata basis (or as close thereto as reasonably possible) based upon the proportion of the aggregate
Investment Portfolio Information as of June 30, 2026(5)
The following table provides a summary of the investments in the Fund's private loan portfolio and LMM portfolio as of June 30, 2026:
June 30, 2026 | ||||
Private Loan | LMM (a) | |||
(dollars in millions) | ||||
Number of portfolio companies | 81 | 55 | ||
Fair value | $ 848.5 | $ 503.9 | ||
Cost | $ 856.3 | $ 397.6 | ||
Debt investments as a % of portfolio (at cost) | 92.9 % | 71.1 % | ||
Equity investments as a % of portfolio (at cost) | 7.1 % | 28.9 % | ||
% of debt investments at cost secured by first priority lien | 99.5 % | 99.9 % | ||
Weighted-average annual effective yield (b) | 10.4 % | 12.7 % | ||
Average EBITDA (c) | $ 32.9 | $ 13.1 | ||
(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 June 30, 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 June 30, 2026. |
(c) | The average EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is calculated using a weighted-average for the private loan portfolio companies and a simple average for the LMM portfolio companies. These calculations exclude certain portfolio companies, including three private loan portfolio companies and four 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 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 June 30, 2026, the Fund's investment portfolio also included:
- Middle market portfolio investments in eight portfolio companies, collectively totaling
$21.9 million $40.8 million 1.6% 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
$15.2 million $13.2 million 1.1% and1.0% of the Fund's investment portfolio at fair value and cost, respectively.
As of June 30, 2026, investments on non-accrual status comprised
Second Quarter 2026 Financial Results Conference Call / Webcast
MSC Income has scheduled a conference call for Friday, August 7, 2026 at 11:00 a.m. Eastern time to discuss the second 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, August 14, 2026 and may be accessed by dialing 201-612-7415 and using the passcode 13761585#. 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 June 30, 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 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 MSC Income's operations or the operations of its portfolio companies; the operating and financial performance of MSC Income's portfolio companies and their access to capital; retention of key investment personnel by the Adviser; competitive factors; and such other factors described under the captions "Cautionary Statement Concerning Forward-Looking Statements" and "Risk Factors" included in MSC Income's filings with the SEC (www.sec.gov). MSC Income 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.
MSC INCOME FUND, INC. Consolidated Statements of Operations (in thousands, except shares and per share amounts) (Unaudited) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
INVESTMENT INCOME: | |||||||
Interest, dividend and fee income: | |||||||
Control investments | $ 1,032 | $ 1,514 | $ 2,227 | $ 2,956 | |||
Affiliate investments | 9,602 | 9,617 | 18,849 | 18,952 | |||
Non-Control/Non-Affiliate investments | 25,066 | 24,512 | 48,711 | 46,962 | |||
Total investment income | 35,700 | 35,643 | 69,787 | 68,870 | |||
EXPENSES: | |||||||
Interest | (9,865) | (8,678) | (18,785) | (16,921) | |||
Base management fee | (5,341) | (4,907) | (10,566) | (9,879) | |||
Incentive fee on income | (3,117) | (3,431) | (6,216) | (5,454) | |||
Incentive fee on capital gains (3) | (2,949) | — | (2,311) | — | |||
General and administrative | (1,124) | (1,149) | (2,163) | (2,176) | |||
Internal administrative services expenses | (188) | (172) | (374) | (346) | |||
Total expenses before expense waivers | (22,584) | (18,337) | (40,415) | (34,776) | |||
Waiver of incentive fee on income | 258 | — | 1,243 | — | |||
Total expenses, net of expense waivers | (22,326) | (18,337) | (39,172) | (34,776) | |||
NET INVESTMENT INCOME BEFORE TAXES | 13,374 | 17,306 | 30,615 | 34,094 | |||
Excise tax expense | (239) | (87) | (289) | (279) | |||
Federal and state income and other tax expenses | (1,136) | (912) | (2,092) | (1,761) | |||
NET INVESTMENT INCOME | 11,999 | 16,307 | 28,234 | 32,054 | |||
NET REALIZED GAIN (LOSS): | |||||||
Control investments | — | 5,296 | — | 5,305 | |||
Affiliate investments | 11,595 | 2 | 9,939 | 2 | |||
Non‑Control/Non‑Affiliate investments | (1,738) | (519) | (323) | (21,594) | |||
Total net realized gain (loss) | 9,857 | 4,779 | 9,616 | (16,287) | |||
NET UNREALIZED APPRECIATION (DEPRECIATION): | |||||||
Control investments | (1,529) | (5,068) | (5,981) | (5,901) | |||
Affiliate investments | (1,459) | (69) | 6,964 | 2,767 | |||
Non‑Control/Non‑Affiliate investments | 12,092 | 1,233 | 5,478 | 18,013 | |||
Total net unrealized appreciation (depreciation) | 9,104 | (3,904) | 6,461 | 14,879 | |||
Income tax benefit (provision) on net realized gain (loss) and net | (1,688) | (893) | (1,816) | 1,518 | |||
NET INCREASE IN NET ASSETS RESULTING FROM | $ 29,272 | $ 16,289 | $ 42,495 | $ 32,164 | |||
NET INVESTMENT INCOME BEFORE TAXES PER | $ 0.29 | $ 0.37 | $ 0.67 | $ 0.74 | |||
NET INVESTMENT INCOME PER SHARE—BASIC AND | $ 0.26 | $ 0.35 | $ 0.62 | $ 0.70 | |||
NET INCREASE IN NET ASSETS RESULTING FROM | $ 0.65 | $ 0.35 | $ 0.93 | $ 0.70 | |||
WEIGHTED-AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED | 45,345,229 | 47,047,888 | 45,728,932 | 45,870,527 | |||
MSC INCOME FUND, INC. Consolidated Balance Sheets (in thousands, except per share amounts) | ||||
June 30, | December 31, | |||
(Unaudited) | ||||
ASSETS | ||||
Investments at fair value: | ||||
Control investments | $ 52,620 | $ 58,372 | ||
Affiliate investments | 418,827 | 406,771 | ||
Non‑Control/Non‑Affiliate investments | 917,956 | 870,244 | ||
Total investments | 1,389,403 | 1,335,387 | ||
Cash and cash equivalents | 28,055 | 20,635 | ||
Interest and dividend receivable | 11,722 | 12,273 | ||
Prepaids and other assets | 11,740 | 9,546 | ||
Deferred financing costs | 2,909 | 3,190 | ||
Total assets | $ 1,443,829 | $ 1,381,031 | ||
LIABILITIES | ||||
Credit Facilities | $ 362,000 | $ 453,000 | ||
October 2026 Notes | 149,901 | 149,751 | ||
May 2029 Notes | 149,279 | — | ||
Accounts payable and other liabilities | 2,428 | 786 | ||
Interest payable | 8,295 | 5,946 | ||
Dividend payable | — | 16,772 | ||
Base management and incentive fees payable | 8,198 | 8,388 | ||
Capital gains incentive fee accrual (3) | 5,074 | 2,763 | ||
Deferred tax liability, net | 9,854 | 4,966 | ||
Total liabilities | 695,029 | 642,372 | ||
NET ASSETS | ||||
Common stock | 45 | 47 | ||
Additional paid-in capital | 765,979 | 782,007 | ||
Total overdistributed earnings | (17,224) | (43,395) | ||
Total net assets | 748,800 | 738,659 | ||
Total liabilities and net assets | $ 1,443,829 | $ 1,381,031 | ||
NET ASSET VALUE PER SHARE | $ 16.51 | $ 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 | Six Months Ended | ||||||
June 30, | June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Net investment income | $ 11,999 | $ 16,307 | $ 28,234 | $ 32,054 | |||
Incentive fee on capital gains (3) | 2,949 | — | 2,311 | — | |||
Adjusted net investment income (1) | 14,948 | 16,307 | 30,545 | 32,054 | |||
Excise tax expense | 239 | 87 | 289 | 279 | |||
Federal and state income and other tax expenses | 1,136 | 912 | 2,092 | 1,761 | |||
Adjusted net investment income before taxes (2) | $ 16,323 | $ 17,306 | $ 32,926 | $ 34,094 | |||
Per share amounts: | |||||||
Net investment income per share - | |||||||
Basic and diluted | $ 0.26 | $ 0.35 | $ 0.62 | $ 0.70 | |||
Adjusted net investment income per share - | |||||||
Basic and diluted (1) | $ 0.33 | $ 0.35 | $ 0.67 | $ 0.70 | |||
Adjusted net investment income before taxes per share - | |||||||
Basic and diluted (2) | $ 0.36 | $ 0.37 | $ 0.72 | $ 0.74 | |||
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 Fund's 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 August 7, 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
View original content:https://www.prnewswire.com/news-releases/msc-income-fund-announces-second-quarter-2026-results-302845398.html
SOURCE MSC Income Fund, Inc.