Monroe Capital Corporation BDC Announces Third Quarter 2025 Results
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Insights
Mixed quarter: income and NAV down; dividend maintained using spillover income while merger with HRZN expected in
Net investment income fell to
The company sustained its quarterly dividend of
Key dependencies and risks include realized proceeds from the wind-down and sales in the SLF joint venture, the ability to convert unrealized marks to cash without further NAV dilution, and successful closing and integration of the proposed merger. Watch the company’s announced merger closing timeline, further SLF distributions (the company reported an additional
CHICAGO, Nov. 05, 2025 (GLOBE NEWSWIRE) -- Monroe Capital Corporation (NASDAQ: MRCC) today announced its financial results for the third quarter ended September 30, 2025.
Except where the context suggests otherwise, the terms “Company,” “we,” “us,” and “our” refer to Monroe Capital Corporation (together with its subsidiaries).
Third Quarter 2025 Financial Highlights
- Net Investment Income ("NII") of
$1.8 million , or$0.08 per share - Adjusted Net Investment Income (a non-GAAP measure described below) of
$1.9 million , or$0.09 per share - Net increase (decrease) in net assets resulting from operations of
$(1.1) million , or$(0.05) per share - Net Asset Value (“NAV”) of
$173.0 million , or$7.99 per share - Paid quarterly dividend of
$0.25 per share on September 30, 2025 - Current annual cash dividend yield to stockholders of approximately
14.3% (1)
Chief Executive Officer Theodore L. Koenig commented, "We believe that MRCC's previously announced merger with Horizon Technology Finance Corporation ("HRZN"), through its NAV for NAV structure, will unlock meaningful value for our shareholders and provide them with compelling long-term upside through participation in a larger, more scaled HRZN, which stands to benefit from meaningful synergies and operating leverage as it continues to grow. We currently anticipate the closing of the merger to occur during the first quarter of 2026. In advance of the expected closing of the merger, we have continued to support the quarterly dividend of
Monroe Capital Corporation is a business development company affiliate of the award-winning private credit investment firm and lender, Monroe Capital LLC.
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(1) Based on an annualized dividend and closing share price as of November 4, 2025.
Management Commentary
Adjusted Net Investment Income totaled
At quarter end, the Company's debt-to-equity leverage increased from 1.17 times debt-to-equity at June 30, 2025 to 1.23 times debt-to-equity at September 30, 2025. Weighted average leverage decreased to 1.18 times debt-to-equity for the quarter ended September 30, 2025, compared to 1.22 times debt-to-equity for the prior quarter ended June 30, 2025. The decline in weighted average leverage was primarily driven by the use of proceeds from sales, payoffs and paydowns to reduce the average outstanding balance on the revolving credit facility.
Selected Financial Highlights
(in thousands, except per share data)
| September 30, 2025 | June 30, 2025 | ||||
| Consolidated Statements of Assets and Liabilities data: | (unaudited) | ||||
| Investments, at fair value | $ | 360,650 | $ | 367,700 | |
| Total assets | $ | 388,952 | $ | 394,617 | |
| Net assets | $ | 173,038 | $ | 179,592 | |
| Net asset value per share | $ | 7.99 | $ | 8.29 | |
| For the Quarter Ended | |||||||
| September 30, 2025 | June 30, 2025 | ||||||
| Consolidated Statements of Operations data: | (unaudited) | ||||||
| Net investment income | $ | 1,813 | $ | 3,298 | |||
| Adjusted net investment income(2) | $ | 1,883 | $ | 3,255 | |||
| Net gain (loss) | $ | (2,950 | ) | $ | (5,167 | ) | |
| Net increase (decrease) in net assets resulting from operations | $ | (1,137 | ) | $ | (1,869 | ) | |
| Per share data: | |||||||
| Net investment income | $ | 0.08 | $ | 0.15 | |||
| Adjusted net investment income(2) | $ | 0.09 | $ | 0.15 | |||
| Net gain (loss) | $ | (0.13 | ) | $ | (0.24 | ) | |
| Net increase (decrease) in net assets resulting from operations | $ | (0.05 | ) | $ | (0.09 | ) | |
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(2) See Non-GAAP Financial Measure – Adjusted Net Investment Income below for a detailed description of this non-GAAP measure and a reconciliation from NII to Adjusted Net Investment Income. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends for the Company.
Portfolio Summary
| September 30, 2025 | June 30, 2025 | ||||||
| (unaudited) | |||||||
| Investments, at fair value | $ | 360,650 | $ | 367,700 | |||
| Number of portfolio company investments | 79 | 80 | |||||
| Percentage portfolio company investments on non-accrual(3) | 3.5 | % | 3.6 | % | |||
| Weighted average contractual yield(4) | 9.9 | % | 9.9 | % | |||
| Weighted average effective yield(4) | 8.8 | % | 8.8 | % | |||
| Asset class percentage at fair value: | |||||||
| First lien loans | 74.0 | % | 74.1 | % | |||
| Junior secured loans | 8.7 | % | 8.6 | % | |||
| Equity investments | 17.3 | % | 17.3 | % | |||
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(3) Represents portfolio debt or preferred equity investments on non-accrual status as a percentage of total investments at fair value.
(4) Portfolio yield is calculated only on the portion of the portfolio that has a contractual coupon and therefore does not account for dividends on equity investments (other than preferred equity investments).
Financial Review
The Company's NII for the quarter ended September 30, 2025 totaled
Total investment income for the quarter ended September 30, 2025 totaled
Total expenses for the quarter ended September 30, 2025 were
Net gain (loss) was
The Company's average portfolio mark slightly decreased by
Net increase (decrease) in net assets resulting from operations was
Liquidity and Capital Resources
As of September 30, 2025, the Company had
MRCC Senior Loan Fund
SLF is a joint venture with Life Insurance Company of the Southwest (“LSW”), an affiliate of National Life Insurance Company. SLF invests primarily in senior secured loans to middle market companies in the United States. SLF’s underlying investments are loans to middle-market borrowers that are generally larger than the rest of MRCC’s portfolio, which is focused on lower middle-market companies. The Company and LSW each committed
As of September 30, 2025, the Company had made net capital contributions of
As of September 30, 2025, SLF had total assets of
Non-GAAP Financial Measure – Adjusted Net Investment Income
On a supplemental basis, the Company discloses Adjusted Net Investment Income (including on a per share basis) which is a financial measure that is calculated and presented on a basis of methodology other than in accordance with generally accepted accounting principles of the United States of America (“non-GAAP”). Adjusted Net Investment Income represents NII, excluding the net capital gains incentive fee and income taxes. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends for the Company. The management agreement with the Company’s advisor provides that a capital gains incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized capital losses for such year. Management believes that Adjusted Net Investment Income is a useful indicator of operations exclusive of any net capital gains incentive fee as NII does not include gains associated with the capital gains incentive fee.
The following tables provide a reconciliation from NII (the most comparable GAAP measure) to Adjusted Net Investment Income for the periods presented (in thousands, except per share data):
| For the Quarter Ended | ||||||||||||
| September 30, 2025 | June 30, 2025 | |||||||||||
| Amount | Per Share Amount | Amount | Per Share Amount | |||||||||
| (unaudited) | ||||||||||||
| Net investment income | $ | 1,813 | $ | 0.08 | $ | 3,298 | $ | 0.15 | ||||
| Net capital gains incentive fee | — | — | — | — | ||||||||
| Income tax expense (benefit), including excise taxes | 70 | 0.01 | (43 | ) | 0.00 | |||||||
| Adjusted Net Investment Income | $ | 1,883 | $ | 0.09 | $ | 3,255 | $ | 0.15 | ||||
Adjusted Net Investment Income may not be comparable to similar measures presented by other companies, as it is a non-GAAP financial measure that is not based on a comprehensive set of accounting rules or principles and therefore may be defined differently by other companies. In addition, Adjusted Net Investment Income should be considered in addition to, not as a substitute for, or superior to, financial measures determined in accordance with GAAP.
| MONROE CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (in thousands, except per share data) | |||||||
| September 30, 2025 | June 30, 2025 | ||||||
| (unaudited) | |||||||
| Assets | |||||||
| Investments, at fair value: | |||||||
| Non-controlled/non-affiliate company investments | $ | 254,910 | $ | 261,164 | |||
| Non-controlled affiliate company investments | 77,500 | 76,379 | |||||
| Controlled affiliate company investments | 28,240 | 30,157 | |||||
| Total investments, at fair value (amortized cost of: | 360,650 | 367,700 | |||||
| Cash and cash equivalents | 3,526 | 2,425 | |||||
| Interest and dividend receivable | 23,832 | 23,461 | |||||
| Other assets | 944 | 1,031 | |||||
| Total assets | $ | 388,952 | $ | 394,617 | |||
| Liabilities | |||||||
| Debt | $ | 212,800 | $ | 210,300 | |||
| Less: Unamortized debt issuance costs | (1,602 | ) | (1,722 | ) | |||
| Total debt, less unamortized debt issuance costs | 211,198 | 208,578 | |||||
| Interest payable | 1,444 | 2,768 | |||||
| Base management fees payable | 1,652 | 1,742 | |||||
| Accounts payable and accrued expenses | 1,561 | 1,937 | |||||
| Directors' fees payable | 59 | — | |||||
| Total liabilities | 215,914 | 215,025 | |||||
| Net Assets | |||||||
| Common stock, | $ | 22 | $ | 22 | |||
| Capital in excess of par value | 297,712 | 297,712 | |||||
| Accumulated undistributed (overdistributed) earnings | (124,696 | ) | (118,142 | ) | |||
| Total net assets | $ | 173,038 | $ | 179,592 | |||
| Total liabilities and total net assets | $ | 388,952 | $ | 394,617 | |||
| Net asset value per share | $ | 7.99 | $ | 8.29 | |||
| MONROE CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) | |||||||
| For the Quarter Ended | |||||||
| September 30, 2025 | June 30, 2025 | ||||||
| (unaudited) | |||||||
| Investment income: | |||||||
| Non-controlled/non-affiliate company investments: | |||||||
| Interest income | $ | 5,463 | $ | 6,757 | |||
| Payment-in-kind interest income | 1,325 | 983 | |||||
| Dividend income | 54 | 69 | |||||
| Other income | 23 | 54 | |||||
| Total investment income from non-controlled/non-affiliate company investments | 6,865 | 7,863 | |||||
| Non-controlled affiliate company investments: | |||||||
| Interest income | 577 | 573 | |||||
| Payment-in-kind interest income | 704 | 677 | |||||
| Dividend income | 60 | 60 | |||||
| Total investment income from non-controlled affiliate company investments | 1,341 | 1,310 | |||||
| Controlled affiliate company investments: | |||||||
| Dividend income | — | 700 | |||||
| Total investment income from controlled affiliate company investments | — | 700 | |||||
| Total investment income | 8,206 | 9,873 | |||||
| Operating expenses: | |||||||
| Interest and other debt financing expenses | 3,913 | 3,933 | |||||
| Base management fees | 1,652 | 1,742 | |||||
| Incentive fees | — | — | |||||
| Professional fees | 187 | 267 | |||||
| Administrative service fees | 360 | 374 | |||||
| General and administrative expenses | 152 | 232 | |||||
| Directors' fees | 59 | 70 | |||||
| Total operating expenses | 6,323 | 6,618 | |||||
| Net investment income before income taxes | 1,883 | 3,255 | |||||
| Income tax expense (benefit), including excise taxes | 70 | (43 | ) | ||||
| Net investment income | 1,813 | 3,298 | |||||
| Net gain (loss): | |||||||
| Net realized gain (loss): | |||||||
| Non-controlled/non-affiliate company investments | (2,378 | ) | 77 | ||||
| Net realized gain (loss) | (2,378 | ) | 77 | ||||
| Net change in unrealized gain (loss): | |||||||
| Non-controlled/non-affiliate company investments | 458 | (2,603 | ) | ||||
| Non-controlled affiliate company investments | 337 | (881 | ) | ||||
| Controlled affiliate company investments | (1,367 | ) | (1,760 | ) | |||
| Net change in unrealized gain (loss) | (572 | ) | (5,244 | ) | |||
| Net gain (loss) | (2,950 | ) | (5,167 | ) | |||
| Net increase (decrease) in net assets resulting from operations | $ | (1,137 | ) | $ | (1,869 | ) | |
| Per common share data: | |||||||
| Net investment income per share - basic and diluted | $ | 0.08 | $ | 0.15 | |||
| Net increase (decrease) in net assets resulting from operations per share - basic and diluted | $ | (0.05 | ) | $ | (0.09 | ) | |
| Weighted average common shares outstanding - basic and diluted | 21,666 | 21,666 | |||||
Additional Supplemental Information:
The composition of the Company’s investment income was as follows (in thousands):
| For the Quarter Ended | |||||
| September 30, 2025 | June 30, 2025 | ||||
| (unaudited) | |||||
| Interest income | $ | 5,844 | $ | 6,864 | |
| Payment-in-kind interest income | 2,029 | 1,660 | |||
| Dividend income | 114 | 829 | |||
| Other income | 23 | 54 | |||
| Prepayment gain (loss) | 43 | 288 | |||
| Accretion of discounts and amortization of premiums | 153 | 178 | |||
| Total investment income | $ | 8,206 | $ | 9,873 | |
The composition of the Company’s interest expense and other debt financing expenses was as follows (in thousands):
| For the Quarter Ended | |||||
| September 30, 2025 | June 30, 2025 | ||||
| (unaudited) | |||||
| Interest expense - revolving credit facility | $ | 1,947 | $ | 1,977 | |
| Interest expense - 2026 Notes | 1,555 | 1,555 | |||
| Amortization of debt issuance costs | 411 | 401 | |||
| Total interest and other debt financing expenses | $ | 3,913 | $ | 3,933 | |
About Monroe Capital Corporation
Monroe Capital Corporation is a publicly-traded specialty finance company that principally invests in senior, unitranche and junior secured debt and, to a lesser extent, unsecured debt and equity investments in middle-market companies. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation. The Company’s investment activities are managed by its investment adviser, Monroe Capital BDC Advisors, LLC, which is an investment adviser registered under the Investment Advisers Act of 1940, as amended, and an affiliate of Monroe Capital LLC. To learn more about Monroe Capital Corporation, visit https://monroebdc.com.
About Monroe Capital LLC
Monroe Capital LLC (“Monroe”) is a premier asset management firm specializing in private credit markets across various strategies, including direct lending, technology finance, venture debt, alternative credit solutions, structured credit, real estate and equity. Since 2004, the firm has been successfully providing capital solutions to clients in the U.S. and Canada. Monroe prides itself on being a value-added and user-friendly partner to business owners, management, and both private equity and independent sponsors. Monroe’s platform offers a wide variety of investment products for both institutional and high net worth investors with a focus on generating high quality “alpha” returns irrespective of business or economic cycles. The firm is headquartered in Chicago and has 12 locations throughout the United States, Middle East, Asia and Australia.
Monroe has been recognized by both its peers and investors with various awards including Inc.’s 2025 Founder-Friendly Investors List; DealCatalyst as the 2025 Most Innovative Private Credit CLO Manager of the Year; Private Debt Investor as the 2024 Lower Mid-Market Lender of the Year, Americas and 2023 Lower Mid-Market Lender of the Decade; Global M&A Network as the 2024 Lower Mid-Markets Lender of the Year, Americas; Korean Economic Daily as the 2022 Best Performance in Private Debt – Mid Cap; Creditflux as the 2021 Best U.S. Direct Lending Fund; and Pension Bridge as the 2020 Private Credit Strategy of the Year. For more information and important disclaimers, please visit https://monroecap.com.
Forward-Looking Statements
This press release may contain certain forward-looking statements. Any such statements, other than statements of historical fact, are likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under the Company’s control, and that the Company may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from these estimates and projections of the future. Such statements speak only as of the time when made, and the Company undertakes no obligation to update any such statement now or in the future.
SOURCE: Monroe Capital Corporation
| Investor Contact: | Mick Solimene |
| Chief Financial Officer and Chief Investment Officer | |
| Monroe Capital Corporation | |
| (312) 598-8401 | |
| msolimene@monroecap.com | |
| Media Contact: | Daniel Abramson |
| BackBay Communications | |
| (857) 305-8441 | |
| daniel.abramson@backbaycommunications.com |
