Stellus Capital Investment Corporation Reports Results for its Second Fiscal Quarter Ended June 30, 2026

Rhea-AI Summary

Stellus Capital Investment Corporation (NYSE: SCM) reported fiscal Q2 2026 net investment income of $7.53 million, or $0.26 per share, versus $9.56 million, or $0.34 per share, a year earlier. Core net investment income was $7.56 million, or $0.26 per share. Total realized income was $0.29 million, or $0.01 per share, reflecting $7.24 million of net realized losses on investments, partially offset by $15.90 million of net unrealized appreciation, leading to a $16.21 million net increase in net assets from operations, or $0.56 per share.

At June 30, 2026, the investment portfolio stood at $968.2 million at fair value, with net assets of $367.0 million and NAV per share of $12.80. Stellus funded $18.0 million of new investments and received $49.2 million of repayments in the quarter. The company declared Q2 distributions totaling $0.34 per share and repurchased 274,343 shares for about $2.45 million under its up to $20.0 million share repurchase program.

Positive

• Net assets from operations increased to $16.21 million ($0.56/share) in Q2 2026
• Net unrealized appreciation on investments rose to $15.90 million in Q2 2026
• Portfolio at fair value remained sizable at $968.2 million as of June 30, 2026
• Share repurchases of 274,343 shares for $2.45 million at $8.92 average in Q2 2026
• Credit facility capacity of $335.0 million with accordion up to $365.0 million
• Weighted average yield on debt and other income-producing investments totaled 9.0% as of June 30, 2026

Negative

• Net investment income declined to $7.53 million ($0.26/share) from $9.56 million ($0.34/share) year over year
• Core net investment income fell to $7.56 million ($0.26/share) from $9.99 million ($0.35/share) year over year
• Investment income decreased to $22.3 million from $25.7 million for the quarter year over year
• Net realized loss on investments widened to $7.24 million from $0.86 million year over year
• Net investment activity was negative $31.2 million in Q2 2026 as repayments exceeded new investments
• Quarterly distributions decreased to $0.34 per share from $0.40 per share year over year

News Explained

The July 14 SBA license permits $125 million of equity and up to $250 million of debentures, expanding financing capacity without reporting a draw.

On July 14, 2026, Stellus received an SBA license for its SBIC III subsidiary, creating permitted access to a new funding structure rather than documenting a completed financing.

Under the disclosed terms, Stellus may contribute $125 million of equity and draw up to $250 million of SBA-guaranteed debentures, subject to the $475 million family-of-funds limit and applicable SBA rules; the release describes capacity, not a draw.

Outstanding borrowings under the Credit Facility were $211.7 million on August 10, 2026, compared with $222.2 million at June 30, 2026.

The material follow-up is whether SBIC III contributes the stated equity or draws debentures, subject to SBA regulations and the family-of-funds limit.

Market Context

Recent Form 4 data recorded 10,700 shares bought and zero sold by one director. That insider context...

Analysis

Recent Form 4 data recorded 10,700 shares bought and zero sold by one director. That insider context supplements the earnings report, while lower income and realized investment losses remained relevant risks.

Key Figures

Net investment income: $0.26 per share Core net investment income: $0.26 per share Net realized income: $0.01 per share +5 more

8 metrics

Net investment income $0.26 per share Three months ended June 30, 2026; $0.34 prior-year quarter

Core net investment income $0.26 per share Three months ended June 30, 2026; $0.35 prior-year quarter

Net realized income $0.01 per share Three months ended June 30, 2026

Portfolio fair value $968 million As of June 30, 2026

Net asset value $12.80 per share As of June 30, 2026

Net increase in net assets $0.56 per share Three months ended June 30, 2026

Distributions $0.34 per share Three months ended June 30, 2026; $0.40 prior-year quarter

Share repurchases 467,317 shares at an average price of $8.50 per share Since the Share Repurchase Program was announced in March

Historical Context

5 past events · Latest: Jul 29 (Positive)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Jul 29	Preliminary earnings results	Positive	+5.2%	Preliminary Q2 results estimated NII, NAV growth, portfolio activity, and SBA licensing.
Jul 16	Dividend declaration	Positive	-9.4%	Third-quarter monthly dividend declaration preceded a sharp negative reaction.
May 19	Fund closing	Positive	-1.9%	Credit Fund IV reached approximately $1.5 billion of investable capital.
May 11	First-quarter earnings	Positive	-0.8%	Q1 earnings reported NII, portfolio value, yield, NAV, and distributions.
May 07	Earnings scheduling	Neutral	+0.5%	First-quarter results release and conference call were scheduled.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Across the selected recent events, positive or informational announcements more often diverged from the stock's 24-hour reaction than aligned.

Key Terms

u.s. gaap, payment-in-kind, rule 10b-18, convertible promissory note, +1 more

5 terms

u.s. gaap financial

"U.S. GAAP net investment income and core net investment income"

U.S. GAAP is a set of rules and standards that companies in the United States follow to prepare their financial reports. It helps ensure that financial information is consistent and clear, so investors and others can compare and understand a company's financial health easily.

payment-in-kind financial

"Payment-in-kind ("PIK")"

Payment-in-kind is when a borrower or issuer settles interest, dividends, or other obligations by giving more of the same asset—extra shares, additional bond principal, or goods—instead of paying cash. It matters to investors because it changes who owns what and when cash is actually received: it can preserve a company’s short-term cash but may dilute equity or increase future claims, altering risk and potential returns much like taking goods instead of a paycheck.

rule 10b-18 regulatory

"guidelines specified in Rule 10b-18 of the Securities Exchange Act"

Rule 10b-18 is a regulation that sets strict rules for how a company's executives and employees can buy back their own company's stock from the market. It helps ensure that these buybacks happen in a fair and transparent way, reducing the chance of market manipulation. This is important for investors because it offers protection against unfair practices and promotes confidence in the integrity of the stock market.

convertible promissory note financial

"Convertible Promissory Note Add-On Investment"

A convertible promissory note is a loan a company takes now that can later be turned into shares instead of being repaid in cash. Think of it as lending money with the option to accept ownership in the business down the road; that matters to investors because it affects who gets paid first, how much ownership existing shareholders keep, and the company’s future valuation and cash needs. Terms such as conversion price, interest and maturity determine the financial impact.

delayed draw term loan commitment financial

"Delayed Draw Term Loan Commitment"

A delayed draw term loan commitment is an agreement from one or more lenders to provide a lump-sum loan to a borrower at a specified future time or times, provided certain conditions are met. Think of it like a reserved line of credit you can tap later when needed; for investors it matters because it creates potential new debt that can change a company’s cash position, leverage and risk profile once drawn, and may carry costs or covenants while unused.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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HOUSTON, Aug. 10, 2026 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE: SCM) ("Stellus", "we", or the "Company") today announced financial results for its fiscal quarter ended June 30, 2026.

Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended June 30, 2026, in which we earned both U.S. GAAP net investment income and core net investment income of $0.26 per share and net realized income of $0.01 per share. During the quarter, we funded $18 million of investments and received $49 million of repayments, resulting in a total portfolio of $968 million at fair value. I'm also pleased to report that since we announced our Share Repurchase Program in March, we have repurchased 467,317 shares at an average price of $8.50 per share."

FINANCIAL HIGHLIGHTS

($ in millions, except data relating to per share amounts and shares outstanding)

	Three Months Ended						Six Months Ended
	June 30, 2026			June 30, 2025			June 30, 2026			June 30, 2025
	Amount	Per Share		Amount	Per Share		Amount	Per Share		Amount	Per Share
Net investment income	$7.53	$0.26		$9.56	$0.34		$15.03	$0.52		$19.35	$0.69
Core net investment income(1)	7.56	0.26		9.99	0.35		15.42	0.53		20.28	0.72
Net realized loss on investments	(7.24)	(0.25)		(0.86)	(0.03)		(6.49)	(0.22)		(6.83)	(0.24)
Net realized loss on foreign currency translation	—	—		(0.02)	—		—	—		(0.05)	—
Total realized income(2)	$0.29	$0.01		$8.68	$0.31		$8.54	$0.30		$12.47	$0.45
Distributions	(9.80)	(0.34)		(11.36)	(0.40)		(19.64)	(0.68)		(22.45)	(0.80)
Net unrealized change in appreciation on investments	15.90	0.55		1.44	0.05		9.35	0.32		2.63	0.09
Net unrealized change in appreciation (depreciation) on foreign currency translation	0.02	—		0.03	—		(0.03)	—		0.04	—
Net increase in net assets resulting from operations	$16.21	$0.56		$10.15	$0.36		$17.86	$0.62		$15.14	$0.54
Weighted average shares outstanding		28,869,028			28,412,849			28,907,925			28,009,969

(1)	Core net investment income, as presented, excludes the impact of capital gains incentive fees (reversal) and income taxes, the majority of which are excise taxes. The Company believes presenting core net investment income and the related per share amount is a useful supplemental disclosure for analyzing its financial performance. However, core net investment income is a non-U.S. GAAP measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. GAAP. A reconciliation of net investment income in accordance with U.S. GAAP to core net investment income is presented in the table below the financial statements.
(2)	Total realized income is the sum of net investment income, net realized gains (losses) on investments, net realized gains (losses) on foreign currency, and losses on debt extinguishment, all U.S. GAAP measures.

 

PORTFOLIO ACTIVITY

($ in millions, except data relating to per share amounts, shares outstanding, and number of portfolio companies)

		As of		As of
		June 30, 2026		December 31, 2025
Investments at fair value		$968.2		$1,007.6
Total assets		$982.1		$1,041.3
Net assets		$367.0		$371.2
Shares outstanding		28,672,911		28,947,254
Net asset value per share		$12.80		$12.82
		Three Months Ended				Six Months Ended
		June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025
New investments		$18.0		$22.8		$45.7		$78.2
Repayments of investments		(49.2)		(31.6)		(90.9)		(46.6)
Net activity		($31.2)		($8.8)		($45.2)		$31.6
		As of		As of
		June 30, 2026		December 31, 2025
Number of portfolio company investments		116		115
Number of debt investments		98		100
Weighted average yield of debt and other income producing investments (3)
Cash		7.9 %		8.5 %
Payment-in-kind ("PIK")		0.8 %		0.5 %
Fee amortization		0.3 %		0.3 %
Total		9.0 %		9.3 %
Weighted average yield of total investments(4)
Cash		7.4 %		7.9 %
PIK		0.7 %		0.5 %
Fee amortization		0.3 %		0.3 %
Total		8.4 %		8.7 %

(3)	The dollar-weighted average annualized effective yield is computed using the effective interest rate for our debt investments and other income producing investments, including cash and PIK interest, as well as the accretion of deferred fees. The individual investment yields are then weighted by the respective cost of the investments (as of the date presented) in calculating the weighted average effective yield of the portfolio. The dollar-weighted average annualized yield on the Company's investments for a given period will generally be higher than what investors in the Company's common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expenses or any sales load that may be paid by investors.
(4)	The dollar-weighted average yield on total investments takes the same yields as calculated in the footnote above but weights them to determine the weighted average effective yield as a percentage of the Company's total investments, including non-income producing equity positions and debt investments on non-accrual status.

 

Results of Operations

Investment income for the three months ended June 30, 2026 and 2025 totaled $22.3 million and $25.7 million, respectively, most of which was interest income from portfolio investments.

Gross operating expenses for the three months ended June 30, 2026 and 2025 totaled $14.8 million and $17.1 million, respectively. For the same respective periods, base management fees totaled $4.4 million and $4.3 million, income incentive fees totaled $0.2 million and $2.2 million, fees and expenses related to our borrowings totaled $8.5 million and $8.7 million (including interest and amortization of deferred financing costs), administrative expenses totaled $0.6 million and $0.5 million, income tax totaled $0.0 million and $0.4 million and other expenses totaled $1.1 million and $1.0 million. The Company waived $0.0 million and $1.0 million of income incentive fees due to the total return limitation pursuant to the provisions of the Investment Advisory Agreement between the Company and the Advisor (as defined below) for the three months ended June 30, 2026 and 2025, respectively, for net operating expenses of $14.8 million and $16.1 million, respectively.

Net investment income was $7.5 million and $9.6 million, or $0.26 and $0.34 per common share based on 28,869,028 and 28,412,849 weighted average common shares outstanding for the three months ended June 30, 2026 and 2025, respectively. Core net investment income, which is a non-U.S. GAAP measure that excludes capital gains incentive fees (reversals) and income tax expense accruals, for the three months ended June 30, 2026 and 2025 was $7.6 million and $10.0 million, or $0.26 and $0.35 per share, respectively.

For the three months ended June 30, 2026 and 2025, the Company's investment portfolio had a net change in unrealized appreciation of $15.9 million and $1.4 million, respectively, and the Company had net realized losses of ($7.2) million and ($0.9) million, respectively.

Net increase in net assets resulting from operations totaled $16.2 million and $10.1 million, or $0.56 and $0.36 per common share, based on 28,869,028 and 28,412,849 weighted average common shares outstanding for the three months ended June 30, 2026 and 2025, respectively.

Liquidity and Capital Resources

As of June 30, 2026, the Company's amended senior secured revolving credit agreement with certain bank lenders and Zions Bancorporation, N.A. dba Amegy Bank, as administrative agent (as amended from time to time, the "Credit Facility") provided for borrowings in an aggregate amount of up to $335.0 million on a committed basis. As of both June 30, 2026 and December 31, 2025, the Credit Facility had an accordion feature which allowed for potential future expansion of the facility size up to $365.0 million.

As of June 30, 2026 and December 31, 2025, the Company had $222.2 million and $236.6 million in outstanding borrowings under the Credit Facility, respectively.

On March 3, 2026, the Company announced that its Board authorized a program for the purpose of repurchasing up to $20,0 million of its shares of common stock (the "Repurchase Program"). Under the Repurchase Program, the Company may, but is not obligated to, repurchase its outstanding common stock in the open market from time to time, provided that the Company complies with the requirements under its Code of Ethics and the guidelines specified in Rule 10b-18 of the Securities Exchange Act of 1934, as amended, including certain price, market volume and timing constraints. Unless amended or extended by the Board, the Repurchase Program will expire on the earlier of March 2, 2027 or when $20.0 million of the Company's outstanding shares of common stock have been repurchased.

During the three months ended June 30, 2026, the Company repurchased 274,343 shares of its common stock under the Repurchase Program for an aggregate purchase price of $2,447,682, including commissions, at a weighted average net repurchase price of $8.92 per share.

Distributions

For the three months ended June 30, 2026 and 2025, the Company declared aggregate distributions of $0.34 per share and $0.40 per share, respectively ($9.8 million and $11.4 million in the aggregate, respectively). Tax characteristics of all distributions are reported to stockholders on Form 1099-DIV. Tax characteristics of all distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year. None of these dividends are expected to include a return of capital.

Recent Portfolio Activity

The Company invested in the following portfolio companies during the three months ended June 30, 2026:

Activity Type		Date		Company Name		Company Description		Investment Amount			Instrument Type
Add-On Investment		April 1, 2026		EH Real Estate Services, LLC*		Offers residential property brokerage, title & settlement, and property and casualty insurance brokerage services to home buyers and sellers		$	190,093		Senior Secured – First Lien
New Investment		April 3, 2026		VeloSource Purchaser, LLC		Locum tenens staffing agency		$	200,000		Senior Secured – First Lien
								$	100,000		Delayed Draw Term Loan Commitment
								$	100,000		Revolver Commitment
								$	18,605		Equity
Add-On Investment		April 13, 2026		Venbrook Buyer, LLC*		An independent insurance services broker		$	1,256,415		Senior Secured – First Lien
New Investment		April 13, 2026		Solomon AcquisitionCo, LLC		An innovative process automation and digital systems integrator		$	4,196,557		Senior Secured – First Lien
								$	100,000		Revolver Commitment
								$	186,807		Equity
New Investment		April 27, 2026		OW RSG LLC		Manufacturer of walk-in coolers, freezers, and refrigeration systems		$	4,000,000		Senior Secured – First Lien
								$	100,000		Delayed Draw Term Loan Commitment
								$	100,000		Revolver Commitment
								$	324,074		Equity
Add-On Investment		April 28, 2026		Venbrook Buyer, LLC*		An independent insurance services broker		$	502,566		Senior Secured – First Lien
Add-On Investment		April 28, 2026		Advanced Barrier Extrusions, LLC*		Manufacturer of flexible packaging		$	330,250		Senior Secured – First Lien
Add-On Investment		June 1, 2026		Venbrook Buyer, LLC*		An independent insurance services broker		$	736,152		Senior Secured – First Lien
Add-On Investment		June 26, 2026		Venbrook Buyer, LLC*		An independent insurance services broker		$	352,052		Senior Secured – First Lien
Add-On Investment		June 29, 2026		Monarch Behavioral Therapy, LLC*		Provider of center-based applied behavioral analysis therapy services		$	29,822		Convertible Promissory Note
Add-On Investment		June 30, 2026		Valor Buyco LLC*		Provider of dispatched road services		$	120,000		Delayed Draw Term Loan Commitment
*Existing portfolio company

 

The Company realized investments in the following portfolio companies during the three months ended June 30, 2026:

Activity Type		Date		Company Name		Company Description		Proceeds Received			Realized Gain			Instrument Type
Full Repayment		April 17, 2026		Sales Benchmark Index, LLC		Provider of revenue growth management consulting services for private equity-owned and large enterprise clients		$	11,968,656		$	—		Senior Secured – First Lien
								$	443,820		$	—		Revolver Commitment
Full Realization								$	486,925		$	(178,805)		Equity
Full Repayment		April 24, 2026		Equine Network, LLC		Provider of equine competitions, content, products, and services		$	9,043,164		$	—		Senior Secured – First Lien
								$	97,900		$	—		Delayed Draw Term Loan Commitment
								$	166,667		$	—		Revolver Commitment
Full Repayment		April 30, 2026		Cerebro Buyer, LLC		Manufacturer of single-use electrodes for medical procedures		$	4,526,683		$	—		Senior Secured – First Lien
								$	376,902		$	—		Delayed Draw Term Loan Commitment
Full Repayment		May 21, 2026		Premiere Digital Services, Inc.		Provider of digital media services to the entertainment industry.		$	12,038,926		$	—		Senior Secured – First Lien
Full Repayment		June 30, 2026		Tilley Company		Distributor of specialty chemicals, oils, and lubricants into the food & beverage, lubricants, flavor and fragrances, personal care, and other chemicals end-markets		$	44,110		$	—		Senior Secured – First Lien
								$	13,043		$	—		Revolver Commitment

 

Events Subsequent to June 30, 2026

The Company's management has evaluated subsequent events through August 10, 2026. There have been no subsequent events that require recognition or disclosure except for the following described below.

Investment Portfolio

The Company invested in the following portfolio companies subsequent to June 30, 2026:

Activity Type		Date		Company Name		Company Description		Investment Amount			Instrument Type
Add-On Investment		July 2, 2026		Blade Landscape Investments, LLC*		Regional provider of commercial landscaping services		$	5,250		Equity
New Investment		July 16, 2026		Emergent Software		Microsoft-centric data, AI, and cloud IT services partner		$	3,197,377		Senior Secured – First Lien
								$	2,664,481		Delayed Draw Term Loan Commitment
								$	500,000		Revolver Commitment
								$	306,732		Equity
New Investment		August 5, 2026		LJ Welding Automation Ltd.		Manufacturer of material handling and welding automation systems		$	7,693,688		Senior Secured – First Lien
								$	500,000		Revolver Commitment
								$	303,470		Equity
*Existing portfolio company

 

The Company realized investments in the following portfolio companies subsequent to June 30, 2026:

Activity Type		Date		Company Name		Company Description		Proceeds Received			Instrument Type
Full Repayment		July 1, 2026		General LED OPCO, LLC		Provider of LED lighting systems and modules		$	4,500,000		Senior Secured – Second Lien
Full Repayment		July 27, 2026		MacKenzie-Childs Acquisition, Inc.		Lifestyle home décor brand		$	86,331		Senior Secured – First Lien
Full Repayment		July 30, 2026		U.S. Expediters, LLC		Reseller of CPAP machines and accessories		$	14,236,513		Senior Secured – First Lien

 

Credit Facility 

The outstanding balance under the Credit Facility as of August 10, 2026 was $211.7 million.

SBA Licensing

On July 14, 2026, we received a license from the SBA for the SBIC III subsidiary, which allows us to contribute $125.0 million of equity and draw up to $250.0 million of SBA-guaranteed debentures, subject to the increased family of funds limit of $475.0 million across all of our SBIC subsidiaries and applicable SBA regulations and policies.

Distributions Declared

On July 16, 2026, the Board of Directors of the Company declared a regular monthly dividend for each of July 2026, August 2026, and September 2026 as follows:

		Record		Payment		Amount per
Declared		Date		Date		Share
July 16, 2026		July 31, 2026		August 14, 2026		$	0.0833
July 16, 2026		August 31, 2026		September 15, 2026		$	0.0833
July 16, 2026		September 30, 2026		October 15, 2026		$	0.0833

 

Share Repurchase Program

Since June 30, 2026, we repurchased 192,974 shares of our common stock under the Repurchase Program at a weighted-average purchase price of $7.95 per share.

Conference Call Information

Stellus Capital Investment Corporation will host a conference call to discuss these results on Tuesday, August 11, 2026 at 10:00 AM, Central Time. The conference call will be led by Robert T. Ladd, Chief Executive Officer, and W. Todd Huskinson, Chief Financial Officer, Chief Compliance Officer, Treasurer, and Secretary.

For those wishing to participate by telephone, please dial (888) 506-0062. Use passcode 218557. Starting approximately two hours after the conclusion of the call, a replay will be available through Tuesday, August 25, 2026 by dialing (877) 481-4010 and entering passcode 54324. The replay will also be available on the Company's website.

For those wishing to participate via Live Webcast, connect via the Public (SCIC) section of our website at www.stelluscapital.com, under the Events tab. A replay of the conference will be available on our website for approximately 90 days.

About Stellus Capital Investment Corporation

The Company is an externally managed, closed-end, non-diversified investment management company that has elected to be regulated as a business development company under the Investment Company Act of 1940. The Company's investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation by investing primarily in private lower middle-market companies (typically those with $5.0 million to $50.0 million of EBITDA (earnings before interest, taxes, depreciation and amortization)) with a focus on investing through first lien (including unitranche) loans, often with a corresponding equity investment. The Company's investment activities are managed by its investment adviser, Stellus Capital Management. To learn more about Stellus Capital Investment Corporation, visit www.stelluscapital.com under the "Public (SCIC)" tab. Stellus Capital Management, LLC was acquired by Ridgepost Capital, LLC on June 22, 2026. Ridgepost Capital, LLC's parent company, Ridgepost Capital, Inc., is a reporting company listed on the New York Stock Exchange. Please reference Ridgepost Capital, Inc.'s periodic filings with the U.S. Securities and Exchange Commission for additional information.

Forward-Looking Statements

Statements included herein may contain "forward-looking statements" which relate to future performance or financial condition. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission including the final prospectus that will be filed with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

Contacts

Stellus Capital Investment Corporation
W. Todd Huskinson, Chief Financial Officer
(713) 292-5414
thuskinson@stelluscapital.com

 

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
		(unaudited)
		June 30, 2026			December 31, 2025
ASSETS
Controlled investments, at fair value (amortized cost of $34,691,986 and $33,603,521, respectively)		$	11,573,435		$	14,953,132
Non-controlled, affiliated investments, at fair value (amortized cost of $29,323,333 and $4,806,660, respectively)			32,257,658			3,750,674
Non-controlled, non-affiliated investments, at fair value (amortized cost of $913,612,730 and $987,729,505, respectively)			924,415,324			988,919,589
Cash and cash equivalents			5,138,950			25,050,156
Receivable for sales and repayments of investments			2,166,620			581,509
Interest receivable			5,973,539			6,375,996
Income tax receivable			—			1,385,387
Other receivables			66,430			85,000
Related party receivable			—			20
Deferred offering costs			75,000			—
Prepaid expenses			457,821			150,843
Total Assets		$	982,124,777		$	1,041,252,306
LIABILITIES
2030 Notes Payable		$	122,897,963		$	122,671,409
Credit Facility payable			219,221,522			233,167,360
SBA-guaranteed debentures			257,304,593			295,984,063
Dividends payable			3,248,641			3,858,669
Management fees payable			4,393,771			4,442,705
Income incentive fees payable			889,986			2,317,429
Interest payable			5,569,922			6,138,076
Unearned revenue			496,577			582,007
Administrative services payable			517,253			539,338
Income tax payable			56,518			—
Other accrued expenses and liabilities			570,085			372,294
Total Liabilities		$	615,166,831		$	670,073,350
Commitments and contingencies (Note 7)
Net Assets		$	366,957,946		$	371,178,956
NET ASSETS
Common stock, par value $0.001 per share (100,000,000 shares authorized; 28,672,911 and 28,947,254 shares issued and outstanding, respectively)		$	28,673		$	28,947
Paid-in capital			395,382,385			397,829,793
Total distributable loss			(28,453,112)			(26,679,784)
Net Assets		$	366,957,946		$	371,178,956
Total Liabilities and Net Assets		$	982,124,777		$	1,041,252,306
Net Asset Value Per Share		$	12.80		$	12.82

 

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
		For the three months ended						For the six months ended
		June 30, 2026			June 30, 2025			June 30, 2026			June 30, 2025
INVESTMENT INCOME
From non-controlled, affiliated investments
Interest income		$	1,016		$	—		$	1,061		$	—
Payment-in-kind interest income			559,310			—			631,610			—
From non-controlled, non-affiliated investments
Interest income			19,864,060			23,134,800			39,811,025			46,285,437
Payment-in-kind interest income			1,159,038			1,519,405			3,392,735			2,495,884
Other income			719,448			1,042,397			1,759,375			1,866,939
Total Investment Income		$	22,302,872		$	25,696,602		$	45,595,806		$	50,648,260
OPERATING EXPENSES
Management fees		$	4,393,770		$	4,279,441		$	8,786,127		$	8,334,167
Valuation fees			44,995			38,507			211,114			196,396
Administrative services expenses			550,235			474,284			1,199,355			923,582
Income incentive fees			150,863			2,158,075			257,572			4,294,566
Professional fees			283,474			312,808			1,101,201			730,839
Directors' fees			84,250			93,250			213,500			204,500
Insurance expense			102,057			98,668			195,113			195,758
Interest expense and other fees			8,585,467			8,680,015			17,437,008			16,943,034
Income tax expense			29,685			428,951			390,156			928,498
Other general and administrative expenses			585,510			500,302			825,127			718,653
Total Operating Expenses		$	14,810,306		$	17,064,301		$	30,616,273		$	33,469,993
Income incentive fee waiver			(38,583)			(928,926)			(49,644)			(2,171,769)
Total Operating Expenses, net of fee waivers		$	14,771,723		$	16,135,375		$	30,566,629		$	31,298,224
Net Investment Income		$	7,531,149		$	9,561,227		$	15,029,177		$	19,350,036
Net realized loss on controlled investments		$	—		$	(1,132,576)		$	—		$	(1,132,576)
Net realized (loss) gain on non-controlled, non-affiliated investments			(7,243,523)			272,549			(6,493,113)			(5,694,672)
Net realized (loss) gain on foreign currency translations			(1,811)			(20,003)			1,853			(49,658)
Net change in unrealized (depreciation) appreciation on controlled investments			(922,785)			1,290,491			(4,468,162)			1,345,767
Net change in unrealized appreciation on non-controlled, affiliated investments			3,913,525			—			3,468,901			—
Net change in unrealized appreciation on non-controlled, non-affiliated investments			12,908,698			143,176			10,350,353			1,281,193
Net change in unrealized appreciation (depreciation) on foreign currency translations			21,045			30,546			(26,975)			38,865
Net Increase in Net Assets Resulting from Operations		$	16,206,298		$	10,145,410		$	17,862,034		$	15,138,955
Net Investment Income Per Share—basic and diluted		$	0.26		$	0.34		$	0.52		$	0.69
Net Increase in Net Assets Resulting from Operations Per Share –  basic and diluted		$	0.56		$	0.36		$	0.62		$	0.54
Weighted Average Shares of Common Stock Outstanding—basic and diluted			28,869,028			28,412,849			28,907,925			28,009,969
Distributions Per Share—basic and diluted		$	0.34		$	0.40		$	0.68		$	0.80

 

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited)
		Common Stock								Total
		Number		Par			Paid-in			distributable
		of shares		value			capital			(loss)			Net Assets
Balances at December 31, 2024		27,481,118		$	27,481		$	379,549,272		$	(9,654,813)		$	369,921,940
Net investment income		—			—			—			9,788,809			9,788,809
Net realized loss on investments		—			—			—			(5,967,221)			(5,967,221)
Net realized loss on foreign currency translations		—			—			—			(29,655)			(29,655)
Net change in unrealized appreciation on investments		—			—			—			1,193,293			1,193,293
Net change in unrealized depreciation on foreign currency translations		—			—			—			8,319			8,319
Distributions from net investment income		—			—			—			(11,087,389)			(11,087,389)
Issuance of common stock, net of offering costs(1)		656,085			656			8,937,430			—			8,938,086
Balances at March 31, 2025		28,137,203		$	28,137		$	388,486,702		$	(15,748,657)		$	372,766,182
Net investment income		—			—			—			9,561,227			9,561,227
Net realized loss on investments		—			—			—			(860,027)			(860,027)
Net realized loss on foreign currency translations		—			—			—			(20,003)			(20,003)
Net change in unrealized appreciation on investments		—			—			—			1,433,667			1,433,667
Net change in unrealized appreciation on foreign currency translations		—			—			—			30,546			30,546
Provision for taxes on unrealized appreciation on investments		—			—			—			—			—
Distributions from net investment income		—			—			—			(11,363,618)			(11,363,618)
Issuance of common stock, net of offering costs(1)		278,945			279			3,822,637			—			3,822,916
Balances at June 30, 2025		28,416,148		$	28,416		$	392,309,339		$	(16,966,865)		$	375,370,890
Balances at December 31, 2025		28,947,254		$	28,947		$	397,829,793		$	(26,679,784)		$	371,178,956
Net investment income		—			—			—			7,498,028			7,498,028
Net realized gain on investments		—			—			—			750,410			750,410
Net realized gain on foreign currency translation		—			—			—			3,664			3,664
Net change in unrealized depreciation on investments		—			—			—			(6,548,346)			(6,548,346)
Net change in unrealized depreciation on foreign currency translations		—			—			—			(48,020)			(48,020)
Distributions from net investment income		—			—			—			(9,839,171)			(9,839,171)
Balances at March 31, 2026		28,947,254		$	28,947		$	397,829,793		$	(34,863,219)		$	362,995,521
Net investment income		—			—			—			7,531,149			7,531,149
Net realized loss on investments		—			—			—			(7,243,523)			(7,243,523)
Net realized loss on foreign currency translation		—			—			—			(1,811)			(1,811)
Net change in unrealized appreciation on investments		—			—			—			15,899,438			15,899,438
Net change in unrealized appreciation on foreign currency translations		—			—			—			21,045			21,045
Distributions from net investment income		—			—			—			(9,796,191)			(9,796,191)
Repurchase of common stock, net of commissions(1)		(274,343)			(274)			(2,447,408)			—			(2,447,682)
Balances at June 30, 2026		28,672,911		$	28,673		$	395,382,385		$	(28,453,112)		$	366,957,946

 

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
		For the six months ended
		June 30, 2026			June 30, 2025
Cash Flows from Operating Activities
Net increase in net assets resulting from operations		$	17,862,034		$	15,138,955
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:
Purchases of investments			(45,678,450)			(78,230,159)
Proceeds from sales and repayments of investments			90,888,206			46,638,287
Net change in unrealized appreciation on investments			(9,351,092)			(2,626,960)
Net change in unrealized depreciation (appreciation) on foreign currency translations			26,975			(38,865)
Increase in investments due to payment-in-kind income			(3,392,735)			(2,492,551)
Amortization of premium and accretion of discount, net			(1,383,610)			(1,437,223)
Amortization of loan structure fees			511,422			634,745
Amortization of deferred financing costs			270,866			303,468
Amortization of discount on Notes Payable			67,121			31,434
Amortization of premium on Notes Payable			(61,432)			—
Amortization of loan fees on SBA-guaranteed debentures			320,530			371,260
Net realized loss on investments			6,493,113			6,827,248
Changes in other assets and liabilities
Decrease (increase) in interest receivable			402,457			(921,344)
Decrease (increase) in income tax receivable			1,385,387			(743,732)
Decrease in other receivables			18,570			70,495
Decrease in related party receivables			20			3,687
(Increase) decrease in prepaid expenses			(306,978)			218,975
(Decrease) increase in management fees payable			(48,934)			245,332
Decrease in income incentive fees payable			(1,427,443)			(1,057,366)
(Decrease) increase in administrative services payable			(22,085)			22,297
(Decrease) increase in interest payable			(568,154)			1,248,079
Increase in related party payable			—			1,088,287
(Decrease) increase in unearned revenue			(85,430)			127,664
Increase in income tax payable			56,518			—
Increase in other accrued expenses and liabilities			197,791			1,322,363
Net Cash Provided by (Used in) Operating Activities		$	56,174,667		$	(13,255,624)
Cash Flows from Financing Activities
Proceeds from the issuance of common stock		$	—		$	13,153,366
Sales load for common stock issued			—			(197,464)
Offering costs paid for common stock issued			(75,000)			(303,959)
Payment for repurchase of common stock			(2,436,708)			—
Commission for repurchase of common stock			(10,975)			—
Stockholder distributions paid			(20,245,390)			(22,326,367)
Financing costs paid on Notes Payable			(50,000)			(1,698,806)
Repayments of SBA-guaranteed debentures			(39,000,000)			(16,250,000)
Borrowings under Credit Facility			92,200,000			104,400,000
Repayments of Credit Facility			(106,467,800)			(117,817,800)
Net Cash (Used in) Provided by Financing Activities		$	(76,085,873)		$	33,188,720
Net (Decrease) Increase in Cash and Cash Equivalents		$	(19,911,206)		$	19,933,096
Cash and Cash Equivalents Balance at Beginning of Period		$	25,050,156		$	20,058,594
Cash and Cash Equivalents Balance at End of Period		$	5,138,950		$	39,991,690
Supplemental and Non-Cash Activities
Cash paid for interest expense		$	16,896,905		$	14,354,048
Income and excise tax refund, net			(1,051,749)			1,672,230
Exchange of investments			8,670,888			1,663,301

 

Reconciliation of Core Net Investment Income(1) (Unaudited)
		Three Months Ended				Six Months Ended
		June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025
Net investment income		$7,531,149		$9,561,227		$15,029,177		$19,350,036
Income tax expense		29,685		428,951		390,156		928,498
Core net investment income		$7,560,834		$9,990,178		$15,419,333		$20,278,534
Per share amounts:
Net investment income per share		$0.26		$0.34		$0.52		$0.69
Core net investment income per share		$0.26		$0.35		$0.53		$0.72

 

Reconciliation of Realized Net Investment Income(2) (Unaudited)
		Three Months Ended				Six Months Ended
		June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025
Net investment income		$7,531,149		$9,561,227		$15,029,177		$19,350,036
Net realized loss on investments		(7,243,523)		(860,027)		(6,493,113)		(6,827,248)
Net realized (loss) gain on foreign currency translation		(1,811)		(20,003)		1,853		(49,658)
Total realized net investment income		$285,815		$8,681,197		$8,537,917		$12,473,130
Per share amounts:
Net investment income per share		$0.26		$0.34		$0.52		$0.69
Realized net investment income per share		$0.01		$0.31		$0.30		$0.45

 

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SOURCE Stellus Capital Investment Corporation

FAQ

How did Stellus Capital (SCM) perform in Q2 2026 in terms of net investment income?

Stellus Capital reported Q2 2026 net investment income of $7.53 million, or $0.26 per share. According to Stellus, this compares with $9.56 million, or $0.34 per share, in Q2 2025, reflecting lower investment income and higher realized losses on investments.

What was Stellus Capital’s (SCM) net asset value per share as of June 30, 2026?

Stellus Capital reported a net asset value of $12.80 per share as of June 30, 2026. According to Stellus, net assets totaled $367.0 million with 28,672,911 shares outstanding, compared with NAV of $12.82 per share at December 31, 2025.

How large is Stellus Capital’s (SCM) investment portfolio and yield as of Q2 2026?

As of June 30, 2026, Stellus Capital’s investment portfolio was $968.2 million at fair value. According to Stellus, the dollar‑weighted average yield on debt and other income‑producing investments totaled 9.0%, while the yield on total investments was 8.4%.

What share repurchase activity did Stellus Capital (SCM) report for Q2 2026?

In Q2 2026, Stellus Capital repurchased 274,343 shares for about $2.45 million at a weighted average price of $8.92 per share. According to Stellus, this was under its Board‑authorized program to repurchase up to $20.0 million of common stock through March 2, 2027.

What distributions did Stellus Capital (SCM) declare for Q2 2026 and how do they compare year over year?

Stellus Capital declared aggregate Q2 2026 distributions of $0.34 per share, totaling $9.8 million. According to Stellus, this compares with $0.40 per share, or $11.4 million, in Q2 2025, and none of these dividends are expected to include a return of capital.

How much capacity and borrowing did Stellus Capital (SCM) have under its credit facility at June 30, 2026?

As of June 30, 2026, Stellus Capital’s senior secured revolving credit facility allowed $335.0 million of committed borrowings. According to Stellus, outstanding borrowings under the facility were $222.2 million, and the accordion feature permitted potential expansion up to $365.0 million.

What were Stellus Capital’s (SCM) new investments and repayments during Q2 2026?

During Q2 2026, Stellus Capital funded $18.0 million of new investments and received $49.2 million of repayments. According to Stellus, this resulted in negative net investment activity of $31.2 million and a portfolio of 116 portfolio company investments at quarter‑end.