Stellus Capital Investment Corporation Reports Results for its Third Fiscal Quarter Ended September 30, 2026

Lower operating expenses did not offset the decline in investment income, while credit-facility borrowings decreased.

Rhea-AI Summary

Stellus Capital Investment Corporation (NYSE:SCM) reported third-quarter net investment income of $0.25 per share, down from the prior-year quarter. Net investment income fell to $7.16 million from $9.14 million, while investment income declined to $22.4 million from $26.3 million. Unrealized investment depreciation of $13.50 million contributed to a $6.37 million decrease in net assets from operations, versus a $6.69 million increase a year earlier.

Quarterly distributions fell to $0.25 per share from $0.40. At September 30, 2026, portfolio fair value was $966.1 million and net asset value was $12.40 per share, versus $1,007.6 million and $12.82 at December 31, 2025. Quarterly investments of $37.8 million exceeded repayments of $30.3 million. Stellus repurchased 493,537 shares at an average $8.36, adding approximately $0.08 per share to net asset value.

5 points · 0 major

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0 major · 20 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate point493,537 shares repurchased at an average $8.36 added approximately $0.08 per share to third-quarter net asset value.
• Moderate pointNet operating expenses declined to $15.2 million from $17.1 million in the prior-year quarter.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Committed credit facility provided up to $335.0 million, with potential expansion up to $365.0 million. 1.6× market cap
• Minor pointCredit-facility borrowings decreased to $230.6 million from $236.6 million at December 31, 2025.
• Minor pointMSCP Fulfillment Holdings investment added $6,000,000 in first-lien debt and $125,253 in equity on October 16, 2026.

Negative

• Moderate pointQuarterly net investment income fell to $7.16 million, or $0.25 per share, from $9.14 million, or $0.32.
• Moderate pointQuarterly operating result shifted to a $6.37 million decrease in net assets from a $6.69 million increase.
• Moderate pointQuarterly distributions fell to $0.25 per share from $0.40 in the prior-year quarter.
• Moderate pointNet asset value declined to $12.40 per share from $12.82 at December 31, 2025.
• Minor pointQuarterly investment income declined to $22.4 million from $26.3 million a year earlier.

15 minor points

• Minor pointQuarterly unrealized investment depreciation widened to $13.50 million from $5.14 million a year earlier.
• Minor pointPortfolio fair value decreased to $966.1 million from $1,007.6 million at December 31, 2025.
• Minor pointQuarterly core net investment income, a non-GAAP measure, fell to $7.47 million from $9.65 million.
• Minor pointQuarterly realized investment gains were zero, versus $2.86 million a year earlier.
• Minor pointQuarterly foreign-currency realized loss widened to $0.03 million from $0.01 million a year earlier.
• Minor pointQuarterly new investments declined to $37.8 million from $63.8 million a year earlier.
• Minor pointNine-month net investment income fell to $22.19 million, or $0.77 per share, from $28.48 million, or $1.01.
• Minor pointNine-month core net investment income, a non-GAAP measure, fell to $22.89 million from $29.93 million.
• Minor pointNine-month realized investment losses widened to $6.49 million from $3.96 million a year earlier.
• Minor pointNine-month unrealized investment depreciation widened to $4.15 million from $2.51 million a year earlier.
• Minor pointNine-month operating increase in net assets fell to $11.49 million from $21.83 million a year earlier.
• Minor pointNine-month distributions declined to $0.93 per share from $1.20 in the prior-year period.
• Minor pointNine-month net investment activity was negative $37.7 million, versus positive $56.4 million a year earlier.
• Minor pointIncome-producing investment yield declined to 9.1% from 9.3% at December 31, 2025.
• Minor pointTotal investment yield declined to 8.5% from 8.7% at December 31, 2025.

News Explained

The board declared monthly distributions through January 2027, while a post-quarter portfolio investment was fully realized with losses reported.

In its third-quarter release, Stellus declared three regular monthly distributions of $0.0833 per share for October, November and December 2026, payable November 13, December 15 and January 15, 2027, scheduling payments to holders through January.

After quarter-end, Stellus fully realized Exigo on October 1; the release lists $2,979,866 in proceeds and realized losses of $5,606,201 on first-lien debt and $377,535 on equity.

As of November 9, Stellus reported $212.0 million outstanding under its Credit Facility and $276.5 million in SBA-guaranteed debentures.

Key Figures

Net investment income per share: $0.25 vs. $0.32 Core net investment income per share: $0.26 vs. $0.34 Net increase (decrease) in net assets from operations per share: ($0.22) vs. $0.23 +5 more

Net investment income per share

$0.25 vs. $0.32

Third quarter 2026 vs. third quarter 2025

Core net investment income per share

$0.26 vs. $0.34

Third quarter 2026 vs. third quarter 2025

Net increase (decrease) in net assets from operations per share

($0.22) vs. $0.23

Third quarter 2026 vs. third quarter 2025

Investments at fair value

$966.1 million

As of September 30, 2026

Shares repurchased

493,537 shares

Under the Share Repurchase Program during the third quarter

Average repurchase price

$8.36 per share

Third-quarter share repurchases

NAV accretion from repurchases

Approximately $0.08 per share

During the third quarter

Aggregate distributions per share

$0.25 vs. $0.40

Third quarter 2026 vs. third quarter 2025

Historical Context

1 past event · Latest: Aug 10

1 event

1. Aug 10

   2Q earnings report

   24h Move

   +3.9%

   Q2 reported $0.26/share net investment income and a $16.21 million increase in net assets from operations.

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

Key Terms

payment-in-kind, non-accrual status, accordion feature, senior secured

4 terms

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.

non-accrual status financial

"debt investments on non-accrual status"

A loan or credit account is placed in non-accrual status when the lender stops recording expected interest income because the borrower is not making scheduled payments or repayment is doubtful. Think of it like a landlord who stops counting unpaid rent as future income once a tenant stops paying; it signals rising credit problems and potential losses. For investors, non-accrual levels indicate loan quality and can foreshadow write-downs, lower earnings, and increased risk to a lender’s balance sheet.

accordion feature financial

"the Credit Facility had an accordion feature"

An accordion feature is a clause in a loan or financing agreement that allows a company to expand the size of a credit line or the amount of securities available under the same contract without drafting a completely new deal. Like a suitcase that can be extended to hold more items, it gives a company quick flexibility to raise extra money, which can help fund growth but may increase debt or dilute existing shareholders—so investors watch it for changes in risk and ownership.

senior secured financial

"Senior Secured First Lien"

Senior secured describes a loan or bond that has first claim on a company’s assets and is backed by specific collateral, like a mortgage on property. For investors, that means they are paid before other creditors if the company struggles or is liquidated, reducing the chance of loss compared with unsecured or junior debt. Think of it as a front-of-the-line, collateral-backed claim that typically carries lower interest because of that added protection.

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

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HOUSTON, Nov. 9, 2026 /PRNewswire/ -- (PR Newswire) – Stellus Capital Investment Corporation (NYSE:SCM) ("Stellus", "we", or the "Company") today announced financial results for its fiscal quarter ended September 30, 2026.

Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended September 30, 2026, in which we earned U.S. GAAP net investment income of $0.25 per share, core net investment income of $0.26 per share and net realized income of $0.25 per share. During the quarter, we funded $38 million of investments and received $30 million of repayments, resulting in a total portfolio of $966 million at fair value. I'm also pleased to report that we have remained active under our Share Repurchase Program, repurchasing 493,537 shares at an average price of $8.36 per share. These repurchases were accretive to NAV by approximately $0.08 per share during the third quarter."

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

	Three Months Ended						Nine Months Ended
	September 30, 2026			September 30, 2025			September 30, 2026			September 30, 2025
	Amount	Per Share		Amount	Per Share		Amount	Per Share		Amount	Per Share
Net investment income	$7.16	$0.25		$9.14	$0.32		$22.19	$0.77		$28.48	$1.01
Core net investment income(1)	7.47	0.26		9.65	0.34		22.89	0.80		29.93	1.06
Net realized gain (loss) on investments	—	—		2.86	0.10		(6.49)	(0.23)		(3.96)	(0.14)
Net realized loss on foreign currency translation	(0.03)	—		(0.01)	—		(0.03)	—		(0.06)	—
Loss on debt extinguishment	—	—		(0.16)	(0.01)		—	—		(0.16)	(0.01)
Benefit for taxes on realized loss on investments in taxable subsidiaries	—	—		—	—		—	—		—	—
Total realized income(2)	$7.13	$0.25		$11.83	$0.41		$15.67	$0.54		$24.30	$0.86
Distributions	(7.11)	(0.25)		(11.43)	(0.40)		(26.74)	(0.93)		(33.89)	(1.20)
Net unrealized change in depreciation on investments	(13.50)	(0.47)		(5.14)	(0.18)		(4.15)	(0.14)		(2.51)	(0.08)
Net unrealized change in (depreciation) appreciation on foreign currency translation	—	—		—	—		(0.03)	—		0.04	—
Net increase in net assets resulting from operations	($6.37)	($0.22)		$6.69	$0.23		$11.49	$0.40		$21.83	$0.78
Weighted average shares outstanding		28,465,675			28,480,472			28,758,889			28,168,527

(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
		September 30, 2026		December 31, 2025
Investments at fair value		$966.1		$1,007.6
Total assets		$973.9		$1,041.3
Net assets		$349.3		$371.2
Shares outstanding		28,179,374		28,947,254
Net asset value per share		$12.40		$12.82
		Three Months Ended				Nine Months Ended
		September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
New investments		$37.8		$63.8		$83.5		$142.0
Repayments of investments		(30.3)		(39.0)		(121.2)		(85.6)
Net activity		$7.5		$24.8		($37.7)		$56.4
		As of		As of
		September 30, 2026		December 31, 2025
Number of portfolio company investments		119		115
Number of debt investments		99		100
Weighted average yield of debt and other income producing investments (3)
Cash		8.3 %		8.5 %
Payment-in-kind ("PIK")		0.5 %		0.5 %
Fee amortization		0.3 %		0.3 %
Total		9.1 %		9.3 %
Weighted average yield of total investments(4)
Cash		7.8 %		7.9 %
PIK		0.4 %		0.5 %
Fee amortization		0.3 %		0.3 %
Total		8.5 %		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 September 30, 2026 and 2025 totaled $22.4 million and $26.3 million, respectively, most of which was interest income from portfolio investments.

Gross operating expenses for the three months ended September 30, 2026 and 2025 totaled $15.2 million and $17.6 million, respectively. For the same respective periods, base management fees totaled $4.3 million and $4.4 million, income incentive fees totaled $0.5 million and $2.2 million, fees and expenses related to our borrowings totaled $8.3 million and $8.9 million (including interest and amortization of deferred financing costs), administrative expenses totaled $0.7 million and $0.6 million, income tax totaled $0.3 million and $0.5 million and other expenses totaled $1.1 million and $1.0 million. The Company waived $0.0 million and $0.5 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 September 30, 2026 and 2025, respectively, for net operating expenses of $15.2 million and $17.1 million, respectively.

Net investment income was $7.2 million and $9.1 million, or $0.25 and $0.32 per common share based on 28,465,675 and 28,480,472 weighted average common shares outstanding for the three months ended September 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 September 30, 2026 and 2025 was $7.5 million and $9.7 million, or $0.26 and $0.34 per share, respectively.

For the three months ended September 30, 2026 and 2025, the Company's investment portfolio had a net change in unrealized depreciation of ($13.5) million and ($5.1) million, respectively, and the Company had net realized gains of $0.0 million and $2.9 million, respectively.

Net (decrease) increase in net assets resulting from operations totaled ($6.4) million and $6.7 million, or ($0.22) and $0.23 per common share, based on 28,465,675 and 28,480,472 weighted average common shares outstanding for the three months ended September 30, 2026 and 2025, respectively.

Liquidity and Capital Resources

As of September 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 September 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 September 30, 2026 and December 31, 2025, the Company had $230.6 million and $236.6 million in outstanding borrowings under the Credit Facility, respectively.

Distributions

For the three months ended September 30, 2026 and 2025, the Company declared aggregate distributions of $0.25 per share and $0.40 per share, respectively ($7.1 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 September 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
Add-On Investment		August 6, 2026		Carolina Topco Holdings, LP*		Commercial flooring maintenance  and restoration services		$	46,082		Equity
Add-On Investment		August 13, 2026		Cathay Hypnos LLC*		Reseller of CPAP machines and accessories		$	62,566		Equity
Add-On Investment		August 17, 2026		Venbrook Buyer, LLC*		An independent insurance services broker		$	644,133		Senior Secured – First Lien
New Investment		August 26, 2026		Revenew International LLC		Provider of contract compliance and cost recovery solutions		$	7,500,000		Senior Secured – First Lien
								$	100,000		Delayed Draw Term Loan Commitment
								$	100,000		Revolver Commitment
								$	446,377		Equity
Add-On Investment		September 1, 2026		B&A Partners Holding, LLC*		Government IT services		$	156,372		Equity
Add-On Investment		September 11, 2026		Naumann Hobbs Holdings, L.P.*		Material handling equipment dealer and aftermarket parts and services provider		$	138,280		Equity
New Investment		September 14, 2026		Strategic Maintenance Solutions, LLC		A provider of enterprise asset management and industrial Internet of Things solutions.		$	10,000,000		Senior Secured – First Lien
								$	100,000		Delayed Draw Term Loan Commitment
								$	100,000		Revolver Commitment
								$	231,818		Equity
Add-On Investment		September 18, 2026		Venbrook Buyer, LLC*		An independent insurance services broker		$	276,057		Senior Secured – First Lien
Add-On Investment		September 18, 2026		Centeotl Co-Invest B, LP*		Manufacturer of frozen burritos and breakfast snacks		$	15,058		Equity
Add-On Investment		September 28, 2026		Monarch Behavioral Therapy, LLC*		Provider of center-based applied behavioral analysis therapy services		$	8,029		Unsecured
___________________________________________
*Existing portfolio company

The Company realized investments in the following portfolio companies during the three months ended September 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

Events Subsequent to September 30, 2026

The Company's management has evaluated subsequent events through November 9, 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 September 30, 2026:

---

Activity Type		Date		Company Name		Company Description		Investment Amount			Instrument Type
Add-on Investment		October 2, 2026		Eskola LLC*		Provider of commercial re-roofing services		$	167,505		Senior Secured – First Lien
								$	79,263		Delayed Draw Term Loan Commitment
Add-On Investment		October 7, 2026		GS HVAM Intermediate, LLC*		Specialized food distributor		$	1,442,585		Revolver Commitment
New Investment		October 16, 2026		MSCP Fulfillment Holdings, Inc.		Third-party logistics and e-commerce fulfillment provider		$	6,000,000		Senior Secured – First Lien
								$	100,000		Delayed Draw Term Loan Commitment
								$	100,000		Revolver Commitment
								$	125,253		Equity
Add-On Investment		October 19, 2026		Venbrook Group*		An independent insurance services broker		$	233,728		Senior Secured – First Lien
Add-on Investment		November 5, 2026		Fidus Investments Holdings, L.P.*		Provider of outsourced electronic product development and engineering services		$	267,820		Equity

*Existing portfolio company

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

Activity Type

Date

Company Name

Company Description

Proceeds Received

Realized Loss

Instrument Type

Full Realization

October 1, 2026

Exigo, LLC

Software platform for direct selling organizations

$

2,979,866

$

(5,606,201)

Senior Secured – First Lien

$

-

$

(377,535)

Equity

Credit Facility

The outstanding balance under the Credit Facility as of November 9, 2026 was $212.0 million.

SBA-guaranteed Debentures

The outstanding balance under the SBA-guaranteed debentures as of November 9, 2026 was $276.5 million.

Distributions Declared

On October 9, 2026, the Board of Directors of the Company declared a regular monthly dividend for each of October 2026, November 2026, and December 2026 as follows:

		Record		Payment		Amount per
Declared		Date		Date		Share
October 9, 2026		October 30, 2026		November 13, 2026		$	0.0833
October 9, 2026		November 30, 2026		December 15, 2026		$	0.0833
October 9, 2026		December 31, 2026		January 15, 2027		$	0.0833

Conference Call Information

Stellus Capital Investment Corporation will host a conference call to discuss these results on Tuesday, November 10, 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 157435. Starting approximately two hours after the conclusion of the call, a replay will be available through Wednesday, November 18, 2026 by dialing (877) 481-4010 and entering passcode 54725. 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 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)
		September 30, 2026			December 31, 2025
ASSETS
Controlled investments, at fair value (amortized cost of $34,691,986 and $33,603,521, respectively)		$	8,765,829		$	14,953,132
Non-controlled, affiliated investments, at fair value (amortized cost of $30,106,186 and $4,806,660, respectively)			29,587,186			3,750,674
Non-controlled, non-affiliated investments, at fair value (amortized cost of $924,192,888 and $987,729,505, respectively)			927,792,799			988,919,589
Cash and cash equivalents			2,324,400			25,050,156
Receivable for sales and repayments of investments			510,690			581,509
Interest receivable			4,397,392			6,375,996
Income tax receivable			—			1,385,387
Other receivables			135,180			85,000
Related party receivable			—			20
Deferred offering costs			75,000			—
Prepaid expenses			294,749			150,843
Total Assets		$	973,883,225		$	1,041,252,306
LIABILITIES
2030 Notes Payable		$	123,038,555		$	122,671,409
Credit Facility payable			227,901,577			233,167,360
SBA-guaranteed debentures			257,459,825			295,984,063
Dividends payable			2,347,342			3,858,669
Management fees payable			4,355,563			4,442,705
Income incentive fees payable			1,335,939			2,317,429
Interest payable			5,708,964			6,138,076
Related party payable			685,547			—
Unearned revenue			411,244			582,007
Administrative services payable			556,639			539,338
Income tax payable			363,615			—
Other accrued expenses and liabilities			385,804			372,294
Total Liabilities		$	624,550,614		$	670,073,350
Commitments and contingencies (Note 7)
Net Assets		$	349,332,611		$	371,178,956
NET ASSETS
Common stock, par value $0.001 per share (100,000,000 shares authorized; 28,179,374 and 28,947,254 shares issued and outstanding, respectively)		$	28,179		$	28,947
Paid-in capital			391,236,554			397,829,793
Total distributable loss			(41,932,122)			(26,679,784)
Net Assets		$	349,332,611		$	371,178,956
Total Liabilities and Net Assets		$	973,883,225		$	1,041,252,306
Net Asset Value Per Share		$	12.40		$	12.82

 

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
		For the three months ended						For the nine months ended
		September 30, 2026			September 30, 2025			September 30, 2026			September 30, 2025
INVESTMENT INCOME
From non-controlled, affiliated investments
Interest income		$	5,333		$	—		$	6,394		$	—
Payment-in-kind interest income			334,060			—			965,670			—
From non-controlled, non-affiliated investments
Interest income			19,552,119			23,634,587			59,029,084			69,923,357
Payment-in-kind interest income			1,306,887			1,378,166			5,033,682			3,870,717
Other income			1,198,050			1,262,956			2,957,425			3,129,895
Total Investment Income		$	22,396,449		$	26,275,709		$	67,992,255		$	76,923,969
OPERATING EXPENSES
Management fees		$	4,355,563		$	4,401,305		$	13,141,690		$	12,735,472
Valuation fees			160,576			172,364			371,690			368,760
Administrative services expenses			658,084			592,409			1,857,439			1,515,991
Income incentive fees			581,482			2,166,047			839,054			6,460,613
Professional fees			399,798			395,098			1,500,999			1,125,937
Directors' fees			96,250			93,250			309,750			297,750
Insurance expense			103,679			99,248			298,792			295,006
Interest expense and other fees			8,342,992			8,949,075			25,780,000			25,892,109
Income tax expense			307,096			515,686			697,252			1,444,184
Other general and administrative expenses			231,516			227,037			1,056,643			945,690
Total Operating Expenses		$	15,237,036		$	17,611,519		$	45,853,309		$	51,081,512
Income incentive fee waiver			—			(471,251)			(49,644)			(2,643,020)
Total Operating Expenses, net of fee waivers		$	15,237,036		$	17,140,268		$	45,803,665		$	48,438,492
Net Investment Income		$	7,159,413		$	9,135,441		$	22,188,590		$	28,485,477
Net realized loss on controlled investments		$	—		$	—		$	—		$	(1,132,576)
Net realized gain (loss) on non-controlled, non-affiliated investments			3,126			2,867,155			(6,489,987)			(2,827,517)
Net realized loss on foreign currency translations			(31,026)			(9,422)			(29,173)			(59,080)
Loss on debt extinguishment			—			(164,762)			—			(164,762)
Net change in unrealized (depreciation) appreciation on controlled investments			(2,807,606)			51,367			(7,275,768)			1,397,134
Net change in unrealized (depreciation) appreciation on non- controlled, affiliated investments			(3,453,325)			—			15,576			—
Net change in unrealized (depreciation) appreciation on non- controlled, non-affiliated investments			(7,243,749)			(5,187,426)			3,106,604			(3,906,233)
Net change in unrealized (depreciation) appreciation on foreign currency translations			(712)			(325)			(27,687)			38,540
Net (Decrease) Increase in Net Assets Resulting from Operations		$	(6,373,879)		$	6,692,028		$	11,488,155		$	21,830,983
Net Investment Income Per Share—basic and diluted		$	0.25		$	0.32		$	0.77		$	1.01
Net (Decrease) Increase in Net Assets Resulting from Operations Per Share – basic and diluted		$	(0.22)		$	0.23		$	0.40		$	0.78
Weighted Average Shares of Common Stock Outstanding— basic and diluted			28,465,675			28,480,472			28,758,889			28,168,527
Distributions Per Share—basic and diluted		$	0.25		$	0.40		$	0.93		$	1.20

 

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
Net investment income		—			—			—			9,135,441			9,135,441
Net realized gain on investments		—			—			—			2,867,155			2,867,155
Net realized loss on foreign currency translations		—			—			—			(9,422)			(9,422)
Loss on debt extinguishment		—			—			—			(164,762)			(164,762)
Net change in unrealized depreciation on investments		—			—			—			(5,136,059)			(5,136,059)
Net change in unrealized depreciation on foreign currency translations		—			—			—			(325)			(325)
Provision for taxes on unrealized appreciation on investments		—			—			—			—			—
Distributions from net investment income		—			—			—			(11,434,413)			(11,434,413)
Issuance of common stock, net of offering costs(1)		531,106			531			7,101,291			—			7,101,822
Balances at September 30, 2025		28,947,254		$	28,947		$	399,410,630		$	(21,709,250)		$	377,730,327
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
Net investment income		—			—			—			7,159,413			7,159,413
Net realized gain on investments		—			—			—			3,126			3,126
Net realized loss on foreign currency translation		—			—			—			(31,026)			(31,026)
Net change in unrealized depreciation on investments		—			—			—			(13,504,680)			(13,504,680)
Net change in unrealized depreciation on foreign currency translations		—			—			—			(712)			(712)
Distributions from net investment income		—			—			—			(7,105,131)			(7,105,131)
Repurchase of common stock, net of commissions(1)		(493,537)			(494)			(4,145,831)			—			(4,146,325)
Balances at September 30, 2026		28,179,374		$	28,179		$	391,236,554		$	(41,932,122)		$	349,332,611

 

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
		For the nine months ended
		September 30, 2026			September 30, 2025
Cash Flows from Operating Activities
Net increase in net assets resulting from operations		$	11,488,155		$	21,830,983
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:
Purchases of investments			(83,478,197)			(141,983,167)
Proceeds from sales and repayments of investments			121,218,577			85,635,632
Net change in unrealized depreciation on investments			4,153,588			2,509,099
Net change in unrealized depreciation (appreciation) on foreign currency translations			27,687			(37,811)
Increase in investments due to payment-in-kind income			(5,033,682)			(3,870,717)
Amortization of premium and accretion of discount, net			(1,977,242)			(2,172,972)
Amortization of loan structure fees			768,598			954,033
Amortization of deferred financing costs			408,543			447,751
Amortization of discount on Notes Payable			101,633			63,395
Amortization of premium on Notes Payable			(93,029)			—
Amortization of loan fees on SBA-guaranteed debentures			475,762			553,695
Net realized loss on investments			6,489,987			3,960,093
Loss on debt extinguishment			—			164,762
Changes in other assets and liabilities
Decrease (increase) in interest receivable			1,978,604			(2,099,921)
Decrease (increase) in income tax receivable			1,385,387			(220,233)
Increase in other receivables			(50,180)			(11,116)
Decrease (increase) in related party receivables			20			(18,813)
(Increase) decrease in prepaid expenses			(143,906)			385,232
(Decrease) increase in management fees payable			(87,142)			367,196
Decrease in income incentive fees payable			(981,490)			(467,527)
Increase in administrative services payable			17,301			113,626
(Decrease) increase in interest payable			(429,112)			631,032
Increase in related party payable			685,547			136,535
(Decrease) increase in unearned revenue			(170,763)			92,011
Increase in income tax payable			363,615			—
Increase (decrease) in other accrued expenses and liabilities			13,510			(445,942)
Net Cash Provided by (Used in) Operating Activities		$	57,131,771		$	(33,483,144)
Cash Flows from Financing Activities
Proceeds from the issuance of common stock		$	—		$	20,588,960
Sales load for common stock issued			—			(308,998)
Offering costs paid for common stock issued			(75,000)			(417,138)
Payment for repurchase of common stock			(6,563,291)			—
Commission for repurchase of common stock			(30,716)			—
Stockholder distributions paid			(28,251,820)			(33,689,984)
Proceeds from issuance of Notes Payable			—			125,000,000
Repayment of Notes Payable			—			(50,000,000)
Premium from issuance of Notes Payable			—			648,000
Discount from issuance of Notes Payable			—			(770,250)
Financing costs paid on Notes Payable			(50,000)			(2,475,306)
Repayments of SBA-guaranteed debentures			(39,000,000)			(26,000,000)
Financing costs paid on Credit Facility			(35,000)			(1,525,014)
Borrowings under Credit Facility			150,100,000			198,900,000
Repayments of Credit Facility			(155,951,700)			(207,501,700)
Net Cash (Used in) Provided by Financing Activities		$	(79,857,527)		$	22,448,570
Net Decrease in Cash and Cash Equivalents		$	(22,725,756)		$	(11,034,574)
Cash and Cash Equivalents Balance at Beginning of Period		$	25,050,156		$	20,058,594
Cash and Cash Equivalents Balance at End of Period		$	2,324,400		$	9,024,020
Supplemental and Non-Cash Activities
Cash paid for interest expense		$	24,547,855		$	24,940,287
Income and excise tax refund, net			(1,051,750)			1,664,417
Exchange of investments			8,759,438			1,663,301

 

Reconciliation of Core Net Investment Income(1) (Unaudited)
		Three Months Ended				Six Months Ended
		September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Net investment income		$7,159,413		$9,135,441		$22,188,590		$28,485,477
Income tax expense		307,096		515,686		697,252		1,444,184
Core net investment income		$7,466,509		$9,651,127		$22,885,842		$29,929,661
Per share amounts:
Net investment income per share		$0.25		$0.32		$0.77		$1.01
Core net investment income per share		$0.26		$0.34		$0.80		$1.06
Reconciliation of Realized Net Investment Income(2) (Unaudited)
		Three Months Ended				Six Months Ended
		September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Net investment income		$7,159,413		$9,135,441		$22,188,590		$28,485,477
Net realized gain (loss) on investments		3,126		2,867,155		(6,489,987)		(3,960,093)
Net realized loss on foreign currency translation		(31,026)		(9,422)		(29,173)		(59,080)
Total realized net investment income		$7,131,513		$11,828,412		$15,669,430		$24,301,542
Per share amounts:
Net investment income per share		$0.25		$0.32		$0.77		$1.01
Realized net investment income per share		$0.25		$0.42		$0.54		$0.86

     

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SOURCE Stellus Capital Investment Corporation

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Stellus Capital's third-quarter 2026 earnings per share?

Stellus reported GAAP net investment income of $0.25 per share, compared with $0.32 in the prior-year quarter. Core net investment income, a non-GAAP measure, was $0.26 per share versus $0.34. Net assets from operations decreased by $0.22 per share, versus an increase of $0.23 a year earlier.

How much did Stellus Capital declare in third-quarter 2026 distributions?

Stellus declared aggregate third-quarter distributions of $0.25 per share, compared with $0.40 per share a year earlier. Aggregate distributions were $7.11 million, versus $11.43 million in the prior-year quarter.

Does Stellus Capital expect its 2026 dividends to include a return of capital?

Stellus expects none of these dividends to include a return of capital. Final tax characteristics will be reported to stockholders on Form 1099-DIV after the calendar year ends.

What does Stellus Capital exclude from core net investment income?

Core net investment income excludes capital gains incentive fees or reversals and income taxes, most of which are excise taxes. It is a non-GAAP measure and does not replace GAAP net investment income or other GAAP earnings measures.

Does Stellus Capital's reported portfolio yield represent a shareholder's return?

The reported portfolio yield does not reflect company expenses or any sales load investors may pay. The yield on income-producing investments includes cash interest, interest paid through additional debt rather than cash, and deferred-fee recognition, weighted by investment cost.