First Quarter 2026 Adjusted Net Investment Income(1) of $0.34 Per Share
First Quarter 2026 Adjusted Net Investment Income Before Taxes(2) of $0.36 Per Share
Net Asset Value of $15.87 Per Share
HOUSTON, May 7, 2026 /PRNewswire/ -- MSC Income Fund, Inc. (NYSE:MSIF) ("MSC Income" or the "Fund") is pleased to announce its financial results for the first quarter ended March 31, 2026.
First Quarter 2026 Highlights
Net investment income ("NII") of $16.2 million, or $0.35 per share
Adjusted net investment income ("ANII")(1) of $15.6 million, or $0.34 per share
ANII before taxes(2) of $16.6 million, or $0.36 per share
Total investment income of $34.1 million
Net increase in net assets resulting from operations of $13.2 million, or $0.29 per share
Return on equity(4) of 7.3% on an annualized basis
Net asset value of $15.87 per share as of March 31, 2026
Declared a regular quarterly dividend of $0.35 per share and a supplemental dividend of $0.01 per share, both payable in the second quarter of 2026, resulting in total dividends declared in the first quarter of 2026 of $0.36 per share
Repurchased $16.0 million of the Fund's common stock at prices below net asset value, resulting in an increase in net asset value per share of approximately $0.08 per share
Completed $54.8 million in total private loan portfolio investments, which after aggregate repayments, return of invested equity capital and a decrease in cost basis due to realized losses resulted in a net increase of $17.4 million in the total cost basis of the private loan investment portfolio
Completed $19.4 million in total lower middle market ("LMM") portfolio follow-on investments, which after aggregate repayments and return of invested equity capital resulted in a net increase of $15.1 million in the total cost basis of the LMM investment portfolio
Previously approved expanded regulatory leverage capacity became effective January 29, 2026, reducing the Fund's minimum regulatory asset coverage requirement from 200% to 150%
Further diversified the Fund's capital structure by issuing $150.0 million in aggregate principal amount of 6.34% unsecured notes due May 31, 2029 (the "May 2029 Notes")
In commenting on the Fund's operating results for the first quarter of 2026, Dwayne L. Hyzak, MSC Income's Chief Executive Officer, stated, "We are pleased with the Fund's performance in the first quarter, given the backdrop of significant economic and geopolitical uncertainties. Despite these ongoing uncertainties, we are seeing an improved lending environment and significant opportunities in our private loan investment strategy, and we believe the Fund is well positioned to capitalize on and generate attractive returns on those investments. Based upon the quality of the Fund's existing investment portfolio, together with the favorable liquidity position and expanded regulatory leverage capacity which became effective at the end of January 2026 and the current investment pipeline, we remain excited about our future expectations for the Fund."
First Quarter 2026 Operating Results
The following table provides a summary of the Fund's operating results for the first quarter of 2026:
Three Months Ended March 31,
2026
2025
Change
Change (%)
(dollars in thousands, except per share amounts)
Interest income
$ 29,379
$ 27,424
$ 1,955
7 %
Dividend income
3,538
5,142
(1,604)
(31) %
Fee income
1,170
661
509
77 %
Total investment income
$ 34,087
$ 33,227
$ 860
3 %
Net investment income
$ 16,235
$ 15,746
$ 489
3 %
Net investment income per share
$ 0.35
$ 0.35
$ ,
— %
Adjusted net investment income (1)
$ 15,597
$ 15,746
$ (149)
(1) %
Adjusted net investment income per share (1)
$ 0.34
$ 0.35
$ (0.01)
(3) %
Adjusted net investment income before taxes (2)
$ 16,603
$ 16,788
$ (185)
(1) %
Adjusted net investment income before taxes per share (2)
$ 0.36
$ 0.38
$ (0.02)
(5) %
Net increase in net assets resulting from operations
$ 13,223
$ 15,875
$ (2,652)
(17) %
Net increase in net assets resulting from operations per share
$ 0.29
$ 0.36
$ (0.07)
(19) %
Return on equity - quarter annualized (4)
7.3 %
9.5 %
(2.2) %
(23) %
The $0.9 million increase in total investment income in the first quarter of 2026 from the comparable period of the prior year was principally attributable to (i) a $2.0 million increase in interest income, primarily due to higher average levels of income producing investment portfolio debt investments, partially offset by a decrease in interest rates, primarily resulting from decreases in benchmark index rates on floating rate investment portfolio debt investments, and (ii) a $0.5 million increase in fee income, primarily due to an increase in fee income related to increased investment activity. These increases were partially offset by a $1.6 million decrease in dividend income, primarily due to a $1.5 million decrease in dividend income from the Fund's LMM portfolio companies. The $0.9 million increase in total investment income in the first quarter of 2026 is after the impact of a decrease of $0.2 million in certain income considered less consistent or non-recurring, primarily related to decreases of (i) $0.2 million in such dividend income and (ii) $0.2 million in such interest income from accelerated prepayment, repricing and other activity related to certain investment portfolio debt investments, partially offset by a $0.2 million increase in such fee income, in each case when compared to the same period in 2025.
Total expenses, net of waivers, increased by $0.4 million, or 2.5%, to $16.8 million in the first quarter of 2026 from $16.4 million for the same period in 2025. This increase was principally attributable to (i) a $0.7 million increase in interest expense, (ii) a $0.3 million increase in base management fees and (iii) a $0.1 million increase in incentive fee on income, net of waivers, partially offset by a $0.6 million decrease in the ending accrual for the accrued capital gains incentive fee(3) as of March 31, 2026. The increase in interest expense is primarily related to an increase in average borrowings outstanding used to fund a portion of the growth of the Fund's investment portfolio, partially offset by decreased weighted-average interest rates on the Credit Facilities due to decreases in benchmark floating index interest rates and a decrease in the applicable interest rate spread on the SPV Facility resulting from the amendment of the SPV Facility in March 2025 (with the Credit Facilities and the SPV Facility each defined in the Liquidity and Capital Resources section below). The increase in base management fees is primarily the result of the Fund's increased average total assets, partially offset by the benefit of the lower base management fee percentage for the full quarter in the first quarter of 2026 compared to the benefit for a partial quarter in the first quarter of 2025 as a result of the Fund's entry into an amended advisory agreement (the "Amended Advisory Agreement") with the Adviser (defined below), effective upon the listing of the Fund's common stock on the New York Stock Exchange on January 29, 2025 (the "MSC Income Listing"). The increase in incentive fee on income, net of waivers, is the result of (a) an increase in the gross calculated incentive fee on income of $1.1 million, partially offset by (b) a $1.0 million voluntary waiver of incentive fee on income by the Adviser. The increase in the gross calculated incentive fee on income is a result of the Amended Advisory Agreement. The reduction in the capital gains incentive fee accrual(3) is due to the net fair value depreciation of the Fund's investments in the first quarter of 2026.
The Fund's ratio of total non-interest operating expenses, excluding incentive fees, net of waivers, as a percentage of quarterly average total assets, or the Operating Expenses to Assets Ratio, decreased to 1.8% on an annualized basis for the first quarter of 2026, from 1.9% for the first quarter of 2025, primarily due to the benefit of the lower base management fee percentage in the first quarter of 2026 as discussed above.
The $0.5 million increase in NII in the first quarter of 2026 from the comparable period of the prior year was principally attributable to an increase in total investment income, partially offset by an increase in total expenses, net of waivers, each as discussed above. NII on a per share basis was $0.35 per share for the first quarter of 2026, consistent with the first quarter of 2025.
The $0.1 million, or $0.01 per share, decrease in ANII(1) in the first quarter of 2026 to $15.6 million, or $0.34 per share, from $15.7 million, or $0.35 per share, in the first quarter of 2025 was principally attributable to the same factors noted above for the change in NII, but excluding the impact of the $0.6 million decrease in the capital gains incentive fee accrual.
The per share changes in NII and ANII(1) in the first quarter of 2026 from the comparable period of the prior year include the impact of a 3.2% increase in the weighted-average shares outstanding, primarily due to shares issued in connection with the MSC Income Listing and shares issued through the dividend reinvestment plan, partially offset by shares repurchased by the Fund, in each case since the beginning of the comparable period of the prior year. NII and ANII(1) on a per share basis in the first quarter of 2026 each include a decrease of $0.01 per share resulting from a decrease in investment income considered less consistent or non-recurring in nature compared to the first quarter of 2025, as discussed above.
The $13.2 million net increase in net assets resulting from operations in the first quarter of 2026 represents a $2.7 million decrease from the first quarter of 2025. This decrease was primarily the result of (i) a $2.5 million increase in net tax provision on the net fair value change of the portfolio investments resulting from a net tax provision of $0.1 million in the first quarter of 2026 compared to a net tax benefit of $2.4 million in the comparable period of the prior year and (ii) a $0.6 million decrease in the net fair value change of the Fund's portfolio investments resulting from the net impact of net realized gains/losses and net unrealized appreciation/depreciation, with the decrease resulting from a net fair value decrease of $2.9 million in the first quarter of 2026 compared to a net fair value decrease of $2.3 million in the comparable period of the prior year, partially offset by a $0.5 million increase in NII as discussed above. The $2.9 million net fair value decrease in the first quarter of 2026 was the result of a net realized loss of $0.2 million and net unrealized depreciation (including the reversal of net fair value depreciation recognized in prior periods due to the net realized loss in the quarter) of $2.6 million. The $2.3 million net fair value decrease in the first quarter of 2025 was the result of a net realized loss of $21.1 million, partially offset by net unrealized appreciation of $18.8 million. The $0.2 million net realized loss from investments for the first quarter of 2026 was primarily the result of $3.7 million of realized losses on the full exits of two private loan portfolio investments, partially offset by a $3.1 million realized gain on the full exit of a private loan portfolio investment and a net realized gain on other private loan portfolio investments.
The following table provides a summary ...
