Third Quarter 2025 Net Investment Income of $0.35 Per Share
Net Asset Value of $15.54 Per Share
HOUSTON, Nov. 13, 2025 /PRNewswire/ -- MSC Income Fund, Inc. $(MSIF)$ ("MSC Income" or the "Fund") is pleased to announce its financial results for the third quarter ended September 30, 2025.
Third Quarter 2025 Highlights
-- Net investment income ("NII"), including excise tax and NII related
income taxes, of $16.6 million, or $0.35 per share
-- NII before taxes(1) of $17.0 million, or $0.36 per share
-- Total investment income of $35.4 million
-- Net increase in net assets resulting from operations of $26.5 million, or
$0.56 per share
-- Return on equity(2) of 14.6% on an annualized basis for the quarter and
11.6% for the trailing twelve-month period ended September 30, 2025
-- Net asset value of $15.54 per share as of September 30, 2025
-- Declared a regular quarterly dividend of $0.35 per share and a
supplemental quarterly dividend of $0.01 per share, both payable in the
fourth quarter of 2025, resulting in total dividends declared in the
third quarter of 2025 of $0.36 per share
-- Completed $74.6 million in total private loan portfolio investments,
which after aggregate repayments of debt investments and a decrease in
cost basis due to realized losses resulted in a net decrease of $6.7
million in the total cost basis of the private loan investment portfolio
-- Completed $6.0 million in total lower middle market ("LMM") portfolio
follow-on investments, which after aggregate repayments of debt
investments, return of invested equity capital and a decrease in cost
basis due to a realized loss resulted in a net decrease of $2.6 million
in the total cost basis of the LMM investment portfolio
In commenting on the Fund's operating results for the third quarter of 2025, Dwayne L. Hyzak, MSC Income's Chief Executive Officer, stated, "We are pleased with the Fund's performance in the third quarter, which resulted in an annualized return on equity of 14.6% and favorable net investment income. We believe that the quality of the Fund's existing investment portfolio, combined with the Fund's existing liquidity, near-term expanded regulatory leverage capacity which will become effective for the Fund at the end of January 2026 and current attractive pipeline of new private loan investment opportunities provide the opportunity for increased net investment income and shareholder dividends as we work to enhance the Fund's investment portfolio over the next several quarters."
Third Quarter 2025 Operating Results(3)
The following table provides a summary of the Fund's operating results for the third quarter of 2025:
Three Months Ended September 30,
------------------------------------------------------------------------
Change
2025 2024 Change ($) (%)
------------------- ------------------- ------------------- ---------
(in thousands, except per share amounts)
Interest
income $ 30,117 $ 30,236 $ (119) -- %
Dividend
income 3,652 2,485 1,167 47 %
Fee income 1,598 756 842 111 %
------------------- ------------------- ------------------- ---------
Total
investment
income $ 35,367 $ 33,477 $ 1,890 6 %
Net
investment
income
(4) $ 16,577 $ 12,916 $ 3,661 28 %
Net
investment
income per
share (4) $ 0.35 $ 0.32 $ 0.03 9 %
Net
increase
in net
assets
resulting
from
operations $ 26,529 $ 7,371 $ 19,158 260 %
Net
increase
in net
assets
resulting
from
operations
per share $ 0.56 $ 0.18 $ 0.38 211 %
The $1.9 million increase in total investment income in the third quarter of 2025 from the comparable period of the prior year was principally attributable to (i) a $1.2 million increase in dividend income, primarily due to a $0.8 million increase in dividend income from the Fund's LMM portfolio companies, a $0.2 million increase in dividend income from the Fund's other portfolio companies and a $0.2 million increase in dividend income from the Fund's private loan portfolio companies, (ii) a $0.8 million increase in fee income primarily due to a $0.5 million increase from the refinancing and prepayment of debt investments and $0.3 million increase in fees related to increased investment activity. The $1.9 million increase in total investment income in the third quarter of 2025 includes the impact of an increase of $0.9 million in certain income considered less consistent or non-recurring, primarily related to a $0.5 million increase in such fee income and a $0.4 million increase in such interest income from accelerated prepayment, repricing and other activity related to certain investment portfolio debt investments, in each case when compared to the same period in 2024.
Total expenses, net of waivers, decreased by $1.0 million, or 5.0%, to $18.3 million in the third quarter of 2025 from $19.3 million for the same period in 2024. This decrease was principally attributable to (i) a $1.7 million decrease in interest expense and (ii) a $0.5 million decrease in base management fees, partially offset by a $1.2 million increase in incentive fees. The decrease in interest expense is primarily related to a decreased weighted-average interest rate on the Fund's Credit Facilities (as defined in the Liquidity and Capital Resources section below) due to decreases in benchmark index rates and a decrease to the applicable spreads resulting from amendments of the Credit Facilities since the first quarter of 2024, partially offset by an increase in weighted-average outstanding borrowings used to fund the growth of the Fund's investment portfolio. The increase in incentive fees, which is after a $0.2 million voluntary permanent waiver provided by the Fund's investment adviser in the third quarter of 2025, is primarily attributable to an increase in pre-incentive fee NII.
The Fund's ratio of total non-interest operating expenses, excluding incentive fees, as a percentage of quarterly average total assets, or the Operating Expenses to Assets Ratio, decreased to 2.0% on an annualized basis for the third quarter of 2025, from 2.2% for the third quarter of 2024, primarily as a result of the decreased base management fee percentage under the amended advisory agreement effective upon the listing of the Fund's shares of common stock in January 2025.
The $3.7 million increase in NII in the third quarter of 2025 from the comparable period of the prior year was principally attributable to the increase in total investment income and decreased expenses, each as discussed above. NII per share increased by $0.03 per share for the third quarter of 2025, as compared to the third quarter of 2024, to $0.35 per share. The per share increase in NII was after the impact of a 17.8% increase in the weighted-average shares outstanding compared to the third quarter of 2024, primarily due to new shares issued through the Fund's follow-on equity offering in January 2025 and the dividend reinvestment plan. NII on a per share basis in the third quarter of 2025 is also after a net increase of $0.02 per share resulting from an increase in investment income considered less consistent or non-recurring in nature compared to the third quarter of 2024, as discussed above.
The $26.5 million net increase in net assets resulting from operations in the third quarter of 2025 represents a $19.2 million increase from the third quarter of 2024. This increase was primarily the result of a (i) $15.5 million increase 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 increase resulting from a net fair value increase of $11.2 million in the third quarter of 2025 compared to a net fair value decrease of $4.4 million in the prior year and (ii) a $3.7 million increase in NII as discussed above. The $11.2 million net fair value increase in the third quarter of 2025 was the result of net unrealized appreciation (including the reversal of net fair value depreciation in prior periods on the net realized loss in the quarter) of $21.0 million, partially offset by a net realized loss of $9.9 million. The $4.4 million net fair value decrease in the third quarter of 2024 was the result of net unrealized depreciation of $29.7 million, partially offset by a net realized gain of $25.4 million. The $9.9 million net realized loss from investments for the third quarter of 2025 was primarily the result of (i) $8.8 million of realized losses on the restructures of two private loan portfolio investments and (ii) a $2.4 million realized loss on the full exit of a LMM portfolio investment, partially offset by a $1.3 million realized gain on the full exit of a LMM portfolio investment.
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