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Stellus Capital Investment Corporation Reports Q1 2026 Results

Stellus Capital Investment Corporation (NYSE: SCM) has released its financial performance for the first quarter ended March 31, 2026. The figures reflect a complex economic backdrop but showcase substantial operational outcomes that are noteworthy for investors.

Key Financial Highlights

The Company's CEO, Robert T. Ladd, expressed confidence in the results, highlighting a U.S. GAAP net investment income of $0.26 per share. The report also indicated a core net investment income of $0.27 per share, alongside a net realized income of $0.29 per share. In terms of portfolio adjustments, Stellus funded $28 million in investments while recouping $42 million in repayments, resulting in an investment portfolio valued at $990 million.

Significantly, total distributions to investors since inception reached $339 million, translating to approximately $18.49 per share, thus reiterating the Company’s commitment to delivering value to its shareholders.

Detailed Financial Review

For the three months concluded on March 31, 2026:

• - Net investment income: saw a decrease to $7.5 million from $9.79 million in the previous year.
• - Core net investment income also declined to $7.86 million from $10.29 million.
• - Net realized loss stemming from investments recorded $0.75 million, a recovery from last year’s staggering loss of $5.97 million.
• - Additional financial metrics reflect a net decrease in unrealized changes which aggregated to ($6.54 million), compared to a gain of $1.20 million in the year prior.

Investment Portfolio Activity

Stellus engaged in various investment activities during the quarter, with a focus on supporting lower middle-market companies. Highlights include:
1. Add-On Investment in Bart Associates, LLC for $2 million, supporting the U.S. equine industry.
2. New Investment in Silver Corporate Holdings LLC valued at $7.13 million, facilitating senior care placement services.
3. Investments in multiple sectors such as cybersecurity, health care, and real estate throughout the first quarter.
4. The Company’s diversified approach continues to yield an impressive portfolio, now comprising 116 companies with a weighted average yield of 9.0% for income-producing investments.

Operational Insights

In terms of operating expenses, Stellus reported total costs of $15.8 million, showcasing continuous expense management despite a challenging economic landscape. Management fees and other operational costs were closely aligned with their strategic objectives, ensuring support for their active investment portfolio.

The liquidity position remains healthy, with $241.5 million in outstanding borrowings under their credit facility. The Company's consistent cash inflows from repayments and ongoing investments are indicative of solid operational management.

Looking Ahead

As Stellus Capital continues to enhance its investment strategies, they have declared a monthly dividend of $0.1133 for April, May, and June 2026, reflecting their ongoing commitment to shareholder returns and strategic growth in the lower middle-market sector.

Stellus will host a conference call on May 12, 2026, to discuss these results further. Stakeholders and analysts are encouraged to engage and participate in the discussion as the Company navigates future opportunities in investment management.

In summary, Stellus Capital Investment Corporation demonstrates a strong operational foundation combined with prudent financial acumen. This current quarter's results may provide valuable insights for investors keeping an eye on performance amid evolving market dynamics.