Capital Southwest Corporation (CSWC) reported its financial results for the quarter ending June 30, 2026, revealing a total investment income of $61.0 million, a 9.1% increase from $55.9 million in the same period last year. The company's net investment income rose to $35.7 million, up 11.9% from $31.9 million in the prior year. This growth was primarily driven by an increase in interest income, which reached $47.8 million, compared to $44.4 million in the previous year, alongside a notable rise in payment-in-kind (PIK) interest income.
The company’s total assets increased to $2.32 billion as of June 30, 2026, compared to $2.18 billion at the end of March 2026. This growth was attributed to a rise in the fair value of investments, which reached $2.20 billion, up from $2.10 billion in the previous quarter. CSWC's investment portfolio expanded to include 141 portfolio companies, with a total cost of $2.23 billion, reflecting a strategic focus on lower middle-market companies. The company also reported a net asset value per share of $16.61, slightly down from $16.69 in the prior quarter.
Operationally, CSWC made significant investments totaling $234.2 million during the quarter, while also receiving $126.6 million from sales and repayments of debt investments. The company funded $21.0 million on its capital commitment to CapTrin Partners, LLC, a joint venture established to invest in first-out senior secured debt opportunities. The company’s borrowings increased to $1.24 billion, with a debt-to-equity ratio of approximately 1.17, indicating a stable leverage position.
Looking ahead, CSWC remains optimistic about its investment strategy, focusing on providing customized financing solutions to lower middle-market companies. The company is well-positioned with $58.5 million in cash and cash equivalents and $316.2 million of unused capacity under its credit facilities. Management believes that these resources will adequately support its investment activities and operational needs in the coming months. The company continues to monitor macroeconomic conditions, including interest rate fluctuations and inflation, which could impact its portfolio companies and overall performance.
About CAPITAL SOUTHWEST CORP
Capital Southwest Corporation is an internally managed, non-diversified closed-end business development company (BDC) specializing in customized debt and equity financing for lower middle market U.S. companies. It primarily invests in first lien debt securities and equity interests in established companies with positive cash flow and proven management. The company targets flexible financing solutions across capital structures, leveraging deep industry expertise and long-standing relationships to generate attractive risk-adjusted returns.
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