Stellus Capital Investment Corporation reported its financial results for the second quarter of 2026, revealing a net investment income of $7.5 million, or $0.26 per share, compared to $9.6 million, or $0.34 per share, in the same period last year. For the first half of 2026, net investment income totaled $15.0 million, or $0.52 per share, down from $19.4 million, or $0.69 per share, in the first half of 2025. The decline in income was attributed to decreased interest income, primarily due to lower prevailing market rates and a reduction in principal debt outstanding. Total investment income for the quarter was $22.3 million, a decrease from $25.7 million year-over-year.
The company's total assets as of June 30, 2026, were reported at $982.1 million, down from $1.041 billion at the end of 2025. This decline was driven by a reduction in cash and cash equivalents, which fell to $5.1 million from $25.1 million. Stellus Capital's liabilities also decreased to $615.2 million from $670.1 million, resulting in net assets of $367.0 million, down from $371.2 million. The net asset value per share slightly decreased to $12.80 from $12.82.
In terms of operational developments, Stellus Capital's investment portfolio consisted of 116 companies, with a fair value of $968.2 million. The portfolio was primarily composed of first lien debt, which accounted for approximately 89% of the total investments. The company made $45.7 million in investments during the first half of 2026, while receiving $90.9 million from repayments. The company also reported that five portfolio companies were on non-accrual status, representing about 8.5% of total investments at cost.
Strategically, Stellus Capital entered into a new investment advisory agreement with Stellus Capital Management, following a change in control of the advisor. The agreement maintains the same fee structure as the previous contract. Additionally, the company has initiated a share repurchase program, authorizing the repurchase of up to $20 million of its common stock, with 274,343 shares repurchased at an average price of $8.92 per share during the quarter. Looking ahead, Stellus Capital remains focused on maximizing total returns through investments in lower middle-market companies, while navigating macroeconomic uncertainties that may impact its operations and investment strategies.
About Stellus Capital Investment Corp
Stellus Capital Investment Corporation is a Maryland-based business development company (BDC) that invests in private lower middle-market companies through debt and equity financing. Its core activities include originating, structuring, and monitoring senior secured, unsecured, and subordinated loans, often with equity co-investments. Managed by Stellus Capital Management, the firm focuses on industries like healthcare, software, and industrials, providing tailored financing solutions to creditworthy, growth-oriented businesses.
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