Press Release: OFS Capital Corporation Announces Fourth Quarter 2025 Financial Results

Dow Jones
Mar 03

Declares First Quarter 2026 Distribution of $0.17 Per Share

CHICAGO--(BUSINESS WIRE)--March 02, 2026-- 

OFS Capital Corporation (Nasdaq: OFS) ("OFS Capital," "we," "us," or "our") today announced its financial results for the fiscal quarter ended December 31, 2025.

FOURTH QUARTER FINANCIAL HIGHLIGHTS

   --  Net investment income decreased to $0.20 per common share for the 
      quarter ended December 31, 2025 from $0.22 per common share for the 
      quarter ended September 30, 2025. 
 
   --  Net loss on investments of $1.01 per common share for the quarter ended 
      December 31, 2025, primarily comprised of net unrealized depreciation of 
      $0.96 per common share. See additional information under "Results of 
      Operations" below. 
 
   --  Net asset value per common share decreased to $9.19 at December 31, 
      2025 from $10.17 at September 30, 2025. 
 
   --  As of December 31, 2025, based on fair value, 89% of our loan portfolio 
      consisted of floating rate loans and 100% of our loan portfolio consisted 
      of first and second lien loans. 
 
   --  For the quarter ended December 31, 2025, our investment portfolio's 
      weighted-average performing income yield increased to 13.5% from 13.3% 
      during the quarter ended September 30, 2025, primarily due to an increase 
      in earned yields on our structured finance securities. 
 
   --  During the quarter ended December 31, 2025, we placed one loan on 
      non-accrual status, while we removed loans to a portfolio company 
      previously on non-accrual status following a restructuring. See 
      additional information under "Portfolio and Investment Activities" 
      below. 

OTHER RECENT EVENTS

   --  On January 9, 2026, we amended the Banc of California Credit Facility 
      to extend the maturity date from February 28, 2026 to February 28, 2028. 
 
 
   --  On February 9, 2026, we redeemed the remaining $16.0 million in 
      aggregate principal amount of our 4.75% notes due February 10, 2026. 
 
   --  On February 18, 2026, our indirect, wholly owned subsidiary, OFSCC-FS, 
      LLC, entered into a revolving credit and security agreement with Natixis, 
      New York Branch, which provides for borrowings in an aggregate principal 
      amount up to $80,000,000. See additional information under "Liquidity and 
      Capital Resources" below. 
 
   --  On February 18, 2026, in connection with the closing of the Natixis 
      credit facility, OFSCC-FS repaid in full all outstanding obligations due, 
      and terminated all commitments, under its credit facility with BNP 
      Paribas. All liens securing the BNP credit facility were released upon 
      such repayment. 
 
   --  On February 26, 2026, our Board of Directors declared a distribution of 
      $0.17 per common share for the first quarter of 2026, payable on March 
      31, 2026 to stockholders of record as of March 20, 2026. 
 
SELECTED FINANCIAL HIGHLIGHTS                  Quarter Ended 
                               --------------------------------------------- 
(Per common share)               December 31, 2025      September 30, 2025 
                               ---------------------  ---------------------- 
Net Investment Income 
Net investment income            $          0.20        $           0.22 
 
Net Realized/Unrealized Gain 
(Loss) 
Net realized loss on 
 investments, net of taxes       $         (0.05)       $          (0.35) 
Net unrealized depreciation 
 on investments, net of 
 taxes                                     (0.96)                  (0.23) 
Loss on extinguishment of 
 debt(1)                                      --                   (0.04) 
                               ---  ------------      ---  ------------- 
Net loss                         $         (1.01)       $          (0.62) 
 
Net Earnings (Loss) 
Net Earnings (loss)              $         (0.81)       $          (0.40) 
 
Net Asset Value 
Net asset value                  $          9.19        $          10.17 
Distributions paid                          0.17                    0.34 
 
 
(1)   For the quarter ended December 31, 2025, loss on extinguishment of debt 
      rounds to less than $(0.01) per common share. 
 
 
                                                     As of 
                                   ----------------------------------------- 
(in millions)                       December 31, 2025    September 30, 2025 
                                   -------------------  -------------------- 
Balance Sheet Highlights 
Total investments, at fair value     $           342.0    $            370.2 
Total outstanding debt - 
 principal                                       220.5                 239.2 
Total net assets                                 123.2                 136.3 
 
 
PORTFOLIO AND INVESTMENT ACTIVITIES 
 ($ in millions) 
                                             Quarter Ended 
                             --------------------------------------------- 
Portfolio Yields(2)            December 31, 2025      September 30, 2025 
--------------------------   ---------------------  ---------------------- 
Average performing 
 interest-bearing 
 investments, at cost          $       260.4          $        279.0 
Weighted-average performing 
 income yield - 
 interest-bearing 
 investments(3)                         13.5%                   13.3% 
Weighted-average realized 
 yield - interest-bearing 
 investments(4)                         11.6%                   11.5% 
 
 
(2)   The weighted-average yield of our investments is not the same as a 
      return on investment for our stockholders, but rather relates to our 
      investment portfolio and is calculated before the payment of all of our 
      fees and expenses. 
(3)   Performing income yield is calculated as (a) the actual amount earned on 
      performing interest-bearing investments, including interest, prepayment 
      fees and amortization of net loan fees, divided by (b) the 
      weighted-average of total performing interest-bearing investments at 
      amortized cost. 
(4)   Realized yield is calculated as (a) the actual amount earned on 
      interest-bearing investments, including interest, prepayment fees and 
      amortization of net loan fees, divided by (b) the weighted-average of 
      total interest-bearing investments at amortized cost, in each case, 
      including debt investments on non-accrual status and non-performing 
      structured finance securities. 
 
 
                                               Quarter Ended 
                                 ----------------------------------------- 
Portfolio Purchase Activity       December 31, 2025    September 30, 2025 
------------------------------   -------------------  -------------------- 
Debt and equity investments          $           8.0     $             9.6 
Structured finance securities                    1.5                   8.5 
                                 -----  ------------  ----  -------------- 
Total investment purchases and 
 originations                        $           9.5     $            18.1 
                                 -----  ------------  ----  -------------- 
 

As of December 31, 2025, based on fair value, our investment portfolio was comprised of the following:

   --  Total investments of $342.0 million, which was equal to approximately 
      104% of amortized cost; 
 
   --  Debt investments of $179.8 million, of which 95% and 5% were first lien 
      loans and second lien loans, respectively; 
 
   --  Equity investments of $100.6 million; and 
 
   --  Structured finance securities of $61.6 million. 

During the quarter ended December 31, 2025, a loan to a portfolio company with an amortized cost and fair value of $6.8 million and $4.1 million, respectively, was placed on non-accrual status. Additionally, we restructured a loan to a portfolio company with an amortized cost and fair value of $13.5 million and $5.3 million, respectively, which had been on non-accrual status, in exchange for a combination of a new loan and equity in the portfolio company. Our existing zero-basis equity investment in the portfolio company was also extinguished upon the exchange. Following the restructuring, the loan we received with an amortized cost and fair value of $3.8 million and $3.8 million, respectively, was placed on accrual status. As of December 31, 2025, our loan portfolio had non-accrual loans with an aggregate fair value of $14.4 million, or 4.2% of our total investments at fair value.

OUTSTANDING DEBT

During the quarters ended December 31, 2025 and September 30, 2025, the average dollar borrowings and weighted-average effective interest rate for our debt were as follows ($ in millions):

 
                       Average Dollar        Weighted-Average 
Quarter ended            Borrowings       Effective Interest Rate 
-------------------   ----------------  -------------------------- 
December 31, 2025       $        239.5              7.07% 
September 30, 2025               270.2              6.67 
 

Following the extension of our Banc of California Credit Facility executed in January 2026, and the refinancing of our BNP credit facility executed in February 2026, we do not have any debt maturities until February 2028.

 
RESULTS OF OPERATIONS 
(in thousands)                                Quarter Ended 
                               ------------------------------------------- 
                                December 31, 2025     September 30, 2025 
                               -------------------  ---------------------- 
Total investment income         $           9,369     $         10,551 
Expenses: 
   Interest expense                         4,267                4,542 
   Base management and 
    incentive fees                          1,331                2,017 
   Professional, 
    administration and other 
    expenses                                1,075                1,052 
                                   --------------   ---  ------------- 

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March 02, 2026 16:30 ET (21:30 GMT)

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