MSC INCOME FUND ANNOUNCES SECOND QUARTER 2025 RESULTS
Second Quarter 2025 Net Investment Income of $0.35 Per Share
Net Asset Value of $15.33 Per Share
HOUSTON, Aug. 13, 2025 /PRNewswire/ -- MSC Income Fund, Inc. (NYSE:MSIF) ("MSC Income") is pleased to announce its financial results for the second quarter ended June 30, 2025. Unless otherwise noted or the context otherwise indicates, the terms the "Company" and the "Fund" refer to MSC Income and its consolidated subsidiaries.
Second Quarter 2025 Highlights
Net investment income of $16.3 million (or $0.35 per share), including excise tax and net investment income related income taxes of $1.0 million (or $0.02 per share)
Net investment income before taxes of $17.3 million (or $0.37 per share)
Total investment income of $35.6 million
Net increase in net assets resulting from operations of $16.3 million (or $0.35 per share)
Return on equity(1) of 9.0% on an annualized basis for the quarter and 9.1% for the trailing twelve-month period ended June 30, 2025
Net asset value of $15.33 per share as of June 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 third quarter of 2025, resulting in total dividends declared in the second quarter of 2025 of $0.36 per share
Completed $44.0 million in total private loan portfolio investments, which after aggregate repayments and sales 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 $29.6 million in the total cost basis of the private loan investment portfolio
Completed $20.3 million in total lower middle market ("LMM") portfolio follow-on investments, which after aggregate repayments of debt investments and return of invested equity capital resulted in a net increase of $15.9 million in the total cost basis of the LMM investment portfolio
Net decrease of $0.6 million in the total cost basis of the middle market investment portfolio
In commenting on the Company's operating results for the second quarter of 2025, Dwayne L. Hyzak, MSC Income's Chief Executive Officer, stated, "We are pleased with the Fund's performance in the second quarter, which resulted in an annualized return on equity of 9% and a favorable level of net investment income per share. We believe that the second quarter results provide visibility to the opportunity for the Fund's continued favorable performance in the future, with the potential for increased net investment income and dividends as we work to expand the Fund's investment portfolio over the next several quarters."
Second Quarter 2025 Operating Results(2)
The following table provides a summary of the Fund's operating results for the second quarter of 2025:
Three Months Ended June 30,
2025
2024
Change ($)
Change (%)
(in thousands, except per share amounts)
Interest income
$ 29,349
$ 28,859
$ 490
2 %
Dividend income
4,956
4,007
949
24 %
Fee income
1,338
1,080
258
24 %
Total investment income
$ 35,643
$ 33,946
$ 1,697
5 %
Net investment income (3)
$ 16,307
$ 13,419
$ 2,888
22 %
Net investment income per share (3)
$ 0.35
$ 0.33
$ 0.02
6 %
Net increase in net assets resulting from operations
$ 16,289
$ 18,129
$ (1,840)
(10) %
Net increase in net assets resulting from operations per share
$ 0.35
$ 0.45
$ (0.10)
(22) %
The $1.7 million increase in total investment income in the second quarter of 2025 from the comparable period of the prior year was principally attributable to (i) a $0.9 million increase in dividend income, primarily due to a $0.9 million increase in dividend income from the Fund's LMM portfolio investments and a $0.5 million increase in dividend income from the Company's private loan portfolio companies, partially offset by a $0.4 million decrease in dividend income from the Company's other portfolio companies, (ii) a $0.5 million increase in interest income, primarily due to higher average levels of income producing investment portfolio debt investments, partially offset by an increase in investments on non-accrual status and a decrease in interest rates on floating rate investment portfolio debt investments, primarily resulting from decreases in benchmark index rates and (iii) a $0.3 million increase in fee income due to changes in investment activity. The $1.7 million increase in total investment income in the second quarter of 2025 is after the impact of a net decrease of $0.7 million in certain income considered less consistent or non-recurring, primarily related to a $0.3 million decrease in such fee income and a $0.3 million decrease in such dividend income when compared to the same period in 2024.
Total expenses, net of waivers, decreased by $1.2 million, or 6.4%, to $18.3 million in the second quarter of 2025 from $19.6 million for the same period in 2024. This decrease was principally attributable to (i) a $0.9 million decrease in interest expense and (ii) a $0.3 million decrease in base management fees. The decrease in interest expense is primarily due 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 in the Fund's investment portfolio.
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 1.9% on an annualized basis for the second quarter of 2025, from 2.2% for the second 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 $2.9 million increase in net investment income in the second 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. Net investment income per share increased by $0.02 per share for the second quarter of 2025, as compared to the second quarter of 2024, to $0.35 per share. The per share increase in net investment income was after the impact of a 17.1% increase in the weighted-average shares outstanding compared to the second 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. Net investment income on a per share basis in the second quarter of 2025 is also after a net decrease of $0.02 per share resulting from a decrease in investment income considered less consistent or non-recurring in nature compared to the second quarter of 2024, as discussed above.
The $16.3 million net increase in net assets resulting from operations in the second quarter of 2025 represents a $1.8 million decrease from the second quarter of 2024. This decrease was primarily the result of a $5.7 million decrease in the net fair value change of our portfolio investments resulting from the net impact of net realized gains/losses and net unrealized appreciation/depreciation, with the decrease resulting from a net fair value increase of $0.9 million in the second quarter of 2025 compared to a net fair value increase of $6.5 million in the prior year, partially offset by a $2.9 million increase in net investment income as discussed above and a $0.9 million benefit from the change in the net tax provision/benefit on the net fair value change of our portfolio investments resulting from a net tax provision of $0.9 million in the second quarter of 2025 compared to a net tax provision of $1.8 million in the prior year. The $0.9 million net fair value increase in the second quarter of 2025 was the result of a net realized gain of $4.8 million, partially offset by net unrealized depreciation (including the reversal of net fair value appreciation in prior periods on the net realized gain) of $3.9 million. The $6.5 million net fair value increase in the second quarter of 2024 was the result of a net realized gain of $0.3 million and net unrealized appreciation of $6.2 million. The $4.8 million net realized gain from investments for the second quarter of 2025 was primarily the result of (i) a $5.3 million of realized gain on the partial exit of an other portfolio investment and (ii) a $0.7 million realized gain on the full exit of a private loan portfolio investment, partially offset by (i) a $0.8 million realized loss on the restructure of a private loan portfolio investment and (ii) a $0.3 million realized loss on the partial exit of a private loan portfolio investment.
The following table provides a summary of the total net unrealized depreciation of $3.9 million for the second quarter of 2025:
Three Months Ended June 30, 2025
Private
Loan
LMM (a)
Middle
Market
Other
Total
(dollars in millions)
Accounting reversals of net unrealized (appreciation) depreciation recognized in prior periods due to net realized (gains / income) losses recognized during the current period
$ (0.1)
$ (0.3)
$ ,
$ (5.3)
$ (5.7)
Net unrealized appreciation (depreciation) relating to portfolio investments
(0.8)
3.1
(1.0)
0.5
1.8
Total net unrealized appreciation (depreciation) relating to portfolio investments
$ (0.9)
$ 2.8
$ (1.0)
$ (4.8)
$ (3.9)
