Capital Southwest (CSWC) investor relations material

Executive summary

• Pre-tax net investment income was $34.6 million ($0.60 per share), with strong recurring earnings, robust undistributed taxable income of $1.02 per share, and total investment income of $61.4 million, up from $56.9 million sequentially.

• Net asset value per share increased to $16.75 as of December 31, 2025, up from $16.62 at September 30, 2025.

• Total dividends declared for the quarter were $0.64 per share, including a $0.06 supplemental dividend, reflecting continued strong dividend coverage.

• Originated $244 million in new commitments across eight new and 16 existing portfolio companies, with add-on financings representing 29% of total new commitments over the last 12 months.

• Announced a new joint venture with a private credit asset manager to enhance competitiveness and access larger, higher-quality deals, targeting low to mid-teens equity returns.

Financial highlights

• Weighted average yield on debt investments was 11.3%, and total investment income for the quarter was $61.4 million.

• Regulatory debt to equity ratio ended at 0.89x, and non-accruals represented 1.5% of the investment portfolio at fair value.

• LTM operating leverage ended at 1.7%, outperforming the BDC industry average of 2.6%.

• Cash and cash equivalents stood at $42.6 million, with $395 million in undrawn credit facility capacity.

• Net realized and unrealized losses on investments totaled $1.9 million, with $9.2 million net appreciation in equity and $8.7 million net depreciation in credit.

Outlook and guidance

• Expect to maintain regular and supplemental dividends, supported by strong UTI and unrealized appreciation.

• Anticipate continued robust deal flow and net portfolio growth, aided by expanded origination capacity and the new JV.

• Project spreads on new deals to remain between 7% and 7.25% over the next 12 months, with continued conservative underwriting.

• Management believes liquidity and capital resources are adequate for the next twelve months, supported by cash, investment cash flows, and undrawn credit facilities.

• The company intends to continue funding investment activities through existing resources and future issuances of debt and equity.