Stellus Capital Investment Corporation delivered solid fourth quarter results, with the business development company maintaining a billion-dollar portfolio while generating steady income for shareholders.
The Houston-based investment firm reported both U.S. GAAP net and core investment income of $0.29 per share for the quarter ended December 31, 2025. Chief Executive Officer Robert T. Ladd highlighted the company's balanced approach to portfolio management during the period.
"I am pleased to report solid operating results for the quarter ended December 31, 2025, in which we earned both U.S. GAAP net and core investment income of $0.29 per share and net realized income of $0.48 per share," said Ladd.
Portfolio activity remained robust during the fourth quarter, with Stellus funding $52 million in new investments while receiving $54 million in repayments. This resulted in a slight net decrease of $1.9 million, bringing the total portfolio to $1.01 billion at fair value as of December 31, 2025.
The company's net realized income of $0.48 per share for the quarter was driven by net realized gains on investments of $0.19 per share, combined with the core net investment income. For the full year 2025, net realized income totaled $1.34 per share.
Ladd emphasized the company's track record of returning value to shareholders since operations began. "I'm also pleased to report that our investors have received a total of $333 million in distributions, equivalent to $18.27 per share, since we began operations," said Ladd.
The portfolio composition showed continued diversification, with 115 portfolio company investments as of December 31, 2025, compared to 105 a year earlier. Of these investments, 100 were debt investments, up from 92 in the prior year.
However, the company's net asset value per share declined to $12.82 from $13.46 a year earlier, primarily due to net unrealized depreciation on investments of $0.39 per share for the full year. The weighted average yield on total investments also decreased to 8.7% from 9.7% in the previous year.
For the full year 2025, Stellus reported net investment income of $1.30 per share, down from $1.64 per share in 2024. The company maintained its quarterly distribution of $0.40 per share throughout 2025, resulting in annual distributions of $1.60 per share.
Total assets stood at $1.04 billion as of December 31, 2025, with net assets of $371.2 million. The company's shares outstanding increased to 28.9 million from 27.5 million a year earlier.
Investors will be watching Stellus's ability to maintain its dividend coverage and portfolio performance amid changing market conditions in 2026. The company's focus on middle-market lending and diversified portfolio positioning will be key factors in navigating the current interest rate environment.