Core Viewpoint - Main Street Capital is highlighted as a top investment choice for passive income due to its reliable and growing dividend payments, making it an attractive option for investors seeking financial independence [2][14]. Company Overview - Main Street Capital is a business development company (BDC) that provides private debt and equity capital to lower-middle-market companies with annual revenues between $10 million and $150 million, as well as debt capital to middle-market companies with revenues over $150 million [4]. - The company has maintained a consistent dividend payment since its IPO in 2007, currently paying $0.255 per share monthly, which translates to an annual yield of 4.6% [6]. Dividend Policy - Main Street Capital distributes a portion of its income to investors through monthly dividends, which are set at a sustainable level, currently 1.4 times its distributable net investment income [5]. - The company has a unique dividend policy that includes both a conservative monthly dividend and periodic quarterly supplemental dividends, which have recently been declared at $0.30 per share [8][9]. Dividend Growth - Since its IPO, Main Street Capital has increased its dividend payout by 132%, including a 4.1% increase over the past year, providing investors with a growing stream of passive income [7]. - The annualized dividend yield, including supplemental dividends, is approximately 6.5%, significantly higher than the S&P 500's yield [9]. Investment Strategy - Main Street Capital aims to be a comprehensive capital solutions provider by offering both debt and equity capital, which allows for additional upside potential beyond dividend income [12]. - The company has grown its net asset value per share by 151% since its IPO, enabling it to provide additional returns through equity investments [13]. Conclusion - Main Street Capital is positioned as an ideal investment for passive income strategies, offering a reliable monthly income stream, supplemental dividends, and potential for capital appreciation through equity investments [14][15].

Group 1 - Main Street Capital (MAIN) is a notable stock in the Finance sector, currently outperforming its peers with a year-to-date gain of approximately 13.2% compared to the sector average of 12.9% [4] - The Zacks Rank system indicates that MAIN has a Zacks Rank of 2 (Buy), reflecting a positive analyst sentiment and an improving earnings outlook, with a consensus estimate for full-year earnings increasing by 3.3% over the past quarter [3] - MAIN belongs to the Financial - SBIC & Commercial Industry, which includes 37 stocks that have collectively lost about 4.7% year-to-date, further highlighting MAIN's strong performance relative to its industry [5] Group 2 - Axos Financial (AX) is another Finance stock that has outperformed the sector, with a year-to-date increase of 30.6% [4] - The consensus EPS estimate for Axos Financial has risen by 2.4% over the past three months, and it also holds a Zacks Rank of 2 (Buy) [5] - Axos Financial is part of the Financial - Miscellaneous Services industry, which consists of 93 stocks and has gained 5.4% year-to-date, indicating a solid performance within its own industry [6]

Core Viewpoint - Main Street Capital (MAIN) has received a Zacks Rank 1 (Strong Buy) upgrade due to an upward trend in earnings estimates, indicating a positive outlook for the company's stock price [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates in influencing stock prices, making it a valuable tool for investors [2][4]. - Rising earnings estimates for Main Street Capital suggest an improvement in the company's underlying business, which is expected to drive stock appreciation [5][8]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Main Street Capital's upgrade to Zacks Rank 1 places it in the top 5% of stocks covered by Zacks, indicating strong potential for market-beating returns [10]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Main Street Capital is projected to earn $4.06 per share, with a 3.3% increase in the Zacks Consensus Estimate over the past three months [8].

Core Viewpoint - The focus is on creating a portfolio that emphasizes growth and dividend income, aiming for an easy retirement through compounding dividend income and growth [1]. Group 1: Investment Strategy - The portfolio is structured to generate monthly dividend income, which is expected to grow through dividend reinvestment and annual increases [1]. Group 2: Personal Position - The company has a beneficial long position in several stocks, including MAIN, ARCC, BXSL, BBDC, GBDC, OBDC, GSBD, FSK, and PSEC, either through stock ownership, options, or other derivatives [1].

Group 1 - Main Street Capital Corporation has announced a dual listing of its common stock on NYSE Texas, a newly launched electronic equities exchange in Dallas, Texas [1] - The dual listing reflects Main Street's commitment to supporting the growth of privately-held U.S. businesses and delivering long-term value for shareholders [2] - Main Street will maintain its primary listing on the New York Stock Exchange with the same ticker symbol "MAIN" on NYSE Texas [3] Group 2 - Main Street is a principal investment firm that provides customized long-term debt and equity capital solutions primarily to lower middle market companies [4] - The firm typically invests in companies with annual revenues between $10 million and $150 million for its lower middle market portfolio and between $25 million and $500 million for its private loan portfolio [4] - Main Street also manages investments for external parties through its wholly-owned portfolio company MSC Adviser I, LLC, which is registered as an investment adviser [5]

Core Viewpoint - The article highlights several high-quality dividend stocks that offer attractive yields above 5%, despite the overall decline in dividend yields in the market, particularly the S&P 500's yield at around 1.2% [1]. Group 1: Brookfield Infrastructure Partners - Brookfield Infrastructure Partners (BIP) currently yields approximately 5.8%, outperforming its corporate counterpart, Brookfield Infrastructure Corporation (BIPC), which yields 4.4% [3]. - About 85% of Brookfield's funds from operations (FFO) are derived from long-term contracts or regulated frameworks, with a conservative dividend payout ratio of 60%-70% [4]. - The company anticipates FFO per share growth of 10% or more, supporting annual dividend increases of 5% to 9% over the long term, extending its 16-year growth streak [5]. Group 2: EPR Properties - EPR Properties offers a yield of 6.7% and pays dividends monthly, appealing to investors seeking consistent passive income [6]. - The REIT focuses on experiential real estate investments, generating predictable rental income through long-term, primarily triple net leases [7]. - EPR plans to invest between $200 million and $300 million annually in acquisitions and development projects, aiming for a 3% to 4% annual growth in income per share [8]. Group 3: Main Street Capital - Main Street Capital has a unique dividend policy, paying a monthly dividend that has never been decreased or suspended, with a cumulative increase of 132% since its public debut in 2007, resulting in a yield of 6.6% [9]. - The company supports its dividends through a portfolio of debt and equity investments, maintaining an investment-grade credit rating [10]. Group 4: MPLX - MPLX, a master limited partnership, yields over 7.5% and generates stable cash flow from long-term contracts [11]. - The company produces cash sufficient to cover its distribution by 1.5 times, allowing for funding of expansion projects while maintaining a strong financial profile [12]. - MPLX's recent $2.4 billion acquisition of Northwind Midstream and ongoing organic projects are expected to support continued distribution increases, with a compound annual growth rate above 10% since 2021 [13]. Group 5: Realty Income - Realty Income yields more than 5.5% and owns a diversified portfolio of commercial real estate, providing stable rental income through net leases [14]. - The company has increased its dividend 131 times since its public listing in 1994, with a strong financial profile and significant room for expansion in the net lease market [15]. Group 6: Conclusion - The highlighted companies exhibit strong dividend-paying track records, stable and growing cash flows, and robust financial profiles, making them suitable candidates for long-term investment to boost income [16].

Group 1 - Main Street Capital Corporation has priced a public offering of $350 million in 5.40% notes due 2028, with interest payable semiannually and a maturity date of August 15, 2028 [1] - The net proceeds from the offering will be used to repay outstanding indebtedness and for general corporate purposes, including investments in marketable securities and operating expenses [2] - The offering is managed by J.P. Morgan Securities LLC, RBC Capital Markets, LLC, SMBC Nikko Securities America, Inc., and Truist Securities, Inc. as joint book-runners [3] Group 2 - Main Street Capital Corporation primarily provides customized long-term debt and equity capital solutions to lower middle market companies, with portfolio investments typically supporting management buyouts and growth financings [7] - The company’s lower middle market portfolio companies generally have annual revenues between $10 million and $150 million, while its private loan portfolio companies have annual revenues between $25 million and $500 million [7][8]

Group 1 - Main Street Capital (MAIN) is outperforming its peers in the Finance sector with a year-to-date gain of approximately 13.8%, compared to the sector's average return of 10.6% [4] - The Finance group ranks 2 within the Zacks Sector Rank, indicating strong performance among its 869 companies [2] - MAIN has a Zacks Rank of 2 (Buy), reflecting improving earnings estimates, with a 1.2% increase in the consensus estimate for full-year earnings over the past 90 days [3] Group 2 - Main Street Capital belongs to the Financial - SBIC & Commercial Industry, which has 37 stocks and currently ranks 199 in the Zacks Industry Rank, with this group losing about 5.5% year-to-date [5] - Another Finance stock, ACNB, has also outperformed the sector with a year-to-date increase of 11.9% and has a Zacks Rank of 2 (Buy) [4][5] - The Banks - Southwest industry, which includes ACNB, has 19 stocks and is ranked 31, with a year-to-date increase of 2.1% [6]

PART I FINANCIAL INFORMATION This section presents Main Street Capital Corporation's unaudited financial statements, management's discussion, and market risk disclosures [Item 1. Consolidated Financial Statements](index=2&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents Main Street Capital Corporation's unaudited consolidated financial statements and comprehensive notes for the periods ended June 30, 2025, and December 31, 2024 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets%E2%80%94June%2030%2C%202025%20(unaudited)%20and%20December%2031%2C%202024) These statements present Main Street's financial position as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | |:---|:---|:---| | **ASSETS** ||| | Total investments at fair value | $5,093,070 | $4,932,669 | | Cash and cash equivalents | $86,984 | $78,251 | | Total assets | $5,287,766 | $5,121,341 | | **LIABILITIES** ||| | Credit Facilities | $477,000 | $384,000 | | Total liabilities | $2,403,549 | $2,323,503 | | **NET ASSETS** ||| | Total net assets | $2,884,217 | $2,797,838 | | NET ASSET VALUE PER SHARE | $32.30 | $31.65 | - Total assets increased by **$166,425 thousand (3.25%)** from December 31, 2024, to June 30, 2025, primarily due to growth in investments at fair value[11](index=11&type=chunk) - Net Asset Value (NAV) per share increased from **$31.65** at December 31, 2024, to **$32.30** at June 30, 2025[11](index=11&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20(unaudited)%E2%80%94Three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) These statements detail Main Street's financial performance for the three and six months ended June 30, 2025, and 2024 Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Total investment income | $143,973 | $132,154 | $281,019 | $263,759 | | Total expenses | $(50,639) | $(44,854) | $(97,875) | $(86,653) | | Net investment income | $88,183 | $83,899 | $174,080 | $170,330 | | Net realized gain (loss) | $52,420 | $3,414 | $22,875 | $(8,954) | | Net unrealized appreciation (depreciation) | $(18,951) | $23,044 | $44,239 | $63,693 | | Net increase in net assets from operations | $122,534 | $102,688 | $238,616 | $209,835 | | Net investment income per share | $0.99 | $0.97 | $1.96 | $1.99 | | Net increase in net assets from operations per share | $1.37 | $1.19 | $2.68 | $2.45 | - Total investment income increased by **9%** for the three months ended June 30, 2025, and by **7%** for the six months ended June 30, 2025, compared to the prior year periods[13](index=13&type=chunk) - Net realized gain significantly increased to **$52,420 thousand** for the three months ended June 30, 2025, from $3,414 thousand in the prior year, and shifted from a loss to a gain for the six-month period[13](index=13&type=chunk) - Net unrealized appreciation shifted to a depreciation of **$(18,951) thousand** for the three months ended June 30, 2025, from an appreciation of $23,044 thousand in the prior year, but remained positive for the six-month period[13](index=13&type=chunk) [Consolidated Statements of Changes in Net Assets](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets%20(unaudited)%E2%80%94Three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) These statements illustrate changes in Main Street's net assets from operations, capital raises, and dividends for the periods ended June 30, 2025 Changes in Net Assets (in thousands, except shares) | Metric | Balances as of December 31, 2024 | Balances as of June 30, 2025 | |:---|:---|:---| | Common stock (shares) | 88,400,391 | 89,282,595 | | Common stock (par value) | $884 | $893 | | Additional paid-in capital | $2,394,492 | $2,429,817 | | Total undistributed earnings | $402,462 | $453,507 | | Total net assets | $2,797,838 | $2,884,217 | | Net increase in net assets resulting from operations (6 months) | N/A | $238,616 | | Dividends to stockholders (6 months) | N/A | $(187,571) | - Total net assets increased by **$86,379 thousand** from December 31, 2024, to June 30, 2025, primarily driven by net increase in net assets from operations and capital raises[15](index=15&type=chunk) - Public offerings of common stock generated **$16,031 thousand** in net proceeds for the six months ended June 30, 2025[15](index=15&type=chunk) - Dividends to stockholders totaled **$(187,571) thousand** for the six months ended June 30, 2025[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)%E2%80%94Six%20months%20ended%20June%2030%2C%202025%20and%202024) These statements outline Main Street's cash sources and uses for the six months ended June 30, 2025, and 2024 Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---| | Net cash provided by (used in) operating activities | $82,125 | $(304,551) | | Net cash provided by (used in) financing activities | $(73,392) | $274,940 | | Net increase (decrease) in cash and cash equivalents | $8,733 | $(29,611) | | Cash and cash equivalents as of end of period | $86,984 | $30,472 | | Dividends paid | $(168,050) | $(157,212) | | Proceeds from Credit Facilities | $607,000 | $1,395,000 | | Repayments on Credit Facilities | $(514,000) | $(1,130,000) | - Net cash provided by operating activities significantly improved to **$82,125 thousand** for the six months ended June 30, 2025, compared to a net cash outflow of $(304,551) thousand in the prior year[18](index=18&type=chunk) - Net cash used in financing activities was **$(73,392) thousand** for the six months ended June 30, 2025, primarily due to dividends paid and net repayments on credit facilities, a reversal from the $274,940 thousand provided in the prior year[18](index=18&type=chunk) - Cash and cash equivalents increased by **$8,733 thousand**, reaching **$86,984 thousand** at June 30, 2025[18](index=18&type=chunk) [Consolidated Schedule of Investments – June 30, 2025](index=8&type=section&id=Consolidated%20Schedule%20of%20Investments%20(unaudited)%E2%80%94June%2030%2C%202025) This schedule details Main Street's investment portfolio as of June 30, 2025, categorized by control level and providing specifics on individual portfolio companies Investment Portfolio Summary (in thousands) | Category | Cost | Fair Value | |:---|:---|:---| | Control Investments | $1,561,120 | $2,295,565 | | Affiliate Investments | $790,583 | $856,226 | | Non-Control/Non-Affiliate Investments | $2,001,002 | $1,941,279 | | Total Portfolio Company investments | $4,352,705 | $5,093,070 | | Money market funds | $19,041 | $19,041 | - Control investments represent **79.6%** of net assets at fair value, while Affiliate investments represent **29.7%** and Non-Control/Non-Affiliate investments represent **67.3%**[36](index=36&type=chunk) - A significant portion of debt investments (**96%** based on par amount) have Term Secured Overnight Financing Rate ("SOFR") floors ranging from 0.75% to 5.25%, with a weighted-average floor of **1.30%**[79](index=79&type=chunk) - Debt investments are generally income-producing, while equity and warrants are non-income producing unless otherwise noted[79](index=79&type=chunk) [Consolidated Schedule of Investments – December 31, 2024](index=38&type=section&id=Consolidated%20Schedule%20of%20Investments%E2%80%94December%2031%2C%202024) This schedule details Main Street's investment portfolio as of December 31, 2024, categorized by control level and investment type Investment Portfolio Summary (in thousands) | Category | Cost | Fair Value | |:---|:---|:---| | Control Investments | $1,415,970 | $2,087,890 | | Affiliate Investments | $743,441 | $846,798 | | Non-Control/Non-Affiliate Investments | $2,077,901 | $1,997,981 | | Total Portfolio Company investments | $4,237,312 | $4,932,669 | | Money market funds | $6,474 | $6,474 | - Control investments constituted **74.6%** of net assets at fair value, Affiliate investments **30.3%**, and Non-Control/Non-Affiliate investments **71.4%** as of December 31, 2024[99](index=99&type=chunk)[100](index=100&type=chunk)[135](index=135&type=chunk) - **95%** of debt investments (based on par amount) had Term SOFR floors ranging from 0.50% to 5.25%, with a weighted-average floor of **1.32%** as of December 31, 2024[138](index=138&type=chunk) [Notes to Consolidated Financial Statements](index=65&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(unaudited)) These notes provide essential context for Main Street's financial statements, detailing accounting policies, fair value, and debt [NOTE A — ORGANIZATION AND BASIS OF PRESENTATION](index=68&type=section&id=NOTE%20A%20%E2%80%94%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) This note describes Main Street Capital Corporation's structure as an internally managed BDC and its tax treatment as a RIC - MSCC is an internally managed BDC, primarily focused on LMM and Private Loan investment strategies, providing customized long-term debt and equity capital solutions[143](index=143&type=chunk)[403](index=403&type=chunk) - The company maintains a legacy portfolio of Middle Market investments and other portfolio investments, with Middle Market investments expected to decline[144](index=144&type=chunk)[404](index=404&type=chunk) - MSCC has elected to be treated as a Regulated Investment Company (RIC) for U.S. federal income tax purposes, generally avoiding corporate-level taxes on distributed income[149](index=149&type=chunk)[410](index=410&type=chunk) - The External Investment Manager, a wholly-owned subsidiary, provides services to external parties and is accounted for as a portfolio investment, not a consolidated subsidiary[148](index=148&type=chunk)[154](index=154&type=chunk)[409](index=409&type=chunk) [NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=71&type=section&id=NOTE%20B%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details Main Street's significant accounting policies, including fair value valuation, revenue recognition, and compensation - Main Street accounts for its Investment Portfolio at fair value, following ASC 820, with valuation processes approved by its Board of Directors[160](index=160&type=chunk)[162](index=162&type=chunk)[443](index=443&type=chunk) - Valuation methods include the Waterfall methodology for LMM equity, Yield-to-Maturity for LMM/Private Loan/Middle Market debt, and NAV for Other Portfolio equity investments[164](index=164&type=chunk)[166](index=166&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) - External Financial Advisory Firms are consulted for fair value determinations of LMM and Private Loan portfolio companies, with **92%** of LMM and **91%** of Private Loan portfolios reviewed in the trailing twelve months ended June 30, 2025[170](index=170&type=chunk)[173](index=173&type=chunk) - Investments on non-accrual status comprised **2.1%** of the total Investment Portfolio at fair value and **5.0%** at cost as of June 30, 2025[186](index=186&type=chunk)[452](index=452&type=chunk) Investment Income Composition (in thousands) | Income Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Interest income | $100,857 | $100,031 | $198,874 | $200,136 | | Dividend income | $37,845 | $26,688 | $73,871 | $49,479 | | Fee income | $5,271 | $5,435 | $8,274 | $14,144 | | Total investment income | $143,973 | $132,154 | $281,019 | $263,759 | - PIK interest and cumulative dividends constituted **2.3%** and **0.9%** of total investment income, respectively, for the three months ended June 30, 2025, and **2.6%** and **0.7%** for the six months ended June 30, 2025[187](index=187&type=chunk)[448](index=448&type=chunk) [NOTE C — FAIR VALUE HIERARCHY FOR INVESTMENTS — PORTFOLIO COMPOSITION](index=81&type=section&id=NOTE%20C%20%E2%80%94%20FAIR%20VALUE%20HIERARCHY%20FOR%20INVESTMENTS%20%E2%80%94%20PORTFOLIO%20COMPOSITION) This note explains Main Street's fair value hierarchy for investments, detailing valuation inputs and providing a comprehensive breakdown of the portfolio's composition by type and industry - All LMM and Private Loan portfolio investments, and most Middle Market investments, are categorized as **Level 3** due to reliance on unobservable inputs for fair value determination[220](index=220&type=chunk)[221](index=221&type=chunk)[223](index=223&type=chunk) - Key unobservable inputs for equity valuations include WACC (**9.7% - 22.7%** range, **14.5%** weighted-average) and EBITDA multiples (**5.0x - 9.0x** range, **7.2x** weighted-average)[226](index=226&type=chunk)[227](index=227&type=chunk) - Key unobservable inputs for debt valuations include risk-adjusted discount rates (**8.3% - 18.6%** range, **12.3%** weighted-average) and expected principal recovery percentages (**0.0% - 500.0%** range, **98.8%** weighted-average)[226](index=226&type=chunk)[227](index=227&type=chunk) Investment Portfolio Composition by Type (at cost) | Investment Type | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | First lien debt | 81.5 % | 82.9 % | | Equity | 17.9 % | 16.4 % | | Second lien debt | 0.1 % | 0.2 % | | Equity warrants | 0.3 % | 0.3 % | | Other | 0.2 % | 0.2 % | | **Total** | **100.0 %** | **100.0 %** | Investment Portfolio Composition by Type (at fair value) | Investment Type | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | First lien debt | 70.5 % | 71.4 % | | Equity | 28.7 % | 27.8 % | | Second lien debt | 0.1 % | 0.2 % | | Equity warrants | 0.5 % | 0.4 % | | Other | 0.2 % | 0.2 % | | **Total** | **100.0 %** | **100.0 %** | - The LMM portfolio had **88 companies** with an average EBITDA of **$10.4 million** and a weighted-average annual effective yield of **12.8%** (12.1% including non-accrual)[248](index=248&type=chunk)[249](index=249&type=chunk) - The Private Loan portfolio had **87 companies** with an average EBITDA of **$32.5 million** and a weighted-average annual effective yield of **11.4%** (10.0% including non-accrual)[248](index=248&type=chunk)[249](index=249&type=chunk) - Middle Market investments decreased from **15 companies ($155.3 million fair value)** to **12 companies ($108.7 million fair value)** from December 31, 2024, to June 30, 2025[252](index=252&type=chunk)[437](index=437&type=chunk) - The investment in the External Investment Manager had a fair value of **$272.6 million (5.4% of total portfolio)** as of June 30, 2025, up from $246.0 million (5.0%) at December 31, 2024[254](index=254&type=chunk)[440](index=440&type=chunk) [NOTE D — EXTERNAL INVESTMENT MANAGER](index=93&type=section&id=NOTE%20D%20%E2%80%94%20EXTERNAL%20INVESTMENT%20MANAGER) This note describes the operations and financial contribution of Main Street's External Investment Manager - The External Investment Manager provides investment advisory and administrative services to external clients, including MSC Income Fund, Private Loan Fund I, and Private Loan Fund II[268](index=268&type=chunk)[269](index=269&type=chunk) - The External Investment Manager's total contribution to Main Street's net investment income was **$8.7 million** for the three months ended June 30, 2025 (down from $9.2 million in 2024), and **$16.6 million** for the six months ended June 30, 2025 (down from $17.8 million in 2024)[272](index=272&type=chunk)[428](index=428&type=chunk) External Investment Manager Summarized Financial Information (in thousands) | Metric | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | Accounts receivable - advisory clients | $10,688 | $10,183 | | Intangible asset | $29,500 | $29,500 | | Total assets | $40,188 | $39,683 | | Accounts payable to MSCC and its subsidiaries | $7,839 | $7,785 | | Dividend payable to MSCC and its subsidiaries | $2,849 | $2,398 | | Equity | $29,500 | $29,500 | | Total liabilities and equity | $40,188 | $39,683 | External Investment Manager Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Total revenues | $9,600 | $10,162 | $18,216 | $19,901 | | Total expenses | $(5,903) | $(5,902) | $(11,277) | $(11,470) | | Net income | $2,849 | $3,312 | $5,343 | $6,313 | [NOTE E — DEBT](index=95&type=section&id=NOTE%20E%20%E2%80%94%20DEBT) This note summarizes Main Street's debt obligations, including Credit Facilities and unsecured notes, with details on rates and amendments Summary of Debt (in thousands) | Debt Instrument | June 30, 2025 Outstanding Balance | December 31, 2024 Outstanding Balance | |:---|:---|:---| | Corporate Facility | $301,000 | $208,000 | | SPV Facility | $176,000 | $176,000 | | July 2026 Notes | $500,000 | $500,000 | | June 2027 Notes | $400,000 | $400,000 | | March 2029 Notes | $350,000 | $350,000 | | SBIC debentures | $350,000 | $350,000 | | December 2025 Notes | $150,000 | $150,000 | | Total Debt | $2,227,000 | $2,134,000 | Summarized Interest Expense (in thousands) | Debt Instrument | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Corporate Facility | $5,867 | $7,240 | $10,324 | $11,522 | | SPV Facility | $3,771 | $3,096 | $7,587 | $4,774 | | July 2026 Notes | $3,882 | $3,882 | $7,763 | $7,763 | | June 2027 Notes | $6,572 | $1,473 | $13,144 | $1,473 | | March 2029 Notes | $6,261 | $6,261 | $12,522 | $11,747 | | SBIC debentures | $3,135 | $2,273 | $6,286 | $4,979 | | December 2025 Notes | $3,031 | $3,031 | $6,061 | $6,061 | | May 2024 Notes | $0 | $1,905 | $0 | $7,618 | | Total Interest Expense | $32,519 | $29,161 | $63,687 | $55,937 | - Corporate Facility commitments increased to **$1.145 billion**, with an accordion feature up to **$1.718 billion**, and maturity extended to April 2030, with interest rate decreased to SOFR + 0.10% + 1.775% (or 1.65%)[284](index=284&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk)[497](index=497&type=chunk) - SPV Facility revolving period extended to September 2028 and final maturity to September 2030, with interest rate decreased to SOFR + 1.95% (during revolving period)[288](index=288&type=chunk)[289](index=289&type=chunk)[498](index=498&type=chunk) - Weighted-average effective interest rate on total borrowings was **5.8%** for the three and six months ended June 30, 2025, compared to 5.8% and 5.6% for the corresponding periods in 2024[282](index=282&type=chunk) [NOTE F — FINANCIAL HIGHLIGHTS](index=102&type=section&id=NOTE%20F%20%E2%80%94%20FINANCIAL%20HIGHLIGHTS) This note presents Main Street's key financial highlights, including per share data, NAV ratios, and investment returns Per Share Data | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---| | NAV as of the beginning of the period | $31.65 | $29.20 | | Net investment income | $1.96 | $1.99 | | Net realized gain (loss) | $0.26 | $(0.10) | | Net unrealized appreciation | $0.49 | $0.74 | | Net increase in net assets resulting from operations | $2.68 | $2.45 | | Dividends paid | $(2.10) | $(2.04) | | NAV as of the end of the period | $32.30 | $29.80 | | Market value as of the end of the period | $59.10 | $50.49 | | Shares outstanding as of the end of the period | 89,282,595 | 86,552,506 | Ratios to Average NAV | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---| | Ratio of total expenses, including income tax expense, to average NAV | 3.86 % | 4.31 % | | Ratio of operating expenses to average NAV | 3.45 % | 3.43 % | | Ratio of net investment income to average NAV | 6.13 % | 6.75 % | | Portfolio turnover ratio | 11.40 % | 8.62 % | | Total investment return | 4.67 % | 21.97 % | | Total return based on change in NAV | 8.53 % | 8.47 % | - Net increase in net assets resulting from operations per share increased to **$2.68** for the six months ended June 30, 2025, from $2.45 in the prior year[309](index=309&type=chunk) - Total investment return was **4.67%** for the six months ended June 30, 2025, compared to 21.97% in the prior year, while total return based on change in NAV remained strong at **8.53%** (2025) vs. 8.47% (2024)[316](index=316&type=chunk) [NOTE G — DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME](index=104&type=section&id=NOTE%20G%20%E2%80%94%20DIVIDENDS%2C%20DISTRIBUTIONS%20AND%20TAXABLE%20INCOME) This note details Main Street's dividend policy, RIC tax treatment, and reconciliation of net assets to taxable income Summarized Dividend Information | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Regular monthly dividends per share | $0.75 | $0.72 | $1.50 | $1.44 | | Supplemental quarterly dividends per share | $0.30 | $0.30 | $0.60 | $0.60 | | Total dividends per share | $1.05 | $1.02 | $2.10 | $2.04 | | Total dividends paid (in thousands) | $93,726 | $87,954 | $186,873 | $174,789 | - Main Street declared total dividends of **$1.05 per share** for the three months ended June 30, 2025, and **$2.10 per share** for the six months ended June 30, 2025[319](index=319&type=chunk) Reconciliation of Net Increase in Net Assets to Taxable Income (in thousands) | Metric | Six Months Ended June 30, 2025 (estimated) | Six Months Ended June 30, 2024 (estimated) | |:---|:---|:---| | Net increase in net assets resulting from operations | $238,616 | $209,835 | | Estimated taxable income | $157,812 | $153,911 | | Total distributions accrued or paid to common stockholders | $187,571 | $175,625 | Income Tax Provision (in thousands) | Tax Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Total net investment income tax provision | $5,151 | $3,401 | $9,064 | $6,776 | | Total investment valuation related income tax provision (benefit) | $(882) | $7,669 | $2,578 | $15,234 | | Total income tax provision | $4,269 | $11,070 | $11,642 | $22,010 | [NOTE H — COMMON STOCK](index=107&type=section&id=NOTE%20H%20%E2%80%94%20COMMON%20STOCK) This note describes Main Street's At-The-Market (ATM) Program for common stock sales and remaining share availability - Main Street sold **280,730 shares** of common stock under its ATM Program for **$16.1 million** in gross proceeds during the six months ended June 30, 2025[328](index=328&type=chunk)[506](index=506&type=chunk) - New distribution agreements in March 2025 allow for the sale of up to **20,000,000 shares** through the ATM Program, with **19,790,632 shares** remaining available as of June 30, 2025[328](index=328&type=chunk)[506](index=506&type=chunk) [NOTE I — DIVIDEND REINVESTMENT PLAN](index=107&type=section&id=NOTE%20I%20%E2%80%94%20DIVIDEND%20REINVESTMENT%20PLAN) This note outlines Main Street's Dividend Reinvestment Plan (DRIP), detailing participation and shares issued DRIP Information (in thousands, except shares) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---| | DRIP participation | $18,466 | $17,229 | | Shares issued for DRIP | 324,454 | 366,496 | - DRIP participation for the six months ended June 30, 2025, was **$18,466 thousand**, leading to the issuance of **324,454 shares**[331](index=331&type=chunk) [NOTE J — SHARE-BASED COMPENSATION](index=108&type=section&id=NOTE%20J%20%E2%80%94%20SHARE-BASED%20COMPENSATION) This note details Main Street's share-based compensation plans, including restricted stock awards and unrecognized expense - Total share-based compensation expense was **$10.3 million** for the six months ended June 30, 2025, an increase from $9.0 million in the prior year[335](index=335&type=chunk) - As of June 30, 2025, there was **$46.0 million** of total unrecognized compensation expense related to non-vested restricted shares, expected to be recognized over a weighted-average period of **2.8 years**[339](index=339&type=chunk) Restricted Stock Awards (RSAs) Activity (shares) | Metric | Six Months Ended June 30, 2025 | |:---|:---| | Non-vested, December 31, 2024 | 1,039,417 | | Granted | 455,810 | | Vested | (455,608) | | Forfeited | (13,231) | | Non-vested, June 30, 2025 | 1,026,388 | | Restricted stock available for issuance (Equity and Incentive Plan) | 3,511,962 | | Restricted stock available for issuance (Non-Employee Director Plan) | 285,545 | [NOTE K — COMMITMENTS AND CONTINGENCIES](index=109&type=section&id=NOTE%20K%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines Main Street's outstanding commitments and confirms no material impact from current legal proceedings - Total outstanding commitments were **$307.5 million** as of June 30, 2025, comprising **$28.9 million** in equity capital commitments and **$278.6 million** in loan commitments[340](index=340&type=chunk)[342](index=342&type=chunk)[516](index=516&type=chunk) - The largest loan commitments include Mission Critical Group (**$39.0 million**), ZRG Partners, LLC (**$20.8 million**), and TEC Services, LLC (**$16.2 million**)[340](index=340&type=chunk)[342](index=342&type=chunk) - Main Street expects to fund unfunded commitments through existing cash, operating cash flows, and available borrowings under Credit Facilities[344](index=344&type=chunk)[508](index=508&type=chunk) - The company does not expect any current legal proceedings to materially affect its financial condition or results of operations[345](index=345&type=chunk)[534](index=534&type=chunk) [NOTE L — RELATED PARTY TRANSACTIONS](index=113&type=section&id=NOTE%20L%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) This note describes Main Street's transactions and agreements with related parties, including investment activities and compensation - Main Street had a **$10.7 million** receivable from the External Investment Manager as of June 30, 2025, including operating expenses and declared but unpaid dividends[347](index=347&type=chunk) - Main Street has a share purchase plan to buy up to **$20.0 million** of MSC Income common stock in the open market when its price is below NAV, with **$19.955 million** remaining available as of June 30, 2025[349](index=349&type=chunk)[351](index=351&type=chunk) - Main Street committed **$15.0 million** to Private Loan Fund I, with **$14.2 million** funded and **$0.8 million** unfunded as of June 30, 2025, and provided a **$15.0 million** revolving line of credit to the fund, with **$4.0 million** outstanding[353](index=353&type=chunk)[354](index=354&type=chunk) - Main Street committed **$15.0 million** to Private Loan Fund II, with **$9.0 million** funded and **$6.0 million** unfunded as of June 30, 2025[355](index=355&type=chunk) - As of June 30, 2025, **$30.1 million** was deferred under the Deferred Compensation Plan, with **$11.4 million** in phantom Main Street stock units and **$18.7 million** in funded investments in trust, including **$2.1 million** in Private Loan Fund I and **$4.5 million** in Private Loan Fund II[358](index=358&type=chunk) [NOTE M — SUBSEQUENT EVENTS](index=115&type=section&id=NOTE%20M%20%E2%80%94%20SUBSEQUENT%20EVENTS) This note reports subsequent events, including the declaration of supplemental and regular monthly dividends for 2025 - Main Street declared a supplemental dividend of **$0.30 per share** payable in September 2025[359](index=359&type=chunk)[522](index=522&type=chunk) - Regular monthly dividends of **$0.255 per share** were declared for October, November, and December 2025, totaling **$0.765 per share** for Q4 2025, a **4.1% increase** from Q4 2024[360](index=360&type=chunk)[523](index=523&type=chunk) - Cumulative dividends paid since the October 2007 IPO will reach **$46.855 per share**, including Q3 and Q4 2025 declarations[360](index=360&type=chunk)[523](index=523&type=chunk) [Consolidated Schedules of Investments in and Advances to Affiliates](index=116&type=section&id=Consolidated%20Schedules%20of%20Investments%20in%20and%20Advances%20to%20Affiliates%20(unaudited)%E2%80%94Six%20months%20ended%20June%2030%2C%202025%20and%202024) These schedules detail Main Street's investments in and advances to affiliates for the six months ended June 30, 2025, and 2024 - Total Control investments as of June 30, 2025, were **$2,295,565 thousand**, with net realized gain of **$(2,976) thousand** and net unrealized appreciation of **$33,555 thousand** for the six months[379](index=379&type=chunk) - Total Affiliate investments as of June 30, 2025, were **$856,226 thousand**, with net realized gain of **$57,711 thousand** and net unrealized depreciation of **$(8,742) thousand** for the six months[379](index=379&type=chunk) - Geographically, Control investments were concentrated in the Southwest region (**$990,024 thousand fair value**) and Midwest region (**$586,104 thousand fair value**) as of June 30, 2025[379](index=379&type=chunk) - Affiliate investments were primarily in the Southeast region (**$202,564 thousand fair value**) and Southwest region (**$224,323 thousand fair value**) as of June 30, 2025[379](index=379&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=135&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Main Street's financial condition, operating results, investment strategies, and liquidity for the three and six months ended June 30, 2025 - Main Street's LMM investment strategy targets companies with annual revenues between **$10 million and $150 million** and EBITDA between **$3 million and $20 million**[413](index=413&type=chunk) - The Private Loan investment strategy focuses on companies with annual revenues between **$25 million and $500 million** and EBITDA between **$7.5 million and $50 million**[413](index=413&type=chunk) - The company's internally managed structure provides a beneficial operating expense structure, with total operating expenses (excluding interest) as a percentage of quarterly average total assets at **1.3%** for the trailing twelve months ended June 30, 2025[423](index=423&type=chunk) Comparison of Results of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Total investment income | $143,973 | $132,154 | $281,019 | $263,759 | | Total expenses | $(50,639) | $(44,854) | $(97,875) | $(86,653) | | Net investment income | $88,183 | $83,899 | $174,080 | $170,330 | | Net realized gain (loss) | $52,420 | $3,414 | $22,875 | $(8,954) | | Net unrealized appreciation (depreciation) | $(18,951) | $23,044 | $44,239 | $63,693 | | Net increase in net assets from operations | $122,534 | $102,688 | $238,616 | $209,835 | | Distributable net investment income | $94,344 | $88,885 | $185,263 | $179,881 | - Net cash provided by operating activities was **$82.1 million** for the six months ended June 30, 2025, a significant improvement from a net use of $304.5 million in the prior year[493](index=493&type=chunk) - As of June 30, 2025, Main Street had **$87.0 million** in cash and cash equivalents and **$1.264 billion** of unused capacity under its Credit Facilities[495](index=495&type=chunk) - The BDC asset coverage ratio was **253%** as of June 30, 2025, well above the 150% regulatory requirement[512](index=512&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=156&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details Main Street's exposure to financial market risks, particularly interest rate fluctuations, and provides a sensitivity analysis of net investment income - Main Street is subject to financial market risks, particularly changes in interest rates (SOFR and Prime rates), affecting both investment income and debt expense[525](index=525&type=chunk) - As of June 30, 2025, **66%** of the debt Investment Portfolio (at cost) bore floating interest rates, with **96%** of these subject to contractual minimums[526](index=526&type=chunk) - As of June 30, 2025, **79%** of debt obligations bore fixed interest rates[526](index=526&type=chunk) - The company has not entered into any interest rate hedging arrangements[526](index=526&type=chunk) Sensitivity of Annualized Net Investment Income to Hypothetical Base Rate Changes (in thousands, except per share amounts) | Basis Point Change | Increase (Decrease) in Interest Income | (Increase) Decrease in Interest Expense | Increase (Decrease) in Net Investment Income from the External Investment Manager | Increase (Decrease) in Net Investment Income | Increase (Decrease) in Net Investment Income per Share | |:---|:---|:---|:---|:---|:---| | (200) | $(42,342) | $9,540 | $(855) | $(33,657) | $(0.38) | | (100) | $(20,823) | $4,770 | $(384) | $(16,437) | $(0.18) | | 100 | $20,590 | $(4,770) | $665 | $16,485 | $0.18 | | 200 | $41,199 | $(9,540) | $1,119 | $32,778 | $0.37 | [Item 4. Controls and Procedures](index=157&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms the effectiveness of disclosure controls and procedures as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[531](index=531&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[531](index=531&type=chunk) PART II OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and exhibits, providing additional context [Item 1. Legal Proceedings](index=158&type=section&id=Item%201.%20Legal%20Proceedings) The company does not anticipate any current legal proceedings to materially impact its financial condition or results of operations - The company does not expect any current legal proceedings to materially affect its financial condition or results of operations[534](index=534&type=chunk) [Item 1A. Risk Factors](index=158&type=section&id=Item%201A.%20Risk%20Factors) This section refers to previously disclosed risk factors, confirming no material changes since the last annual and quarterly reports - No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for December 31, 2024, and the Quarterly Report on Form 10-Q for March 31, 2025[537](index=537&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=158&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Main Street issued common stock through its dividend reinvestment plan and may withhold shares for employee tax purposes during the quarter - **167,705 shares** of common stock were issued under the dividend reinvestment plan during the three months ended June 30, 2025, with an aggregate value of **$9.4 million**[538](index=538&type=chunk) - Shares may be withheld upon vesting of restricted stock for employee payroll tax withholding, treated as common stock purchases by the company[539](index=539&type=chunk) [Item 5. Other Information](index=158&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans or other trading arrangements during the quarter ended June 30, 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[540](index=540&type=chunk) [Item 6. Exhibits](index=159&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including credit agreement amendments, officer certifications, and iXBRL financial information - Exhibits include the Seventh Amendment to Third Amended and Restated Credit Agreement (April 30, 2025) and the Third Amendment to Credit Agreement (April 24, 2025)[541](index=541&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act of 2002 are filed/furnished[541](index=541&type=chunk) - Financial information from the Quarterly Report is provided in Inline Extensible Business Reporting Language (iXBRL) format[541](index=541&type=chunk) [Signatures](index=160&type=section&id=Signatures) This section contains the required signatures of Main Street Capital Corporation's authorized officers, certifying the report's submission - The report is signed by Dwayne L. Hyzak (Chief Executive Officer), Ryan R. Nelson (Chief Financial Officer), and Ryan H. McHugh (Chief Accounting Officer) on August 8, 2025[546](index=546&type=chunk)

Financial Data and Key Metrics Changes - The company reported total investment income of $144 million for the second quarter, an increase of $11.8 million or 8.9% year-over-year and $6.9 million or 5.1% from the previous quarter [25] - Annualized return on equity was 17.1%, and distributable net investment income (DNII) per share exceeded dividends paid to shareholders [9][30] - Net asset value (NAV) per share reached a record of $32.3, increasing by $0.27 from the previous quarter and by $2.5 or 8.4% year-over-year [30] Business Line Data and Key Metrics Changes - The lower middle market portfolio saw a net increase in investments of $108 million, while private loan investments decreased by $35 million due to lower overall private equity activity [11][24] - The company achieved significant realized gains of $109 million from equity investments in two lower middle market portfolio companies [20][21] - Dividend income increased by $11.2 million year-over-year, driven by the positive performance of lower middle market portfolio companies [26] Market Data and Key Metrics Changes - The private loan investment pipeline was characterized as slightly below average, attributed to a slowdown in overall private equity industry activity [16][18] - The company maintained a diversified portfolio with investments in 187 companies across various industries, with no single investment representing more than 3.9% of total investment income [24] Company Strategy and Development Direction - The company focuses on a differentiated investment strategy in the lower middle market, providing flexible financing solutions and maintaining a long-term investment horizon [16][19] - Plans to grow the asset management business and continue executing investment strategies in the lower middle market were highlighted [12][14] - The company remains optimistic about future investment opportunities, particularly in the lower middle market, despite current economic uncertainties [16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability of portfolio companies to navigate economic uncertainties, with a focus on avoiding new investments in companies with significant consumer exposure [38][40] - The company anticipates continued favorable performance in the third quarter, with expectations for additional supplemental dividends if DNII significantly exceeds regular dividends [15][30] Other Important Information - The company declared a supplemental dividend of $0.30 per share, marking the sixteenth consecutive quarterly supplemental dividend [14] - The total investment portfolio at fair value was 17% above the related cost basis at quarter-end [24] Q&A Session Summary Question: Insights on the reduction in private loan investments - Management indicated that the reduction was due to a combination of lower investment activity and higher-than-expected repayments, with the overall private equity industry still slow [34][35] Question: Themes in underperformance within the portfolio - Management noted that underperformance was primarily in consumer businesses, particularly at the lower end of the market, and indicated a cautious approach to new investments in this sector [39][40] Question: Future exit opportunities and realized gains - Management believes there are potential exit opportunities in the near term, with a mature portfolio that could lead to additional realized gains [44][46] Question: Relationship between spread tightening and deal activity - Management explained that softer deal activity is linked to a decrease in M&A activity in the private equity sector, with expectations for improvement in the future [50][52] Question: Funding options for upcoming debt maturities - Management highlighted strong liquidity and a conservative capital structure, allowing flexibility in addressing upcoming debt maturities [53][55]