Capital Southwest Corporation · NASDAQ:CSWC
Capital Southwest — Q2 2026 Earnings Presentation
25 slides from Capital Southwest's earnings presentation, Nov 3, 2025
Slide 1: Q2 2026 Earnings Presentation
Q2 2026 Earnings Presentation 8333 Douglas Avenue, Suite 1100 | Dallas, Texas 75225 | 214.238.5700 | capitalsouthwest.com November 4, 2025 Capital Southwest Corporation
Slide 2: Important Notices
Page 2 Important Notices • These materials and any presentation of which they form a part are neither an offer to sell, nor a solicitation of an offer to purchase, any securities of Capital Southwest. • These materials and the presentations of which they are a part, and the summaries contained herei
Slide 3: Forward-Looking Statements
Page 3 • This presentation contains forward-looking statements relating to, among other things, the business, market conditions, financial condition and results of operations of Capital Southwest, the anticipated investment strategies and investments of Capital Southwest, and future market demand. A
Slide 4: CSWC Senior Management
Page 4 Chris T. Rehberger Chief Financial Officer, Treasurer and Secretary • Joined Capital Southwest in September 2015 • Former VP at American Capital • 20+ years of BDC experience • BS – University of Virginia | MBA – University of Virginia CSWC Senior Management Josh S. Weinstein Senior Managing
Slide 5: Conference Call Participants
Page 5 Michael S. Sarner President and Chief Executive Officer Chris T. Rehberger Chief Financial Officer, Treasurer and Secretary Josh S. Weinstein Senior Managing Director and Chief Investment Officer Amy L. Baker Executive Vice President of Accounting Conference Call Participants
Slide 6: CSWC Company Overview
Page 6 • CSWC was formed in 1961, and elected to be regulated as a BDC in 1988 • Publicly-traded on Nasdaq: Common Stock (“CSWC”) • Internally Managed BDC with RIC tax treatment for U.S. federal income tax purposes • 32 employees based in Dallas, Texas • Total Balance Sheet Assets of $2.0 B as of Se
Slide 7: Lower Middle Market Credit Strategy
Page 7 CSWC leads financing transactions, primarily backing private equity firms that generally fit the following parameters • Flexible financing solutions to fund growth, changes of control, or other corporate events • Investments are diverse among industries, geographic regions, and end markets •
Slide 8: Q2 2026 Highlights
Page 8 • Q2 2026 Pre-Tax Net Investment Income (“NII”) of $34.0 MM or $0.61 per share • Declared monthly regular dividend of $0.1934 per share for each of October, November, and December 2025 ($0.58 per share quarterly) ◦ In addition, declared a quarterly supplemental dividend of $0.06 per share for
Slide 9: Investment Activity Highlights
Page 9 Investment Activity Highlights • During the quarter, CSWC originated $245.5 MM in total new committed investments ($94.1 MM funded at close) to seven new portfolio companies and ten existing portfolio companies ◦ Committed investments to new portfolio companies consisted of $162.5 MM in first
Slide 10: NAV per Share Bridge for Quarter Ended 9/30/25
Page 10 $16.59 $0.61 $(0.58) $(0.06) $(0.08) $(0.03) $0.18 $(0.01) 6/30/2025 NAV/Share Pre- Tax Net I nvest ment In come Regular Dividend Supplem ental Dividend Net C hange in In vest ment P ortfo lio Valu e Real ize d/Unrea lize d Tax Accr etio n fro m Equity Iss uance Other Corporat e 9/30/2025 NA
Slide 11: CSWC Investment Portfolio Composition
Page 11 CSWC Investment Portfolio Composition (1) At both September 30, 2025 and June 30, 2025, we had equity ownership in approximately 66% of our investments (2) The weighted-average annual effective yields were computed using the effective interest rates during the quarter for all debt investment
Slide 12: Investment Rating Migration
Page 12 Approximately 91% of all debt investments are currently rated a "1" or "2" as credit portfolio continues to demonstrate solid performance Investment Rating 6/30/2025 9/30/2025 # of Companies Fair Value ($MM) % of Portfolio (FV) # of Companies Fair Value ($MM) % of Portfolio (FV) 1 19 $336.9
Slide 13: History of Value Creation
Page 13 History of Value Creation $17.68 $17.38 $18.63 $20.90 $22.71 $21.97 $24.90 $28.27 $30.06 $32.93 $35.40 $35.93 $36.60 $17.68 $17.34 $17.80 $19.08 $18.62 $15.13 $16.01 $16.86 $16.37 $16.77 $16.70 $16.59 $16.62 $0.26 $0.26 $1.16 $2.31 $2.71 $3.41 $3.66 $3.89 $4.12 $4.18 $4.24 $0.04 $0.57 $1.56
Slide 14: Track Record of Consistent Dividends Continues
Page 14 • In the last twelve months ended 9/30/2025, CSWC generated $2.42 per share in Pre-Tax NII and paid out $2.32 per share in Regular Dividends ◦ LTM Pre-Tax NII Regular Dividend Coverage of 104% • Cumulative Pre-Tax NII Regular Dividend Coverage of 110% since launch of credit strategy in 2015
Slide 15: Granular Credit Portfolio Heavily Weighted Towards First Lien
Page 15 Granular Credit Portfolio Heavily Weighted Towards First Lien Investments 99% of credit portfolio in first lien senior secured loans with an average investment hold size of 0.9% as of 9/30/2025 Credit Portfolio Heavily Weighted to First Lien $ (M illi on s) Average H old S ize % $93 $167 $23
Slide 16: CSWC Portfolio Mix as of September 30, 2025
Page 16 CSWC Portfolio Mix as of September 30, 2025 at Fair Value Current Investment Portfolio (By Type) Current Investment Portfolio (By Industry) Current Investment Portfolio of approximately $1.9 B continues to be heavily weighted towards first lien loans and diversified across industries First L
Slide 17: Operating Leverage Trend
Page 17 Operating Leverage Trend Driving exceptional Operating Leverage through benefits of internally-managed structure Period Ending To ta l A ss et s ( $M M ) O perating Expenses as % of A vg A ssets $284 $326 $417 $552 $585 $736 $974 $1,258 $1,557 $1,883 $1,882 $2,021 4.9% 4.2% 3.7% 3.0% 2.8% 2.
Slide 18: Significant Unused Debt Capacity with Long-Term Duration
Page 18 Significant Unused Debt Capacity with Long-Term Duration Subsequent to quarter end, CSWC redeemed in full the October 2026 Notes and the August 2028 Notes with no "make-whole" premium required Debt Obligations Total Commitments Interest Rate Maturity Principal Drawn Undrawn Commitment Octobe
Slide 19: Balance Sheet
Page 19 Balance Sheet (In Thousands, except per share amounts) Quarter Ended 12/31/2024 Quarter Ended 3/31/2025 Quarter Ended 6/30/2025 Quarter Ended 9/30/2025 Assets Portfolio Investments $1,701,286 $1,785,299 $1,780,198 $1,877,907 Cash & Cash Equivalents 36,013 43,221 46,889 87,429 Restricted Cash
Slide 20: Income Statement
Page 20 Income Statement (In Thousands, except per share amounts) Quarter Ended 12/31/2024 Quarter Ended 3/31/2025 Quarter Ended 6/30/2025 Quarter Ended 9/30/2025 Investment Income Interest Income $42,889 $44,619 $47,115 $48,258 PIK Interest Income 3,246 3,982 3,260 2,794 Dividend Income 586 970 3,6
Slide 21: Portfolio Statistics
Page 21 Portfolio Statistics Continuing to build a well performing credit portfolio (In Thousands) Quarter Ended 12/31/2024 Quarter Ended 3/31/2025 Quarter Ended 6/30/2025 Quarter Ended 9/30/2025 Portfolio Statistics Fair Value of Debt Investments $1,542,524 $1,605,906 $1,613,985 $1,706,251 Average
Slide 22: Investment Income Detail
Page 22 Investment Income Detail Constructing a portfolio of investments with recurring cash yield (In Thousands) Quarter Ended 12/31/2024 Quarter Ended 3/31/2025 Quarter Ended 6/30/2025 Quarter Ended 9/30/2025 Investment Income Breakdown Cash Interest $42,294 $42,985 $44,689 $46,823 Cash Dividends
Slide 23: Key Financial Metrics
Page 23 Key Financial Metrics Strong Pre-Tax Net Investment Income and Dividend Yield driven by net portfolio growth and investment performance (1) Return on Equity is calculated as the quarterly annualized Pre-Tax NII, Realized Earnings, or Total Earnings, respectively, divided by equity at the end
Slide 24: Interest Rate Sensitivity
Page 24 Note: Illustrative change in annual NII does not adjust for potential changes in the credit market, credit quality, size and composition of the assets in the portfolio. It also does not adjust for other business developments, including future originations and repayments. Accordingly, no assu
Slide 25: Corporate Information
Page 25 Corporate Information Board of Directors Senior Management Fiscal Year End Inside Director Michael S. Sarner March 31 Michael S. Sarner President & Chief Executive Officer Independent Directors Independent Auditor David R. Brooks Chris T. Rehberger RSM US LLP Chicago, ILChristine S. Battist