Stellus Capital Investment Corporation · NYSE:SCM
Stellus Capital Investment — Stellus Private Credit BDC — Q4 2024 Earnings Presentation
20 slides from Stellus Capital Investment's earnings presentation, March 2025
Slide 1: Stellus Private Credit BDC Investor Presentation
Stellus Private Credit BDC Investor Presentation Quarter ended December 31, 2024 HOUSTON, TX WASHINGTON D.C. CHARLOTTE, NC
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS FOR INFORMATIONAL PURPOSES ONLY. THE INFORMATION CONTAINED HEREIN IS NOT INTENDED TO PROVIDE, AND SHOULD NOT BE RELIED UPON FOR, ACCOUNTING, LEGAL OR TAX ADVICE OR INVESTMENT RECOMMENDATIONS. THIS PRESENTATION IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER
Slide 3: There are 50+ Private BDCs ~ What is our Competitive Advantage?
There are 50+ Private BDCs ~ What is our Competitive Advantage? Strong Historical Portfolio Performance and Consistent Returns to Shareholders Strong History of Underwriting Credit Favorable Performance Over Time • Fair Value of investment portfolio of $300.7 million as of • ROE since commencement o
Slide 4: Provides Flexible Financing for Middle Market Companies
Provides Flexible Financing for Middle Market Companies Investment Type & Size Investment Focus Origination Focus Investment size between $10 and $60 Private companies generating between Focus on originated loans, as opposed million per transaction. $5 and $50 million of EBITDA. to broadly syn
Slide 5: Established Private Credit Team and Institutional Platform
Established Private Credit Team and Institutional Platform • Stellus’ private credit team’s long tenure enables cohesive evaluation and efficient execution of investment opportunities Experienced Team Longevity Continuity Extensive underwriting and Senior members of the investment team have Six of t
Slide 6: Diverse Sponsor Relationships and Investment Experience
Diverse Sponsor Relationships and Investment Experience All partners have significant experience in restructuring Management team has been Partners have invested investing together for nearly 25 approximately $9.4 billion since years 2004* Stellus Capital Management Relationship-driven team who Team
Slide 7: Sourcing and Origination
Sourcing and Origination • The Stellus deal team is responsible for origination and sourcing utilizing a highly focused regional approach resulting in a diverse financial sponsor network. • Since 2004, the Stellus Capital team has partnered with over 190 unique sponsors1 1. Includes investments cons
Slide 8: One of the most experienced lower middle market investment teams
Stellus Capital Management has one of the most experienced lower middle market investment teams in the marketplace with over 315 combined years of principal investing experience 105 ~365 ~$9.4 Cumulative Current Active Billion Completed Investments Invested Capital Investments Select List of Investm
Slide 9: PBDC Focuses on Shareholders
PBDC Focuses on Shareholders • PBDC aligns interest with shareholders Net Investment Income Incentive Fee 1 Pre-Incentive Fee Net Return Limitation 1 15.0% 14.0% PBDC has a Cumulative Pre- <35% 10.0% 10.0% Incentive Fee Net Return of externally- limitation (aka a "lookback") that 5.0% can limit the
Slide 10: Stable Asset Quality: Portfolio is Performing in Accordance with Plan
Stable Asset Quality: Portfolio is Performing in Accordance with Plan Risk Grade Trends Investment Category Definitions at fair value (“Risk Grade” or “RG”): 13% 13% 12% 16% 16% 1 Exceeding expectations 2 Performing in accordance with plan 3 Requires closer monitoring 85% 75% 76% (no loss of return
Slide 11: Loan Investment Portfolio
Loan Investment Portfolio • We originate and invest primarily in private middle-market companies through first lien (including unitranche) debt financing, often with corresponding equity co-investments. *Includes unitranche investments. Unitranche structures may combine characteristics of first lien
Slide 12: Portfolio Construction as of December 31, 2024
Portfolio Construction as of December 31, 2024 Broad Industry Diversification 10.8% 11.0% 9.2% 100% First Lien / Senior Secured Weighted Average Yield Debt4 12.8% 6.8% $5.24 6.3% 100% Average Loan Investment Size 5.8% Sponsor Backed (in millions)1 17.1% Transactions1 5.7% 4.2% 8.9% 4.6% 95% Largest
Slide 13: Investment Portfolio Growth Since Commencement of Operations
Investment Portfolio Growth Since Commencement of Operations Historical Capital Deployment, Deal Activity, and PBDC Milestones $350,000 FV of Investment Portfolio # of Portfolio Companies 65 60 Increases syndicated Stellus Private Credit revolving credit facility to $300,000 BDC first close with $17
Slide 14: First Quarter 2024 Overview
First Quarter 2024 Overview $0.38 Core NII per share1 $43.8 million New investment activity during the quarter2 $300.7 million Investments at fair value as of December 31, 2024 Nine New Initial Investment Funding & Eight Follow On 10.14% Investment Weighted average yield on new debt investments New
Slide 15: Cumulative Distributions Declared per share Since Commencement of Operations
Cumulative Distributions Declared per share Since Commencement of Operations $5.03 per share in Monthly dividends of Approximate Current monthly cumulative $0.12 per share annualized dividend dividend is $0.36 per distributions since declared in Q1 for yield of 9.5% while share for the commencement
Slide 16: Corporate Information
Corporate Information Executive Officers Corporate Headquarters Robert T. Ladd 4400 Post Oak Parkway, Suite 2200 Chairman, President & Chief Executive Officer Houston, TX, 77027 W. Todd Huskinson Phone: 713-292-5400 Chief Financial Officer, Chief Compliance Officer, Current Financial Information Tre
Slide 17: Income Statement Summary
Income Statement Summary Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 INVESTMENT INCOME (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Interest income $ 6,827,160 $ 6,309,381 $ 6,844,595 $ 7,800,382 $ 7,605,783 Other income 266,251 109,596 86,125 132,962 149,861 Total Investment Income $ 7,0
Slide 18: Per Share Change in Net Asset Value (NAV)
Per Share Change in Net Asset Value (NAV) Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 (1) Per Share Data: (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Net asset value at beginning of period $ 15.10 $ 15.21 $ 15.26 $ 15.19 $ 15.14 Net investment income 0.56 0.49 0.46 0.49 0.37 Change in un
Slide 19: Balance Sheet Summary
Balance Sheet Summary Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 ASSETS (audited) (unaudited) (unaudited) (unaudited) (audited) Investments at fair value $ 208,574,078 $ 216,314,810 $ 254,154,676 $ 256,654,766 $ 300,732,065 Cash and cash equivalents 593,685 297,635 565,106 3,518,021 2,144,116 Interest
Slide 20: Liquidity and Capitalization
Liquidity and Capitalization Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Assets Available (audited) (unaudited) (unaudited) (unaudited) (audited) Cash and cash equivalents $ 593,685 $ 297,635 $ 565,106 $ 3,518,021 $ 2,144,116 Unfunded capital commitments 141,687,500 141,687,500 138,980,000 121,687,500 1
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