TCPC earnings call transcript, November 5, 2026

Before we begin, I will note that this conference call may contain forward-looking statements based on management's estimates and assumptions at the time such statements were made, which are not guarantees of future performance. Forward-looking statements involve risks and uncertainties, and actual results could differ materially from those projected. For more information, please refer to the risk factors discussed in our Form 10-Q and the Form 8-K filed with the SEC today, along with the associated press release. Any forward-looking statements made on this call are, as of today, and are subject to change without notice. Additionally, certain information discussed and presented may have been derived from third-party sources and have not been discussed. It's not been independently verified. Accordingly, we make no representation or warranty with respect to such information. Today's discussion includes references to certain non-GAAP financial measures. Including adjusted net investment income. As detailed in our earnings press release, adjusted net investment income excludes the amortization of the purchase accounting discount resulting from our merger with BCIC. A full reconciliation of adjusted net investment income to GAAP net investment income, as well as other non-GAAP financial measures is included in the earnings press release and 10Q. Earlier today, we issued our earnings release for the third quarter ended September 30th, 2026, and posted a supplemental earnings presentation on our website at www.tcpcapital.com.

To view the slide presentation, which we will refer to on today's call, please click the Investor Relations link and select Events and Presentations. These documents should be reviewed in conjunction with the company's Form 10. and CUE, which was filed with the SEC earlier today. Now, I will turn the call over to our Chairman and Chief Executive Officer, Jason Merring.

Through payments increased our liquidity, reduced net leverage to 0.16 times, and contributed to a quarter-end cash balance of approximately $253 million. Given the ongoing strategic review, we made a delay. We made a deliberate decision to maximize investment dry powder and liquidity rather than pursue new deployment opportunities. While we do not intend to hold this level of cash over the long term, following discussions with our advisor, we believe that the approach best preserves optionality to maximize shareholder value and keeps all alternatives available to the board as it continues the evaluation process. Moving to the portfolio, NAV declined 97 cents. per share from $6.58 to $5.61 per share at September 30th. The primary driver was the 68 cent per share impact of the portfolio sale transaction, which we discussed on our last. The largest component of the remaining reduction was attributable to job and talent, which accounted for $0.15 per share of the decline. Job and talent is currently evaluating strategic alternatives and our quarter end value. Evaluation reflects the latest information available from that process. Other markdowns in the portfolio, in aggregate, reduced NAV by approximately $0.13 per share. Nonaccruals as a percentage of portfolio value increase. During the quarter, reflecting both new nonaccruals and significant repayment activity that reduced the size of the portfolio. Dan will provide more details later. Turning to capital allocation on November 5th, 2020.

Our Board of Directors declared a fourth quarter dividend of $0.17 per share, payable on December 31st of 2026 to shareholders of record as of December 17th of 2026. With a smaller portfolio and elevated cash balances, adjusted net investment income was $0.15 per share for the quarter compared with the $0.17 per share dividend in the third quarter. The Board will continue to evaluate the dividend in the context of the strategic review. With that, I'll turn the call over to our president, Dan Morrell, to discuss the portfolio and investment activity.

As we review the quarter's results, it is important to consider the impact of the portfolio sale, as well as the significant repayment activity we experienced during the quarter. Together, these resulted in a smaller and more concentrated investment portfolio. I'll begin with an overview of the portfolio composition and then discuss investment activity and credit performance. Before doing so, I'd like to note that the portfolio statistics we reference on a percentage basis have been calculated excluding excess portfolio cash. At quarter end, the portfolio had a fair market value of $544 million invested across 126 portfolio. companies in 35 industry sectors with an average position size of $4.3 million. 79.6% of the portfolio was invested in first lien senior secured loans, 88% of which were floating rate with the balance. of the portfolio in equity investments. Our largest investment based on fair value is our ownership stake in 36th Street Capital, which represented 19.3% of the portfolio. 36th Street Capital is itself a broadly diversified equipment leasing business. Our five largest investments accounted for 38.5% of the portfolio. September 30th software represented 25.7% of the portfolio at fair value and was spread across 40 portfolio companies with approximately 95% in debt positions. And the remaining 5% in equity. At the end of the third quarter, the weighted average effective yield on our total portfolio based on fair value was 9.4%. Investments we

exited during the quarter had a weighted average yield of 10.9%. Moving on to investment activity net repayments totaled approximately 224 million, including the full real. of several larger positions, Domo, Motive Technologies, Pico, and ESO solutions. New investment activity totaled 6.2 million and was limited primarily to follow. on investments in existing portfolio companies. This reflects our decision to maintain liquidity and flexibility while the strategic review remains underway. Turning to credit performance. Job and talent remains on accrual but was the largest contributor to unrealized losses during the quarter. In dollar terms, non-accrual investments at fair value declined slightly during the quarter to 18. $1.5 million at September 30 compared with $20.6 million at June 30 the number of portfolio companies on non accrual also declined to 12 at September. 30 compared with 13 at June 30 Celer X and terror boost were added to non accrual during the quarter while KBS Paramount and zillion were removed. Non accruals as a percentage of portfolio value increased during the quarter to 14.2% of the portfolio at cost and 3.4% fair value compared with 7.4%. and 1.6% respectively at June 30th. The increase primarily reflects the reduction in portfolio size resulting from the portfolio sales transaction and significant repayment. of predominantly performing loans during the quarter. Now I'll turn the call over to our CFO, Eric Cuellar, to walk through our financial results, balance sheet, and liquidity.

I'll begin with a review of our financial results for the third quarter of 2026. Total investment income was $28.5 million, or $0.34 per share. This included recurring cash. Interest income of $0.20 per share, non-recurring income of $0.08 per share, recurring discount and fee amortization of $0.02 per share, pick income of $0.03 per share, and dividend. Interest income of $0.01 per share, pick income represented 8.8% of total investment income, up from 7.6% in the second quarter. Operating expenses for the quarter were 15. $1.1 million or 18 cents per share, including $9.4 million or 11 cents per share of interest and other debt expenses. Net investment income was $13.4 million. Or 16 cents per share. An adjusted net investment income was $12.5 million or 15 cents per share. Also, September 30th, 2026, the cumulative total return. Did not exceed the total return hurdle and therefore no incentive compensation was accrued for the quarter. Net realized losses for the quarter were $75.8 million or 91 cents per share. Inclusive of $56.7 million or 68 cents per share that we previously shared related to the portfolio sale transaction. Net unrealized losses for the quarter of $4.3 million. or $0.05 per share were primarily attributable to an $11.5 million markdown in job and talent, which was partially offset by the reversal of previous unrealized losses related to the portfolio sale transaction. Quarterly distributions to show

shareholders totaled $0.17 per share during the period. After net investment income, realized and unrealized gains and losses and distributions, NAV declined by $0.97 per share. to $5.61 per share at September 30th. As Jason discussed, approximately $0.68 per share of that amount reflects the portfolio sale transactions. The total decrease in net assets for the quarter was $81.0 million. Now, I'll discuss our balance sheet and liquidity, which benefited from the portfolio sale transaction and repayment activity during the quarter. Total liquidity at the end of the third quarter was $511. million, including $258 million in available borrowing capacity under our revolver and $253 million in cash. As Jason mentioned, we do not intend to hold this level of cash over the long term, but following discussions with our advisor, we believe it is appropriate to preserve liquidity and flexibility while the strategic review remains ongoing. Our total debt was $330 million, compared with $917 million at June 30th. All of our outstanding debt is composed of unsecured bonds that are not currently callable. The combined weighted average interest rate on debt outstanding was 6.9% as of September 30th, 2026. Net regulatory leverage was 0.16 times at quarter end. For reference, following the continuation vehicle transaction, we estimated pro forma net regulatory leverage was approximately 0.4 times. Subsequent repayment activity further reduced leverage to current

levels. Total debt to equity was 0.7 times compared with 1.66 times at June 30th. Unfunded loan commitments represented 6.0% of our $544 million investment portfolio. or $33 million, including $18 million in revolver commitments as of September 30th, 2026. Now I'll turn a call back over to Jason.

Timeline or guidance on the outcome just yet. I mean, we continue to make progress and are obviously focused on getting to the best outcome for shareholders. I would say we're working to be both efficient and thorough and where those things enter. You know, is TBD, but again, we'll be back to people with additional information at the appropriate time. Okay. Thank you. Sure. Thank you.