On this page of StockholderLetter.com we present the latest annual shareholder letter from MidCap Financial Investment Corp — ticker symbol MFIC. Reading current and past MFIC letters to shareholders can bring important insights into the investment thesis.
2025 ANNUAL REPORT
Dear Fellow Stockholders, On behalf of the entire leadership team at MidCap Financial Investment Corporation ( MFIC, the Company, our or we ), I am writing to share a review of our performance and accomplishments during fiscal year 2025 and to discuss how we are positioned going forward.i The past year presented a complex and, at times, volatile operating environment. Markets navigated aggressive tariff announcements, shifting monetary policy, persistent but moderating inflation, and evolving geopolitical dynamics. MFIC remains primarily invested in first lien floating rate loans to middle market companies sourced by MidCap Financial ( MidCap Financial ),ii a leading middle market lender managed by an affiliate of Apollo Global Management, Inc. ( Apollo ), a high growth global alternative asset manager with approximately $938 billion of assets under management,iii as of December 31, 2025. Financial Performance For the fiscal year ending December 31, 2025, MFIC generated net investment income of $1.52 per share, representing a strong level of recurring earnings power from our predominantly first lien, floating-rate portfolio. Total distributions for the year were also $1.52 per share. On a GAAP basis, net income per shareiv for the year was $0.68, which reflects unrealized and realized losses. We believe that MFIC s fee structure is one of the most attractive fee structures among listed BDCs that is meaningfully aligned with stockholders and helps mitigate the impact of losses. Net asset value ( NAV ) per share declined to $14.18 at the end of 2025. While we are never satisfied with credit losses, we believe that these were mostly concentrated in specific situations rather than being indicative of broader portfolio deterioration. Importantly, several challenged credits were successfully resolved during the year demonstrating our ability to work through difficult situations and maximize recoveries. Portfolio Construction and Investment Activity During 2025, we maintained a portfolio that we believe is well-positioned for the current economic environment. At year-end, MFIC s portfolio had a fair value of $3.17 billion, with investments in 247 companies across 46 industries.v Our direct origination investmentsvi, which represented 96% of the total portfolio, underscores our focus on conservative, senior-secured lending: Direct Origination Portfolio Characteristics (December 31, 2025) First Lien: 99% Floating Rate: 100% Sponsored: 92% With Financial Covenants (at cost): 94% Average Exposure: $12.8 million Median Borrower EBITDA:vii $50 million Weighted Average Borrower Net Leverage:vii, viii 5.29x 1
Weighted Average Attachment Point:vii, viii 0.00x Weighted Average Interest Coverage:vii, viii 2.3x The granularity of our portfolio, our covenant protections, and our focus on less cyclical, service-oriented businesses in the core middle market are intentional features of our portfolio design. As of the end of the year, software represented just 11.4% of MFIC s portfolio, which is well below the business development company ( BDC ) industry average.ix We believe these attributes are particularly valuable in an uncertain environment. During 2025, MFIC made approximately $918 million in new commitments across 109 transactions. While we observed spread compression as the year progressed with weighted average spreads on new commitments declining from 513 basis points in the first quarter to 497 basis points in the fourth quarter we also observed a concurrent decline in net leverage on new deals, from 4.2x to 4.0x, over the same period, resulting in what we believe to be an attractive spread per unit of leverage. The MidCap Financial Advantage MFIC s relationship with MidCap Financial,ii one of the largest middle market lenders in the United States, remains our most significant During 2025, MidCap Financial closed approximately $24.3 billion commitments across its platform, a remarkable figure given the subdued characterized much of the year ended December 31, 2025. and most experienced competitive advantage. in aggregate lending M&A environment that With over 350 employees and an origination track record that includes closing on over $150 billion in lending commitments since 2013, MidCap Financial provides MFIC with an unrivaled depth of origination, underwriting expertise, and portfolio management capabilities. Key members of MidCap Financial s management team have worked together for more than 25 years, and this continuity translates directly into disciplined credit selection and effective risk management. MidCap Financial leads and serves as administrative agent on the vast majority of MFIC s direct lending deals. We believe this agent role is invaluable, as it gives us direct dialogue with our borrowers, enhanced information flow, and the ability to detect and address issues early. Meaningful Progress Reducing Merx Exposure One of our most significant accomplishments of 2025 was the substantial reduction of our investment in Merx Aviation Finance, LLC ( Merx ), our aircraft leasing portfolio company. Through a combination of aircraft sales, insurance recoveries related to aircraft detained in Russia, and other paydowns, we reduced this exposure meaningfully over the course of the year. By year-end, MFIC s investment in Merx had been reduced to approximately $103 million, or 3.2% of the total portfolio. We expect to report further progress in reducing our investment in Merx in 2026. Credit Quality We continue to monitor credit quality closely and believe our portfolio is well-positioned to navigate periods of economic uncertainty. Throughout 2025, underlying portfolio company credit metrics remained relatively stable. Borrower net leverage improved to 5.29x at the end of 2025, compared to 5.50x at the end of 2024. In addition, the weighted average interest coverage ratio increased to 2.3x from 2.1x over the same period, driven primarily by the benefit of lower base rates. 2
Investments on non-accrual status, which rose somewhat during the year, were 2.61% at fair value at year end. These non-accruals were driven by company-specific challenges rather than systemic credit weakness. We successfully resolved several non-accrual positions during the year through restructurings and paydowns, and we continue to work actively on our remaining challenged credits. Payment-in-kind income accounted for 5.6% of total investment income for the year, remaining well below the BDC industry average and reflecting our focus on cash-pay investments.ix Capital Structure and Financing We made meaningful progress in 2025 optimizing our capital structure to reduce financing costs and extend maturities. In February 2025, we priced a $529 million collateralized loan obligation ( CLO ) adding approximately $399 million of relatively low-cost secured debt. In October 2025, we increased and reduced the pricing on our other CLO which we believe reflects the market s recognition of MFIC s portfolio quality. And in October 2025, we amended our revolving credit facility, to extend the final maturity to October 2030 and reduce both the funded spread and the commitment fee on any used portion. We were also pleased that Kroll Bond Rating Agency ( KBRA ) affirmed MFIC s investmentgrade credit rating of BBB- with a Stable Outlook in April 2026.x Stockholder Returns and Capital Allocation During 2025, MFIC paid total dividends of $1.52 per share or $0.38 per share per quarter. In light of declining base rates and other factors, in February 2026 our Board of Directors (the Board ) concluded it was prudent to adjust the quarterly dividend rate beginning in 2026 to $0.31 per share. We are committed to maintaining a well-covered dividend that reflects the sustainable earnings power of the Company. We also took advantage of the discount at which our shares traded relative to NAV by actively repurchasing stock. During the year, we repurchased approximately 1.6 million shares at meaningful discounts to NAV, generating $0.05 per share of NAV in accretion in 2025 for remaining stockholders. In February 2026, our Board authorized a new $100 million stock repurchase plan, reflecting our conviction that MFIC s market price does not appropriately reflect the intrinsic value of our portfolio. Management Appointments During the year, we made two leadership appointments. Kenneth Seifert was named MFIC s Chief Financial Officer and Treasurer, effective June 30, 2025. Kenneth has been a senior leader within Apollo s finance and accounting organization since 2015 and previously served as Chief Financial Officer of both Apollo Senior Floating Rate Fund Inc. ( AFT ) and Apollo Tactical Income Fund Inc. ( AIF ), which merged with MFIC in 2024. In September 2025, Joseph Durkin joined Apollo and was appointed MFIC s Chief Accounting Officer. 3
Looking Ahead In 2026, we remain focused on navigating a dynamic macroeconomic environment with an emphasis on stability and disciplined risk management. We continue to closely monitor the impact of interest rates and approach capital allocation thoughtfully. MFIC s conservative portfolio construction, focus on the core middle market, and affiliation with MidCap Financial provide a durable foundation across market cycles. On behalf of the entire team, we thank you for your interest in MFIC. We remain committed to delivering value for our stockholders. Sincerely, Tanner Powell Chief Executive Officer MidCap Financial Investment Corporation April 2026 Forward-Looking Statements Some of the statements in this letter constitute forward-looking statements because they relate to future events, future performance or financial condition. The forward-looking statements may include statements as to: future operating results of MFIC and distribution projections; business prospects of MFIC, and the prospects of its portfolio companies, if applicable; and the impact of the investments that MFIC expects to make. In addition, words such as anticipate, believe, expect, seek, plan, should, estimate, project and intend indicate forwardlooking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this letter involve risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with: future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); changes in general economic conditions, including the impact of supply chain disruptions, tariffs and trade disputes with other countries, or changes in financial markets, and the risk of recession; changes in the interest rate environment and levels of general interest rates and the impact of inflation; the return on equity; the yield on investments; the ability to borrow to finance assets; new strategic initiatives; the ability to reposition the investment portfolio; the market outlook; future investment activity; and risks associated with changes in business conditions and the general economy. MFIC has based the forward-looking statements included in this letter on information available to it on the date hereof, and assumes no obligation to update any such forward-looking statements. Although MFIC undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that they may make directly to you or through reports that MFIC in the future may file with the Securities and Exchange Commission (the SEC ), including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The contents of this letter should be reviewed in conjunction with our annual report on Form 10-K for the fiscal year ended December 31, 2025, filed on February 26, 2026, with the SEC. 4
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MFIC Shareholder/Stockholder Letter Transcript:

2025 ANNUAL REPORT

Dear Fellow Stockholders,
On behalf of the entire leadership team at MidCap Financial Investment Corporation
(   MFIC,    the    Company,       our    or    we   ), I am writing to share a review of our performance and
accomplishments during fiscal year 2025 and to discuss how we are positioned going forward.i
The past year presented a complex and, at times, volatile operating environment. Markets
navigated aggressive tariff announcements, shifting monetary policy, persistent but moderating
inflation, and evolving geopolitical dynamics.
MFIC remains primarily invested in first lien floating rate loans to middle market
companies sourced by MidCap Financial (   MidCap Financial   ),ii a leading middle market lender
managed by an affiliate of Apollo Global Management, Inc. (   Apollo   ), a high growth global
alternative asset manager with approximately $938 billion of assets under management,iii as of
December 31, 2025.
Financial Performance
For the fiscal year ending December 31, 2025, MFIC generated net investment income of
$1.52 per share, representing a strong level of recurring earnings power from our predominantly
first lien, floating-rate portfolio. Total distributions for the year were also $1.52 per share. On a
GAAP basis, net income per shareiv for the year was $0.68, which reflects unrealized and realized
losses. We believe that MFIC   s fee structure is one of the most attractive fee structures among
listed BDCs that is meaningfully aligned with stockholders and helps mitigate the impact of losses.
Net asset value (   NAV   ) per share declined to $14.18 at the end of 2025. While we are
never satisfied with credit losses, we believe that these were mostly concentrated in specific
situations rather than being indicative of broader portfolio deterioration. Importantly, several
challenged credits were successfully resolved during the year demonstrating our ability to work
through difficult situations and maximize recoveries.
Portfolio Construction and Investment Activity
During 2025, we maintained a portfolio that we believe is well-positioned for the current
economic environment. At year-end, MFIC   s portfolio had a fair value of $3.17 billion, with
investments in 247 companies across 46 industries.v Our direct origination investmentsvi, which
represented 96% of the total portfolio, underscores our focus on conservative, senior-secured
lending:
Direct Origination Portfolio Characteristics (December 31, 2025)
First Lien: 99%
Floating Rate: 100%
Sponsored: 92%
With Financial Covenants (at cost): 94%
Average Exposure: $12.8 million
Median Borrower EBITDA:vii $50 million
Weighted Average Borrower Net Leverage:vii, viii 5.29x
1

Weighted Average Attachment Point:vii, viii 0.00x
Weighted Average Interest Coverage:vii, viii 2.3x
The granularity of our portfolio, our covenant protections, and our focus on less cyclical,
service-oriented businesses in the core middle market are intentional features of our portfolio
design. As of the end of the year, software represented just 11.4% of MFIC   s portfolio, which is well
below the business development company (   BDC   ) industry average.ix We believe these attributes
are particularly valuable in an uncertain environment.
During 2025, MFIC made approximately $918 million in new commitments across 109
transactions. While we observed spread compression as the year progressed   with weighted
average spreads on new commitments declining from 513 basis points in the first quarter to 497
basis points in the fourth quarter   we also observed a concurrent decline in net leverage on new
deals, from 4.2x to 4.0x, over the same period, resulting in what we believe to be an attractive
spread per unit of leverage.
The MidCap Financial Advantage
MFIC   s relationship with MidCap Financial,ii one of the largest
middle market lenders in the United States, remains our most significant
During 2025, MidCap Financial closed approximately $24.3 billion
commitments across its platform, a remarkable figure given the subdued
characterized much of the year ended December 31, 2025.
and most experienced
competitive advantage.
in aggregate lending
M&A environment that
With over 350 employees and an origination track record that includes closing on over
$150 billion in lending commitments since 2013, MidCap Financial provides MFIC with an
unrivaled depth of origination, underwriting expertise, and portfolio management capabilities. Key
members of MidCap Financial   s management team have worked together for more than 25 years,
and this continuity translates directly into disciplined credit selection and effective risk
management.
MidCap Financial leads and serves as administrative agent on the vast majority of MFIC   s
direct lending deals. We believe this agent role is invaluable, as it gives us direct dialogue with our
borrowers, enhanced information flow, and the ability to detect and address issues early.
Meaningful Progress Reducing Merx Exposure
One of our most significant accomplishments of 2025 was the substantial reduction of our
investment in Merx Aviation Finance, LLC (   Merx   ), our aircraft leasing portfolio company. Through
a combination of aircraft sales, insurance recoveries related to aircraft detained in Russia, and
other paydowns, we reduced this exposure meaningfully over the course of the year. By year-end,
MFIC   s investment in Merx had been reduced to approximately $103 million, or 3.2% of the total
portfolio. We expect to report further progress in reducing our investment in Merx in 2026.
Credit Quality
We continue to monitor credit quality closely and believe our portfolio is well-positioned
to navigate periods of economic uncertainty. Throughout 2025, underlying portfolio company
credit metrics remained relatively stable. Borrower net leverage improved to 5.29x at the end of
2025, compared to 5.50x at the end of 2024. In addition, the weighted average interest coverage
ratio increased to 2.3x from 2.1x over the same period, driven primarily by the benefit of lower
base rates.
2

Investments on non-accrual status, which rose somewhat during the year, were 2.61% at
fair value at year end. These non-accruals were driven by company-specific challenges rather than
systemic credit weakness. We successfully resolved several non-accrual positions during the year
through restructurings and paydowns, and we continue to work actively on our remaining
challenged credits.
Payment-in-kind income accounted for 5.6% of total investment income for the year,
remaining well below the BDC industry average and reflecting our focus on cash-pay
investments.ix
Capital Structure and Financing
We made meaningful progress in 2025 optimizing our capital structure to reduce financing
costs and extend maturities.
In February 2025, we priced a $529 million collateralized loan obligation (   CLO   ) adding
approximately $399 million of relatively low-cost secured debt. In October 2025, we increased and
reduced the pricing on our other CLO which we believe reflects the market   s recognition of MFIC   s
portfolio quality.
And in October 2025, we amended our revolving credit facility, to extend the final maturity
to October 2030 and reduce both the funded spread and the commitment fee on any used
portion.
We were also pleased that Kroll Bond Rating Agency (   KBRA   ) affirmed MFIC   s investmentgrade credit rating of BBB- with a Stable Outlook in April 2026.x
Stockholder Returns and Capital Allocation
During 2025, MFIC paid total dividends of $1.52 per share or $0.38 per share per quarter.
In light of declining base rates and other factors, in February 2026 our Board of Directors (the
   Board   ) concluded it was prudent to adjust the quarterly dividend rate beginning in 2026 to $0.31
per share. We are committed to maintaining a well-covered dividend that reflects the sustainable
earnings power of the Company.
We also took advantage of the discount at which our shares traded relative to NAV by
actively repurchasing stock. During the year, we repurchased approximately 1.6 million shares at
meaningful discounts to NAV, generating $0.05 per share of NAV in accretion in 2025 for
remaining stockholders.
In February 2026, our Board authorized a new $100 million stock repurchase plan,
reflecting our conviction that MFIC   s market price does not appropriately reflect the intrinsic value
of our portfolio.
Management Appointments
During the year, we made two leadership appointments. Kenneth Seifert was named
MFIC   s Chief Financial Officer and Treasurer, effective June 30, 2025. Kenneth has been a senior
leader within Apollo   s finance and accounting organization since 2015 and previously served as
Chief Financial Officer of both Apollo Senior Floating Rate Fund Inc. (   AFT   ) and Apollo Tactical
Income Fund Inc. (   AIF   ), which merged with MFIC in 2024. In September 2025, Joseph Durkin
joined Apollo and was appointed MFIC   s Chief Accounting Officer.
3

Looking Ahead
In 2026, we remain focused on navigating a dynamic macroeconomic environment with an
emphasis on stability and disciplined risk management. We continue to closely monitor the impact
of interest rates and approach capital allocation thoughtfully. MFIC   s conservative portfolio
construction, focus on the core middle market, and affiliation with MidCap Financial provide a
durable foundation across market cycles.
On behalf of the entire team, we thank you for your interest in MFIC. We remain
committed to delivering value for our stockholders.
Sincerely,
Tanner Powell
Chief Executive Officer
MidCap Financial Investment Corporation
April 2026
Forward-Looking Statements
Some of the statements in this letter constitute forward-looking statements because they
relate to future events, future performance or financial condition. The forward-looking statements
may include statements as to: future operating results of MFIC and distribution projections;
business prospects of MFIC, and the prospects of its portfolio companies, if applicable; and the
impact of the investments that MFIC expects to make. In addition, words such as    anticipate,   
   believe,       expect,       seek,       plan,       should,       estimate,       project    and    intend    indicate forwardlooking statements, although not all forward-looking statements include these words. The
forward-looking statements contained in this letter involve risks and uncertainties. Certain factors
could cause actual results and conditions to differ materially from those projected, including the
uncertainties associated with: future changes in laws or regulations (including the interpretation of
these laws and regulations by regulatory authorities); changes in general economic conditions,
including the impact of supply chain disruptions, tariffs and trade disputes with other countries, or
changes in financial markets, and the risk of recession; changes in the interest rate environment
and levels of general interest rates and the impact of inflation; the return on equity; the yield on
investments; the ability to borrow to finance assets; new strategic initiatives; the ability to
reposition the investment portfolio; the market outlook; future investment activity; and risks
associated with changes in business conditions and the general economy. MFIC has based the
forward-looking statements included in this letter on information available to it on the date
hereof, and assumes no obligation to update any such forward-looking statements. Although
MFIC undertakes no obligation to revise or update any forward-looking statements, whether as a
result of new information, future events or otherwise, you are advised to consult any additional
disclosures that they may make directly to you or through reports that MFIC in the future may file
with the Securities and Exchange Commission (the    SEC   ), including annual reports on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K.
The contents of this letter should be reviewed in conjunction with our annual report on
Form 10-K for the fiscal year ended December 31, 2025, filed on February 26, 2026, with the SEC.
4


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