Steele Creek Capital's Net Assets Decline Amid Investment Losses

TL;DR

**Steele Creek Capital is bleeding, with net assets shrinking and investment income plummeting – time to re-evaluate your position.**

AI Summary

Steele Creek Capital Corporation reported a net decrease in net assets from operations of $441 thousand for the three months ended September 30, 2025, a significant decline from the $598 thousand net increase in the same period of 2024. For the nine months ended September 30, 2025, the company experienced a net decrease of $39 thousand, a sharp contrast to the $2.488 million increase in 2024. Total investment income decreased to $2.384 million for the three months ended September 30, 2025, from $3.322 million in the prior year, and to $7.334 million for the nine months, down from $10.295 million. Net expenses, after management fees waived, were $1.775 million for the quarter and $5.018 million for the nine months, compared to $2.269 million and $6.510 million respectively in 2024. The company saw a net realized loss on investments of $2.186 million for the nine months ended September 30, 2025, and a net change in unrealized depreciation of $169 thousand. Net asset value per share declined to $8.93 as of September 30, 2025, from $9.40 at December 31, 2024.

Why It Matters

Steele Creek Capital's significant decline in net assets and investment income signals potential headwinds for investors, reflecting a challenging market for its portfolio of primarily first-lien term loans. The decrease in net asset value per share from $9.40 to $8.93 could erode investor confidence and impact future capital raising efforts. For employees, a struggling investment performance might lead to reduced bonuses or job insecurity. In a competitive landscape, this underperformance could make it harder for Steele Creek Capital to attract new capital and maintain its market position against more robustly performing peers, potentially affecting its ability to fund new ventures or support existing portfolio companies.

Risk Assessment

Risk Level: high — The company reported a net decrease in net assets from operations of $441 thousand for the three months ended September 30, 2025, and a net realized loss on investments of $2.186 million for the nine months. This, coupled with a decline in net asset value per share from $9.40 to $8.93, indicates significant financial underperformance and potential erosion of capital.

Analyst Insight

Investors should carefully review Steele Creek Capital's portfolio quality and management's strategy for mitigating further losses. Consider reducing exposure if the trend of declining net assets and investment income persists, as the current trajectory suggests ongoing capital erosion.

Financial Highlights

debt To Equity

1.45

revenue

$7.334M

operating Margin

N/A

total Assets

$134.673M

total Debt

$71.889M

net Income

-$0.039M

eps

N/A

gross Margin

N/A

cash Position

$10.850M

revenue Growth

-28.8%

Revenue Breakdown

Key Numbers

• $441K — Net decrease in net assets from operations (For the three months ended September 30, 2025, a significant decline from a $598K increase in 2024.)
• $39K — Net decrease in net assets from operations (For the nine months ended September 30, 2025, a sharp contrast to a $2.488M increase in 2024.)
• $7.334M — Total investment income (For the nine months ended September 30, 2025, down from $10.295M in 2024.)
• $2.186M — Net realized loss on investments (For the nine months ended September 30, 2025, indicating significant portfolio underperformance.)
• $8.93 — Net asset value per share (As of September 30, 2025, a decrease from $9.40 at December 31, 2024.)
• 6,129,854 — Common shares outstanding (As of November 14, 2025, indicating the current share count.)
• $119.798M — Non-controlled/non-affiliated company investments, at fair value (As of September 30, 2025, down from $121.572M at December 31, 2024.)
• $10.850M — Cash (As of September 30, 2025, an increase from $2.612M at December 31, 2024.)
• $71.889M — Credit facility (As of September 30, 2025, a slight decrease from $73.278M at December 31, 2024.)
• $55.000M — Total net assets (As of September 30, 2025, a slight increase from $54.684M at December 31, 2024, despite operational losses.)

Key Players & Entities

• Steele Creek Capital Corporation (company) — Registrant
• $441 thousand (dollar_amount) — Net decrease in net assets from operations for Q3 2025
• $598 thousand (dollar_amount) — Net increase in net assets from operations for Q3 2024
• $39 thousand (dollar_amount) — Net decrease in net assets from operations for nine months ended Sep 30, 2025
• $2.488 million (dollar_amount) — Net increase in net assets from operations for nine months ended Sep 30, 2024
• $2.384 million (dollar_amount) — Total investment income for Q3 2025
• $3.322 million (dollar_amount) — Total investment income for Q3 2024
• $2.186 million (dollar_amount) — Net realized loss on investments for nine months ended Sep 30, 2025
• $8.93 (dollar_amount) — Net asset value per share as of September 30, 2025
• $9.40 (dollar_amount) — Net asset value per share as of December 31, 2024

FAQ

Risk Factors

• Investment Performance Decline [high — financial]: The company experienced a net decrease in net assets from operations of $441 thousand for Q3 2025, a significant decline from a $598 thousand increase in Q3 2024. For the nine months, there was a net decrease of $39 thousand, a sharp contrast to a $2.488 million increase in 2024, indicating substantial underperformance.
• Realized Investment Losses [high — financial]: Steele Creek Capital reported a net realized loss on investments of $2.186 million for the nine months ended September 30, 2025. This is a significant negative swing from a net realized loss of $1.682 million in the same period of 2024, highlighting ongoing portfolio challenges.
• Unrealized Depreciation [medium — financial]: The company recorded a net change in unrealized depreciation of $169 thousand for the nine months ended September 30, 2025. This contrasts with an unrealized appreciation of $385 thousand in the prior year's nine-month period, further contributing to the decline in asset value.
• Decreasing Net Asset Value Per Share [high — financial]: Net asset value per share declined to $8.93 as of September 30, 2025, from $9.40 at December 31, 2024. This 6.06% decrease reflects the negative operational results and investment performance.
• Increased Interest and Debt Financing Expenses [medium — financial]: Interest and debt financing expenses were $3.249 million for the nine months ended September 30, 2025, compared to $4.600 million in the prior year. While the total decreased, it remains a significant expense, especially given the operational losses.
• Concentration in Non-controlled Investments [medium — market]: The company's primary investments are in non-controlled/non-affiliated companies, valued at $119.798 million as of September 30, 2025. The performance of these investments directly impacts the company's overall financial health and net asset value.
• Leverage through Credit Facility [medium — financial]: Steele Creek Capital utilizes a credit facility, with $71.889 million drawn as of September 30, 2025. While slightly reduced from $73.278 million at year-end 2024, this leverage amplifies both potential gains and losses.

Industry Context

Steele Creek Capital operates within the investment management sector, likely focusing on private credit or alternative investments given the nature of its portfolio. The industry is characterized by intense competition, reliance on deal sourcing, and sensitivity to macroeconomic conditions affecting interest rates and credit markets. Performance is heavily driven by investment selection, risk management, and the ability to generate attractive risk-adjusted returns.

Regulatory Implications

As a capital corporation, Steele Creek is subject to various financial regulations, including those related to investment advisory, reporting, and capital adequacy. Changes in accounting standards or regulatory oversight could impact its operations and financial reporting. The company's reliance on credit facilities also subjects it to lender covenants and financial reporting requirements.

What Investors Should Do

1. Monitor Investment Performance Closely
2. Analyze Expense Structure
3. Assess NAV Trend and Leverage
4. Evaluate Cash Position Growth

Key Dates

• 2025-09-30: Quarter and Nine-Month Period End — Reporting period for the current 10-Q, showing significant declines in investment income and operational results compared to the prior year.
• 2024-09-30: Prior Year Quarter and Nine-Month Period End — Benchmark period for comparison, showing positive net assets from operations and higher investment income.
• 2024-12-31: Prior Fiscal Year End — Reference point for year-end balance sheet items, including net asset value per share and investment valuations.

Glossary

Non-controlled/non-affiliated company investments

Investments in companies where Steele Creek Capital does not have control or significant influence, typically valued at fair value. (Represents the core investment portfolio of the company, and its performance is critical to overall results.)

Payment in-kind interest income

Interest income that is not paid in cash but is added to the principal amount of a loan or investment. (A component of investment income, indicating accrual of interest that may not be immediately liquid.)

Net realized (loss) gain on investments

The profit or loss realized from selling investments during the reporting period. (Directly impacts the company's profitability and reflects the success of investment exit strategies.)

Net change in unrealized (depreciation) appreciation

The change in the fair value of investments that have not been sold during the reporting period. (Reflects the market's valuation of the company's holdings and can significantly impact net assets.)

Net assets

The total value of a company's assets minus its liabilities. (Represents the equity value of the company available to shareholders.)

Credit facility

A line of credit that a company can draw upon as needed to meet short-term obligations or fund operations. (Indicates the company's use of leverage and its borrowing capacity.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Steele Creek Capital Corp. has seen a significant downturn. Total investment income decreased by 28.8% to $7.334 million, and the company swung from a net increase in net assets from operations of $2.488 million to a net decrease of $39 thousand. This deterioration is largely driven by a $2.186 million net realized loss on investments and a shift to unrealized depreciation. While total liabilities decreased slightly, the company's net asset value per share has fallen to $8.93 from $9.40 at the end of the previous fiscal year.

Key Financial Figures

• $0.001 — (g) of the Act: Common Stock, par value $0.001 per share Indicate by check mark wheth
• $500 thousand — nths ended September 30, 2025 and 2024, $500 thousand and $1,073 thousand, respectively, repr
• $1,073 — er 30, 2025 and 2024, $500 thousand and $1,073 thousand, respectively, represent non-c

Filing Documents

• ea0262329-10q_steele.htm (10-Q) — 3296KB
• ea026232901ex31-1_steele.htm (EX-31.1) — 10KB
• ea026232901ex31-2_steele.htm (EX-31.2) — 10KB
• ea026232901ex32-1_steele.htm (EX-32.1) — 4KB
• ea026232901ex32-2_steele.htm (EX-32.2) — 4KB
• 0001213900-25-110796.txt ( ) — 12835KB
• ck0000181782-20250930.xsd (EX-101.SCH) — 43KB
• ck0000181782-20250930_cal.xml (EX-101.CAL) — 32KB
• ck0000181782-20250930_def.xml (EX-101.DEF) — 175KB
• ck0000181782-20250930_lab.xml (EX-101.LAB) — 360KB
• ck0000181782-20250930_pre.xml (EX-101.PRE) — 194KB
• ea0262329-10q_steele_htm.xml (XML) — 3703KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 1 Item 1. Consolidated Financial Statements 1 Consolidated Statements of Assets and Liabilities as of September 30, 2025 (unaudited) and December 31, 2024 1 Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 (unaudited) 2 Consolidated Statements of Changes in Net Assets for the three and nine months ended September 30, 2025 and 2024 (unaudited) 3 Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (unaudited) 4 Consolidated Schedules of Investments as of September 30, 2025 (unaudited) and December 31, 2024 5

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 36 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 52 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 70 Item 4.

Controls and Procedures

Controls and Procedures 70

OTHER INFORMATION

PART II. OTHER INFORMATION 71 Item 1.

Legal Proceedings

Legal Proceedings 71 Item 1A.

Risk Factors

Risk Factors 71 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 71 Item 3. Defaults Upon Senior Securities 71 Item 4. Mine Safety Disclosures 71 Item 5. Other Information 71 Item 6. Exhibits 71

Financial Information

Part I. Financial Information

Consolidated Financial Statements

Item 1. Consolidated Financial Statements Steele Creek Capital Corporation Consolidated Statements of Assets and Liabilities (in thousands, except share and per share data) September 30, 2025 December 31, 2024 (unaudited) Assets Investments: Non-controlled/non-affiliated company investments, at fair value (amortized cost of $ 123,927 and $ 125,533 , respectively) $ 119,798 $ 121,572 Cash 10,850 2,612 Receivable for investments sold 2,993 18,374 Prepaid expenses and other assets 542 573 Interest receivable 490 648 Total assets $ 134,673 $ 143,779 Liabilities Credit facility 71,889 73,278 Payable for investments purchased 6,492 14,209 Management fees payable 295 310 Interest payable 124 143 Accounts payable and accrued expenses 445 448 Distributions payable 428 707 Total liabilities 79,673 89,095 Commitments and contingencies (Note 8) Net Assets: Common shares, $ 0.001 par value, 450,000,000 shares authorized and 6,156,455 and 5,816,048 shares issued and outstanding, respectively $ 6 $ 6 Paid-in-capital in excess of par value 65,202 62,091 Total distributable (deficit) earnings ( 10,208 ) ( 7,413 ) Total net assets $ 55,000 $ 54,684 Total liabilities and net assets $ 134,673 $ 143,779 Net asset value per share $ 8.93 $ 9.40 The accompanying notes are an integral part of these consolidated financial statements 1 Steele Creek Capital Corporation Consolidated Statements of Operations (unaudited) (in thousands, except per share data) Three months ended September 30, 2025 Nine months ended September 30, 2025 Three months ended September 30, 2024 Nine months ended September 30, 2024 Investment income: Non-controlled/non-affiliated company investments: Interest income $ 2,314 $ 7,131 $ 3,263 $ 10,099 Payment in-kind interest income 70 203 56 134 Other income - - 3 62 Total investment income 2,384 7,334 3,322 10,295 Expense

View Full Filing

View this 10-Q filing on SEC EDGAR