Palmer Square Capital BDC Inc. Announces Fourth Quarter and Full Year 2025 Financial Results

Declares First Quarter 2026 Base Dividend of $0.36 Per Share with Supplemental Dividend Expected to be Announced in March

MISSION WOODS, Kan.--(BUSINESS WIRE)--Palmer Square Capital BDC Inc. (NYSE: PSBD) (“PSBD” or the “Company”), an externally managed business development company, today announced its financial results for the fourth quarter and full year ended December 31, 2025.

Financial and Operating Highlights

• Total investment income of $29.8 million for the fourth quarter of 2025, compared to $34.9 million for the prior year period
• Net investment income of $13.1 million or $0.41 per share for the fourth quarter of 2025, as compared to $14.8 million or $0.45 per share for the comparable period last year
• Net asset value of $14.85 per share as of December 31, 2025, compared to $15.39 per share as of September 30, 2025
• Total net realized and unrealized losses of $18.4 million for the fourth quarter of 2025, compared to losses of $2.9 million in the fourth quarter of 2024
• As of December 31, 2025, total assets were $1.2 billion and total net assets were $464.1 million
• Debt-to-equity as of December 31, 2025 was 1.54x, compared to 1.53x as of September 30, 2025
• Paid cash distributions to stockholders totaling $0.43 per share for the fourth quarter of 2025
• Declared a first quarter regular base dividend distribution of $0.36 per share, payable on April 9, 2026, to shareholders of record as of March 27, 2026. In accordance with our dividend policy, we expect to announce a supplemental dividend in March
• In the fourth quarter, we had only $431.8 thousand of recurring PIK interest income, or 1.45% of total investment income

“We are pleased with Palmer Square Capital BDC’s steady execution throughout 2025 amid dynamic market conditions,” said Christopher D. Long, Chairman and Chief Executive Officer of PSBD. “While it appears the market remains some distance from a sustained increase in transaction volumes, sponsor engagement continues to build, and pipelines across both the broadly syndicated and private credit markets are healthier than a year ago. We believe our credit performance within the portfolio remains solid, reflected in our low non-accrual rate in a normalizing environment. Looking ahead, we believe our disciplined underwriting and highly diversified portfolio position us to deliver strong outcomes for shareholders over the long term.”

$ in thousands, except per share data	For the Quarter Ended
	12/31/25		9/30/25		12/31/24
Financial Highlights
Net Investment Income Per Share^1	$	0.41	$	0.43	$	0.45
Net Investment Income	$	13,068	$	13,641	$	14,796
NAV Per Share	$	14.85	$	15.39	$	16.50
Dividends Earned Per Share^2	$	0.43	$	0.42	$	0.48
		12/31/25		9/30/25		12/31/24
Portfolio Highlights
Total Fair Value of Investments	$	1,203,640	$	1,258,988	$	1,407,131
Number of Industries		42		42		38
Number of Portfolio Companies		205		209		207
Portfolio Yield^3		11.30%		10.07%		10.65%
Senior Secured Loan^4		95%		95%		96%
Investments on Non-Accrual^5		0.09%		0.40%		0.08%
Total Return^6		(0.09)%		1.41%		2.36%
Debt-to-Equity		1.54x		1.53x		1.50x

1. Net investment income for the period divided by the weighted average share count for the period.
2. Dividend amount reflects dividend earned in period.
3. Weighted average total yield of debt and income producing securities at fair value.
4. As a percentage of long-term investments, at fair value.
5. As a percentage of total investments, at fair value.
6. Total return is calculated as the change in net asset value (“NAV”) per share during the period, plus distributions per share (if any), divided by the beginning NAV per share. Total return is not annualized. Assumes reinvestment of distributions.

Portfolio and Investment Activity

As of December 31, 2025, we had 264 investments in 205 portfolio companies with an aggregate fair value of approximately $1.1 billion. Based on a total fair value of $1.2 billion, including short term investments, the portfolio consisted of approximately 84.3% first lien senior secured debt investments, 5.0% second lien senior secured debt investments, 6.0% short-term investments, 3.4% collateralized loan obligation structured credit funds (“CLOs”) mezzanine and equity investments, 0.7% corporate bond investments, and 0.6% equity investments.

As of December 31, 2025, 98% of the long-term investments based on fair value in our portfolio were at floating rates. At the end of the fourth quarter, 99.91% of the portfolio at fair value was income producing. There were three portfolio companies on non-accrual status. As of December 31, 2025, the weighted average total yield to maturity of debt and income producing securities at fair value was 11.30%, and weighted average total yield to maturity of debt and income producing securities at amortized cost was 8.15%. For the fourth quarter of 2025, the principal amount of new investments funded was $91.4 million which included 24 investments at an average value of approximately $3.4 million. For this period, the Company had $148.3 million aggregate principal amount in sales and repayments.

Liquidity and Capital Resources

As of December 31, 2025, the Company had $3.2 million in cash and cash equivalents and approximately $716.5 million in total aggregate principal amount of debt outstanding. Subject to borrowing base and other restrictions, the Company had available liquidity, consisting of cash and undrawn capacity on credit facilities of approximately $311.3 million compared to $21.5 million of unfunded investment commitments as of December 31, 2025.

Recent Developments

On February 26, 2026, PSBD’s Board of Directors announced that it had declared a first quarter regular base dividend distribution of $0.36 per share, payable on April 9, 2026, to shareholders of record as of March 27, 2026. We expect to announce an additional quarterly supplemental dividend distribution for the first quarter of 2026 in March.

Earnings Conference Call

The Company will host a conference call on Thursday, February 26, 2026, at 1:00 pm ET to review its financial performance and conduct a question-and-answer session. To participate in the earnings call, participants should register online at the Palmer Square Investor Relations website. To avoid potential delays, please join at least 10 minutes prior to the start of the call. The conference call can be accessed through the following links:

• United States: [phone]
• International: [phone]
• Event Plus Entry Passcode: 1803382#
• Live Audio Webcast

A replay of the live conference call will be available shortly after the conclusion of the event and accessible on the events and presentations section of the Palmer Square Investor Relations website.

About Palmer Square Capital BDC Inc.

Palmer Square Capital BDC Inc. (NYSE: PSBD) is an externally managed, non-diversified closed-end management investment company that primarily lends to and invests in corporate debt loans, including but not limited to large private U.S. companies in the broadly syndicated loan market, as well as the direct large cap private credit market. PSBD has elected to be regulated as a business development company under the Investment Company Act of 1940. PSBD’s investment objective is to maximize total return, comprised of current income and capital appreciation. PSBD’s current investment focus is guided by two strategies that facilitate its investment opportunities and core competencies: (1) investing in corporate debt loans and, to a lesser extent, (2) investing in other debt securities which may include collateralized loan obligation debt and equity. PSBD’s investment activities are managed by its investment adviser, Palmer Square BDC Advisor LLC, an affiliate of Palmer Square Capital Management LLC.

Forward-Looking Statements

Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. The forward-looking statements may include statements as to our future base and supplemental dividend distributions and the prospects of our portfolio companies. These and other forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “seek,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” “target,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in PSBD’s filings with the SEC. PSBD undertakes no duty to update any forward-looking statement made herein unless required by law. All forward-looking statements speak only as of the date of this press release. Although PSBD 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 PSBD may make directly to you or through reports that in the future may be filed with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Financial Highlights
	For the Year Ended December 31,
	2025			2024			2023			2022			2021
Per Common Share Operating Performance
Net Asset Value, Beginning of Period	$	16.50		$	17.04		$	14.96		$	20.06		$	20.15
Results of Operations:
Net Investment Income^(1)		1.66			1.93			2.26			1.78			1.47
Net Realized and Unrealized Gain (Loss) on Investments^(4)		(1.65	)		(0.56	)		1.98			(5.00	)		(0.18	)
Net Increase (Decrease) in Net Assets Resulting from Operations		0.01			1.37			4.24			(3.22	)		1.29
Distributions to Common Stockholders
Distributions from Net Investment Income		(1.66	)		(1.91	)		(2.16	)		(1.85	)		(1.01	)
Distributions from Realized Gains		—			—			—			(0.03	)		(0.37	)
Net Decrease in Net Assets Resulting from Distributions		(1.66	)		(1.91	)		(2.16	)		(1.88	)		(1.38	)
Net Asset Value, End of Period	$	14.85		$	16.50		$	17.04		$	14.96		$	20.06
Shares Outstanding, End of Period		31,260,963			32,600,193			27,102,794			24,286,628			22,750,331
Ratio/Supplemental Data
Net assets, end of period	$	464,123,172		$	537,844,969		$	461,955,393		$	363,443,482		$	452,797,588
Weighted-average shares outstanding		32,133,879			32,353,615			25,700,603			23,130,666			15,494,614
Total Return^(3)		2.11	%		8.74	%		29.21	%		(16.51	)%		8.10	%
Portfolio turnover		35	%		36	%		25	%		27	%		53	%
Ratio of operating expenses to average net assets without waiver^(2)		13.89	%		14.68	%		13.15	%		8.28	%		5.54	%
Ratio of operating expenses to average net assets with waiver^(2)		13.89	%		14.67	%		12.90	%		8.03	%		5.29	%
Ratio of net investment income (loss) to average net assets without waiver^(2)		10.47	%		11.34	%		13.54	%		9.61	%		6.92	%
Ratio of net investment income (loss) to average net assets with waiver^(2)		10.47	%		11.35	%		13.79	%		9.86	%		7.17	%

(1)	The per common share data was derived by using weighted average shares outstanding.
(2)	The ratios reflect an annualized amount.
(3)	Total return is calculated as the change in net asset value (“NAV”) per share during the period, plus distributions per share (if any), divided by the beginning NAV per share. Total return is not annualized. Assumes reinvestment of distributions.
(4)	Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with the aggregate gains and losses in the Consolidated Statements of Operations due to share transactions during the period.

Palmer Square Capital BDC Inc.
Consolidated Statement of Assets and Liabilities
	December 31, 2025			December 31, 2024
Assets:
Non-controlled, non-affiliated investments, at fair value (amortized cost of $1,294,556,070 and $1,454,611,467, respectively)	$	1,203,640,318		$	1,407,130,945
Cash and cash equivalents		3,217,449			2,766,409
Receivables:
Receivable for sales of investments		2,821,628			7,799,523
Receivable for paydowns of investments		233,930			1,347,516
Due from investment adviser		616,715			248,110
Dividend receivable		195,710			259,625
Interest receivable		8,608,563			11,458,267
Prepaid expenses and other assets		41,446			32,364
Total Assets	$	1,219,375,759		$	1,431,042,759
Liabilities:
Credit facilities (net of deferred financing costs of $5,030,068 and $5,375,986, respectively) (Note 6)	$	414,438,758		$	501,650,602
Notes (net of deferred financing costs of $1,609,420 and $1,748,822, respectively) (Note 6)		302,075,353			302,505,057
Payables:
Payable for investments purchased		20,366,967			67,460,523
Distributions payable		13,442,214			15,649,925
Management fee payable		2,129,141			2,413,798
Incentive fee payable		1,866,531			2,149,132
Accrued other general and administrative expenses		933,623			1,368,753
Total Liabilities	$	755,252,587		$	893,197,790
Commitments and contingencies (Note 9)
Net Assets:
Common Shares, $0.001 par value; 450,000,000 shares authorized; 31,260,963 and 32,600,193 as of December 31, 2025 and December 31, 2024, respectively issued and outstanding	$	31,261		$	32,600
Additional paid-in capital		593,643,044			611,122,164
Total distributable earnings (accumulated deficit)		(129,551,133	)		(73,309,795	)
Total Net Assets	$	464,123,172		$	537,844,969
Total Liabilities and Net Assets	$	1,219,375,759		$	1,431,042,759
Net Asset Value Per Common Share	$	14.85		$	16.50

The accompanying notes are an integral part of these consolidated financial statements.

(Note 6)

See Note 6 to the consolidated financial statements for a description of the Company’s borrowings, including its revolving credit facility with Bank of America, N.A., its credit facility with Wells Fargo Bank, National Association, and its term debt securitization (CLO transaction).

(Note 9)

As of December 31, 2025 and December 31, 2024, the Company had an aggregate of $21.5 million and $21.6 million, respectively, of unfunded commitments to provide debt financing to its portfolio companies. As of each of December 31, 2025 and December 31, 2024, there were no capital calls or draw requests made by the portfolio companies to fund these commitments. Such commitments are generally up to the Company’s discretion to approve or are subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Company’s consolidated statements of assets and liabilities and are not reflected in the Company’s consolidated statements of assets and liabilities.

Palmer Square Capital BDC Inc.
Consolidated Statement of Operations
	For the Year Ended December 31,
	2025			2024			2023
Income:
Investment income from non-controlled, non-affiliated investments:
Interest income	$	118,265,930		$	137,508,964		$	107,739,382
Dividend income		2,279,271			3,315,849			4,066,745
Payment-in-kind interest income		1,647,034			1,123,611			—
Other income		2,202,527			1,564,875			417,480
Total investment income from non-controlled, non-affiliated investments		124,394,762			143,513,299			112,223,607
Total Investment Income		124,394,762			143,513,299			112,223,607
Expenses:
Incentive fees		7,599,716			8,553,414			—
Interest expense		50,057,703			58,006,112			44,483,152
Management fees		8,938,527			9,704,528			8,408,074
Professional fees		1,113,938			1,451,419			792,645
Directors fees		150,000			150,000			75,000
Other general and administrative expenses		3,071,298			3,097,955			1,528,225
Total Expenses		70,931,182			80,963,428			55,287,096
Less: Management fee waiver (Note 3)		—			(50,511	)		(1,051,009	)
Net expenses		70,931,182			80,912,917			54,236,087
Net Investment Income (Loss)		53,463,580			62,600,382			57,987,520
Realized and unrealized gains (losses) on investments and foreign currency transactions
Net realized gains (losses):
Non-controlled, non-affiliated investments		(13,198,727	)		(17,778,119	)		(2,715,413	)
Total net realized gains (losses)		(13,198,727	)		(17,778,119	)		(2,715,413	)
Net change in unrealized gains (losses):
Non-controlled, non-affiliated investments		(43,434,583	)		2,843,502			52,563,544
Total net change in unrealized gains (losses)		(43,434,583	)		2,843,502			52,563,544
Total realized and unrealized gains (losses)		(56,633,310	)		(14,934,617	)		49,848,131
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(3,169,730	)	$	47,665,765		$	107,835,651
Per Common Share Data:
Basic and diluted net investment income per common share	$	1.66		$	1.93		$	2.26
Basic and diluted net increase (decrease) in net assets resulting from operations	$	(0.10	)	$	1.47		$	4.20
Weighted Average Common Shares Outstanding - Basic and Diluted		32,133,879			32,353,615			25,700,603

The accompanying notes are an integral part of these consolidated financial statements.

(Note 3)

On January 22, 2024, PSBD completed its initial public offering (the "IPO"). Prior to the IPO, the base management fee was 2.00% of the average value of the weighted average (based on the number of shares outstanding each day in the quarter) of the Company’s total net assets at the end of the two most recently completed calendar quarters. Palmer Square BDC Advisor LLC (the "Investment Advisor"), however, during any period prior to the IPO, agreed to waive its right to receive management fees in excess of an annual rate of 1.75% of the average value of the weighted average total net assets at the end of each of our two most recently completed calendar quarters. The Investment Advisor will not be permitted to recoup any base management fees waived for any period of time prior to the IPO.

Palmer Square Capital BDC Inc.
Portfolio and Investment Activity
	For the Year Ended December 31,
	2025			2024			2023
New investments:
Gross investments	$	426,717,344		$	773,809,544		$	273,733,424
Less: sold investments		(581,986,420	)		(468,762,595	)		(247,083,117	)
Total new investments		(155,269,076	)		305,046,949			26,650,307
Principal amount of investments funded:
First-lien senior secured debt investments	$	387,718,348		$	687,351,131		$	267,272,174
Second-lien senior secured debt investments		14,689,341			46,287,869			3,858,750
Corporate bonds		6,487,586			4,095,000			2,602,500
Collateralized securities and structured products - debt		10,286,581			34,817,350			—
Common stock		6,937,015			1,258,194			—
Preferred Stock		598,473			—			—
Total principal amount of investments funded		426,717,344			773,809,544			273,733,424
Principal amount of investments sold or repaid:
First-lien senior secured debt investments	$	541,154,686		$	416,686,491		$	233,535,659
Second-lien senior secured debt investments		21,412,711			24,881,614			8,013,549
Corporate Bonds		2,707,568			4,020,000			—
Collateralized securities and structured products - debt		13,225,000			12,000,000			3,000,000
CLO Equity		3,486,455			11,174,490			2,533,909
Total principal amount of investments sold or repaid	$	581,986,420		$	468,762,595		$	247,083,117

	For the Year Ended December 31,
	2025	2024	2023
Number of new investment commitments	90	94	67
Average new investment commitment amount	$3,957,888	$4,419,385	$3,802,624
Weighted average maturity for new investment commitments	5.63 years	5.60 years	5.19 years
Percentage of new debt investment commitments at floating rates	98.96%	100.00%	98.82%
Percentage of new debt investment commitments at fixed rates	1.04%	0.00%	1.18%
Weighted average interest rate of new investment commitments^(1)	8.25%	9.12%	10.22%
Weighted average spread over reference rate of new floating rate investment commitments^(2)	4.49%	4.62%	4.87%
Weighted average interest rate on long-term investments sold or paid down	8.02%	9.68%	9.56%

(1)

New CLO equity investments do not have an ascribed interest rate and are therefore excluded from the calculation.

(2)

Variable rate loans bear interest at a rate determined by reference to the CME Term Secured Overnight Financing Rate (“SOFR” or “S”) (which can include one-, three-, or six-month SOFR), which resets periodically based on the terms of the loan agreement. At the borrower’s option, loans may instead reference an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate), which also resets periodically based on the terms of the loan agreements. Loans that reference SOFR may include a Credit Spread Adjustment (“CSA”), where the CSA is a defined additional spread amount based on the tenor of SOFR the borrower selects (making the reference rate S+CSA).