• Fourth quarter net investment income of $4.6 million, or $0.34 per common share.
• Full year 2019 net investment income of $19.1 million, or $1.43 per common share - an increase of 4% year-over-year and above the $1.36 regular distribution.
• Paid $1.36 per share in distributions in 2019.
• Closed investments in the fourth quarter of approximately $52.5 million.
• Net asset value ("NAV") per share decreased to $12.46 at December 31, 2019 from $12.74 at September 30, 2019 due to unrealized depreciation of the portfolio.
• At December 31, 2019, 90% of our loan portfolio consisted of senior secured loans, based on fair value.
• On March 11, 2020, OFS Capital's Board of Directors declared a distribution of $0.34 per share for the first quarter of 2020, payable on March 31, 2020 to stockholders of record as of March 24, 2020.

The total fair value of our investment portfolio was $516.9 million at December 31, 2019, which was equal to approximately 96% of amortized cost. As of December 31, 2019, the fair value of OFS Capital's debt investment portfolio totaled $451.8 million in 79 portfolio companies, of which 90% and 10% were senior secured loans and subordinated loans, respectively. As of December 31, 2019, we also held approximately $43.5 million in common and preferred equity investments, at fair value, in 15 portfolio companies in which we also held debt investments and six portfolio companies in which we solely held an equity investment. As of December 31, 2019, our investment portfolio also included four investments in structured finance notes with a fair value of $21.6 million. We had unfunded commitments of $4.8 million to four portfolio companies at December 31, 2019. As of December 31, 2019, floating rate loans comprised 93% of OFS Capital's debt investment portfolio, with the remaining 7% in fixed rate loans, as a percentage of fair value.

Interest income increased approximately $10.0 million, due to a $12.7 million increase in recurring interest income caused by a $103 million increase in the average outstanding loan balance during 2019 along with a decrease of $1.8 million in recurring interest income resulting from a 43 basis point decrease in the weighted average yield in our debt portfolio during the year ended December 31, 2019. Acceleration of Net Loan Fees (defined as loan origination fees, original issue discount, market discount or premium and loan amendment fees) of $0.3 million from the repayment of loans prior to their scheduled due dates were included in interest income for the year ended December 31, 2019.

Fee income consisted of prepayment fees of $0.4 million resulting from $56.8 million of unscheduled principal payments during the year ended December 31, 2019, compared to $0.9 million from $50.0 million of unscheduled principal payments during the year ended December 31, 2018. We recognized syndication fees of $0.7 million and $0.7 million for the years ended December 31, 2019 and 2018, respectively, resulting from approximately $91.5 million and $64.0 million in loan originations during that period in which OFS Capital Management, LLC sourced, structured, and arranged the lending group, and for which we were additionally compensated.

Interest expense increased by $6.6 million primarily due to an increase of $100.9 million in the average amount of outstanding borrowings, specifically due to a full year of interest expense relating to the $98.5 million of unsecured notes issued in April 2018 and October 2018, the establishment of the revolving credit facility with BNP Paribas in June 2019 ("BNP Facility"), and the issuance of the $54.3 million of unsecured notes in October 2019.

We recognized net gains of $3.8 million on common equity and warrant investments for the year ended December 31, 2019, as a result of unrealized gains of $3.6 million and $1.6 million on our common equity investments in Pfanstiehl Holdings, Inc. and Professional Pipe Holdings LLC, respectively, offset by net unrealized losses of $1.4 million in our remaining common equity and warrant investments due to net negative impact of portfolio company-specific performance factors.

At December 31, 2019, we had $13.4 million of cash, which includes cash and cash equivalents of $1.9 million held by OFS SBIC I, LP ("SBIC I LP"), our wholly owned SBIC. Our use of cash held by SBIC I LP is restricted by SBA regulation, including limitations on the amount of cash SBIC I LP can distribute to OFS Capital Corporation as parent company (the "Parent"). Any such distributions to the Parent from SBIC I LP are generally restricted to a statutory measure of undistributed accumulated earnings of SBIC I LP under SBA regulation. At December 31, 2019, the Parent had $13.4 million of cash and cash equivalents available for general corporate activities, including approximately $1.9 million held by SBIC I LP that was available for distribution to the Parent.

As part of our plans to focus on lower-yielding, first lien senior secured loans to larger borrowers, which we believe will improve our overall risk profile, SBIC I LP intends, over time, to repay its outstanding SBA debentures prior to the scheduled maturity date of its debentures. We do not expect to make new investments through SBIC I LP, other than follow-on investments. We believe that investing in more senior loans to larger borrowers is consistent with our view of the private loan market and will reduce our overall leverage on a consolidated basis.

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OFS Capital Corporation is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company. OFS Capital's investment objective is to provide stockholders with both current income and capital appreciation primarily through debt investments and, to a lesser extent, equity investments. OFS Capital invests primarily in privately held middle-market companies in the United States, including lower-middle-market companies, targeting investments of $3 million to $20 million in companies with annual EBITDA between $3 million and $50 million. OFS Capital offers flexible solutions through a variety of asset classes including senior secured loans, which includes first-lien, second-lien and unitranche loans, as well as subordinated loans and, to a lesser extent, warrants and other equity securities. OFS Capital's investment activities are managed by OFS Capital Management, LLC, an investment adviser registered under the Investment Advisers Act of 1940¹, as amended, and headquartered in Chicago, Illinois, with additional offices in New York and Los Angeles.

Statements in this press release regarding management's future expectations, beliefs, intentions, goals, strategies, plans or prospects, including statements relating to: OFS Capital's results of operations, including net investment income, net asset value and net investment gains and losses and the factors that may affect such results; management's plans to focus on capital preservation and belief that the Company is well positioned for the future; management's plans to focus on lower-yielding, first lien senior secured loans to larger borrowers and the potential impact of that plan on the Company's overall risk profile; SBIC I LP's intention to repay its outstanding SBA debentures prior to their scheduled maturity dates; the expectation that any future investments by SBIC I LP will only be in the form of follow-on investments; management's views of the private loan market and belief that investing in more senior loans to larger borrowers will reduce the Company's overall leverage on a consolidated basis; and other factors may constitute forward-looking statements for purposes of the safe harbor protection under applicable securities laws. Forward-looking statements can be identified by terminology such as "anticipate," "believe," "could," "could increase the likelihood," "estimate," "expect," "intend," "is planned," "may," "should," "will," "will enable," "would be expected," "look forward," "may provide," "would" or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors referred to in OFS Capital's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission under the section "Risk Factors," as well as other documents that may be filed by OFS Capital from time to time with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. OFS Capital is providing the information in this press release as of this date and assumes no obligations to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise.