Exhibit 99.1

FOR IMMEDIATE RELEASE

 

 

NewStar Reports Net Income of $8.6 Million, or $0.19 per Diluted Share, for the Third Quarter of 2016

 

 

 

Investment Activity – New funded credit investments totaled $427 million in the third quarter compared to $476 million last quarter and $720 million in the same quarter last year, reflecting credit selectivity in a mixed market environment.

 

 

Managed Assets – Managed loans and credit investments increased slightly from the prior quarter to $6.7 billion, which was $2.0 billion, or 44.4%, higher than in the same period last year. Growth in assets from a new managed fund launched in the third quarter offset an expected decrease in assets in funds past their investment periods. New funds and separate accounts with targeted investment portfolios of $600 million were launched after the end of the third quarter.              

 

 

Revenue – Total revenue1 increased by $10.9 million, or 43.4%, from the prior quarter to $36.2 million in the third quarter due primarily to higher average assets, favorable mark-to-market adjustments, previously unrecorded interest income recognized in connection with the repayment of a non-performing loan at par and higher capital markets related income.  

 

 

Net Interest Margin – The margin widened to 2.50% for the third quarter from 2.10% in the second quarter due primarily to the impact of interest income recognized in the quarter in connection with the pay-off of a non-performing loan at par.

 

 

Credit – Credit performance remained within expected ranges with provision expense of $3.6 million for the third quarter, consistent with the prior quarter and $0.9 million lower than in the same period last year.

 

 

Expenses – Operating expenses increased by $5.2 million to $18.1 million in the third quarter compared to the prior quarter due primarily to $4.2 million of severance charges related to cost saving initiatives and approximately $1.0 million of other elevated expenses related to short-term projects.

 

 

Equity - Book value per share increased by $0.26 to $14.38 as of September 30, 2016 from $14.12 at the end of the prior quarter due primarily to comprehensive income totaling $11.7 million in the third quarter. Subsequent to the end of the third quarter, the company repurchased 2.5 million shares at a weighted average cost of $8.93 per share in privately negotiated transactions, which is expected to be accretive to book value per share.  

 

 

Divestitures – Assets and liabilities of the equipment finance business were reclassified as held-for-sale as of September 30, 2016, reflecting an ongoing process to sell that business, which has resulted in a non-binding letter of intent with a prospective buyer.  

 

 

Boston, November 2, 2016 – NewStar Financial, Inc. (NASDAQ: NEWS) (“NewStar” or the “Company”), an internally-managed, middle market direct lender and credit-oriented asset manager, today announced financial results for its third quarter of 2016, reporting net income of $8.6 million, or $0.19 per diluted share. These results compare to net income of $5.2 million, or $0.11 per diluted share in the second quarter of 2016 and $5.1 million, or $0.11 per diluted share in the third quarter of 2015. Operating income

 

1 

Total revenue is defined as the sum of net interest income and non-interest income


The following information was filed by Newstar Financial, Inc. (NEWS) on Wednesday, November 2, 2016 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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