Exhibit 99.1

FOR IMMEDIATE RELEASE

 

 

NewStar Reports Net Income of $4.6 Million, or $0.11 per Diluted Share, for the Third Quarter of 2017 and Declares $0.02 Quarterly Dividend per Share

 

 

Investment Activity – New funded, middle-market credit investments totaled $317 million in the third quarter, down from $460 million last quarter and up from $193 million in the same quarter last year.  

 

 

Managed Assets – Managed loans and credit investments at the end of the quarter increased by $660 million from the prior quarter to $7.2 billion due to the addition of two managed credit funds acquired through the purchase of Fifth Street CLO Management LLC in July 2017.

 

 

Net Interest Margin – The margin increased to 1.61% for the third quarter from 1.56% in the prior quarter due to a combination of rising index rates and an increase in loans as a percentage of earning assets, which was partially offset by lower deferred fee income resulting from slower prepayments.

 

 

Revenue – Total revenue1 in the third quarter was $21.1 million, up 4.7% from the prior quarter due primarily to higher net interest income and lower mark-to-market adjustments on loans held at fair value which was partially offset by a decrease in fee income from capital markets activities.  

 

 

Credit – Credit costs decreased by $1.2 million from the prior period to $1.5 million due primarily to a release of general provision, while net charge-offs increased by $1.1 million from the prior quarter to $8.6 million in the third quarter due primarily to losses recognized in connection with the resolution of two loans through sales and restructurings.  

 

 

Expenses – Operating expenses increased by $1.6 million, or 15.5%, from the prior quarter to $11.9 million due partly to expenses incurred in connection with strategic projects.    

 

 

Capital Management – Returned approximately $4.1 million to stockholders in the third quarter through share repurchases and dividends.  Book value per share increased to $15.57 as of September 30, 2017, up $0.17 from the end of the prior quarter.  

 

 

Quarterly Dividend – Board of Directors declared a quarterly dividend of $0.02 per share of common stock payable on December 15, 2017 to shareholders of record on November 29, 2017.

 

 

Sale of the Company – Entered into a definitive agreement to be acquired by First Eagle Investment Management for $11.44 in cash plus contingent value rights worth up to an estimated $0.88-$1.00 per share and, in a related transaction, agreed to sell a portfolio of investment assets, including approximately $2.4 billion of middle-market loans and other credit investments, to a newly formed fund sponsored by GSO Capital Partners.

 

 

Boston, November 1, 2017 – 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 2017, reporting net income of $4.6 million, or $0.11 per diluted share. These results compare to net income of $4.2 million, or $0.10 per diluted share in the second quarter of 2017 and $8.6 million, or $0.19 per diluted share in the third quarter of 2016. Operating income before income taxes was $7.7 million for the third quarter of 2017 compared to $7.2 million for the second quarter of 2017 and $14.6 million in the third quarter of 2016.

Tim Conway, Chief Executive Officer of NewStar commented: “Our results in the third quarter were solid and in line with our expectations as we maintained an active investment pace and completed the previously announced acquisition of a CLO manager, adding approximately $725 million to our assets

 

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 1, 2017 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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