- Net income was $6.4 million, or $0.12 per diluted share in the
quarter and $14.2 million, or $0.27 per diluted share for 2011
- New funded loan volume exceeded $250 million in the quarter and
$850 million for the year, driving annual net loan growth of
8%
- Weighted average yield on new loans was 7.5% in the
quarter
- Net interest margin increased to 4.77% in the quarter from
3.98%, or 4.61% adjusted for the impact of early debt retirement,
in the third quarter
- Credit costs were consistent with the prior quarter at $4.7
million and the NPA rate declined to 5.6% from 5.8% of loans
- Book value per share increased $0.15 to $11.42
NewStar Financial, Inc. (Nasdaq:NEWS), a specialized commercial
finance company, today reported net income of $6.4 million, or
$0.12 per diluted share for the fourth quarter of 2011. On an
adjusted basis, net income was $6.6 million, or $0.13 per diluted
share, which reflected $0.2 million after-tax non-cash equity
compensation expense related to the 2006 IPO.
The Company also reported that net income for 2011 increased 38%
to $14.2 million, or $0.27 per diluted share, compared to $10.2
million, or $0.19 per diluted share in 2010.
"Adjusted net income" and other non-GAAP financial measures used
in this release are defined under "Non-GAAP Financial Measures" on
page 5. Reconciliations between GAAP and adjusted (non-GAAP)
measures can be found in the attached financial tables.
"I am excited about the company's performance in the fourth
quarter. We finished 2011 in a strong position with solid results
across all aspects of the business. We also continued to gain
momentum with customers in the marketplace and added balance sheet
capacity to meet increasing loan demand," said Tim Conway,
NewStar's Chairman and Chief Executive Officer. "Our financial
results reflected strong new business volume and further
improvement in our credit performance. Increased loan volume drove
loan growth of 8% despite high levels of run-off during the year,"
he added. "With solid loan growth, improving margins and credit
costs approaching more normalized levels, we generated a 38%
increase in net income for 2011. I am pleased with our results and
optimistic about 2012 because I believe that we are beginning to
once again, demonstrate our earnings capacity and the value of our
specialized lending franchise," he concluded.
Managed and Owned Loan Portfolios
- Total funded loan origination volume was $257 million in the
fourth quarter and $858 million for the full year compared to $190
million in the third quarter and $572 million in 2010.
- Net loan growth was 3% in the fourth quarter and 8% for the
full year as the owned loan portfolio increased to approximately
$1.9 billion as of December 31, 2011 from $1.8 billion as of
September 30, 2011 and $1.7 billion as of December 31, 2010.
- Asset-based lending and equipment finance businesses originated
$29 million in the fourth quarter, or 15% of new loan volume
retained on the balance sheet.
- The owned loan portfolio remained balanced across industry
sectors and highly diversified by issuer. As of December 31, 2011,
no outstanding borrowings by a single obligor represented more than
1.5% of total loans outstanding, and the ten largest obligors
comprised approximately 10% of the loan portfolio.
- The managed loan portfolio increased 3% in the fourth quarter
and 9% for the full year 2011 to $2.4 billion as of December 31,
2011 reflecting the net impact of new loan origination, which was
partially offset by prepayments and scheduled amortization of
existing loans.
- Assets managed for third party institutional investors
increased 4% in the fourth quarter and 15% for the year to
approximately $518 million at December 31, 2011 compared to $500
million at September 30, 2011 and $452 million at December 31,
2010.
Net Interest Income / Margin
- Net interest income before provision for credit losses
increased to $23.5 million for the fourth quarter of 2011 compared
to $18.8 million for the third quarter of 2011. Approximately $3
million of the improvement was due to the impact of the early
retirement of debt in the third quarter and the balance was
attributable to growth in interest income driven by net loan growth
and an increase in the yield on the loan portfolio.
- Net interest margin widened to 4.77% for the fourth quarter of
2011 compared to 3.98% for the third quarter of 2011. The net
interest margin for the third quarter of 2011 reflected the
accelerated amortization of deferred financing fees and unamortized
discount related to the early retirement of bonds issued by the
2009-1 CLO. The net interest margin for the third quarter of 2011
was 4.61% before the impact of the early retirement of CLO
bonds.
- Adjusting for the impact of non-performing loans, the loan
portfolio yield would have been 52 bps higher and net interest
margin would have been 5.29%.
Non-Interest Income
- Non-interest income was $1.9 million for the fourth quarter of
2011 compared to $3.4 million for the third quarter of
2011.
- Non-interest income in the fourth quarter of 2011 consisted
primarily of a $0.6 million gain on the repurchase of debt, $0.7
million of asset management income, and $0.4 million of unused fees
on revolving credit commitments, which was partially offset by a
$1.5 million loss on certain equity interests retained in
connection with various workouts.
Expenses
- Operating expenses decreased to $11.1 million in the fourth
quarter of 2011 compared to $11.9 million in the third quarter of
2011 due primarily to lower professional fees and loan workout
costs.
- The Company had 88 full-time employees as of December 31,
2011.
Income Taxes
- Deferred income taxes increased modestly to $47.9 million as of
December 31, 2011 from $47.1 million as of September 30, 2011. The
increase was driven primarily by differences in the timing of when
credit costs and equity compensation expenses are recognized
according to GAAP and when they are deductible for income
tax.
- Approximately $26.0 million and $13.0 million of the deferred
tax asset as of December 31, 2011 were related to our allowance for
credit losses and equity compensation, respectively.
Loan Credit Quality
- Credit performance continued to normalize as key credit metrics
improved in the fourth quarter of 2011.
- Total credit costs (including provision for credit losses and
losses on interests retained in connection with workouts of
impaired loans) in the fourth quarter were consistent with the
prior quarter at $4.7 million.
- Provision for credit losses to establish additional specific
reserves were approximately $0.4 million in the fourth quarter of
2011, down significantly from $6.3 million in the third quarter of
2011.
- Total provision expense was $4.3 million in the quarter
compared to $4.6 million in the third quarter of 2011.
- The allowance for credit losses decreased to $64.1 million, or
3.52% of loans and 63% of NPLs, at December 31, 2011, compared to
$73.0 million, or 4.10% of loans, at September 30, 2011.
- Two loans with an aggregate balance of $23.9 million as of
December 31, 2011 were placed on non-accrual status in the fourth
quarter of 2011.
- Non-performing assets decreased by $37.7 million, or 27%, in
2011 to $102.2 million as of December 31, 2011 and the NPA rate
declined from 8.17% to 5.61%.
- Non-performing assets decreased 2% from the third quarter of
2011. At December 31, 2011, loans with an aggregate
outstanding balance of $102.2 million, net of charge-offs, were on
non-accrual status compared to loans with an aggregate outstanding
balance of $103.8 million, net of charge-offs, at September 30,
2011. Non-performing assets, net of charge-offs, specific reserves
and other adjustments were $102.2 million, or 42.8% of their
aggregate face amount, as of December 31, 2011.
- Non-accrual loans with an outstanding balance of $88.8 million
and an additional $8.4 million of loans as of December 31, 2011
were also delinquent.
- Net charge-offs were $13.2 million, or 2.89% of loans on an
annualized basis, in the fourth quarter of 2011 compared to $9.4
million, or 2.10% of loans on an annualized basis, in the third
quarter of 2011.
Funding and Capital
- Increased the size of a warehouse credit facility with Wells
Fargo from $125 million to $150 million.
- Increased available liquidity by $25 million through an
amendment of a credit facility with Fortress Credit Corp. effective
January 27, 2012, increasing the size from $100 million to $125
million and extending the effective maturity by two years.
- Extended the maturity of a seasoning warehouse credit facility
with NATIXIS to May 19, 2012.
- Maintained balance sheet leverage at 2.4x as of December 31,
2011.
- Maintained ample liquidity with total cash and equivalents as
of December 31, 2011 of $102.3 million, of which $18.5 million was
unrestricted. Unrestricted cash decreased from approximately $27.6
million at September 30, 2011 and restricted cash increased from
approximately $74.6 million to $83.8 million.
Book Value
- Book value per share was $11.42 at the end of the fourth
quarter 2011 up from $11.27 at the end of the prior quarter
primarily due to net income for the quarter and the amortization of
equity compensation into stockholders' equity.
- Book value per share increased $0.46 in 2011.
Share Count
- Average diluted shares outstanding were 52.2 million shares for
the quarter down from 52.6 million for prior quarter. Total
outstanding shares at December 31, 2011 were 49.3 million compared
to 49.5 million at September 30, 2011.
Conference Call and Webcast
NewStar will host a webcast/conference call to discuss the
results today at 10:00 am Eastern Time. All interested parties are
invited to participate via telephone or webcast, which will be
hosted through the Investor Relations section at
www.newstarfin.com. Please visit the website to register for the
webcast and test your connection prior to the call. You can also
access the conference call by dialing 877-755-7419 approximately
5-10 minutes prior to the call. International callers should
dial 973-200-3080. All callers should reference "NewStar
Financial."
For convenience, an archived replay of the call will be
available through February 18, 2012 by dialing 800-585-8367.
International callers should call 404-537-3406. For all replays,
please use the passcode 49012850. The audio replay will also be
available through the Investor Relations section at
www.newstarfin.com.
About NewStar Financial
NewStar Financial (Nasdaq:NEWS) is a specialized commercial
finance company focused on meeting the complex financing needs of
companies and private investors in the middle market. The Company
specializes in providing senior secured debt financing options to
mid-sized companies to fund working capital, growth strategies,
acquisition and recapitalization, as well as, equipment purchases.
NewStar originates loans and leases directly through a team of
experienced, senior bankers and marketing officers organized around
key industry and market segments. The Company targets 'hold'
positions of up to $35 million and selectively underwrites or
arranges larger transactions for syndication to other lenders.
NewStar is headquartered in Boston MA and has regional offices
in Darien CT, Chicago IL, Dallas TX, Los Angeles CA, Philadelphia,
PA, San Francisco CA, and Portland OR. For more detailed
transaction and contact information, please visit our website at
www.newstarfin.com.
The NewStar Financial, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4044
Forward-Looking Statements
This release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements other than statements of historical fact
included in this release are forward-looking statements.
Forward-looking statements give our current expectations and
projections relating to our financial condition, results of
operations, strategic plans, objectives, future performance,
financing plans and business. As such, they are subject to material
risks and uncertainties, including our limited operating history;
the general state of the economy; our ability to compete
effectively in a highly competitive industry; and the impact of
federal, state and local laws and regulations that govern
non-depository commercial lenders and businesses generally.
More detailed information about these risk factors can be found
in NewStar's filings with the Securities and Exchange Commission
(the "SEC"), including Item 1A ("Risk Factors") of our 2010 Annual
Report on Form 10-K, as supplemented by the Risk Factors contained
in our Quarterly Reports on Form 10‑Q. NewStar is under no
obligation to (and expressly disclaims any such obligation to)
update or alter its forward-looking statements, whether as a result
of new information, future events or otherwise, except as required
by law. NewStar plans to file its Annual Report on Form 10-K for
the year ended December 31, 2011 with the SEC on or before March
15, 2012 and urges its shareholders to refer to that document for
more complete information concerning NewStar's financial
results.
Non-GAAP Financial Measures
References to "adjusted net income" and "adjusted earnings per
share" mean net income or earnings per diluted share, respectively,
as determined under GAAP, excluding the following items:
compensation expense related to restricted stock grants made since
our inception as a private company, including equity awards made in
connection with the initial public offering and the related impact
on our effective tax rate. GAAP requires that these items be
included in net income. NewStar management uses "adjusted net
income" and "adjusted earnings per share" to make operational and
investment decisions, and NewStar believes that they provide useful
information to investors in their evaluation of our financial
performance and condition. Excluding the financial results and
expenses incurred in connection with the compensation expense
related to restricted stock grants made since our inception as a
private company eliminates unique amounts that make it difficult to
assess our core performance and compare our period‑over‑period
results. A reconciliation of adjusted net income to net income is
included on pages 7 and 8 of this release.
Adjusted return on average assets means adjusted net income
divided by average assets for the period. Adjusted return on
average equity means adjusted net income divided by average equity
for the period. Adjusted efficiency ratio means operating expenses
determined in accordance with GAAP less compensation expense
related to restricted stock grants made since our inception as a
private company. The adjusted ratios exclude unique expenses that
make it difficult to assess our core performance and compare our
period-over-period results.
A reconciliation of our adjusted financial measures to their
GAAP equivalents is included on pages 7, 11 and 12 of this release.
NewStar's adjusted financial measures should not be considered as
alternatives to financial measures determined in accordance with
GAAP and may be different from, or inconsistent with, non-GAAP
financial measures used by other companies.
NewStar Financial, Inc. |
|
|
|
Consolidated Balance
Sheets |
|
|
|
(unaudited) |
|
|
|
|
|
December 31, |
September 30, |
December 31, |
($ in thousands) |
2011 |
2011 |
2010 |
Assets: |
|
|
|
Cash and cash equivalents |
$ 18,468 |
$ 27,604 |
$ 54,365 |
Restricted cash |
83,815 |
74,610 |
178,364 |
Investments in debt securities,
available-for-sale |
17,817 |
11,431 |
4,014 |
Loans held-for-sale, net |
38,278 |
31,192 |
41,386 |
Loans and leases, net |
1,699,187 |
1,676,651 |
1,590,331 |
Deferred financing costs, net |
11,997 |
12,608 |
15,504 |
Interest receivable |
9,857 |
8,702 |
6,797 |
Property and equipment, net |
740 |
837 |
879 |
Deferred income taxes, net |
47,902 |
47,120 |
48,093 |
Income tax receivable |
293 |
5,494 |
5,435 |
Other assets |
18,029 |
20,075 |
29,798 |
Total
assets |
$ 1,946,383 |
$ 1,916,324 |
$ 1,974,966 |
Liabilities: |
|
|
|
Credit facilities |
$ 214,711 |
$ 161,909 |
$ 108,502 |
Term debt |
1,073,105 |
1,095,977 |
1,278,868 |
Repurchase agreements |
64,868 |
67,554 |
-- |
Accrued interest payable |
2,853 |
2,040 |
4,014 |
Accounts payable |
430 |
717 |
242 |
Other liabilities |
26,654 |
30,739 |
29,161 |
Total liabilities |
1,382,621 |
1,358,936 |
1,420,787 |
Total stockholders'
equity |
563,762 |
557,388 |
554,179 |
Total liabilities
and stockholders' equity |
$ 1,946,383 |
$ 1,916,324 |
$ 1,974,966 |
|
|
|
|
|
|
|
|
NewStar Financial, Inc. |
|
|
|
Consolidated Statements of
Operations |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
December 31, |
September 30, |
December 31, |
($ in thousands, except per share
amounts) |
2011 |
2011 |
2010 |
Net interest income: |
|
|
|
Interest income |
$ 30,877 |
$ 29,500 |
$ 28,483 |
Interest expense |
7,371 |
10,683 |
9,092 |
Net interest income |
23,506 |
18,817 |
19,391 |
Provision for credit losses |
4,314 |
4,408 |
(768) |
Net interest income after provision for
credit losses |
19,192 |
14,409 |
20,159 |
|
|
|
|
Non-interest income: |
|
|
|
Fee income |
1,563 |
573 |
983 |
Asset management income |
684 |
697 |
664 |
Gain (loss) on derivatives |
(35) |
252 |
(92) |
Gain (loss) on sale of loans |
-- |
20 |
(3) |
Gain on acquisition |
-- |
-- |
5,649 |
Other income (loss) |
(318) |
1,862 |
(343) |
Total non-interest income |
1,894 |
3,404 |
6,858 |
Operating expenses: |
|
|
|
Compensation and benefits |
7,823 |
7,706 |
7,495 |
Occupancy and equipment |
496 |
519 |
543 |
General and administrative expenses |
2,749 |
3,671 |
3,192 |
Total operating expenses |
11,068 |
11,896 |
11,230 |
Income before income
taxes |
10,018 |
5,917 |
15,787 |
Income tax expense |
3,650 |
2,508 |
6,414 |
Net income before noncontrolling
interest |
6,368 |
3,409 |
9,373 |
Net income attributable to noncontrolling
interest |
-- |
-- |
-- |
Net income |
$ 6,368 |
$ 3,409 |
$ 9,373 |
After tax adjustments to net income: |
|
|
|
IPO related compensation and benefits
expense (1) |
201 |
210 |
711 |
Adjusted net income |
$ 6,569 |
$ 3,619 |
$ 10,084 |
|
|
|
|
Net income per share: |
|
|
|
Basic |
$ 0.13 |
$ 0.07 |
$ 0.19 |
Diluted |
$ 0.12 |
$ 0.06 |
$ 0.18 |
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
Basic |
47,442,907 |
47,942,803 |
48,745,084 |
Diluted |
52,166,449 |
52,618,806 |
52,749,213 |
|
|
|
|
Adjusted net income per
share: |
|
|
|
Basic |
$ 0.14 |
$ 0.08 |
$ 0.21 |
Diluted |
$ 0.13 |
$ 0.07 |
$ 0.19 |
|
|
|
|
Adjusted weighted average shares
outstanding: |
|
|
|
Basic |
47,442,907 |
47,942,803 |
48,745,084 |
Diluted |
52,166,449 |
52,618,806 |
52,749,213 |
|
|
|
|
(1) Non-cash compensation charge
related to restricted stock grants made since our inception as a
private company, including equity awards made in connection with
the initial public offering. |
|
|
|
|
|
|
NewStar Financial, Inc. |
|
|
Consolidated Statements of
Operations |
|
|
(unaudited) |
|
|
|
|
|
|
|
Year Ended
December 31, |
($ in thousands, except per share
amounts) |
2011 |
2010 |
Net interest income: |
(unaudited) |
|
Interest income |
$ 115,680 |
$ 112,826 |
Interest expense |
34,953 |
40,558 |
Net interest income |
80,727 |
72,268 |
Provision for credit losses |
17,312 |
32,997 |
Net interest income after provision for
credit losses |
63,415 |
39,271 |
|
|
|
Non-interest income: |
|
|
Fee income |
3,070 |
2,409 |
Asset management income |
2,635 |
2,872 |
Gain on derivatives |
242 |
28 |
Gain (loss) on sale of loans |
128 |
(116) |
Gain on acquisition |
-- |
5,649 |
Other income |
(2,008) |
7,854 |
Total non-interest income |
4,067 |
18,696 |
Operating expenses: |
|
|
Compensation and benefits |
30,144 |
26,418 |
Occupancy and equipment |
2,036 |
2,094 |
General and administrative expenses |
11,751 |
12,101 |
Total operating expenses |
43,931 |
40,613 |
Income before income
taxes |
23,551 |
17,354 |
Income tax expense |
9,403 |
6,935 |
Net income before noncontrolling
interest |
14,148 |
10,419 |
Net income attributable to noncontrolling
interest |
-- |
(187) |
Net income |
$ 14,148 |
$ 10,232 |
After tax adjustments to net income: |
|
|
IPO related compensation and benefits
expense (1) |
918 |
2,449 |
Adjusted net income |
$ 15,066 |
$ 12,681 |
|
|
|
Net income per share: |
|
|
Basic |
$ 0.29 |
$ 0.21 |
Diluted |
$ 0.27 |
$ 0.19 |
|
|
|
Weighted average shares
outstanding: |
|
|
Basic |
48,106,032 |
49,449,314 |
Diluted |
52,925,924 |
52,548,104 |
|
|
|
Adjusted net income per
share: |
|
|
Basic |
$ 0.31 |
$ 0.26 |
Diluted |
$ 0.28 |
$ 0.24 |
|
|
|
Adjusted weighted average shares
outstanding: |
|
|
Basic |
48,106,032 |
49,449,314 |
Diluted |
52,925,924 |
52,548,104 |
|
|
|
(1) Non-cash compensation charge
related to restricted stock grants made since our inception as a
private company, including equity awards made in connection with
the initial public offering. |
|
|
|
|
|
|
|
|
NewStar Financial, Inc. |
|
|
|
Selected Financial Data |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
December 31, |
September 30, |
December 31, |
($ in thousands) |
2011 |
2011 |
2010 |
Performance Ratios: |
|
|
|
Return on average assets |
1.32% |
0.71% |
1.93% |
Return on average equity |
4.50 |
2.41 |
6.76 |
Net interest margin, before
provision |
4.77 |
3.98 |
4.01 |
Efficiency ratio |
43.57 |
53.53 |
42.78 |
Portfolio yield |
6.61 |
6.58 |
6.33 |
|
|
|
|
Credit Quality Ratios: |
|
|
|
Delinquent loan rate (at period end) |
5.34% |
4.72% |
6.74% |
Delinquent loan rate for accruing loans
60 days or more past due (at period end) |
0.46 |
0.47 |
0.50 |
Non-accrual loan rate (at period
end) |
5.61 |
5.83 |
7.98 |
Non-performing asset rate (at period
end) |
5.61 |
5.83 |
8.17 |
Annualized net charge off rate (end of
period loans) |
2.89 |
2.10 |
1.38 |
Annualized net charge off rate (average
period loans) |
2.89 |
2.12 |
1.32 |
Allowance for credit losses ratio (at
period end) |
3.52 |
4.10 |
4.99 |
|
|
|
|
Capital and Leverage
Ratios: |
|
|
|
Equity to assets |
28.96% |
29.09% |
28.06% |
Debt to equity |
2.40 x |
2.38 x |
2.50 x |
Book value per share |
$ 11.42 |
$ 11.27 |
$ 10.96 |
|
|
|
|
Average Balances: |
|
|
|
Loans and other debt products, gross |
$ 1,852,525 |
$ 1,778,988 |
$ 1,782,540 |
Interest earning assets |
1,954,471 |
1,877,897 |
1,917,295 |
Total assets |
1,916,742 |
1,900,623 |
1,930,917 |
Interest bearing liabilities |
1,328,051 |
1,286,503 |
1,327,025 |
Equity |
561,825 |
560,821 |
549,830 |
|
|
|
|
Allowance for credit loss
activity: |
|
|
|
Balance as of beginning of period |
$ 73,038 |
$ 78,040 |
$ 91,468 |
General provision (credit) for credit
losses |
3,918 |
(1,922) |
(8,763) |
Specific provision for credit losses |
396 |
6,330 |
7,995 |
Net charge offs |
(13,240) |
(9,410) |
(5,919) |
Balance as of end of period |
$ 64,112 |
$ 73,038 |
$ 84,781 |
|
|
|
|
Supplemental Data (at period
end): |
|
|
|
Investments in debt securities,
gross |
$ 25,298 |
$ 17,298 |
$ 6,468 |
Loans held-for-sale, gross |
38,837 |
31,786 |
42,228 |
Loans held-for-investment, gross |
1,820,193 |
1,781,917 |
1,698,238 |
Loans and investments in debt securities,
gross |
1,884,328 |
1,831,001 |
1,746,934 |
Unused lines of credit |
252,288 |
241,902 |
270,793 |
Standby letters of credit |
6,462 |
8,768 |
8,737 |
Total funding commitments |
$ 2,143,078 |
$ 2,081,671 |
$ 2,026,464 |
|
|
|
|
Loan portfolio |
$ 1,884,328 |
$ 1,831,001 |
$ 1,746,934 |
Loans owned by NewStar Credit
Opportunities Fund |
517,596 |
499,780 |
451,929 |
Managed loan portfolio |
$ 2,401,924 |
$ 2,330,781 |
$ 2,198,863 |
|
|
|
|
Loans held-for-sale, gross |
$ 38,837 |
$ 31,786 |
$ 42,228 |
Loans held-for-investment, gross |
1,820,193 |
1,781,917 |
1,698,238 |
Total loans, gross |
1,859,030 |
1,813,703 |
1,740,466 |
Deferred fees, net |
(57,865) |
(33,212) |
(24,247) |
Allowance for loan losses - general |
(23,022) |
(19,126) |
(24,152) |
Allowance for loan losses - specific |
(40,678) |
(53,522) |
(60,350) |
Total loans, net |
$ 1,737,465 |
$ 1,707,843 |
$ 1,631,717 |
|
|
|
|
|
|
NewStar Financial, Inc. |
|
|
Selected Financial Data |
|
|
(unaudited) |
|
|
|
|
|
|
|
Year Ended
December 31, |
($ in thousands) |
2011 |
2010 |
Performance Ratios: |
|
|
Return on average assets |
0.75% |
0.51% |
Return on average equity |
2.52 |
1.87 |
Net interest margin, before
provision |
4.28 |
3.60 |
Efficiency ratio |
51.81 |
44.74 |
Portfolio yield |
6.50 |
6.02 |
|
|
|
Credit Quality Ratios: |
|
|
Annualized net charge off rate (end of
period loans) |
2.09 |
3.69 |
Annualized net charge off rate (average
period loans) |
2.15 |
3.36 |
|
|
|
Average Balances: |
|
|
Loans and other debt products, gross |
$ 1,776,195 |
$ 1,870,178 |
Interest earning assets |
1,886,165 |
2,007,908 |
Total assets |
1,885,407 |
2,016,264 |
Interest bearing liabilities |
1,286,256 |
1,430,526 |
Equity |
560,617 |
546,974 |
|
|
|
Allowance for credit loss
activity: |
|
|
Balance as of beginning of period |
$ 84,781 |
$ 114,470 |
General provision (credit) for credit
losses |
(1,470) |
(14,698) |
Specific provision for credit losses |
18,782 |
47,695 |
Net charge offs |
(37,981) |
(62,686) |
Balance as of end of period |
$ 64,112 |
$ 84,781 |
|
|
|
|
|
|
|
|
NewStar Financial, Inc. |
|
|
|
Non-GAAP Data |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Adjusted |
|
Three Months
Ended |
|
December 31, |
September 30, |
December 31, |
($ in thousands) |
2011 |
2011 |
2010 |
Performance Ratios: |
|
|
|
Return on average assets |
1.36% |
0.76% |
2.07% |
Return on average equity |
4.64 |
2.56 |
7.28 |
Efficiency ratio |
42.33 |
51.90 |
39.74 |
|
|
|
|
Consolidated Statement of
Operations Adjustments(1): |
|
|
|
Operating expenses |
$ 11,068 |
$ 11,896 |
$ 11,230 |
Less: IPO related compensation and
benefits expense (2) |
317 |
364 |
798 |
Adjusted operating expenses |
$ 10,751 |
$ 11,532 |
$ 10,432 |
|
|
|
|
(1) Adjustments are pre-tax. |
|
|
|
(2) Non-cash compensation
charge related to restricted stock grants made since our inception
as a private company, including equity awards made in connection
with the initial public offering. |
|
|
|
|
|
|
NewStar Financial, Inc. |
|
|
Non-GAAP Data |
|
|
(unaudited) |
|
|
|
|
|
|
|
Adjusted |
|
Year Ended
December 31, |
($ in thousands) |
2011 |
2010 |
Performance Ratios: |
|
|
Return on average assets |
0.80% |
0.63% |
Return on average equity |
2.69 |
2.32 |
Efficiency ratio |
49.98 |
40.72 |
|
|
|
Consolidated Statement of
Operations Adjustments(1): |
|
|
Operating expenses |
$ 43,931 |
$ 40,613 |
Less: IPO related compensation and
benefits expense (2) |
1,550 |
3,647 |
Adjusted operating expenses |
$ 42,381 |
$ 36,966 |
|
|
|
(1) Adjustments are pre-tax. |
|
|
(2) Non-cash compensation
charge related to restricted stock grants made since our inception
as a private company, including equity awards made in connection
with the initial public offering. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NewStar Financial, Inc. |
|
|
|
|
|
|
Portfolio Data |
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
December 31,
2011 |
September 30,
2011 |
December 31,
2010 |
|
|
|
|
|
|
|
Portfolio Data: |
|
|
|
|
|
|
First mortgage |
$ 252,927 |
13.4% |
$ 252,311 |
13.8% |
$ 264,156 |
15.1% |
Senior secured asset-based |
114,585 |
6.1 |
109,084 |
6.0 |
73,764 |
4.2 |
Senior secured cash flow |
1,439,181 |
76.4 |
1,402,856 |
76.6 |
1,356,805 |
77.7 |
Other |
77,635 |
4.1 |
66,750 |
3.6 |
52,209 |
3.0 |
Total |
$ 1,884,328 |
100.0% |
$ 1,831,001 |
100.0% |
$ 1,746,934 |
100.0% |
|
|
|
|
|
|
|
Leveraged Finance |
$ 1,501,175 |
79.7% |
$ 1,457,512 |
79.6% |
$ 1,396,934 |
80.0% |
Real Estate |
271,381 |
14.4 |
270,736 |
14.8 |
282,610 |
16.2 |
Business Credit |
111,772 |
5.9 |
102,753 |
5.6 |
67,390 |
3.8 |
Total |
$ 1,884,328 |
100.0% |
$ 1,831,001 |
100.0% |
$ 1,746,934 |
100.0% |
CONTACT: Colleen M. Banse
500 Boylston St., Suite 1250
Boston, MA 02116
P. 617.848.2502
F. 617.848.4390
cbanse@newstarfin.com
Brian J. Fischesser
500 Boylston St., Suite 1250
Boston, MA 02116
P. 617.848.2512
F. 617.848.4398
bfischesser@newstarfin.com
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