Daily News: May 2, 2012

NewStar Financial Y/Y Q1 Earnings Higher; Funded Volume Up 51%


NewStar Financial reported first quarter 2012 net income of $6.1 million compared to net income of $0.9 million first quarter of 2011 and $6.4 million in the prior quarter. Pre-tax income was $10.4 million for the first quarter of 2012, up from $10.0 million in the prior quarter and $1.6 million in the first quarter of 2011.

NewStar said total new funded loan origination volume was $241 million in the first quarter compared to $257 million in the prior quarter and $160 million in the first quarter of the prior year.

The managed loan portfolio grew at a 16% annualized rate in the first quarter to $2.5 billion as of March 31, 2012, reflecting the net impact of continued strong new loan origination, which was partially offset by scheduled amortization and prepayments of existing loans.

The company noted that its provision for credit losses of $2.9 million was $3.4 million lower than the same quarter in 2011. The company said credit performance continued to normalize as most key credit metrics improved in the first quarter 2012.

“I am pleased to report another solid quarter highlighted by strong loan growth, improving credit performance and a 3.6% increase in pre-tax income,” said Tim Conway, NewStar’s chairman and chief executive officer. “More than $240 million of loan volume drove 16% annualized growth in our managed assets. Credit performance also continued to improve this quarter as provision expense, charge-offs and additions to non-accruals all declined, while we reduced NPAs by 15%,” he added “I am pleased with our results in the quarter and continue to be optimistic about 2012. With a lending staff that now totals more than 60 professionals, I believe that our national specialized lending platforms are well-positioned to meet customers’ needs and continue to gain market share,” he concluded.

To read the full NewStar Financial news release click here.