show menu
close menu
LinkedIn icon
2013
  • All Years
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
  • 2010
  • 2009
  • 2008
  • 2007
  • 2006
  • 2005
  • 2004

Dec 03, 2013

NewStar Increases Credit Facility by $100 Million to $275 Million

Amended existing $175 million multi-year, non-recourse credit facility agented by Wells Fargo Securities LLC to support continued loan growth and provide flexibility to fund larger loans Increased commitment by $100 million to $275 million with an accordion feature allowing an additional increase to $325 million subject to certain conditions Increased target advance rate to 70% Amended concentration limits to support larger hold positions Amended pricing to lower cost of funds for advances against middle market loans BOSTON, Dec. 3, 2013 (GLOBE NEWSWIRE) -- NewStar Financial, Inc. (Nasdaq:NEWS), a specialized commercial finance company, today announced that it has amended an existing credit facility with Wells Fargo Bank N.A., increasing the commitment amount by $100 million to $275 million with an accordion feature that provides for the facility to increase in size to $325 million upon the company's request subject to certain conditions, including lender approval. The larger credit facility will be used to support continued loan growth. The financing adds approximately $140 million of lending capacity and provides flexibility to fund a wider range of lending activity. The amendment also increased the advance rates under the credit facility to 70%, up from advance rates ranging from 65% to 70% based on the type of loans pledged as collateral.  In addition to favorable changes in those key terms, pricing was also amended to reflect current market conditions, lowering the cost of funds for advances secured by middle market loans. The new deal amends an existing credit agreement with Wells Fargo which is used to fund new loan origination in the Company's Leveraged Finance group. The existing facility had an outstanding balance of $21 million as of September 30, 2013.  "This deal represents another step in our strategy to re-lever the balance sheet and support loan growth," said Tim Conway, Chairman and Chief Executive Officer. "We have originated nearly $1.2 billion of new loans over the last twelve months, which is our best performance since 2007 and is more reflective of the asset origination capabilities of our specialized lending platforms," he added.  Commenting on the credit facility, NewStar Treasurer John Frishkopf added, "This deal helps create new lending capacity to support increasing loan growth and positions NewStar to continue as a programmatic issuer in the securitization markets. The Wells Fargo team continues to provide us exceptional value through a powerful combination of capital, market perspective and a relationship approach that brings it all together."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 Atlanta GA, Darien CT, Chicago IL, Dallas TX, Los Angeles CA, New York, NY, Philadelphia PA, Portland OR and San Francisco CA. For more detailed transaction and contact information, please visit our website at www.newstarfin.com. CONTACT: Robert K. Brown 500 Boylston St., Suite 1250 Boston, MA 02116 P. 617.848.2558 F. 617.848.4390 rbrown@newstarfin.com
Read

Nov 06, 2013

NewStar Reports Third Quarter 2013 Consolidated Net Income of $6.4 Million, or $0.12 Per Diluted Share

Loan Growth — New funded loan volume was $284 million in the third quarter, up from $180 million in the same quarter last year, and total loans exceeded $2 billion, up 10% from year-end.  Credit Costs — Provision for credit losses decreased $1.9 million from the prior quarter to $2.4 million, or 0.47% of average loans, annualized.  Asset Quality — NPAs decreased by 9% from the prior quarter and non-accruing loans fell to 2.1% of consolidated loans, while charge-offs decreased to 0.18% of loans, annualized.   Funding — Completed seventh term debt securitization and redeemed at par all outstanding bonds issued through first term debt securitization in 2005.   Revenue — Risk-adjusted revenue1 was relatively unchanged from the prior quarter as lower provision expense was offset by the impact of slimmer margins, but consolidated revenue declined 7% from the prior quarter due to lower net interest income.  Net Interest Margin — Margin narrowed to 3.35% for the third quarter from 4.68% in the prior quarter due to lower deferred loan fee amortization driven by fewer prepayments, discrete items related to the term debt securitization completed in the third quarter, and the recognition of deferred loan income in the prior quarter in connection with the resolution of certain problem loans. BOSTON, Nov. 6, 2013 (GLOBE NEWSWIRE) -- NewStar Financial, Inc. (Nasdaq:NEWS), a specialized commercial finance company, today reported consolidated net income of $6.4 million, or $0.12 per diluted share for the third quarter of 2013.  Net income excluding the results of the Arlington Fund, a consolidated variable interest entity ("VIE"), was $6.2 million2. These results compare to net income of $5.6 million, or $0.11 per diluted share in the second quarter of 2013 and $6.1 million, or $0.11 per diluted share in the third quarter of 2012. Operating income before income taxes was $9.9 million for the third quarter of 2013 compared to $9.3 million in the second quarter of 2013 and $10.5 million in the third quarter of 2012.  "Our operating results in the third quarter were highlighted by strong loan growth, continued improvement in asset quality and solid earnings. We also continued to make significant progress on other key objectives, including completion of our seventh loan securitization," said Tim Conway, NewStar's Chairman and Chief Executive Officer. "Although deal activity typically slows in the summer, we were able to carry our momentum from last quarter to drive strong loan growth as the portfolio topped $2 billion.  Earnings also improved as higher fee revenue and lower credit costs offset slimmer margins, which were impacted by non-recurring factors, higher leverage and lower portfolio yields. Asset quality continued to improve as we reduced NPAs by 9% and brought the non-accrual rate down to just 2.1% of loans," he added. "On the funding side, we completed a $400 million loan securitization, increasing balance sheet leverage to 3x. Our stock has also performed well as the market continues to recognize the value of asset origination platforms like NewStar," he concluded.Managed and Owned Loan Portfolios Total new funded loan volume was approximately $284 million in the third quarter compared to $319 million in the prior quarter and $180 million in the third quarter of the prior year. Higher volumes reflected higher asset-based lending volume and increased demand for acquisition financing from financial sponsors compared to the same period last year.      The managed loan portfolio increased slightly to $2.5 billion as of September 30, 2013 compared to $2.4 billion as of June 30, 2013 as new funded loan volume was partially offset by loan run-off from scheduled amortization and prepayments of existing loans in the NewStar Credit Opportunities Fund. Consolidated loans increased by 7% from the prior quarter and 10% since the end of 2012, reflecting new loan volume and lower runoff in the third quarter, as well as, the consolidation of loans managed in the Arlington Fund.  Excluding loans in the Arlington Fund, the owned loan portfolio increased 5% from the prior quarter to $1.9 billion as of September 30, 2013 as new funded loan origination exceeded run-off from scheduled amortization and prepayments of existing loans.    The Leveraged Finance loan portfolio, excluding loans in the Arlington Fund, increased by $16 million during the third quarter of 2013 to over $1.5 billion, while asset-based loans and leases in our Business Credit portfolio increased 38% to $278 million.    Assets managed for third party institutional investors, including the Arlington Fund, increased to $547 million at September 30, 2013 as the growth in assets managed for the new Arlington Fund exceeded the run-off of assets managed in the NewStar Credit Opportunities Fund.  Asset-based lending and equipment finance business lines originated approximately $32 million and $14 million, respectively, in the third quarter of 2013, or 17% of new loan volume retained on the balance sheet. Real estate loans decreased by $12 million, or 9.6%, during the quarter to $110 million, or 5.4% of consolidated loans.   The owned loan portfolio (excluding the Arlington Fund) remained balanced across industry sectors and highly diversified by issuer. As of September 30, 2013, no outstanding borrowings by a single obligor represented more than 1.5% of total loans outstanding, and the ten largest obligors comprised approximately 10.3% of the loan portfolio.Arlington Fund Loans managed for the benefit of the Arlington Fund and consolidated into NewStar's results increased to $130 million as of September 30, 2013 from $85 million as of June 30, 2013. Borrowings under the Fund's warehouse credit facilities were approximately $93 million and the Fund's membership interests characterized as debt in accordance with GAAP were $25 million at September 30, 2013.  The net results (after-tax) of the Fund included in NewStar's financial statements as a consolidated VIE were $0.5 million up from $0.1 million, or approximately $0.01 per share in the third and second quarters of 2013. Net Interest Income / Margin The portfolio yield decreased to 6.33% in the third quarter of 2013 compared to 7.33% in the prior quarter, and 6.45% in the third quarter of 2012. Net interest income also decreased by approximately $5.7 million to $19.5 million for the third quarter of 2013 compared to $25.2 million for the second quarter of 2013 and $21.7 million in the third quarter of 2012.  Net interest income and portfolio yield were both negatively impacted by the prior recognition of deferred interest income on problem loans resolved during the second quarter and higher amortization of deferred loan fees related to an elevated level of prepayments during the second quarter.  Adjusting for the negative impact of non-accruing loans on a non-GAAP basis, the loan portfolio yield would have been 14 bps higher, or 6.47%. Net interest margin narrowed to 3.35% for the third quarter of 2013 compared to 4.68% for the second quarter of 2013 as net interest income decreased $5.7 million from the second quarter and interest expense increased $1.8 million.  As noted above, the decline in interest income was due primarily to prior quarter higher amortization of deferred loan fees associated with the increase in loan prepayments during the second quarter and the recognition of deferred interest income on certain problem loans resolved during the quarter. The increase in interest expense reflected higher average borrowings due primarily to the completion of a new term debt securitization and the related accelerated amortization of capitalized financing fees, as well as the consolidation of the Arlington Fund's debt.Non-Interest Income Non-interest income was $5.1 million for the third quarter of 2013, up from $1.5 million for the second quarter of 2013, and $3.2 million for the third quarter of 2012. The change from the second quarter was due primarily to a $1.1 million increase in value of an equity position retained in connection with a restructuring of an impaired loan, $0.9 million increase in equity method of accounting interests in impaired borrowers and a $0.4 million of gains on debt repurchases during the third quarter of 2013.  Other non-interest income in the third quarter of 2013 consisted primarily of $0.6 million of asset management income, $0.8 million of amendment and exit fees and $0.5 million of unused fees on revolving credit commitments. It also included approximately $0.6 million of revenue related to OREO currently being managed by the Company, which, prior to 2013, was reported net of related expenses and is now recognized on a gross basis in the Company's financial results.   Expenses Operating expenses decreased by $1.2 million to $11.5 million in the third quarter of 2013 compared to $12.8 million in the second quarter of 2013 due to lower compensation, general and administrative expenses, and lower operating expense related to OREO currently being managed by the Company, which, prior to 2013, was reported net of related revenue as part of non-interest income and is now recognized as an expense on a gross basis in the Company's financial results. Operating expenses excluding non-cash equity compensation3 were $10.8 million in the third quarter of 2013, or 1.9% of average assets on an annualized basis, compared to $11.6 million in the prior quarter. The efficiency ratio excluding non-cash equity compensation4 in the third quarter of 2013 was 43.8% compared to 43.9% in the prior quarter. The Company had 101 full-time employees as of September 30, 2013, compared to 103 at June 30, 2013.Income Taxes Deferred income taxes decreased to $30.7 million as of September 30, 2013 compared to $32.1 million as of June 30, 2013 due primarily to the vesting of performance-based equity awards and a decrease in the allowance for credit losses, as well as the related timing differences of when credit costs are recognized according to GAAP and when they are excluded for income tax. Approximately $20.0 million and $8.6 million of the deferred tax asset as of September 30, 2013 were related to our allowance for credit losses and equity compensation, respectively.Loan Credit Quality Total credit costs (including provision for credit losses and losses on OREO or interests retained in connection with workouts of impaired loans) in the third quarter of 2013 decreased by $3.8 million to $2.4 million from $6.2 million in the prior quarter.  Specific provision expense was approximately $2.4 million in the third quarter of 2013, down from $6.5 million in the second quarter of 2013.  The allowance for credit losses was $40.4 million, or 2.01% of consolidated loans and approximately 97% of NPLs, at September 30, 2013, compared to $39.0 million, or 2.07% of loans and approximately 83% of NPLs, at June 30, 2013. Non-performing assets decreased by $5.5 million, or 9%, from the prior quarter. Charge-offs on non-performing assets totaled $0.9 million.  At September 30, 2013, loans with an aggregate outstanding balance of $41.7 million (net of charge-offs), or 2.07% of consolidated loans, were on non-accrual status compared to loans with an aggregate outstanding balance of $46.9 million (net of charge-offs), or 2.49% of loans at June 30, 2013. Non-performing assets, net of charge-offs, specific reserves and other adjustments were $54.6 million, or 2.69% of consolidated loans as of September 30, 2013.Funding and Capital Completed $400.0 million tem debt securitization in September. All notes were priced at par yielding a weighted average spread of approximately Libor plus 221 bps. Achieved advance rate of approximately 85%, placing six classes of notes with investors totaling approximately $339 million, rated AAA/Aaa through BBB-. Amended commercial real estate credit facility with Macquarie Bank Limited in October, extending the maturity date by one year to June 2017 and providing $25.5 million of additional advances for existing eligible assets, allowing for an additional advance of up to $15.0 million to fund an additional commercial mortgage loan, and releasing $41.1 million of principal payments as unrestricted cash.   Called in October the term debt securitization which was completed in 2005 at par. Balance sheet leverage increased to 3.0x as of September 30, 2013 from 2.7x at June 30, 2013 due primarily to the new term debt securitization and an increase in borrowing by the Arlington Fund on its credit facility. Added liquidity with total cash and equivalents as of September 30, 2013 of $362.3 million, of which $87.8 million (excluding cash at the Arlington Fund) was unrestricted. Unrestricted cash increased from approximately $83.4 million at June 30, 2013 and restricted cash increased from approximately $228.3 million to $274.3 million due primarily to timing differences.  Cash at the Arlington Fund totaled $2.0 million.Book Value Book value per share was $12.53 at the end of the third quarter of 2013, up $0.14 from $12.39 at the end of the prior quarter and up $0.66 from $11.87 at the end of the third quarter of 2012 primarily due to net income, the amortization of equity compensation into stockholders' equity and an increase in the value of investments in debt securities.Share Count Average diluted shares outstanding were 52.7 million shares for the quarter, which was up slightly from 52.6 million shares for the prior quarter. Total outstanding shares at September 30, 2013 were 48.7 million, up slightly from 48.6 million as of June 30, 2013.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 November 13, 2013 by dialing 855-859-2056. International callers should call 404-537-3406. For all replays, please use the passcode 88699205. 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, Atlanta GA, Chicago IL, Dallas TX, Los Angeles CA, New York, NY, Philadelphia, PA, Portland, OR, and San Francisco, CA. For more detailed information, please visit our website at www.newstarfin.com.  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 include
Read

Oct 23, 2013

NewStar Financial Schedules Release of Results for the Third Quarter of 2013

BOSTON, Oct. 23, 2013 (GLOBE NEWSWIRE) -- NewStar Financial, Inc. (Nasdaq:NEWS) announced today that it will report results for the third quarter of 2013 on Wednesday, November 6, 2013 before the markets open. NewStar will also host a webcast/conference call to discuss the results on Wednesday, November 6, 2013 at 10:00am Eastern Time. All interested parties are invited to participate via telephone or webcast, which will be hosted through the Investor Relations section of the website 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 November 13, 2013 by dialing 855-859-2056. International callers should call 404-537-3406. For all replays, please use the passcode 88699205. The audio replay will also be available through the Investor Relations section of the website at www.newstarfin.com.About NewStar Financial, Inc.: 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, Atlanta GA, 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.CONTACT: Corporate Inquiries: NewStar Financial Robert K. Brown 617.848.2558 rbrown@newstarfin.com NewStar Financial Brian J. Fischesser 617.848.2512 bfischesser@newstarfin.com
Read

Sep 13, 2013

NewStar Taps Securitization Market for $400 Million in Benchmark Transaction

Upsized deal from $350 million to $400 million due to strong investor interest Six classes of notes were placed with a number of domestic and foreign investors   Priced all notes at par to yield a weighted average spread of approximately Libor plus 221 bps Achieved an advance rate of approximately 85%, placing approximately $339 million of notes rated AAA/Aaa through BBB- Retained notes rated BB and B in addition to equity interests totaling approximately $61 million, or 15% of the capital structure BOSTON, Sept. 13, 2013 (GLOBE NEWSWIRE) -- NewStar Financial Inc. (Nasdaq:NEWS), a specialized commercial finance company, announced today that it completed a $400 million term debt securitization known as NewStar Commercial Loan Funding 2013-1. All classes of notes were priced at par and the transaction was upsized from $350 million, reflecting broad participation among institutional investors.   NewStar Commercial Loan Funding 2013-1 is NewStar's seventh securitization since inception and part of a programmatic approach to the company's funding strategy. The notes offered through this CLO transaction are backed by a diversified portfolio of commercial loans originated by NewStar. The transaction was executed through a private offering via Rule 144A and Regulation S. Various classes of notes rated AAA/Aaa through BBB- totaling approximately $339 million were placed and NewStar retained BB and B rated notes in addition to the equity interests, which together represented 15% of the capital structure, or approximately $61 million. The deal was also structured with a variable funding note class, rated AAA, to provide valuable funding flexibility.  "Our ability to attract strong interest from significant new and repeat investors in this transaction underscores the strength of NewStar's track record and the value of our direct origination platform. The quality of the execution also reinforces our access to the capital markets and ability to expand and diversify our investor base," said NewStar CEO, Tim Conway. "Natixis did an outstanding job structuring and marketing the deal to drive the best execution." "The CLO market continues to provide attractive term financing for our balance sheet and this deal marked another important milestone for us," said John Frishkopf, head of asset management and treasury at NewStar. "Due to the market's strong receptivity, we were able to upsize the deal and price all tranches at par to achieve an attractive structure and all-in interest cost."    NewStar Financial will serve as manager of the CLO, which has a three-year reinvestment period. The class A notes are rated by two rating agencies and classes B — G are rated by a single agency. All notes were priced at par with a weighted average yield of LIBOR plus 2.21%. Natixis was placement agent and sole book runner.This announcement is neither an offer to sell nor a solicitation of an offer to buy the notes. The notes subject to the private placement have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. About NewStar Financial, Inc.: 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 markets. The Company specializes in providing a range of senior secured debt financing options to mid-sized companies to fund working capital, growth strategies, acquisitions and recapitalizations, as well as equipment purchases. NewStar originates loans and leases directly through teams of experienced, senior bankers and marketing officers organized around key industry and market segments. The Company targets 'hold' positions of up to $30 million and will selectively underwrite or arrange larger transactions for syndication to other lenders. NewStar is headquartered in Boston MA and has regional offices in Atlanta GA, Chicago IL, Dallas TX, Darien CT, Los Angeles CA, New York NY, Philadelphia PA, Portland OR, and San Francisco CA. Please visit our website at www.newstarfin.com for more detailed information.CONTACT: Corporate Inquiries: NewStar Financial Robert K. Brown (617) 848-2558
Read

Aug 07, 2013

NewStar Reports Second Quarter 2013 Consolidated Net Income of $5.6 Million, or $0.11 Per Diluted Share

Loan Growth — New funded loan volume was approximately $319 million in the second quarter compared to $147 million in the prior quarter and $205 million in the second quarter of the prior year.Revenue Growth — Consolidated revenue grew 11% from the prior quarter, but decreased on a risk-adjusted basis1 by 4% as the impact of wider margins was offset by higher provision expense.Net Interest Margin — Net interest margin widened to 4.68% for the second quarter from 4.11% in the prior quarter due primarily to recognition of deferred loan income in connection with the resolution of problem loans and higher deferred loan fee amortization associated with an elevated level of prepayments.Asset Quality — NPAs decreased by 33%, or almost $30 million from the prior quarter and non-accruing loans fell to 2.5% of consolidated loans due primarily to the resolution of legacy workouts. Provision for credit losses increased $3.6 million from the prior quarter, reflecting the impact of the resolution of certain problem loans.Funding — Refinanced $100 million of higher cost debt through new $200 million institutional term debt financing rated BB- by S&P.New Managed Fund - Formed a new managed credit fund to co-invest in middle-market commercial loans originated by NewStar. The fund is expected to be $300 million when fully invested and its financial results are now reported on a consolidated basis in NewStar's financial statements in accordance with GAAP2.BOSTON, Aug. 7, 2013 (GLOBE NEWSWIRE) -- NewStar Financial, Inc. (Nasdaq:NEWS), a specialized commercial finance company, today reported consolidated net income of $5.6 million, or $0.11 per diluted share for the second quarter of 2013. Net income excluding the results of the new Arlington Fund, a consolidated variable interest entity ("VIE"), was $5.7 million3. These results compare to net income of $6.2 million, or $0.12 per diluted share in the first quarter of 2013 and $5.6 million, or $0.11 per diluted share in the second quarter of 2012. Operating income before income taxes was $9.3 million for the second quarter of 2013 compared to $10.4 million in the first quarter of 2013 and $9.7 million in the second quarter of 2012. "We made significant progress on our key objectives this quarter. New loan volume rebounded strongly as M&A activity picked up and our productivity improved with the addition of three new bankers. We expanded our asset management activities with the launch of a new credit fund and completed a $200 million debt financing. Although provision expense was higher this quarter, we also reduced NPAs by one-third and brought the non-accrual rate down to 2.5% of loans," said Tim Conway, NewStar's Chairman and Chief Executive Officer. "Revenue grew, margins widened and our stock has performed well as developments in the market reinforce the value of asset origination platforms like NewStar," he concluded.New Managed Fund and its Impact on Financial Reporting In April 2013, NewStar formed a new managed credit fund, NewStar Arlington Fund LLC ("Arlington Fund" or the "Fund"), in partnership with an institutional investor, to co-invest in middle market commercial loans originated by NewStar's Leveraged Finance lending group. The Fund had $210 million of capital commitments from debt and equity investors at June 30, 2013 and is expected to grow to $300 million of assets under management after it is fully invested. NewStar retains a minority ownership interest in the Arlington Fund and manages the Fund's activities with full discretion over its investment decisions. NewStar also participates as a lender in a warehouse line of credit used by the fund to partially finance its loan investments.   The Arlington Fund is treated as a variable interest entity ("VIE") under GAAP and NewStar is deemed its primary beneficiary. As a result, NewStar is required to consolidate the Fund's results of operations and financial position. NewStar's ownership interest and loan receivable due from the Arlington Fund are eliminated upon consolidation.  Due to its treatment as a VIE, in addition to other facts and circumstances, the Arlington Fund's membership interests, representing equity ownership in the Fund, are characterized as debt in NewStar's consolidated financial statements under GAAP and the Fund's financial results include interest expense related to the membership interest debt based on an imputed interest rate. Loans managed for the benefit of the Arlington Fund and consolidated into NewStar's results were $85 million as of June 30, 2013. Borrowings under the Fund's warehouse credit facilities were approximately $51 million and the Fund's membership interests characterized as debt in accordance with GAAP were $22 million at June 30, 2013. The net results (after-tax) of the Fund included in NewStar's financial statements as a consolidated VIE were $0.1 million, or less than $0.01 per share in the second quarter of 2013. Managed and Owned Loan Portfolios Total new funded loan volume was approximately $319 million in the second quarter compared to $147 million in the prior quarter and $205 million in the second quarter of the prior year. Higher volumes reflected an increase in demand for acquisition financing from financial sponsors amid a pickup in M&A activity following a slow first quarter.      The managed loan portfolio remained steady at $2.4 billion as of June 30, 2013 approximately equal to March 31, 2013 as new funded loan origination was largely offset by loan run-off from scheduled amortization and an elevated level of prepayments of existing loans. Consolidated loans increased by 1.2% from the prior quarter and 3.0% since the end of 2012, reflecting stronger new loan volume in the second quarter and the consolidation of managed fund assets, which was partially offset by an elevated level of pre-payments. Excluding the $85 million of loans in the Arlington Fund, the owned loan portfolio decreased slightly from the prior quarter to $1.8 billion as of June 30, 2013 as run-off from scheduled amortization and prepayments of existing loans exceeded new funded loan origination.    The Leveraged Finance loan portfolio, excluding the $85 million of loans in the Arlington Fund, decreased by $32 million during the second quarter of 2013 to approximately $1.5 billion, while asset-based loans and leases in our Business Credit portfolio declined $3.6 million to $201 million.    Assets managed for third party institutional investors, including the Arlington Fund, remained steady at $531 million at June 30, 2013 as the expected run-off of assets managed in the NewStar Credit Opportunities Fund was offset by growth in assets managed for the new Arlington Fund.  Asset-based lending and equipment finance business lines originated approximately $9 million in the second quarter of 2013, or 3% of new loan volume retained on the balance sheet. Real estate loans decreased by $27 million, or 18.1%, during the quarter to $122 million, or 6.3% of consolidated loans.   The owned loan portfolio (excluding the Arlington Fund) remained balanced across industry sectors and highly diversified by issuer. As of June 30, 2013, no outstanding borrowings by a single obligor represented more than 1.5% of total loans outstanding, and the ten largest obligors comprised approximately 10.3% of the loan portfolio.Net Interest Income / Margin Net interest income increased by approximately $4.2 million to $25.2 million for the second quarter of 2013 compared to $21.0 million for the first quarter of 2013 and $21.4 million in the second quarter of 2012.   The portfolio yield increased to 7.33% in the second quarter of 2013 compared to 6.50% in the prior quarter, and 6.35% in the second quarter of 2012. The increase to both net interest income and portfolio yield was due primarily to the recognition of deferred interest income on problem loans resolved during the quarter, higher amortization of deferred loan fees related to an elevated level of prepayments and the consolidation of interest income from the Arlington Fund.    Adjusting for the negative impact of non-accruing loans on a non-GAAP basis, the loan portfolio yield would have been 23 bps higher, or 7.56%. Net interest margin widened to 4.68% for the second quarter of 2013 compared to 4.11% for the first quarter of 2013 as growth in interest income of $5.7 million in the quarter exceeded a $1.4 million increase in interest expense. As noted above, the growth in interest income was due primarily to higher amortization of deferred loan fees associated with the increase in loan prepayments during the second quarter and the recognition of deferred interest income, as well as growth in consolidated loans. The increase in interest expense reflected higher average borrowings due primarily to the completion of a new corporate debt issuance and the consolidation of the Arlington Fund's debt.Non-Interest Income Non-interest income was $1.5 million for the second quarter of 2013, down from $3.1 million for the first quarter of 2013, and $1.8 million for the second quarter of 2012. The change from the first quarter was due primarily to a decline in value of an equity position retained in connection with a restructuring of an impaired loan. There were no gains on debt repurchases during the first six months of 2013, or in the second quarter of 2012.  Other non-interest income in the second quarter of 2013 consisted primarily of $0.7 million of asset management income and $0.5 million of unused fees on revolving credit commitments. It also included approximately $0.6 million of revenue related to OREO currently being managed by the Company, which, prior to 2013, was reported net of related expenses and is now recognized on a gross basis in the Company's financial results.   Expenses Operating expenses decreased slightly by $0.1 million to $12.8 million in the second quarter of 2013 compared to $12.9 million in the first quarter of 2013 due to lower compensation, general and administrative expenses, partially offset by the recognition of $0.9 million of operating expense related to OREO currently being managed by the Company, which, prior to 2013, was reported net of related revenue as part of non-interest income and is now recognized as an expense on a gross basis in the Company's financial results. Operating expenses excluding non-cash equity compensation4 were $11.6 million in the second quarter of 2013, or 2.1% of average assets on an annualized basis, compared to $11.3 million in the prior quarter. The efficiency ratio excluding non-cash equity compensation5 in the second quarter of 2013 was 43.9% compared to 47.1% in the prior quarter. The Company had 103 full-time employees as of June 30, 2013, equal to March 31, 2013.Income Taxes Deferred income taxes decreased to $32.1 million as of June 30, 2013 compared to $40.9 million as of March 31, 2013 due primarily to the vesting of performance-based equity awards and a decrease in the allowance for credit losses, as well as the related timing differences of when credit costs are recognized according to GAAP and when they are excluded for income tax. Approximately $20.4 million and $8.3 million of the deferred tax asset as of June 30, 2013 were related to our allowance for credit losses and equity compensation, respectively.Loan Credit Quality Total credit costs (including provision for credit losses and losses on OREO or interests retained in connection with workouts of impaired loans) in the second quarter of 2013 increased by $5.5 million to $6.2 million from $0.7 million in the prior quarter.  Specific provision expense was approximately $6.5 million in the second quarter of 2013, up from $0.4 million in the first quarter of 2013. The establishment of a new specific reserve for one loan resulted in a corresponding $2 million reduction in the general allowance for credit losses.  The allowance for credit losses was $39.0 million, or 2.07% of consolidated loans and approximately 83% of NPLs, at June 30, 2013, compared to $45.5 million, or 2.50% of loans and approximately 60% of NPLs, at March 31, 2013. Non-performing assets decreased by $29.2 million, or 33%, from the prior quarter. Three assets totaling $26.1 million returned to performing status, two legacy loans totaling $8.6 million were placed on non-accrual status, and charge-offs on non-performing assets totaled $8.8 million.  At June 30, 2013, loans with an aggregate outstanding balance of $46.9 million (net of charge-offs), or 2.49% of consolidated loans, were on non-accrual status compared to loans with an aggregate outstanding balance of $76.3 million (net of charge-offs), or 4.19% of loans at March 31, 2013. Non-performing assets, net of charge-offs, specific reserves and other adjustments were $60.1 million, or 3.17% of consolidated loans and 44% of their aggregate face amount, as of June 30, 2013.Funding and Capital Refinanced $100 million of existing corporate debt through a new $200 million institutional term loan by amending and restating key terms of the existing note agreement on May 13, 2013 to reduce cost, extend maturity and provide additional capital. The loan was syndicated among a group of institutional lenders. The loan was rated BB- by Standard & Poor's and NewStar was assigned a BB- corporate rating with a Stable outlook in connection with the transaction.  Balance sheet leverage increased to 2.73x as of June 30, 2013 from 2.44x at March 31, 2013 due primarily to the corporate debt issuance and the consolidation of the Arlington Fund's debt.     Added substantial liquidity with total cash and equivalents as of June 30, 2013 of $313.3 million, of which $83.4 million (excluding cash at the Arlington Fund) was unrestricted. Unrestricted cash increased from approximately $27.6 million at June 30, 2013 and restricted cash increased from approximately $141.0 million to $228.3 million due primarily to timing differences.  Cash at the Arlington Fund totaled $1.6 million.Book Value Book value per share was $12.39 at the end of the second quarter of 2013, up $0.20 from $12.19 at the end of the prior quarter and up $0.70 from $11.69 at the end of the second quarter of 2012 primarily due to net income, the forfeiture of employee restricted shares to satisfy their personal tax liability upon vesting, and the amortization of equity compensation into stockholders' equity. During the second quarter of 2013, employees forfeited 0.9 million shares to satisfy their tax liability in connection with the vesting of restricted shares.Share Count Average diluted shares outstanding were 52.6 million shares for the quarter, which was down from 53.3 million shares for the prior quarter. Total outstanding shares at June 30, 2013 were 48.6 million, down from 49.3 million as of March 31, 2013.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 August 14, 2013 by dialing 855-859-2056. International callers should call 404-537-3406. For all replays, please use the passcode 21816080. The audio replay will also be available through the Investor Relations section at www.newstarfin.com.            About NewStar Financial
Read

Jul 24, 2013

NewStar Financial Schedules Release of Results for the Second Quarter of 2013

BOSTON, July 24, 2013 (GLOBE NEWSWIRE) -- NewStar Financial, Inc. (Nasdaq:NEWS) announced today that it will report results for the second quarter of 2013 on Wednesday, August 7, 2013 before the markets open. NewStar will also host a webcast/conference call to discuss the results on Wednesday, August 7, 2013 at 10:00am Eastern Time. All interested parties are invited to participate via telephone or webcast, which will be hosted through the Investor Relations section of the website 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 August 14, 2013 by dialing 855-859-2056. International callers should call 404-537-3406. For all replays, please use the passcode 21816080. The audio replay will also be available through the Investor Relations section of the website at www.newstarfin.com.About NewStar Financial, Inc.: 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, Atlanta GA, 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.CONTACT: Corporate Inquiries: NewStar Financial Robert K. Brown 617.848.2558 rbrown@newstarfin.com NewStar Financial Brian J. Fischesser 617.848.2512 bfischesser@newstarfin.com
Read

Jun 05, 2013

NewStar Taps Banking Veteran Pat McAuliffe to Lead Leveraged Finance

BOSTON, June 5, 2013 (GLOBE NEWSWIRE) -- NewStar Financial, Inc. (Nasdaq:NEWS) announced today that it has named banking veteran Pat McAuliffe to lead its Leveraged Finance business and added senior bankers, Eric Herr and Matt Colucci, to its Leveraged Finance origination team as managing directors. With the additions of Herr, Colucci and recent hire, Wes Frangul, NewStar continues to build and enhance the quality of its middle market sponsor coverage team. After serving as co-head of Leveraged Finance in 2012, McAuliffe will now lead NewStar's efforts to deepen relationships with its core clients, while also broadening its coverage of private equity firms with investment strategies focused on the middle market. Mr. Herr will open a new office for NewStar in New York City and Mr. Colucci will be based in the company's Darien CT office. Mr. Frangul is based in Chicago. Former co-head, David Dobies, has left the firm to pursue other professional interests. "Today's announcement reflects the continued growth and expansion of our direct lending platforms focused on the middle markets," said Tim Conway, NewStar's CEO. "I am very excited to have banking veteran and proven manager, Pat McAuliffe, lead our Leveraged Finance business as we continue to grow this specialized lending platform," he added. "These changes, together with additional lending capacity from our new $300 million credit fund and $200 million institutional term debt financing, position us to continue expanding our client base, while also increasing our commitment to existing clients in this important market segment," he concluded. Mr. McAuliffe has been with NewStar since 2005 and Co-head of its Leveraged Finance division since 2012. Prior to joining NewStar Financial in 2005, McAuliffe was a Regional Executive at Bank of America responsible for a $2 billion portfolio consisting of 1,500 Middle Market customers throughout the Metro New York region. Prior to its sale to Bank of America, Mr. McAuliffe spent 20 years at FleetBoston Financial, serving most recently as President of Fleet's metro New York region. Prior to that he was Executive Credit Officer for Fleet's middle market commercial lending business and was Group Executive for several national specialized lending groups including Oil & Gas, Transportation/Auto, Specialty Finance, Sports Finance, Utilities, and Environmental Services. Mr. Herr joins NewStar as a managing director from The Carlyle Group where he was a Principal in the GMS Finance group. Prior to joining Carlyle, he was a Managing Director and founding member of Churchill Financial. Previous to that, Mr. Herr was with GE Antares (a division of GE Capital) where he was Managing Director and a senior banker. Mr. Herr also served as SVP and Team Leader in Risk Management for GE Commercial Finance. He has more than 20 years of experience in leveraged finance and sponsor coverage including positions at Transamerica and Chrysler Capital. Mr. Colucci joins NewStar as a managing director from Balance Point Capital Partners where he was a Partner managing a middle market mezzanine fund.   Prior to that, he was Managing Director and founding member of Patriot Capital Funding, a publicly traded business development company, where he was member of the firm's investment committee and led a six-person investment team. He has more than 16 years of leveraged finance experience including positions at GE Capital and BayernLB. "I am thrilled to have the opportunity to lead this business for NewStar and I am excited about our opportunity in the marketplace with this team," said Pat McAuliffe, Head of Leveraged Finance. "Opening a New York office and adding three respected bankers like Eric Herr, Matt Colucci and Wes Frangul clearly reinforce our commitment to expand in this attractive market segment. Although we are well established in these markets, we continue to emphasize the quality of our sponsor coverage as we enter the next phase of our development," he added. Mr. Patrick McAuliffe   Mr. Matt Colucci 9 Old Kings Highway   9 Old Kings Highway  4th Floor  4th Floor Darien, CT 06820-5900   Darien, CT 06820-5900 P 203-716-8415   P 203-716-8431pmcauliffe@newstarfin.com  mcolucci@newstarfin.com     Mr. Eric Herr   (Temporarily located at)   9 Old Kings Highway    4th Floor   Darien, CT 06820-5900   P 917-363-1329  eherr@newstarfin.com   About NewStar Financial, Inc.: 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, Atlanta GA, Chicago IL, Dallas TX, Los Angeles CA, Philadelphia, PA, San Francisco CA, and Portland OR. For more detailed information, please visit our website at www.newstarfin.com. CONTACT: Corporate Inquiries: NewStar Financial Robert K. Brown 617.848.2558 rbrown@newstarfin.com
Read

May 16, 2013

NewStar Completes $200 Million Institutional Term Loan Financing Rated BB- by Standard & Poor's

BOSTON, May 16, 2013 (GLOBE NEWSWIRE) -- NewStar Financial Inc. (Nasdaq:NEWS), a specialized commercial finance company, announced today that it has amended and restated its senior secured notes to increase the amount to $200 million, extend the term to five years and reduce the interest rate among other things. The notes were rated BB- by Standard & Poor's and NewStar was assigned a BB- corporate rating with a Stable outlook in connection with the transaction.  Key terms of the note agreement have been amended and restated to, among other things: Increase the facility size to $200 million from $125 million (of which $100 million was outstanding), consisting of $170 million of funded term notes and $30 million of delayed draw term loan commitments Extend the final maturity of the facility to May 11, 2018 from August 31, 2016 with a $25 million tranche scheduled to mature May 11, 2017 Reduce borrowing costs to Libor plus 4.50% with a 1.00% Libor floor from Libor plus 7.00% with a 1.50% Libor floor Allow for early repayment of the notes subject to a 1% prepayment fee, if repaid from the proceeds of a new financing prior to May 13, 2014, or at par, if from operating cash, other sources or due to change of control Eliminate the borrowing base structure and related restrictive features Add an accordion feature that enables the Company to request up to $100 million of additional notes to be issued under the facility or pari passu with the facility "Completing a $200 million institutional term loan deal and receiving a BB- rating from S&P represent important new milestones for NewStar as we focus on growth opportunities and strategy options. The notes provide ample capital to support planned growth and significantly improve our financial flexibility, while also improving our cost of funds by replacing higher cost debt," said NewStar CEO, Tim Conway. "Although we considered a range of available options for this financing including an unsecured debt issuance, we were able to avoid substantially higher issuance costs by amending our existing note agreement. This amendment also adds to our financial flexibility by permitting us to prepay at any time while maintaining our ability to raise incremental secured debt backed by separate pools of collateral," said NewStar Treasurer, John Frishkopf. GreensLedge Capital Markets, LLC acted as advisor to NewStar on the transaction. About NewStar Financial, Inc.: 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, Atlanta GA, Chicago IL, Dallas TX, Los Angeles CA, Philadelphia, PA, San Francisco CA, and Portland OR. For more detailed information, please visit our website at www.newstarfin.com. Forward-Looking Statements: This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding NewStar's capital needs for planned growth and the timing of draws under the facility. 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 2012 Annual Report on Form 10-K. 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.CONTACT: NewStar Financial Robert K. Brown 617.848.2558 rbrown@newstarfin.com NewStar Financial Brian J. Fischesser 617.848.2512 bfischesser@newstarfin.com
Read

Page 1 of 2 Arrow next icon

hex medium gray

Latest Corporate Information

Hex divider blue

Copyright 2017 NewStar Financial, Inc. All Rights Reserved. Terms of use.