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NewStar Reports Funded Loan Volume of $1B in 2012; Up 20%

February 14, 2013, 08:07 AM
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NewStar Financial reported net income of $6.2 million for the fourth quarter of 2012. These results compare to net income of $6.4 million in the fourth quarter of 2011 and $6.1 million in the third quarter of 2012. Income before income taxes (pre-tax income) was $10.3 million for the fourth quarter of 2012 compared to $10.0 million in the fourth quarter of 2011 and $10.5 million in the third quarter of 2012.

The company also reported that net income for 2012 increased approximately 70% to $24.0 million compared to $14.2 million in 2011.

Managed and Owned Loan Portfolios

  • Total new funded loan origination volume was approximately $401 million in the fourth quarter compared to $180 million in the prior quarter and $257 million in the fourth quarter of the prior year. Higher volumes reflected a significant increase in refinancing activity and greater demand for acquisition financing from financial sponsors amid an uptick in M&A recapitalization activity. Loan volume was over $1 billion for the full year, up 20% from $858 million in 2011.
  • The managed loan portfolio remained steady at $2.4 billion as of December 31, 2012 approximately equal to September 30, 2012 as new funded loan origination was offset by loan run-off from scheduled amortization and an elevated level of prepayments of existing loans.

"As expected, we had a very strong finish to the year with a significant pick-up in new business activity and another solid quarter of financial results. For the year, we originated over $1 billion in new loans, up 20% from the prior year and we increased earnings 70% to $24 million," said Tim Conway, NewStar's chairman and chief executive officer.

"Although historically high levels of run-off tempered our net loan growth, I am happy with our overall strong results. Revenue growth was solid. Credit results continued to reflect variation around a long term positive trend line and our margins held up well," he added. "We completed our sixth securitization and added additional funding capacity to support our growing asset-based lending business. As a result, I believe we are well positioned to continue growing our loan origination volumes and earnings as we head into 2013," he concluded.

Read the full earnings press release.

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