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Loan Volume Doubles as Better Credit Performance Drives Earnings
Profitable quarter with net income of $5.3 million, or $0.10 per share
Substantially lower provision for credit losses
Decline in non-performing assets to $149.9 million
New loan origination nearly doubled from the prior quarter to $123 million
Net interest margin improved to 3.75% from 3.03%
Expenses were stable at 1.87% of average assets
Strong liquidity and capital position
BOSTON, Aug. 4, 2010 (GLOBE NEWSWIRE) -- NewStar Financial, Inc. (Nasdaq:NEWS), a Boston-based commercial finance company, today reported adjusted net income for the second quarter of 2010 of $5.9 million, or $0.11 per diluted share. On a GAAP basis, the Company reported net income of $5.3 million, or $0.10 per diluted share, which reflected $0.5 million after-tax non-cash equity compensation expense related to the 2006 IPO.
"Adjusted net income (loss)" 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 pleased with the continued improvement in our operating performance as lower credit costs drove our return to profitability in the second quarter as expected. Importantly, we also doubled our new loan origination from the prior quarter, capitalizing on our direct origination platform and improving loan demand," said Tim Conway, Chairman and Chief Executive Officer. "Our return to profitability represents an important milestone for the Company and reflects our ability to stabilize credit performance and bolster the balance sheet, which will allow us to focus on expanding the business in an attractive environment. While our earnings remain vulnerable to potential negative credit surprises at this stage of the cycle, I remain optimistic about the positive trend in our credit performance."