NewStar Financial announced Q2/16 net income of $5.2 million, up from $5.0 million in Q2/15. For the six month period ended June 30, 2016 net income of $9.25 million was up 22.7% compared to $7.54 million a year earlier. NewStar noted a gain of $22.5 million on the sale of its ABL business earlier in the year.
The following highlights were excerpted from the NewStar’s earnings release:
“Our results in the second quarter reflected solid core operating trends, including an increase in investment activity, stable core revenue, improved credit performance and continued progress on our strategic goals. Although loan volumes remained below target levels through the first half of the year, investment activity improved in the second quarter. Loan demand from M&A activity remained weak, however, as continued uncertainty about the potential economic impacts of geopolitical events weighed on market sentiment,” said Tim Conway, NewStar’s chairman and CEO. “Overall, I was pleased with our financial results as earnings increased from last quarter and the comparable quarter last year. Core revenue remained steady at $25 million, excluding non-recurring items, despite the loss of revenue contributed by the asset-based lending (ABL) business, which we sold in the first quarter. Continued pressure on loan values, however, weighed on non-interest income in the quarter as we recognized additional unrealized losses on loans held for sale, which we could recover in future periods. Credit costs normalized in the second quarter as expected. We reduced non-performing assets by 16%. We also sold $34 million of real estate loans, accelerating the disposition of that portfolio. Our ability to take steps last quarter to accelerate certain workout strategies has positioned us well for the second half of the year.”
Like this story? Begin each business day with news you need to know! Click here to register now for our FREE Daily E-News Broadcast and start YOUR day informed!