Net income of $3.4 million, or $5.1 million before impact of early retirement of CLO 2009-1 bonds

Adjusted net income was $3.6 million, or $0.07 per diluted share

New funded loan volume of $190 million drove net loan growth of $50 million, or 11% annualized

Net interest margin before the impact of early debt retirement increased to 4.61% as loan yields continued to improve

Credit costs decreased to $4.6 million from $6.3 million in prior quarter and NPAs declined 7% to 6% of loans

Book value per share increased $0.12 to $11.27 and Board authorized another $10 million share repurchase program

Total funded loan origination volume for the third quarter of 2011 was $190 million compared to $250 million in the second quarter.

Asset-based lending and equipment finance businesses originated $11 million, or 8.5% of new loan volume retained on the balance sheet.

The owned loan portfolio increased 3% to $1.8 billion as of September 30, 2011 compared to June 30, 2011.

The composition of the owned loan portfolio continued to reflect a focus on senior debt with 96% invested in 1^st lien senior secured loans at September 30, 2011.

The owned loan portfolio continued to be balanced across industry sectors and highly diversified by issuer. As of September 30, 2011, no outstanding borrowings by a single issuer represented more than 1.7% of total loans outstanding, and the ten largest issuers comprised approximately 11% of the loan portfolio.

The managed loan portfolio was $2.3 billion as of September 30, 2011 reflecting the net impact of new loan origination, partially offset by prepayments and scheduled amortization of existing loans, as well as charge-offs.

Assets managed for the NCOF were approximately $500 million at September 30, 2011, up slightly from June 30, 2011.

Net interest income before provision for credit losses decreased to $18.8 million for the third quarter of 2011 compared to $20.0 million for the second quarter of 2011.

Net interest margin narrowed to 3.98% for the third quarter of 2011 compared to 4.28% for the second quarter of 2011 due primarily to the accelerated amortization of deferred financing fees and unamortized discount related to the early retirement of bonds issued by the 2009-1 CLO. The net interest margin was 4.61% before the impact of the early retirement of CLO bonds.

Adjusting for the impact of non-performing loans, the loan portfolio yield would have been 45 bps higher and net interest margin would have been 4.23%, or 4.90% before the impact of early debt retirement.

Non-interest income was $3.4 million for the third quarter of 2011 compared to a loss of $0.8 million for the second quarter of 2011.

Non-interest income in the third quarter of 2011 consisted primarily of a $2.1 million gain on the repurchase of debt, $0.7 million of asset management income, $0.4 million of unused fees on revolving credit commitments, partially offset by a $0.6 million loss on certain equity interests retained in connection with various workouts.

Operating expenses increased to $11.9 million in the third quarter of 2011 compared to $10.8 million in the second quarter of 2011 due primarily to higher professional fees.

The Company had 88 full-time employees as of September 30, 2011.

Deferred tax asset decreased to $47.1 million as of September 30, 2011 from $48.5 million as of June 30, 2011. The decrease in the deferred tax asset was driven primarily by differences in the timing of when credit costs and equity compensation expenses are recognized according to GAAP and when they are deductible for income tax.

Approximately $29.3 million and $14.2 million of the deferred tax asset as of September 30, 2011 were related to our allowance for credit losses and equity compensation, respectively.

Credit costs decreased to $4.6 million in the third quarter of 2011 from $6.3 million in the second quarter as an increase in provision expense was more than offset by lower losses on equity interests retained in connection with workouts of impaired loans.

The provision for credit losses increased to $4.4 million in the third quarter of 2011 compared to $2.3 million in the second quarter of 2011.

Approximately $6.3 million of additional specific reserves were established in the third quarter of 2011, up slightly from $6.0 million in the second quarter of 2011.

The allowance for credit losses decreased to $73.0 million, or 4.10% of loans and 70% of NPLs, at September 30, 2011, compared to $78.0 million, or 4.46% of loans, at June 30, 2011.

One loan with a balance of $12.1 million as of September 30, 2011 was placed on non-accrual status in the third quarter of 2011.

Non-performing assets decreased 7% from the second quarter of 2011 due to a 5% decline in non-accruing loans and the sale of an interest in one property, which was included in other real estate owned (“OREO”). At September 30, 2011, loans with an aggregate outstanding balance of $103.8 million, net of charge-offs, were on non-accrual status compared to loans with an aggregate outstanding balance of $109.0 million, net of charge-offs, at June 30, 2011. Non-performing assets, net of charge-offs, specific reserves and other adjustments were $103.8 million, or 40% of their aggregate face amount, as of September 30, 2011.

Non-accrual loans with an outstanding balance of $75.7 million and an additional $8.4 million of loans as of September 30, 2011 were also delinquent loans.

Net charge-offs were $9.4 million, or 2.10% of loans on an annualized basis, in the third quarter of 2011 compared to $10.0 million, or 2.30% of loans on an annualized basis, in the second quarter of 2011.

The Company sold its interest in one property, which was included in OREO for a loss of $0.2 million.

Amended a credit facility with Wells Fargo as of July 12, 2011, increasing the size from $75 million to $125 million and extending the effective maturity by approximately three years.

Called the Class B notes of our 2009-1 CLO as of August 1, 2011 as the Class A notes fully amortized early due to higher than expected loan collateral prepayments.

Balance sheet leverage remained steady at 2.4x as of September 30, 2011.

Total cash and equivalents as of September 30, 2011 were $102.2 million, of which $27.6 million was unrestricted. Unrestricted cash decreased from approximately $49.4 million at June 30, 2011 and restricted cash decreased from approximately $109.9 million to $74.6 million.

Book value per share was $11.27 at the end of the third quarter 2011 up from $11.15 at the end of the prior quarter primarily due to net income for the quarter, share repurchases and the amortization of equity compensation into stockholders’ equity.

Average diluted shares outstanding were 52.6 million shares for the quarter down from 53.3 million for prior quarter. Total outstanding shares at September 30, 2011 were 49.5 million compared to 50.4 million at June 30, 2011.

Repurchased 855,381 shares of common stock at an average price of $9.63 during the third quarter of 2011.

($ in thousands)

Assets:

Cash and cash equivalents

Restricted cash

Investments in debt securities, available-for-sale

Loans held-for-sale, net

Loans and leases, net

Deferred financing costs, net

Interest receivable

Property and equipment, net

Deferred income taxes, net

Income tax receivable

Other assets

Total assets

Liabilities:

Credit facilities

Term debt

Repurchase agreements

Accrued interest payable

Accounts payable

Other liabilities

Total liabilities

Total stockholders’ equity

Total liabilities and stockholders’ equity

($ in thousands, except per share amounts)

Net interest income:

Interest income

Interest expense

Net interest income

Provision for credit losses

Net interest income after provision for credit losses

Non-interest income:

Fee income

Asset management income

Gain (loss) on derivatives

Gain (loss) on sale of loans

Gain on acquisition

Other income (loss)

Total non-interest income (loss)

Operating expenses:

Compensation and benefits

Occupancy and equipment

General and administrative expenses

Total operating expenses

Income before income taxes

Income tax expense

Net income before noncontrolling interest

Net income attributable to noncontrolling interest

Net income

After tax adjustments to net income:

IPO related compensation and benefits expense₍₁₎

Adjusted net income

Net income per share:

Basic

Diluted

Weighted average shares outstanding:

Basic

Diluted

Adjusted net income per share:

Basic

Diluted

Adjusted weighted average shares outstanding:

Basic

Diluted

($ in thousands, except per share amounts)

Net interest income:

Interest income

Interest expense

Net interest income

Provision for credit losses

Net interest income after provision for credit losses

Non-interest income:

Fee income

Asset management income

Gain on derivatives

Gain (loss) on sale of loans

Other income (loss)

Total non-interest income

Operating expenses:

Compensation and benefits

Occupancy and equipment

General and administrative expenses

Total operating expenses

Income before income taxes

Income tax expense

Net income before noncontrolling interest

Net income attributable to noncontrolling interest

Net income

After tax adjustments to net income:

IPO related compensation and benefits expense₍₁₎

Adjusted net income

Net income per share:

Basic

Diluted

Weighted average shares outstanding:

Basic

Diluted

Adjusted net income per share:

Basic

Diluted

Adjusted weighted average shares outstanding:

Basic

Diluted

($ in thousands)

Performance Ratios:

Return on average assets

Return on average equity

Net interest margin, before provision

Efficiency ratio

Portfolio yield

Credit Quality Ratios:

Delinquent loan rate (at period end)

Delinquent loan rate for accruing loans 60 days or more past due (at period end)

Non-accrual loan rate (at period end)

Non-performing asset rate (at period end)

Annualized net charge off rate (end of period loans)

Annualized net charge off rate (average period loans)

Allowance for credit losses ratio (at period end)

Capital and Leverage Ratios:

Equity to assets

Debt to equity

Book value per share

Average Balances:

Loans and other debt products, gross

Interest earning assets

Total assets

Interest bearing liabilities

Equity

Allowance for credit loss activity:

Balance as of beginning of period

General provision (credit) for credit losses

Specific provision for credit losses

Net charge offs

Balance as of end of period

Supplemental Data (at period end):

Investments in debt securities, gross

Loans held-for-sale, gross

Loans held-for-investment, gross

Loans and investments in debt securities, gross

Unused lines of credit

Standby letters of credit

Total funding commitments

Loan portfolio

Loans owned by NewStar Credit Opportunities Fund

Managed loan portfolio

Loans held-for-sale, gross

Loans held-for-investment, gross

Total loans, gross

Deferred fees, net

Allowance for loan losses - general

Allowance for loan losses - specific

Total loans, net

($ in thousands)

Performance Ratios:

Return on average assets

Return on average equity

Net interest margin, before provision

Efficiency ratio

Portfolio yield

Credit Quality Ratios:

Annualized net charge off rate (end of period loans)

Annualized net charge off rate (average period loans)

Average Balances:

Loans and other debt products, gross

Interest earning assets

Total assets

Interest bearing liabilities

Equity

Allowance for credit loss activity:

Balance as of beginning of period

General provision (credit) for credit losses

Specific provision for credit losses

Net charge offs

Balance as of end of period

($ in thousands)

Performance Ratios:

Return on average assets

Return on average equity

Efficiency ratio

Consolidated Statement of Operations Adjustments₍₁₎:

Operating expenses

Less: IPO related compensation and benefits expense ₍₂₎

Adjusted operating expenses

($ in thousands)

Performance Ratios:

Return on average assets

Return on average equity

Efficiency ratio

Consolidated Statement of Operations Adjustments₍₁₎:

Operating expenses

Less: IPO related compensation and benefits expense ₍₂₎

Adjusted operating expenses

($ in thousands)

Portfolio Data:

First mortgage

Senior secured asset-based