New Loan Volume – New funded loan volume exceeded $400 million for the quarter and $1 billion for the year – up 20% from 2011

Revenue Growth – Risk-adjusted revenue¹ in the fourth quarter increased 3% from the prior quarter and was up 29% for the full year

Margins – Net interest margin in the fourth quarter improved to 4.58% from 4.22% in the prior quarter and to 4.34% for the full year from 4.28% in the prior year

Credit Trends – Provision for credit losses increased $2.2 million from the prior quarter, but was down $4.6 million, or 27%, for the full year as NPAs decreased 23% from the prior quarter and 16% from the prior year

Funding – Completed a new $326 million securitization and added a new $75 million credit facility to support continued growth in ABL business and replace capacity from decrease in credit facility with DZ Bank

Building Book Value – Book value per share increased by $0.19 to $12.06 in the quarter, or $0.64 from 2011

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.

The owned portfolio remained stable at $1.9 billion as of December 31, 2012 as new funded loan origination was offset by the impact of run-off from scheduled amortization and prepayments of existing loans. Net loan growth in 2012 was 5.2%, excluding real estate loans, which decreased by $94 million or 34.6% in 2012.

The Leveraged Finance loan portfolio remained relatively stable through 2012 at approximately $1.5 billion, while asset-based loans and leases in our Business Credit portfolio increased by $85 million, or 76%, in 2012.

Assets managed for third party institutional investors increased by 9% in the fourth quarter to approximately $559 million at December 31, 2012 compared to $515 million at September 30, 2012 due primarily to new funded loan origination. Managed assets were up approximately 8% for the year.

Asset-based lending and equipment finance business lines originated approximately $25 million in the fourth quarter, or nearly 10% of new loan volume retained on the balance sheet.

The owned loan portfolio remained balanced across industry sectors and highly diversified by issuer. As of December 31, 2012, no outstanding borrowings by a single obligor represented more than 1.5% of total loans outstanding, and the ten largest obligors comprised approximately 10.2% of the loan portfolio.

Net interest income increased to $24.0 million for the fourth quarter of 2012 compared to $21.7 million for the third quarter of 2012 and $23.5 million in the fourth quarter of 2011. Net interest income for 2012 was $88.4 million, up 9.5% from $80.7 million in 2011.

The portfolio yield increased to 6.88% in the fourth quarter compared to 6.45% in the prior quarter, and 6.61% in the fourth quarter of 2011.

Adjusting for the negative impact of non-performing loans on a non-GAAP basis, the loan portfolio yield would have been 36 bps higher, or 7.24%.

Net interest margin widened to 4.58% for the fourth quarter of 2012 compared to 4.22% for the third quarter of 2012 due primarily to accelerated amortization of deferred loan fees associated with the high level of loan prepayments. The margin was 4.34% for the year, up from 4.28% in 2011.

Non-interest income was $3.8 million for the fourth quarter of 2012, up from $3.2 million for the third quarter of 2012 and $1.9 million for the fourth quarter of 2011. The change from the third quarter was due primarily to $0.8 million gain on sale of a loan, a $0.3 million increase on equity method of accounting interests, and an increase in miscellaneous fees. Gains on debt repurchases were $0.5 million in the fourth quarter of 2012, down from $1.3 million in the prior quarter.

Non-interest income was $11.6 million for the year, up $7.5 million from $4.1 million in 2011. Non-interest income for 2011 was negatively impacted by a $5.4 million loss on the value of equity interests in certain impaired borrowers.

Other non-interest income in the fourth quarter of 2012 consisted primarily of $0.8 million of asset management income, $0.7 million of amendment and exit fees, and $0.4 million of unused fees on revolving credit commitments.

Operating expenses increased by $0.9 million to $11.6 million in the fourth quarter of 2012 compared to $10.7 million in the third quarter of 2012 due to higher professional fees and workout costs.

Operating expenses excluding non-cash equity compensation² were $9.7 million in the fourth quarter of 2012, or 1.8% of average assets an annualized basis, compared to $9.0 million in the prior quarter.

The efficiency ratio excluding non-cash equity compensation³ in the fourth quarter of 2012 was 35.0% compared to 36.1% in the prior quarter.

The Company had 104 full-time employees as of December 31, 2012, up from 100 employees as of September 30, 2012.

Deferred income taxes decreased to $42.5 million as of December 31, 2012 compared to $46.4 million as of September 30, 2012 due primarily to a decrease in the allowance for credit losses and related timing differences of when credit costs are recognized according to GAAP and when they are excluded for income tax.

Approximately $24.9 million and $14.1 million of the deferred tax asset as of December 31, 2012 were related to our allowance for credit losses and equity compensation, respectively.

Total credit costs (including provision for credit losses and losses on OREO or interests retained in connection with workouts of impaired loans) in the fourth quarter increased by $1.9 million to $5.9 million from $4.0 million in the prior quarter.

Specific provision expense was approximately $7.9 million in the fourth quarter of 2012, up from $4.6 million in the third quarter of 2012.

The allowance for credit losses was $50.0 million, or 2.78% of loans and approximately 69% of NPLs, at December 31, 2012, compared to $59.4 million, or 3.21% of loans and approximately 72.5% of NPLs, at September 30, 2012.

Non-performing assets decreased by $9.2 million from the prior quarter. One new loan was placed on non-accrual status and charge-offs on non-performing assets totaled $15.3 million.

At December 31, 2012, loans with an aggregate outstanding balance of $72.7 million, net of charge-offs, were on non-accrual status compared to loans with an aggregate outstanding balance of $81.9 million, net of charge-offs, at September 30, 2012. Non-performing assets, net of charge-offs, specific reserves and other adjustments were $85.7 million, or 54.5% of their aggregate face amount, as of December 31, 2012.

Non-accrual loans with an outstanding balance of $41.7 million and accruing loans with an outstanding balance of $21.0 million as of December 31, 2012 were also delinquent.

Completed a $325.9 million term debt securitization (2012-2 CLO) backed by a diversified portfolio of loans originated by NewStar. This transaction represented the company’s sixth securitization.

Amended an existing credit facility with Wells Fargo to increase its size to $175 million through the addition of a new lender and extended the maturity date to November 2017.

Entered into a new $75 million credit facility with Wells Fargo to support continued growth in asset-based lending activity.

Decreased the size of a credit facility with DZ Bank by $75 million to better match utilization of the credit facility for asset-based lending with its availability, while extending its maturity by two years to June 2015.

Balance sheet leverage increased slightly to 2.49x as of December 31, 2012 from 2.47x at September 30, 2012 due primarily to the issuance of the 2012-2 CLO and increased borrowings under warehouse lines used to fund new loan origination, partially offset by CLO debt amortization and repayments of the commercial real estate repurchase agreement.

Maintained ample liquidity with total cash and equivalents as of December 31, 2012 of $235.9 million, of which $27.2 million was unrestricted. Unrestricted cash decreased from approximately $34.2 million at September 30, 2012 and restricted cash increased from approximately $151.4 million to $208.7 million.

Book value per share was $12.06 at the end of the fourth quarter 2012 up $0.19 from $11.87 at the end of the prior quarter and up $0.64 from $11.42 at the end of 2011 primarily due to net income and the amortization of equity compensation into stockholders’ equity.

Average diluted shares outstanding were 53.0 million shares for the quarter, which was equal to the prior quarter. Total outstanding shares at December 31, 2012 were 49.3 million, consistent with outstanding shares as of September 30, 2012.

($ 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

Income tax 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 on sale of loans

Other income (loss)

Total non-interest income

Operating expenses:

Compensation and benefits

General and administrative expenses

Total operating expenses

Income before income taxes

Income tax expense

Net income

Net income per share:

Basic

Diluted

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 (loss) on derivatives

Gain on sale of loans

Other income (loss)

Total non-interest income

Operating expenses:

Compensation and benefits

General and administrative expenses

Total operating expenses

Income before income taxes

Income tax expense

Net income

Net income per share:

Basic

Diluted

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 for loans 60 days or more past due (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 for credit losses

Specific provision for credit losses

Net (charge offs) recoveries

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 for credit losses

Specific provision for credit losses

Net charge offs

Balance as of end of period

($ in thousands)

Performance Ratios:

Efficiency ratio

Consolidated Statement of Operations Adjustments₍₁₎:

Operating expenses

Less: non-cash equity compensation expense₍₂₎

Adjusted operating expenses

Risk-adjusted revenue

Net interest income after provision for credit losses

Non-interest income (loss)

Risk-adjusted revenue

($ in thousands)

Performance Ratios:

Efficiency ratio

Consolidated Statement of Operations Adjustments₍₁₎:

Operating expenses

Less: non-cash equity compensation expense₍₂₎

Adjusted operating expenses

($ in thousands)

Portfolio Data:

First mortgage

Senior secured asset-based

Senior secured cash flow

Other

Total

Leveraged Finance

Business Credit

Real Estate

Total