Strong Loan Growth - New funded loan volume exceeded $240 million, driving 16% annualized net growth in managed assets

Increased Lending Capacity - Added new $150 million credit facility to support continued loan growth

Attractive Margins - Margin increased as compared to Q1 2011, but narrowed sequentially from 4.77% in Q4 2011 to 4.30% in Q1 2012 due to slower loan prepayments

Continued Positive Credit Trends - Provision expense, net charge-offs and additions to non-accruals declined sequentially and from the same period in the prior year

Lower NPAs - NPAs fell by 15% to $86.5 million, or 4.6% of loans from 5.6% at year-end

Operating Efficiency - Adjusted operating expenses, excluding non-cash equity compensation, were 1.78% of average assets, or 37.1% of revenue

Building Book Value - Book value per share increased $0.15 to $11.57

Total new funded loan origination volume was $241 million in the first quarter compared to $257 million in the prior quarter and $160 million in the first quarter of the prior year.

The managed loan portfolio grew at a 16% annualized rate in the first quarter to $2.5 billion as of March 31, 2012, reflecting the net impact of continued strong new loan origination, which was partially offset by scheduled amortization and prepayments of existing loans.

Net loan growth in the owned portfolio was 11% on an annualized basis in the first quarter as the loan portfolio increased to $1.94 billion as of March 31, 2012 from $1.88 billion as of December 31, 2011. Loan growth was driven by a 4% increase in Leveraged Finance loans, or 16% on an annualized basis, and a 35% increase in the Business Credit loan portfolio, which was partially offset by an 18%, or $48.7 million, decrease in Real Estate loans.

Assets managed for third party institutional investors increased almost 9% in the first quarter to approximately $563 million at March 31, 2012 compared to $518 million at December 31, 2011.

Asset-based lending and equipment finance businesses originated $30 million in the first quarter, or 15% 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 March 31, 2012, no outstanding borrowings by a single obligor represented more than 1.4% of total loans outstanding, and the ten largest obligors comprised approximately 9.8% of the loan portfolio.

Net interest income before provision for credit losses decreased to $21.2 million for the first quarter of 2012 compared to $23.5 million for the fourth quarter of 2011, but increased from $18.4 million in the first quarter of last year. Approximately $1.4 million of the sequential decrease was due to lower deferred fee income as prepayments slowed in the quarter and approximately $1.0 was due to higher interest expense associated with increased debt levels.

Net interest margin narrowed to 4.30% for the first quarter of 2012 compared to 4.77% for the fourth quarter of 2011, but increased from 4.03% in the first quarter of last year.

Adjusting for the impact of non-performing loans, the loan portfolio yield would have been 38 bps higher and net interest margin would have been 4.68%.

Non-interest income was $2.8 million for the first quarter of 2012 compared to $1.9 million for the fourth quarter of 2011.

Non-interest income in the first quarter of 2012 consisted primarily of a $0.9 million gain on the repurchase of debt, $0.8 million of loan syndication fees, $0.7 million of asset management income, and $0.4 million of unused fees on revolving credit commitments, which was partially offset by a $0.5 million loss on the sale of loans.

Operating expenses decreased to $10.7 million in the first quarter of 2012 compared to $11.1 million in the fourth quarter of 2011 due primarily to lower compensation expense and professional fees.

Adjusted operating expenses, excluding non-cash equity compensation, were $8.9 in the first quarter of 2012, or 1.78% of average assets an annualized basis.

The adjusted efficiency ratio, excluding non-cash equity compensation, in the first quarter of 2012 was 37.1%

The Company had 92 full-time employees as of March 31, 2012.

Deferred income taxes were relatively consistent at $48.0 million as of March 31, 2012 compared to $47.9 million as of December 31, 2011. The slight increase reflected an increase in the difference in the timing of when equity compensation expenses are recognized according to GAAP and when they are deductible for income tax.

Approximately $26.0 million and $13.6 million of the deferred tax asset as of March 31, 2012 were related to our allowance for credit losses and equity compensation, respectively.

Credit performance continued to normalize as most key credit metrics improved in the first quarter of 2012.

Total credit costs (including provision for credit losses and losses on OREO or interests retained in connection with workouts of impaired loans) in the first quarter decreased to $2.9 million from $4.3 million in the prior quarter.

Provision expense of $2.9 million in the quarter was 0.63% of average loans on an annualized basis.

The component of provision expense used to establish additional specific reserves was approximately $1.6 million in the first quarter of 2012, up from $0.4 million in the fourth quarter of 2011.

The allowance for credit losses was $64.1 million, or 3.43% of loans and 83.1% of NPLs, at March 31, 2012, compared to $64.1 million, or 3.52% of loans, at December 31, 2011.

No new loans were placed on non-accrual status in the first quarter of 2012.

Non-performing assets decreased by $15.6 million, or 15%, from the end of 2011. Approximately $11.5 million of the decrease was due to the final resolution of three troubled credits and approximately $1.2 million was related to loan repayment activity. The remaining $2.9 million of the reduction reflected the impact of net charge-offs.

At March 31, 2012, loans with an aggregate outstanding balance of $77.1 million, net of charge-offs, were on non-accrual status compared to loans with an aggregate outstanding balance of $102.2 million, net of charge-offs, at December 31, 2011. Non-performing assets, net of charge-offs, specific reserves and other adjustments were $86.5 million, or 55.4% of their aggregate face amount, as of March 31, 2012.

Non-accrual loans with an outstanding balance of $49.4 million as of March 31, 2012 were also delinquent.

Net charge-offs were $2.9 million, or 0.62% of loans on an annualized basis, in the first quarter of 2012 compared to $13.2 million, or 2.89% of loans on an annualized basis, in the fourth quarter of 2011.

Entered into a new $150 million warehouse credit facility due February 2017 with an affiliate of Natixis Financial Products LLC, which increased total warehouse borrowing capacity to $650 million.

Increased available liquidity by $25 million through an amendment of a credit facility with Fortress Credit Corp., increasing the size of the facility from $100 million to $125 million and extending the effective maturity by two years.

Increased balance sheet leverage to 2.55x as of March 31, 2012 from 2.40x at December 31, 2011 due primarily to increased borrowings under warehouse lines to fund new loan origination and $25 million of additional corporate debt advanced under our credit facility with Fortress Credit Corp.

Maintained ample liquidity with total cash and equivalents as of March 31, 2012 of $122.3 million, of which $17.4 million was unrestricted. Unrestricted cash decreased from approximately $18.5 million at December 31, 2011 and restricted cash increased from approximately $83.8 million to $105.0 million.

Book value per share was $11.57 at the end of the first quarter 2012 up from $11.42 at the end of the prior quarter primarily due to net income for the quarter and the amortization of equity compensation into stockholders’ equity.

Average diluted shares outstanding were 52.2 million shares for the quarter, which was approximately equal to the prior quarter. Total outstanding shares at March 31, 2012 were 49.3 million, which was consistent with outstanding shares as of December 31, 2011.

Repurchased 181,723 shares of common stock at an average price of $10.05 during the first quarter of 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

Loss on derivatives

Loss on sale of loans

Other income (loss)

Total non-interest income (loss)

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 (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

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:

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

Real Estate

Business Credit

Total