NewStar Reports Fourth Quarter Results

Record Origination Volume Drives Strong Operating Performance as Managed Assets Reach $3 Billion

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| Source: NewStar Financial, Inc.

        * Generated $7.1 million of adjusted net income in the
          fourth quarter, or $0.18 adjusted earnings per diluted
          share

        * Earned $1.2 million of net income in the fourth quarter, or
          $0.03 net income  per diluted share on a GAAP basis, which
          reflects $2.4 million pretax loss on the retained residual
          interest in securities sold and $2.6 million pretax of
          non-cash equity compensation expense

        * Originated more than $700 million of new loan volume and
          reached $3.0 billion of assets in the managed loan
          portfolio as of 12/31/07

        * Strengthened the balance sheet through $125 million private
          placement of common equity and completion of $300 million
          term debt financing

        * Credit performance reflected natural seasoning of the
          portfolio and remained within expected parameters

BOSTON, Feb. 20, 2008 (PRIME NEWSWIRE) -- NewStar Financial, Inc. (Nasdaq:NEWS), a Boston-based specialty finance company, today reported adjusted net income for the fourth quarter of 2007 of $7.1 million, or $0.18 per diluted share. On a GAAP basis, the Company reported net income of $1.2 million, or $0.03 per diluted share, which reflects a $2.4 million pretax loss on the retained residual interest in securities sold in the second quarter of 2007 and $2.6 million pretax of non-cash equity compensation expense related to the 2006 IPO.

"Adjusted net income" and other non-GAAP financial measures used in this release are defined under "Non-GAAP Financial Measures" on page 4. Reconciliations between GAAP and adjusted (non-GAAP) measures can be found in the attached financial tables.

"Our fourth quarter reflects an increasingly favorable lending environment with better pricing and more conservative deal structures," said Tim Conway, Chairman and Chief Executive Officer. "The full benefit of that environment, however, is partially offset by continued dislocation in the credit markets which are driving marginal funding costs higher.

"While capital markets continue to be challenging and the credit outlook less certain, I believe we are well positioned to capitalize on this environment. Our defensive investment strategy emphasizing senior debt and diversification together with our balance sheet strength and continued access to capital will allow us to continue to build shareholder value."


 Funding and Capital
     * NewStar raised $125 million in a private placement of 12.5
       million shares of common stock, which was priced at $10.00 per
       share.  The transaction was completed in two tranches with the
       first closing occurring in the fourth quarter of 2007.  The
       second closing took place on January 18, 2008, following a
       Special Meeting of Stockholders held on January 15, 2008 at
       which the requisite stockholder approval was obtained.
     * NewStar also completed a $300 million term debt financing with
       Deutsche Bank and the NewStar Credit Opportunities Fund (NCOF)
       completed a $560 million term securitization.
     * The Company had approximately $623 million of available
       borrowing capacity under its credit facilities and existing
       term debt securitizations (CLOs) as of January 9, 2008.  As
       adjusted to include unlevered cash and the net proceeds from
       the second tranche of the common equity raise, NewStar had in
       excess of $700 million of funding capacity as of 1/09/08.
     * Total cash and equivalents as of December 31, 2007 were $192
       million, of which $76 million was unrestricted.

 Origination Volume
     * Overall origination volume for the quarter was $713 million, of
       which $467 million was retained on NewStar's balance sheet,
       $128 million was syndicated to others and $118 million was sold
       to the NewStar Credit Opportunities Fund (NCOF).
     * Middle Market Corporate generated approximately 92% of the new
       volume in the quarter, while Commercial Real Estate represented
       approximately 8%.

 Managed and Owned Loan Portfolios
     * Managed loan portfolio increased to $3.0 billion as of December
       31, 2007, up 14% or $355 million from $2.6 billion at September
       30, 2007, reflecting the net impact of $713 million of new
       origination, which was partially offset by prepayments and
       ongoing amortization.  The managed loan portfolio was $1.9
       billion as of December 31, 2006.
     * Assets managed for the NCOF increased by $87 million, or 18%,
       to $578 million at December 31, 2007 from $491 million at
       September 30, 2007 and increased by $295 million or 104% from
       $283 million as of December 31, 2006.
     * The owned loan portfolio continued to be balanced across
       industry sectors and highly diversified by issuer.  As of
       December 31, 2007, no single issuer represented more than 1%
       of total assets, excluding loans held-for-sale, and the ten
       largest issuers comprised approximately 10% of the loan
       portfolio.
     * The composition of the owned loan portfolio continued to
       reflect a focus on senior debt with 93% invested in senior
       secured loans and debt investments at December 31, 2007, up
       from 91% at September 30, 2007.

 Net Interest Income/Margin
     * Net interest income before provision for credit losses was
       $24.8 million for the fourth quarter 2007 compared to $24.6
       million for the third quarter 2007 and $15.5 million for the
       fourth quarter 2006.
     * Net interest margin was 3.98% for the fourth quarter 2007
       compared to 4.29% for the third quarter 2007 and 3.82% for the
       fourth quarter 2006.
     * Adjusted net interest margin was 3.98% for the fourth quarter
       2007 compared to 4.16% for the third quarter 2007 and 4.37%
       for the fourth quarter 2006.  Lower yields on interest earning
       assets contributed to modest margin compression.

 Non-Interest Income
     * The Company reported non-interest income of $4.0 million for
       the fourth quarter 2007  compared to non-interest income of
       ($21.8) million for the third quarter 2007, which reflected a
       $28.1 million pre-tax charge from the non-cash write-down of a
       retained residual interest in securities sold in the second
       quarter.
     * Excluding the impact of the write-down on the retained residual
       interest, adjusted non-interest income was $6.4 million in the
       fourth quarter 2007, up from $6.3 million in the third quarter
       2007.
     * The adjusted non-interest income of $6.4 million in the fourth
       quarter 2007 was comprised primarily of $3.3 million of
       syndication and agency fees, $1.7 of structuring and placement
       fees and $1.6 million of asset management income.

 Commercial Loan Credit Quality
     * Commercial loan credit performance reflected the natural
       seasoning of the loan portfolio and continued to perform within
       expected parameters.
     * The Company charged-off $4.6 million in the fourth quarter
       against the specific reserve established for a non-performing
       loan in the third quarter.
     * In the fourth quarter, the Company classified two of three
       impaired loans as non-performing and placed them on non-accrual
       status.  Specific reserves totaling $4.6 million were
       established to reflect potential credit losses on those loans.
     * Inclusive of these specific reserves, the provision for credit
       losses was $8.2 million in the fourth quarter 2007, up from
       $6.6 million in the third quarter 2007.
     * As of December 31, 2007, the allowance for credit losses was
       $35.5 million or 1.58% of loans, compared to $31.9 million, or
       1.62%, at September 30, 2007and $20.6 million or 1.40% at
       December 31, 2006.

 Expenses
     * Operating expenses increased modestly to $14.7 million in the
       fourth quarter 2007 from $14.3 million in the third quarter
       2007 due principally to severance costs and expenses associated
       with the equity issuance, which were mostly offset by lower
       incentive compensation expense.
     * The adjusted efficiency ratio improved to 35.7% in the fourth
       quarter from 37.4% the third quarter 2007 as adjusted revenues
       increased faster than expenses.

Conference Call and Webcast

NewStar will host a webcast/conference call to discuss the results today at 10:00 am Eastern Time. All interested parties are invited to participate via telephone or webcast, which will be hosted through the Investor Relations section at www.newstarfin.com. Please visit the website to register for the webcast and test your connection prior to the call. You can also access the conference call by dialing 877-675-4749 approximately 5-10 minutes prior to the call. International callers should dial 719-325-4888. All callers should reference "NewStar Financial."

For convenience, an archived replay of the call will be available through February 27, 2008 by dialing 888-203-1112. International callers should call 719-457-0820. For all replays, please use the passcode 3761480. The audio replay will also be available through the Investor Relations section at www.newstarfin.com.

About NewStar Financial

NewStar Financial (Nasdaq:NEWS) is a specialized commercial finance company focused on meeting the complex financing needs of companies and private investors in the middle markets. The Company specializes in providing senior secured debt financing for the acquisition or recapitalization of mid-sized companies and commercial real estate. NewStar originates loans directly through a team of experienced, senior bankers organized around key industry and market segments. The Company targets 'hold' positions of up to $20 million and selectively underwrites or arranges larger transactions for syndication to other lenders.

NewStar is headquartered in Boston, MA and has regional offices in Darien, CT, Chicago, IL, San Francisco, CA, San Diego, CA, and Charleston, SC. For more detailed transaction and contact information please visit www.newstarfin.com.

The NewStar Financial, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4044

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this release are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. As such, they are subject to material risks and uncertainties, including our limited operating history; the fact that we have yet to be profitable; the rapid expansion of our business since inception; our ability to compete effectively in a highly competitive industry; and the impact of federal, state and local laws and regulations that govern non-depository commercial lenders and businesses generally.

More detailed information about these factors is described in NewStar's filing with the Securities and Exchange Commission (the "SEC"), including Item 1A ("Risk Factors") of our 2006 Form 10-K as updated in our Quarterly Reports for the quarter ended June 30, 2007 and September 30, 2007. NewStar is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. NewStar plans to file its Form 10-K for December 31, 2007 with the SEC on or before March 17, 2008 and urges its shareholders to refer to that document for more complete information concerning NewStar's financial results.

Non-GAAP Financial Measures

References to "adjusted net income" and "adjusted earnings per share" mean net income or earnings per diluted share, respectively, as determined under GAAP, excluding the following items: i) interest expense and amortization of deferred financing costs on corporate debt, ii) the call premium and termination fee associated with the termination of our corporate debt, iii) compensation expense related to restricted stock grants made since our inception as a private company, including equity awards made in connection with the initial public offering; iv) earnings generated from the assets sold in the second quarter of 2007 and the retained residual interest in these assets; and v) the loss and expenses incurred in connection with the asset sale in the second quarter of 2007 and the change in fair value of the residual interest, including the impact on our effective tax rate. GAAP requires that these items be included in net income. NewStar management uses "adjusted net income" and "adjusted earnings per share" to make operational and investment decisions, and NewStar believes that they provide useful information to investors in their evaluation of our financial performance and condition. Excluding interest and amortization of deferred financing costs on corporate debt, the call premium and termination fee associated with the termination of our corporate debt, the financial results and expenses incurred in connection with the assets sold during the second quarter and the compensation expense related to restricted stock grants made since our inception as a private company, including equity awards made in connection with the initial public offering, eliminates unique amounts that make it difficult to assess our core performance and compare our period-over-period results. A reconciliation of adjusted net income to net income is included on pages 7 and 8 of this release.

References to "adjusted net interest margin" mean annualized interest income as determined under GAAP (excluding interest income generated from the assets sold in the second quarter 2007 and the retained residual interest) less annualized interest expense as determined under GAAP (excluding interest and amortization of deferred financing costs on corporate debt and interest expense incurred from the assets sold in the second quarter of 2007), divided by average interest earning assets (excluding the assets sold in the second quarter and the retained residual interest) for the period.

Adjusted return on average assets means adjusted net income divided by average assets for the period excluding the assets sold in the second quarter and the retained residual interest. Adjusted return on average equity means adjusted net income divided by average equity for the period. Adjusted efficiency ratio means operating expenses determined in accordance with GAAP less i) compensation expense related to restricted stock grants made since our inception as a private company, including equity awards made in connection with the initial public offering; ii) earnings generated from the assets sold in the second quarter of 2007 and the retained residual interest; and iii) the loss and expenses incurred in connection with the asset sale in the second quarter of 2007 and the change in fair value of the residual interest. Adjusted cost of funds means adjusted interest expense divided by average interest bearing liabilities for the period less the average corporate debt outstanding for the period and the credit facility funding for the assets sold in the second quarter of 2007. The adjusted ratios exclude unique expenses that make it difficult to assess our core performance and compare our period-over-period results.

A reconciliation of our adjusted financial measures to their GAAP equivalents is included on pages 11 and 12 of this release. NewStar's adjusted financial measures should not be considered as alternatives to financial measures determined in accordance with GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies.


 NewStar Financial, Inc.
 Consolidated Balance Sheets
 (unaudited)
 ---------------------------------------------------------------------
                            December 31,    September 30,  December 31,
 ($ in thousands)               2007            2007           2006
 ---------------------------------------------------------------------
 Assets:

 Cash and cash
  equivalents                $   76,155      $   73,420     $  103,269
 Restricted cash                115,807         119,572         40,174
 Residual interest in
  securitization                    631           3,051             --
 Investments in debt
  securities,
  available-for-sale             35,498          37,636        203,121
 Loans held-for-sale            112,944         117,528         62,620
 Loans, net                   2,201,442       1,933,469      1,437,832
 Deferred financing
  costs, net                     18,399          15,868         11,614
 Interest receivable             14,120          14,501         19,849
 Property and equipment, net      1,593           1,668            961
 Deferred income taxes, net      13,355          11,421         14,705
 Income tax receivable            4,635          12,355             --
 Other assets                    28,186          10,590         21,047
                             ----------      ----------     ----------
   Total assets              $2,622,765      $2,351,079     $1,915,192
 =====================================================================

 Liabilities:

 Repurchase agreements       $       63      $      545     $   34,535
 Credit facilities              677,739         705,401        625,910
 Term debt                    1,364,725       1,165,725        774,225
 Accrued interest payable        17,537          26,629         23,200
 Accounts payable                   197             643          4,315
 Income tax payable                  --              --          4,166
 Other liabilities               59,814          25,042         25,426
                             ----------      ----------     ----------
   Total liabilities          2,120,075       1,923,985      1,491,777
   Total stockholders'
    equity                      502,690         427,094        423,415
                             ----------      ----------     ----------
   Total liabilities and
    stockholders' equity     $2,622,765      $2,351,079     $1,915,192
 =====================================================================

 NewStar Financial, Inc.
 Consolidated Statements of Operations
 (unaudited)
 ---------------------------------------------------------------------
                                            Three Months Ended
                                    ----------------------------------
                                     December    September   December
 ($ in thousands, except per            31,         30,         31,
 share amounts)                        2007        2007        2006
 ---------------------------------  ----------------------------------
 Net interest income:
   Interest income                  $   55,606  $   52,626  $   39,243
   Interest expense                     30,826      28,071      23,766
                                    ----------  ----------  ----------
     Net interest income                24,780      24,555      15,477
   Provision for credit losses           8,155       6,553       5,941
                                    ----------  ----------  ----------
   Net interest income after
    provision for credit losses         16,625      18,002       9,536

 Non-interest income:
   Fee income                            5,620       3,334       3,006
   Asset management income               1,618       1,471         692
   Gain on derivatives                     289         134          73
   Gain (loss) on sale of loans
    and debt securities                   (359)         11         695
   Loss on investments in debt
    securities                          (1,976)     (1,979)       (846)
   Loss on residual interest in
    securitization                      (2,420)    (28,136)         --
   Other income                          1,185       3,317         483
                                    ----------  ----------  ----------
     Total non-interest income           3,957     (21,848)      4,103
 Operating expenses:
   Compensation and benefits            11,169      11,169      47,738
   Occupancy and equipment                 835         781         486
   General and administrative
    expenses                             2,667       2,309       3,380
                                    ----------  ----------  ----------
     Total operating expenses           14,671      14,259      51,604
                                    ----------  ----------  ----------
 Income (loss) before income taxes       5,911     (18,105)    (37,965)
   Income tax expense (benefit)          4,677      (7,260)     (5,911)
                                    ----------  ----------  ----------
 Net income (loss)                  $    1,234  $  (10,845) $  (32,054)
                                    ==========  ==========  ==========
   After tax adjustments to net
    income (loss):
     Extinguishment of corporate
      debt expense (1)                      --          --       2,805
     IPO related compensation and
      benefits expense (2)               1,654       1,946      33,202
     IPO related general and
      administrative expense (3)            --          --         621
     Loss on assets sold and
      retained residual
      interest (4)                       4,240      16,627         328
     Net interest income earned on
      assets sold and retained
      residual interest (5)                 --        (602)     (1,418)
                                    ----------  ----------  ----------
 Adjusted net income                $    7,128  $    7,126  $    3,484
                                    ==========  ==========  ==========

 Net income (loss) per share:
   Basic                            $     0.03  $    (0.30) $    (1.26)
   Diluted                          $     0.03  $    (0.30) $    (1.26)

 Weighted average shares
  outstanding: (6)
   Basic                            38,826,567  36,253,628  25,376,446
   Diluted                          38,826,567  36,253,628  25,376,446

 Adjusted net income per share:
   Basic                            $     0.18  $     0.20  $     0.14
   Diluted                          $     0.18  $     0.20  $     0.13

 Adjusted weighted average shares
  outstanding: (6)
   Basic                            38,826,567  36,253,628  25,376,446
   Diluted                          38,826,567  36,400,569  25,910,522

 (1) Includes interest expense, call premium, termination fee and
     deferred finance costs associated with the Company's corporate
     debt which was repaid on December 20, 2006.
 (2) Non-cash compensation charge related to restricted stock grants
     made since our inception as a private company, including equity
     awards made in connection with the initial public offering.
 (3) General and administrative expense related to the Company's
     initial public offering.
 (4) Loss and expenses incurred in connection with the sale of assets
     comprised of 50 debt securities and two loans during Q2 2007,
     permanent impairments on these assets, the change in fair value
     of the residual interest in these assets, and the impact on the
     effective tax rate. The change in effective tax rate was applied
     retrospectively.
 (5) Net interest income earned on the assets sold
     during Q2 2007 and the residual interest in these assets.
 (6) Weighted average shares for all periods reflect the conversions
     and reverse split that occurred at the IPO.

 NewStar Financial, Inc.
 Consolidated Statements of Operations
 (unaudited)
 ---------------------------------------------------------------------
                                                Year Ended December 31,
                                                ----------------------
 ($ in thousands, except per share amounts)        2007        2006
 ---------------------------------------------  ----------  ----------
 Net interest income:
   Interest income                              $  204,295   $ 116,303
   Interest expense                                109,703      68,728
                                                ----------  ----------
     Net interest income                            94,592      47,575
   Provision for credit losses                      19,510      12,535
                                                ----------  ----------
     Net interest income after provision for
      credit losses                                 75,082      35,040

 Non-interest income:
   Fee income                                       15,797       5,849
   Asset management income                           5,304       1,443
   Gain on derivatives                                 777         909
   Gain (loss) on sale of loans and debt
    securities                                      (4,615)        474
   Loss on investments in debt
    securities                                     (20,303)       (597)
   Loss on residual interest in securitization     (30,556)         --
   Other income                                      5,420       1,606
                                                ----------  ----------
     Total non-interest income                     (28,176)      9,684
 Operating expenses:
   Compensation and benefits                        45,364      65,079
   Occupancy and equipment                           2,718       1,758
   General and administrative expenses               9,412       7,445
                                                ----------  ----------
     Total operating expenses                       57,494      74,282
                                                ----------  ----------
 Loss before income taxes                          (10,588)    (29,558)
   Income tax benefit                               (1,949)     (2,377)
                                                ----------  ----------
 Net loss                                       $   (8,639) $  (27,181)
                                                ==========  ==========
   After tax adjustments to net loss:
     Extinguishment of corporate debt
      expense (1)                                       --       5,078
     IPO related compensation and benefits
      expense (2)                                    8,882      33,202
     IPO related general and administrative
      expense (3)                                       --         795
     Loss on assets sold and retained residual
      interest (4)                                  31,026         328
     Net interest income earned on assets
      sold and retained residual interest (5)       (2,860)     (3,688)
                                                ----------  ----------
 Adjusted net income                            $   28,409  $    8,534
                                                ==========  ==========

 Net loss per share:
   Basic                                        $    (0.23) $    (1.65)
   Diluted                                      $    (0.23) $    (1.65)

 Weighted average shares outstanding: (6)
   Basic                                        36,904,222  16,480,836
   Diluted                                      36,904,222  16,480,836

 Adjusted net income per share:
   Basic                                        $     0.77  $     0.52
   Diluted                                      $     0.76  $     0.50

 Adjusted weighted average shares
  outstanding: (6)
   Basic                                        36,904,222  16,480,836
   Diluted                                      37,217,658  17,005,343


 (1) Includes interest expense, call premium, termination fee and
     deferred finance costs associated with the Company's corporate
     debt which was repaid on December 20, 2006.
 (2) Non-cash compensation charge related to restricted stock grants
     made since our inception as a private company, including equity
     awards made in connection with the initial public offering.
 (3) General and administrative expense related to the Company's
     initial public offering.
 (4) Loss and expenses incurred in connection with the sale of assets
     comprised of 50 debt securities and two loans during Q2 2007,
     permanent impairments on these assets, the change in fair value
     of the residual interest in these assets, and the impact on the
     effective tax rate.
 (5) Net interest income earned on the assets sold during Q2 2007 and
     the residual interest in these assets.
 (6) Weighted average shares for all periods reflect the conversions
     and reverse split that occurred at the IPO.

 NewStar Financial, Inc.
 Selected Financial Data
 (unaudited)
 --------------------------------------------------------------------
                                           Three Months Ended
                                   ----------------------------------
                                    December    September   December
                                       31,         30,         31,
 ($ in thousands)                     2007        2007        2006
 --------------------------------  ----------  ----------  ----------
 Performance Ratios:
   Return on average assets              0.19%      (1.87)%     (7.83)%
   Return on average equity              1.05       (9.91)     (50.91)
   Net interest margin, before
    provision                            3.98        4.29        3.82
   Efficiency ratio                     51.05      526.87      263.57
   Loan portfolio yield                  9.28        9.72       10.00

 Credit Quality and Leverage Ratios
  (at period end):
   Delinquent loan rate                    --        0.37        0.57
   Non-accrual loan rate                 0.97        0.37          --
   Net charge off rate                   0.19          --          --
   Allowance for credit losses ratio     1.58        1.62        1.40
   Equity to assets                     19.17       18.17       22.11
   Debt to equity                        4.06x       4.38x       3.39x

 Average Balances:
   Loans and other debt products,
    gross                          $2,304,028  $2,040,217  $1,525,105
   Interest earning assets          2,471,037   2,272,435   1,606,785
   Total assets                     2,522,382   2,302,288   1,623,952
   Interest bearing liabilities     1,992,228   1,808,174   1,328,178
   Equity                             466,266     434,196     249,773

 Allowance for credit loss
  activity:
   Balance as of beginning of
    period                         $   31,925  $   25,372  $   14,629
   General provision for credit
    losses                              3,563       2,153       5,941
   Specific provision for credit
    losses                              4,592       4,400          --
   Net charge offs                     (4,593)         --          --
                                   ----------  ----------  ----------
   Balance as of end of period     $   35,487  $   31,925  $   20,570
                                   ==========  ==========  ==========

 Supplemental Data (at period end):
   Investments in debt securities,
    gross                          $   38,787  $   41,608  $  217,314
   Loans held-for-sale, gross         115,055     117,755      63,277
   Loans held-for-investment,
    gross                           2,248,480   1,973,793   1,467,038
                                   ----------  ----------  ----------
   Loans and investments in debt
    securities, gross               2,402,322   2,133,156   1,747,629
   Unused lines of credit             454,837     412,168     302,856
   Standby letters of credit           20,382      12,904       6,990
                                   ----------  ----------  ----------
   Total funding commitments       $2,877,541  $2,558,228  $2,057,475
                                   ==========  ==========  ==========

   Loan portfolio                  $2,402,322  $2,133,156  $1,747,629
   Loans owned by NewStar Credit
    Opportunities Fund                578,272     491,436     283,378
   Less: assets sold (1)                   --          --     179,979
                                   ----------  ----------  ----------
   Managed loan portfolio          $2,980,594  $2,624,592  $1,851,028
                                   ==========  ==========  ==========

   Loans held-for-sale, gross      $  115,055  $  117,755  $   63,277
   Loans held-for-investment,
    gross                           2,248,480   1,973,793   1,467,038
                                   ----------  ----------  ----------
   Total loans, gross               2,363,535   2,091,548   1,530,315
   Deferred fees, net                 (15,762)    (10,179)    (10,468)
   Allowance for loan losses          (28,795)    (25,972)    (19,395)
   Specific reserve                    (4,592)     (4,400)         --
                                   ----------  ----------  ----------
   Total loans, net                $2,314,386  $2,050,997  $1,500,452
                                   ==========  ==========  ==========

   Book value per share            $    11.58  $    11.78  $    11.68

   (1) Outstanding par value of the assets sold on June 29, 2007.

 NewStar Financial, Inc.
 Selected Financial Data
 (unaudited)
 ---------------------------------------------------------------------
                                               Year Ended December 31,
                                               ----------------------
 ($ in thousands)                                 2007        2006
 --------------------------------------------- ----------  ----------
 Performance Ratios:
   Return on average assets                         (0.39)%     (2.22)%
   Return on average equity                         (1.97)     (15.85)
   Net interest margin, before provision             4.23        3.93
   Efficiency ratio                                 86.57      129.73
   Loan portfolio yield                              9.63        9.89

 Credit Quality and Leverage Ratios (at
  period end):
   Delinquent loan rate                                --        0.57
   Non-accrual loan rate                             0.97          --
   Net charge off rate                               0.19          --
   Allowance for credit losses ratio                 1.58        1.40
   Equity to assets                                 19.17       22.11
   Debt to equity                                    4.06x       3.39x

 Average Balances:
   Loans and other debt products, gross        $2,038,678  $1,150,111
   Interest earning assets                      2,234,916   1,210,494
   Total assets                                 2,243,524   1,224,744
   Interest bearing liabilities                 1,767,993   1,028,139
   Equity                                         439,650     171,518

 Allowance for credit loss activity:
   Balance as of beginning of period           $   20,570  $    8,035
   General provision for credit losses             10,518      12,535
   Specific provision for credit losses             8,992          --
   Net charge offs                                 (4,593)         --
                                               ----------  ----------
   Balance as of end of period                 $   35,487  $   20,570
                                               ==========  ==========

 Supplemental Data (at period end):
   Investments in debt securities, gross       $   38,787  $  217,314
   Loans held-for-sale, gross                     115,055      63,277
   Loans held-for-investment, gross             2,248,480   1,467,038
                                               ----------  ----------
   Loans and investments in debt securities,
    gross                                       2,402,322   1,747,629
   Unused lines of credit                         454,837     302,856
   Standby letters of credit                       20,382       6,990
                                               ----------  ----------
   Total funding commitments                   $2,877,541  $2,057,475
                                               ==========  ==========

   Loan portfolio                              $2,402,322  $1,747,629
   Loans owned by NewStar Credit Opportunities
    Fund                                          578,272     283,378
   Less: assets sold (1)                               --     179,979
                                               ----------  ----------
   Managed loan portfolio                      $2,980,594  $1,851,028
                                               ==========  ==========

   Loans held-for-sale, gross                  $  115,055  $   63,277
   Loans held-for-investment, gross             2,248,480   1,467,038
                                               ----------  ----------
   Total loans, gross                           2,363,535   1,530,315
   Deferred fees, net                             (15,762)    (10,468)
   Allowance for loan losses                      (28,795)    (19,395)
   Specific reserve                                (4,592)         --
                                               ----------  ----------
   Total loans, net                            $2,314,386  $1,500,452
                                               ==========  ==========

   Book value per share                        $    11.58  $    11.68

 (1) Outstanding par value of the assets sold on June 29, 2007.

 NewStar Financial, Inc.
 Non-GAAP Data
 (unaudited)
                                    ----------------------------------
                                                 Adjusted
 --------------------------------   ----------------------------------
                                            Three Months Ended
                                    ----------------------------------
                                     December    September   December
                                        31,          30,        31,
 ($ in thousands)                      2007         2007       2006
 --------------------------------   ----------  ----------  ----------
 Performance Ratios:
   Return on average assets               1.12%       1.24%       0.94%
   Return on average equity               6.07        6.51        5.53
   Efficiency ratio                      35.65       37.39       49.01
   Net interest margin, before
    provision                             3.98        4.16        4.37
   Yield on interest earning assets       8.93        9.12        9.63
   Cost of funds                          6.14        6.16        6.48

 Credit Quality and Leverage Ratios
  (at period end):
   Equity to assets                      19.17       18.19       24.40
   Debt to equity                         4.06x       4.38x       2.98x

 Consolidated Statement of
  Operations
  Adjustments(1):
   Interest income                  $   55,606  $   52,626  $   39,243
   Less: interest income earned on
    assets sold and retained
    residual interest (2)                   --       1,019       4,136
                                    ----------  ----------  ----------
   Adjusted interest income         $   55,606  $   51,607  $   35,107
                                    ==========  ==========  ==========

   Interest expense                 $   30,826  $   28,071  $   23,766
   Less:
   Interest expense related to
    assets sold (2)                         --          --       1,878
   Interest & amortization related
    to corporate debt                       --          --       2,728
                                    ----------  ----------  ----------
   Adjusted interest expense        $   30,826  $   28,071  $   19,160
                                    ==========  ==========  ==========

   Non-interest income              $    3,957  $  (21,848) $    4,103
   Plus: loss on assets sold and
    retained residual interest (2)       2,420      28,136         522
                                    ----------  ----------  ----------
   Adjusted non-interest income     $    6,377  $    6,288  $    4,625
                                    ==========  ==========  ==========

   Operating expenses               $   14,671  $   14,259  $   51,604
   Less:
   Corporate debt prepayment fees           --          --       1,425
   IPO related compensation and
    benefits expense (3)                 2,632       3,108      39,129
   IPO related general and
    administrative expense (4)              --          --         968
   Expenses resulting from sale of
    assets (2)                             931          --          --
                                    ----------  ----------  ----------
   Adjusted operating expenses      $   11,108  $   11,151  $   10,082
                                    ==========  ==========  ==========

 Average Balances:
   Assets                           $2,522,382  $2,302,288  $1,623,952
   Less: assets sold and residual
    interest (2)                         1,841      26,955     160,083
                                    ----------  ----------  ----------
   Adjusted assets                  $2,520,541  $2,275,333  $1,463,869
                                    ==========  ==========  ==========

   Interest earning assets          $2,471,037  $2,272,435  $1,606,785
   Less: assets sold and residual
    interest (2)                         1,841      26,955     160,083
                                    ----------  ----------  ----------
   Adjusted interest earning assets $2,469,196  $2,245,480  $1,446,702
                                    ==========  ==========  ==========

   Interest bearing liabilities     $1,992,228  $1,808,174  $1,328,178
   Less:
   Credit facility funding for
    assets sold (2)                         --          --     121,650
   Corporate debt                           --          --      33,016
                                    ----------  ----------  ----------
   Adjusted interest bearing
    liabilities                     $1,992,228  $1,808,174  $1,173,512
                                    ==========  ==========  ==========

 Consolidated Balance Sheet
  Adjustments
   Assets                           $2,622,765  $2,351,079  $1,915,192
   Less: assets sold and residual
    interest (2)                           631       3,051     179,979
                                    ----------  ----------  ----------
   Adjusted assets                  $2,622,134  $2,348,028  $1,735,213
                                    ==========  ==========  ==========

   Debt                             $2,042,527  $1,871,671  $1,434,670
   Less: credit facility funding
    for assets sold (2)                     --          --     174,510
                                    ----------  ----------  ----------
   Adjusted debt                    $2,042,527  $1,871,671  $1,260,160
                                    ==========  ==========  ==========

 (1) Adjustments are pre-tax.
 (2) On June 29, 2007, the Company completed the sale of assets
     comprised of 50 debt securities and two loans and retained a
     residual interest in these assets. The adjustment represents
     the financial impact of the sold assets and residual interest.
 (3) Non-cash compensation charge related to restricted stock grants
     made since our inception as a private company, including equity
     awards made in connection with the initial public offering.
 (4) General and administrative expense related to the Company's
     initial public offering.

 NewStar Financial, Inc.
 Non-GAAP Data
 (unaudited)
                                                ----------------------
                                                       Adjusted
 ---------------------------------------------  ----------------------
                                                Year Ended December 31,
                                                ----------------------
 ($ in thousands)                                  2007        2006
 ---------------------------------------------  ----------  ----------
 Performance Ratios:
   Return on average assets                           1.33%       0.77%
   Return on average equity                           6.46        4.98
   Efficiency ratio                                  39.46       55.42
   Net interest margin, before provision              4.21        4.39
   Yield on interest earning assets                   9.14        9.59
   Cost of funds                                      6.21        6.28

 Credit Quality and Leverage Ratios (at
  period end):
   Equity to assets                                  19.17       24.40
   Debt to equity                                     4.06x       2.98x

 Consolidated Statement of Operations
  Adjustments (1):
   Interest income                              $  204,295  $  116,303
   Less: interest income earned on assets
    sold and retained residual interest (2)          9,458      10,738
                                                ----------  ----------
   Adjusted interest income                     $  194,837  $  105,565
                                                ==========  ==========

   Interest expense                             $  109,703  $   68,728
   Less:
   Interest expense related to assets sold (2)       4,620       4,865
   Interest & amortization related to
    corporate debt                                      --       6,662
                                                ----------  ----------
   Adjusted interest expense                    $  105,083  $   57,201
                                                ==========  ==========

   Non-interest income                          $  (28,176) $    9,684
   Plus: loss on assets sold and retained
    residual interest (2)                           47,743         522
                                                ----------  ----------
   Adjusted non-interest income                 $   19,567  $   10,206
                                                ==========  ==========

   Operating expenses                           $   57,494  $   74,282
   Less:
   Corporate debt prepayment fees                       --       1,425
   IPO related compensation and benefits
    expense (3)                                     13,424      39,129
   IPO related general and administrative
    expense (4)                                         --       1,268
   Expenses resulting from sale of assets (2)          931          --
                                                ----------  ----------
   Adjusted operating expenses                  $   43,139  $   32,460
                                                ==========  ==========

 Average Balances:
   Assets                                       $2,243,524  $1,224,744
   Less: assets sold and residual interest (2)     103,248     109,779
                                                ----------  ----------
   Adjusted assets                              $2,140,276  $1,114,965
                                                ==========  ==========

   Interest earning assets                      $2,234,916  $1,210,494
   Less: assets sold and residual interest (2)     103,248     109,779
   Adjusted interest earning assets             $2,131,668  $1,100,715
                                                ==========  ==========

   Interest bearing liabilities                 $1,767,993  $1,028,139
   Less:
   Credit facility funding for assets sold (2)      74,667      80,580
   Corporate debt                                       --      36,370
                                                ----------  ----------
   Adjusted interest bearing liabilities        $1,693,326  $  911,189
                                                ==========  ==========

 Consolidated Balance Sheet Adjustments
   Assets                                       $2,622,765  $1,915,192
   Less: assets sold and residual interest (2)         631     179,979
                                                ----------  ----------
   Adjusted assets                              $2,622,134  $1,735,213
                                                ==========  ==========

   Debt                                         $2,042,527  $1,434,670
   Credit facility funding for assets sold (2)          --     174,510
                                                ----------  ----------
   Adjusted debt                                $2,042,527  $1,260,160
                                                ==========  ==========

 (1) Adjustments are pre-tax.
 (2) On June 29, 2007, the Company completed the sale of assets
     comprised of 50 debt securities and two loans and retained a
     residual interest in these assets. The adjustment represents the
     financial impact of the sold assets and residual interest.
 (3) Non-cash compensation charge related to restricted stock grants
     made since our inception as a private company, including equity
     awards made in connection with the initial public offering.
 (4) General and administrative expense related to the Company's
     initial public offering.

 NewStar Financial, Inc.
 Portfolio Data
 (unaudited)
 ---------------------------------------------------------------------

 ($ in
  thousands)   December 31, 2007  September 30, 2007 December 31, 2006
 ----------    -----------------  -----------------  -----------------

 Portfolio
  Data:
   First
    mortgage   $  353,755   14.7% $  289,426   13.6% $  216,888   12.4%
   Senior
    secured
    asset-
    based          56,988    2.4      65,200    3.1      50,566    2.9
   Senior
    secured
    cash
    flow        1,829,734   76.2   1,582,636   74.2   1,082,048   61.9
   Senior
    subordinated
    asset-
    based         110,719    4.6     115,566    5.4     247,456   14.2
   Senior
    subordinated
    cash flow      14,352    0.6      26,162    1.2      35,161    2.0
   Second lien     32,295    1.3      53,440    2.5      70,875    4.1
   Mezzanine          729    0.0         726     --         719     --
   Subordinated     3,750    0.2          --     --      43,916    2.5
               ----------  -----  ----------  -----  ----------  -----
     Total     $2,402,322  100.0% $2,133,156  100.0% $1,747,629  100.0%
               ==========  =====  ==========  =====  ==========  =====

   Middle
    Market
    Corporate  $1,879,797   78.2% $1,663,247   78.0% $1,183,107   67.7%
   Commercial
    Real Estate   380,763   15.9     314,827   14.7     230,735   13.2
   Structured
    Products      141,762    5.9     155,082    7.3     333,787   19.1
               ----------  -----  ----------  -----  ----------  -----
     Total     $2,402,322  100.0% $2,133,156  100.0% $1,747,629  100.0%
               ==========  =====  ==========  =====  ==========  =====
NewStar Financial, Inc.
Anne G. Bork
617.848.4318
Fax: 617.848.4399
abork@newstarfin.com