UPDATE 1-Newstar Financial Q4 profit trails Wall Street view
* Q3 profit trails estimates * Loan loss provision rises * Net interest income falls * Operating expenses down
Nov 5 (Reuters) - Commercial finance company Newstar Financial Inc (NEWS.O) posted a third-quarter profit below Wall Street estimates, hurt by an 82 percent rise in provision for credit losses.
The company earned $7.6 million, or 16 cents a share, compared with a loss of $10.8 million, or 30 cents a share, a year earlier.
On an adjusted basis, the company earned 15 cents a share, falling short of analysts' estimates by 4 cents a share.
Provision for credit losses rose to $12 million in the third quarter, compared with $6.6 million in the year-ago quarter.
The company, a provider of debt financing solutions to middle-market businesses and commercial real estate borrowers, said net interest income fell 27 percent from the year-ago quarter to $13.1 million.
Net interest margin -- the difference between the interest it makes on loans and the interest it pays on deposits -- fell 39 basis points to 3.90 percent.
Operating expenses were down 37 percent to $8.5 million, reflecting a lower expense base, no severance expense during the quarter and lower compensation expense, the company said.
Shares of the company closed at $4.95 Tuesday on Nasdaq. (Reporting by Anurag Kotoky in Bangalore; Editing by Anil D'Silva)
