NewStar Financial, Inc. announced earlier today that it has terminated its agreement to acquire Southern Commerce Bank, N.A. and withdrawn its related regulatory applications. The news was looked upon favorably by investors as they sent shares up to a high of $2.44 today.
“We have decided to terminate the agreement because it has become unlikely that we would receive approval of our applications on terms that would allow the company to achieve its objectives, which relied on our ability to restructure the combined company’s balance sheet,” stated Timothy J. Conway, NewStar’s Chief Executive Officer.
“Although we have decided to terminate the proposed acquisition of Southern Commerce Bank, acquiring and developing a commercial banking platform remains an attractive strategic opportunity for the company. We expect to continue to consider alternative approaches to acquiring a commercial bank that advance the company’s business goals and meet the policy objectives of federal banking regulators,” Conway added.
“In addition to depository-based strategy options, NewStar continues to pursue other alternatives to finance the company’s operations and manage its core business with a focus on maximizing liquidity, managing the company’s credit portfolio and taking appropriate steps to protect the balance sheet. We remain focused on monetizing the Company’s investments in its loan portfolio, while also expanding the Company’s asset management business,” Conway concluded.
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