nick-ex991

November 8, 2019 – Clearwater, Florida - Nicholas Financial, Inc. (NASDAQ: NICK) announced net income for the three months ended September 30, 2019 of $0.3 million compared to $0.6 million for the three months ended September 30, 2018. Diluted net income per share was $0.03 for the three months ended September 30, 2019 as compared to $0.07 for the three months ended September 30, 2018. Revenue decreased 19.7% to $15.6 million for the three months ended September 30, 2019 as compared to $19.4 million for the three months ended September 30, 2018. The Company reported income before income taxes for the three months ended September 30, 2019 of $0.4 million compared $0.7 million for the three months ended September 30, 2018. The Company recorded an income tax expense of approximately $0.1 million during the three months ended September 30, 2019 compared to an income tax expense of $0.1 million during the three months ended September 30, 2018.

Net income for the six months ended September 30, 2019 of $0.9 million compared to $2.0 million for the six months ended September 30, 2018. Diluted net income per share was $0.11 for the six months ended September 30, 2019 as compared to $0.25 for the six months ended September 30, 2018. Revenue decreased 15.6% to $32.2 million for the six months ended September 30, 2019 as compared to $38.2 million for the six months ended September 30, 2018. The Company reported income before income taxes for the six months ended September 30, 2019 of $1.2 million compared $2.7 million for the six months ended September 30, 2018. The Company recorded an income tax expense of approximately $0.3 million during the six months ended September 30, 2019 compared to $0.7 million during the six months ended September 30, 2018.

“Although our earnings for the 2^nd Quarter of Fiscal Year 2020 were modest, we are very pleased overall with our operational successes and improvements,” said Doug Marohn, President and CEO. “We were able to increase same store and overall loan production in both indirect contract purchases and direct loan originations with 51 branches for the three months ended for September 30, 2019 as compared to 59 branches for the three months ended September 30, 2018. We also saw improvement in overall delinquency and in accounts 60+ days delinquent as compared to the prior year second quarter. We did this while maintaining the integrity and discipline we desire in our new acquisition KPI’s in terms of structure (amount financed, APR, discount, term, etc.).”

Marohn continued, “We also remain focused on proliferating our direct loan product to all of the states in which we operate. We are now operational in Florida, North Carolina, Georgia, Ohio. Tennessee and Alabama. Indiana, Missouri, South Carolina and Kentucky are slated to go live in our 3^rd Quarter. Nicholas is also continuing to grow our branch network through expansion efforts in Columbia, South Carolina; Wichita, Kansas; and Milwaukee, Wisconsin.”

Key Performance Indicators on Contracts Purchased
(Purchases in thousands)
	Number of				Average
Fiscal Year	Contracts		Principal Amount		Amount		Average			Average			Average
/Quarter	Purchased		Purchased		Financed*^		APR*			Discount%*			Term*
2020		3,903	$	39,158	$	10,034		23.5	%	8.1		%		47
2		2,011		20,104		9,997		23.5	%	7.9		%		46
1		1,892		19,054		10,071		23.4	%	8.3		%		47
2019		7,684	$	77,499	$	10,086		23.5	%		8.2	%		47
4		2,151		21,233		9,871		23.5	%		8.0	%		46
3		1,625		16,476		10,139		23.5	%		8.1	%		47
2		1,761		17,845		10,133		23.5	%		8.4	%		47
1		2,147		21,945		10,221		23.7	%		8.3	%		48
2018		9,767	$	109,575	$	11,219		22.4	%		7.4	%		54
4		2,814		29,254		10,396		23.3	%		7.9	%		50
3		2,365		27,378		11,577		21.7	%		6.9	%		54
2		2,239		25,782		11,515		22.0	%		7.3	%		55
1		2,349		27,161		11,563		22.3	%		7.6	%		55

Key Performance Indicators on Direct Loans Originated (Originations in thousands)
	Number of		Principal
Fiscal Year	Loans		Amount		Average Amount		Average			Average
/Quarter	Originated		Originated		Financed*^		APR*			Term*
2020		1,285		5,044		3,904	27.8		%		25
2		739		2,988		4,043	27.4		%		25
1		546		2,056		3,765	28.2		%		24
2019		1,918	$	7,741	$	4,036	26.4		%		25
4		236		1,240		4,654	27.3		%		26
3		738		2,999		4,063	25.9		%		25
2		495		1,805		3,646	26.5		%		25
1		449		1,697		3,779	25.7		%		28
2018		2,036	$	7,642	$	3,754	25.2		%		29
4		380		1,445		3,752		25.0	%		29
3		622		2,218		3,566	25.2		%		28
2		501		1,953		3,897		25.1	%		29
1		533		2,026		3,801		25.4	%		30

Nicholas Financial, Inc. is a publicly-traded specialty consumer finance company, operating branch locations in both Southeastern and Midwestern U.S. states. The Company has approximately 7.9 million shares of voting common stock outstanding. For an index of Nicholas Financial, Inc.’s news releases or to obtain a specific release, visit our web site at www.nicholasfinancial.com.

Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that involve risks and uncertainties including risk relating to competition and our ability to increase and maintain yield and profitability at desirable levels, as well as risks relating to general economic conditions, access to bank financing, our ability to expand the geographical scope of, and otherwise continue growing, our Direct Loan operations, and other risks detailed from time to time in the Company’s filings and reports with the Securities and Exchange Commission including the Company’s Annual Report on Form 10-K for the year ended March 31, 2019. When used in this document, the words “anticipate”, “estimate”, “expect”, “will”, “may”, “plan,” “believe”, “intend” and similar expressions are intended to identify forward-looking statements. Such statements are based on the beliefs of Company management as well as assumptions made by and information currently available to Company management. Actual events or results may differ materially from those anticipated, estimated or expect. All forward-looking statements and cautionary statements included in this document are made as of the date hereof based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement or cautionary statement.

	Three months ended					Six months ended
		September 30,				September 30,
		2019		2018		2019		2018
Revenue:
Interest and fee income on finance receivables		$	15,585	$	19,404	$	32,226		$	38,163
Expenses:
Operating expenses			8,927		7,966		17,898			16,767
Provision for credit losses			4,000		8,374		8,385			13,801
Interest expense			2,298		2,386		4,786			4,926
Total expenses			15,225		18,726		31,069			35,494
Income before income taxes			360		678		1,157			2,669
Income tax expense			92		96		298			669
Net income		$	268	$	582	$	859		$	2,000
Earnings per share:
Basic		$	0.03	$	0.07	$	0.11		$	0.25
Diluted		$	0.03	$	0.07	$	0.11		$	0.25

	September 30,		March 31,
	2019		2019
Cash and restricted cash	$	13,928	$	37,642
Finance receivables, net		199,452		202,042
Other assets		14,137		12,736
Intangibles		79		-
Goodwill		350		-
Total assets	$	227,946	$	252,420
Credit facility	$	116,710	$	142,619
Other liabilities		5,403		4,916
Total liabilities		122,113		147,535
Shareholders’ equity		105,833		104,885
Total liabilities and shareholders’ equity	$	227,946	$	252,420
Book value per share	$	13.36	$	13.26

	Three months ended						Six months ended
	September 30,						September 30,
	(In thousands)						(In thousands)
Portfolio Summary	2019			2018			2019			2018
Average finance receivables (1)	$	232,021		$	279,680		$	236,024			$	287,980
Average indebtedness (2)	$	139,929		$	143,882		$	144,486			$	152,467
Interest and fee income on finance receivables	$	15,585		$	19,404		$	32,226			$	38,163
Interest expense		2,298			2,386		$	4,786			$	4,926
Net interest and fee income on finance receivables	$	13,287		$	17,018		$	27,440			$	33,237
Portfolio yield (3)		26.87	%		27.75	%		27.31	%			26.50	%
Interest expense as a percentage of average finance receivables		3.96	%		3.41	%		4.06	%			3.42	%
Provision for credit losses as a percentage of average finance receivables		6.90	%		11.98	%		7.11	%			9.58	%
Net portfolio yield (3)		16.01	%		12.36	%		16.15	%			13.50	%
Operating expenses as a percentage of average finance receivables		15.39	%		11.39	%		15.17	%			11.64	%
Pre-tax yield as a percentage of average finance receivables (4)		0.62	%		0.97	%		0.98	%			1.86	%
Net charge-off percentage (5)		11.40	%		11.85	%		10.01	%			10.37	%
Allowance percentage (6)		5.82	%		6.86	%		5.72	%			6.66	%

Note: All three-month and six-month statement of income performance indicators expressed as percentages have been annualized.

The following tables present certain information regarding the delinquency rates experienced by the Company with respect to automobile finance installment contracts (“Contracts”) and direct consumer loans (“Direct Loans”), excluding any Chapter 13 bankruptcy accounts:

Contracts	Balance
	Outstanding		30 – 59 days			60 – 89 days			90 – 119 days			120+			Total
September 30, 2019	$	212,396	$	13,981		$	4,950		$	1,946		$	42		$	20,919
				6.58	%		2.33	%		0.92	%		0.02	%		9.85	%
September 30, 2018	$	256,095	$	17,399		$	7,132		$	2,190		$	2,043		$	28,764
				6.79	%		2.78	%		0.86	%		0.80	%		11.23	%

Direct Loans	Balance
	Outstanding		30 – 59 days			60 – 89 days			90 – 119 days			120+			Total
September 30, 2019	$	9,480	$	219		$	115		$	56		-			$	390
				2.31	%		1.21	%		0.59	%		-	%		4.11	%
September 30, 2018	$	7,465	$	162		$	122		$	27		$	68		$	379
				2.17	%		1.63	%		0.36	%		0.91	%		5.08	%

The following table presents selected information on Contracts purchased and Direct Loans originated by the Company:

	Contracts						Direct Loans
	Three months ended						Three months ended
	September 30,						September 30,
	(Purchases in thousands)						(Originations in thousands)
	2019			2018			2019			2018
Purchases/Originations	$	20,104		$	17,845		$	2,988			$	1,805
Average APR		23.5	%		23.5	%	27.4		%		26.5		%
Average discount		7.9	%		8.4	%	N/A				N/A
Average term (months)		46			47			25				25
Average amount financed	$	9,997		$	10,133		$	4,043			$	3,646
Number of contracts		2,011			1,761			739				495

	Contracts						Direct Loans
	Six months ended						Six months ended
	September 30,						September 30,
	(Purchases in thousands)						(Originations in thousands)
	2019			2018			2019			2018
Purchases/Originations	$	39,158		$	39,790		$	5,044			$	3,502
Average APR		23.5	%		23.6	%	27.8		%		26.1		%
Average discount		8.1	%		8.4	%	N/A				N/A
Average term (months)		47			48			25				27
Average amount financed	$	10,034		$	10,177		$	3,904			$	3,713
Number of contracts		3,903			3,908			1,285				944

The following table presents selected information on the entire Contract and Direct Loan portfolios of the Company:

	Contracts						Direct Loans
	As of						As of
	September 30,						September 30,
Portfolio	2019			2018			2019			2018
Average APR		22.7	%		22.4	%		26.5	%			25.1	%
Average discount		7.7	%		7.2	%	N/A				N/A
Average term (months)		52		54			27				32
Number of active contracts		27,294			30,548			2,921				2,458