• Originations year-over-year on new Contracts purchased for the three months ended September 30, 2019 increased by 12.7% compared to prior year second quarter
  
• Originations year-over-year on Direct Loans for the three months ended September 30, 2019 increased by 65.5% compared to prior year second quarter
• Gross Portfolio Yield for the three months ended September 30, 2019 decreased to 26.9% compared to 27.8% during the prior year second quarter
• Interest and fee income on finance receivables for the three months ended September 30, 2019 decreased 19.7% due to a 17.0% decrease in average finance receivables, compared to prior year second quarter
• Accounts 60+ days delinquent decreased to 3.2%, excluding Chapter 13 bankruptcy accounts, compared to 4.4% as of the prior year second quarter
• Average APR on new Contracts purchased was 23.5% for the three months ended September 30, 2019 and September 30, 2018, respectively
• Average APR on Direct Loan originations increased to 27.4% compared to 26.5% during the prior year second quarter

CLEARWATER, Fla., Nov. 08, 2019 (GLOBE NEWSWIRE) -- 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

*Each average included in the tables is calculated as a simple average.
^Average amount financed is calculated as a single loan amount.

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.

Cautionary Note regarding Forward-Looking Statements

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.

Nicholas Financial, Inc.
Condensed Consolidated Statements of Income
(Unaudited, Dollars in Thousands, Except Share and Per Share Amounts)

	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

Condensed Consolidated Balance Sheets
(Unaudited, In Thousands)

	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.               

(1) Average finance receivables represent the average of finance receivables throughout the period.
(2) Average indebtedness represents the average outstanding borrowings under the Credit Facility.
(3) Portfolio yield represents interest and fee income on finance receivables as a percentage of average finance receivables. Net portfolio yield represents (a) interest and fee income on finance receivables minus (b) interest expense minus (c) the provision for credit losses, as a percentage of average finance receivables.
(4) Pre-tax yield represents net portfolio yield minus operating expenses, as a percentage of average finance receivables.
(5) Net charge-off percentage represents net charge-offs (charge-offs less recoveries) divided by average finance receivables, outstanding during the period.
(6) Allowance percentage represents the allowance for credit losses divided by average finance receivables outstanding during the period.

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:

(In thousands, except percentages)

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

Nicholas		Contact:	NASDAQ: NICK
Nicholas Financial, Inc. Corporate Headquarters 2454 McMullen-Booth Rd. Building C, Suite 501 Clearwater, FL 33759		Kelly Malson CFO Ph #  (727)-726-0763	Web site: www.nicholasfinancial.com

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