GlobeNewswire Inc | Jul 30, 2020 08:35AM EDT

July 30, 2020

-- Income year-over-year before income taxes for the three months ended June 30, 2020 increased by 133.2% compared to prior year first quarter -- Pre-tax yield for the three months ended June 30, 2020 increased to 3.5% compared to 1.4% during the prior year first quarter. -- Originations year-over-year on new Contracts purchased for the three months ended June 30, 2020 decreased by 11.9% compared to prior year first quarter -- Originations year-over-year on Direct Loans for the three months ended June 30, 2020 increased by 18.0% compared to prior year first quarter -- Accounts 60+ days delinquent decreased to 2.5%, excluding Chapter 13 bankruptcy accounts, compared to 3.0% as of the prior year first quarter -- Net Portfolio Yield for the three months ended June 30, 2020 increased to 17.2% compared to 16.6% during the prior year first quarter

CLEARWATER, Fla., July 30, 2020 (GLOBE NEWSWIRE) -- Nicholas Financial, Inc. (NASDAQ: NICK) announced net income for the three months ended June 30, 2020 of $1.4 million compared to $0.6 million for the three months ended June 30, 2019. Diluted net income per share was $0.18 for the three months ended June 30, 2020 as compared to $0.07 for the three months ended June 30, 2019. Revenue decreased 15.0% to $14.2 million for the three months ended June 30, 2020 as compared to $16.6 million for the three months ended June 30, 2019. The Company reported income before income taxes for the three months ended June 30, 2020 of $1.9 million compared to $0.8 million for the three months ended June 30, 2019. The Company recorded an income tax expense of approximately $0.4 million during the three months ended June 30, 2020 as compared to $0.2 million during the three months ended June 30, 2019.

During the quarter ended June 30, 2020, the Company originated $19.2 million in finance receivables, collected $28.4 million in principal payments, reduced debt by $4.6 million and increased cash by $7.6 million.

There is no doubt that the Covid-19 pandemic had an impact on our operations overall and particularly on our new loan originations, commented Nicholas president and CEO, Doug Marohn. However, times like these prove out our business concepts and validate our branch-based model nicely. We finance primary transportation to and from work for the subprime borrower through the local independent dealer. Our loans tend to be smaller than most of our competitors and therefore payments are lower and exposure on those accounts is shorter. The vehicle is one that they need not just want - and the payments are affordable even in times of economic crisis. Our local presence allows us to maintain a better relationship with the customer, as well.

Although the pandemic had an early negative impact on new loans and originations in April and May, we were able to outproduce both 2018s and 2019s loan volume for the month of June. From a portfolio management perspective, we enjoyed decreases in 31+ delinquency, 61+ delinquency, repossessions and losses, continued Marohn. Out of an abundance of caution we added over $3 million of provision expense to bolster our reserves in case the pandemic has a more negative impact on our receivables in the upcoming Quarters. Even with the $3 million of provision expense, we were able to turn out the best earnings Quarter in recent history.

The 2020 Annual General Meeting of Shareholders of Nicholas Financial, Inc. will be held at the Companys corporate headquarters, located at 2454 McMullen Booth Road, Building C, Clearwater, Florida, on Thursday, August 27, 2020, at 10:30 a.m. (Clearwater, Florida time). Due to the COVID-19 epidemic, the Company has also elected to have concurrently a virtual shareholder meeting this year for the safety of its shareholders, partners, and board. The URL Path for the virtual meeting is www.issuerdirect.com/virtualevent/nick.

Key Performance Indicators on Contracts Purchased (Purchases in thousands) Numberof Average Fiscal Contracts PrincipalAmount Amount Average Average Average Year/ Purchased Purchased# Financed* APR* Discount%* Term* Quarter ^2021 1,686 $ 16,796 $ 9,962 23.5 % 8.0 % 46 1 1,686 16,796 9,962 23.5 % 8.0 % 46 2020 7,647 $ 76,696 $ 10,035 23.4 % 7.9 % 47 4 1,991 19,658 9,873 23.5 % 7.9 % 46 3 1,753 17,880 10,200 23.3 % 7.6 % 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

Key Performance Indicators on Direct Loans Originated (Originations in thousands) Numberof Principal Fiscal Loans Amount Average Average Average Year Amount/Quarter Originated Originated Financed*^ APR* Term* 2021 555 $ 2,427 $ 4,373 28.7 % 26 1 555 2,427 4,373 28.7 % 26 2020 3,142 $ 12,638 $ 4,017 28.2 % 25 4 720 3,104 4,310 28.6 % 25 3 1,137 4,490 3,949 28.4 % 24 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 % 24 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

*Each average included in the tables is calculated as a simple average.^Average amount financed is calculated as a single loan amount.#Bulk portfolio purchase excluded for period-over-period comparability

Nicholas Financial, Inc. (NASDAQ:NICK) is a specialized consumer finance company, operating branch locations in both Southeastern and Midwestern U.S. States. The Company engages primarily in acquiring and servicing automobile finance installment contracts (Contracts) for purchases of used and new automobiles and light trucks. Additionally, Nicholas Financial originates direct consumer loans (Direct Loans) and sells consumer-finance related products. For an index of Nicholas Financial, Incs new releases or to obtain a specific release, please visit our website 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, including expectations regarding the impact of COVID-19 on the Companys business, its ability to obtain the expected financial and tax benefits from the CARES Act, and its ability to obtain loan forgiveness under its PPP loan, 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, including in connection with the current COVID-19 pandemic, 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 Companys filings and reports with the Securities and Exchange Commission including the Companys 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)

Threemonthsended June 30, 2020 2019 Revenue: Interest and fee income on finance receivables $ 14,151 $ 16,641 Expenses: Operating expenses 7,343 8,971 Provision for credit losses 3,300 4,385 Interest expense 1,649 2,488 Total expenses 12,292 15,844 Income before income taxes 1,859 797 Income tax expense 429 206 Net income $ 1,430 $ 591 Earnings per share: Basic $ 0.18 $ 0.07 Diluted $ 0.18 $ 0.07

Condensed Consolidated Balance Sheets(Unaudited, In Thousands)

June 30, March31, 2020 2020 Cash and restricted cash $ 32,318 $ 24,684 Finance receivables, net 189,328 199,781 Repossessed assets 1,073 1,340 Operating lease right-of-use assets 2,413 2,598 Other assets 9,986 10,415 Total assets $ 235,118 $ 238,818 Credit facility, net of debt issuance costs $ 116,532 $ 124,255 Note payable 3,244 - Operating lease liabilities 2,410 2,652 Other liabilities 3,857 4,332 Total liabilities 126,043 131,239 Shareholders? equity 109,075 107,579 Total liabilities and shareholders? equity $ 235,118 $ 238,818 Book value per share $ 13.98 $ 13.78

Threemonthsended June 30, (In thousands) Portfolio Summary 2020 2019 Average finance receivables (1) $ 213,859 $ 235,172 Average indebtedness (2) $ 122,786 $ 149,043 Interest and fee income on finance $ 14,151 $ 16,641 receivablesInterest expense 1,649 2,488 Net interest and fee income on finance $ 12,502 $ 14,153 receivablesPortfolio yield (3) 26.47 % 28.30 %Interest expense as a percentage of 3.08 % 4.23 %average finance receivablesProvision for credit losses as a 6.17 % 7.46 %percentage of average finance receivablesNet portfolio yield (3) 17.22 % 16.61 %Operating expenses as a percentage of 13.73 % 15.26 %average finance receivablesPre-taxyield as a percentage of average 3.49 % 1.35 %finance receivables (4)Netcharge-offpercentage (5) 6.01 % 8.93 %Finance receivables $ 208,808 $ 235,931 Allowance percentage (6) 5.39 % 6.83 %Total reserves percentage (7) 9.56 % 11.42 %

Note: All three-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-taxyield represents net portfolio yield minus operating expenses, as a percentage of average finance receivables.(5) Netcharge-offpercentage 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 finance receivables outstanding as of ending balance sheet date.(7) Total reserves percentage represents the allowance for credit losses, purchase price discount, and unearned dealer discounts divided by finance receivables outstanding as of ending balance sheet date.

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?59days 60?89days 90?119days 120+ Total June 30, $ 196,943 $ 9,584 $ 3,595 $ 1,334 $ 26 $ 14,539 2020 4.87 % 1.83 % 0.68 % 0.01 % 7.39 %June 30, $ 226,711 $ 13,566 $ 5,302 $ 1,627 $ 10 $ 20,505 2019 5.98 % 2.34 % 0.72 % 0.00 % 9.04 % Direct Balance Loans Outstanding 30?59days 60?89days 90?119days 120+ Total June 30, $ 11,684 $ 244 $ 81 $ 79 $ 0 $ 404 2020 2.09 % 0.69 % 0.68 % 0.00 % 3.46 %June 30, $ 8,698 $ 228 $ 103 $ 46 $ 0 $ 377 2019 2.62 % 1.18 % 0.53 % 0.00 % 4.33 %

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

Contracts Direct Loans Threemonthsended Threemonthsended June 30, June 30, (Purchasesinthousands) (Originationsinthousands) 2020 2019 2020 2019 Purchases/ $ 16,796 $ 19,054 $ 2,427 $ 2,056 OriginationsAverage APR 23.5 % 23.4 % 28.7 % 28.2 %Average 8.0 % 8.3 % N/A N/A discountAverage term 46 47 26 24 (months)Averageamount $ 9,962 $ 10,071 $ 4,373 $ 3,765 financedNumber of 1,686 1,892 555 546 contracts

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

Contracts Direct Loans As of As of June 30, June 30, Portfolio 2020 2019 2020 2019 Average APR 22.6 % 22.6 % 27.4 % 26.2 %Average 7.62 % 7.65 % N/A N/A discountAverageterm 51 52 27 27 (months)Number ofactive 25,931 28,631 3,412 2,763 contracts

Contact: Irina Nashtatik NASDAQ: NICK CFO Web site:www.nicholasfinancial.com Ph # (727)-726-0763