GlobeNewswire Inc | Feb 3, 2021 08:30AM EST

February 03, 2021

-- Income year-over-year before income taxes for the three months ended December 31, 2020 increased by 821.3% compared to prior year third quarter -- Pre-tax yield as a percentage of average finance receivables for the three months ended December 31, 2020 increased to 7.63% compared to 0.98% during the prior year third quarter -- Net Portfolio Yield for the three months ended December 31, 2020 increased to 23.0% compared to 15.5% during the prior year third quarter -- Originations year-over-year on new Contracts purchased for the three months ended December 31, 2020 decreased by 14.5% compared to prior year third quarter -- Originations year-over-year on Direct Loans for the three months ended December 31, 2020 increased by 2.6% compared to prior year third quarter -- Accounts 60+ days delinquent decreased to 3.9%, excluding Chapter 13 bankruptcy accounts, compared to 4.0% as of the prior year third quarter

CLEARWATER, Fla., Feb. 03, 2021 (GLOBE NEWSWIRE) -- Nicholas Financial, Inc. (NASDAQ: NICK) announced net income for the three months ended December 31, 2020 of $3.8 million compared to $0.3 million for the three months ended December 31, 2019. Diluted net income per share was $0.49 for the three months ended December 31, 2020 as compared to $0.04 for the three months ended December 31, 2019. Total revenue decreased 3.3% to $14.5 million for the three months ended December 31, 2020 as compared to $15.0 million for the three months ended December 31, 2019, which included realized gains of $0.2 million and unrealized gains of $1.1 million on equity investments during the three months ended December 31, 2020. The Company reported income before income taxes for the three months ended December 31, 2020 of $5.0 million compared to $0.5 million for the three months ended December 31, 2019. The Company recorded an income tax expense of approximately $1.2 million during the three months ended December 31, 2020 compared to an income tax expense of $0.2 million during the three months ended December 31, 2019.

The Company announced net income for the nine months ended December 31, 2020 of $6.5 million compared to $1.2 million for the nine months ended December 31, 2019. Diluted net income per share was $0.85 for the nine months ended December 31, 2020 as compared to $0.15 for the nine months ended December 31, 2019. Total revenue decreased 9.5% to $42.7 million for the nine months ended December 31, 2020 as compared to $47.2 million for the nine months ended December 31, 2019, which included realized and unrealized gains of $1.3 million on equity investments during the nine months ended December 31, 2020. The Company reported income before income taxes for the nine months ended December 31, 2020 of $8.2 million compared to $1.7 million for the nine months ended December 31, 2019. The Company recorded an income tax expense of approximately $1.7 million during the nine months ended December 31, 2020 compared to $0.5 million during the nine months ended December 31, 2019.

For the nine months ended December 31, 2020, the Company originated $60.3 million in finance receivables, collected $87.5 million in principal payments, reduced debt by a net amount of $29.8 million, repurchased $0.7 million of common stock, and increased cash by $4.6 million.

For the third consecutive Quarter we recognized near-record low losses and strong portfolio performance in terms of organic delinquency control, stated Doug Marohn, President and CEO of Nicholas Financial, Inc. We continue to enjoy these results without any increase in deferments and without the use of any special Covid-19 related customer assistance programs. Indirect sales finance originations continue to be soft, but our direct loan originations are strong.

The increase in core earnings is exciting and is a testament to our successful implementation and execution of Nicholas business strategy, Marohn continued. This unique and disciplined business model is being replicated in new markets as we look to continue our expansion. We have just completed several new offices expansions and continue to initiate expansion in several others states including Texas, Arizona, Utah, Idaho and New Mexico. This will allow us to be prepared to maximize originations potential when the market starts to return to normal levels.



Key Performance Indicators on Contracts Purchased (Purchases in thousands) Numberof Average Fiscal Contracts PrincipalAmount Amount Average Average Average Year/Quarter Purchased Purchased# Financed* APR* Discount%* Term* ^2021 4,878 $ 49,388 $ 10,132 23.5 % 7.4 % 46 3 1,483 15,285 10,307 23.4 % 7.5 % 46 2 1,709 17,307 10,127 23.5 % 6.8 % 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

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 2,744 $ 10,864 $ 4,054 29.6 % 24 3 1,265 4,605 3,641 30.9 % 22 2 924 3,832 4,147 29.2 % 25 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

*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 primarily 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, 2020. 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 Ninemonthsended December 31, December 31, 2020 2019 2020 2019 Revenue: Interestand feeincome on $ 13,180 $ 14,973 $ 41,395 $ 47,199 financereceivablesRealizedgain on 238 - 238 - equityinvestmentsUnrealizedgain on 1,056 - 1,101 - equityinvestmentsTotal 14,474 14,973 42,734 47,199 revenueExpenses: Operating 7,407 7,950 22,881 25,848 expensesProvisionfor credit 650 4,597 7,000 12,982 lossesInterest 1,442 1,886 4,660 6,672 expenseTotal 9,499 14,433 34,541 45,502 expensesIncomebefore 4,975 540 8,193 1,697 incometaxesIncome tax 1,190 229 1,711 527 expenseNet income $ 3,785 $ 311 $ 6,482 $ 1,170 Earnings per share:Basic $ 0.49 $ 0.04 $ 0.84 $ 0.15 Diluted $ 0.49 $ 0.04 $ 0.85 $ 0.15

Condensed Consolidated Balance Sheets(Unaudited, In Thousands)

December March31, 31, 2020 2020 Cash and restricted cash $ 29,261 $ 24,684 Equity investments with readily determinable fair 4,286 - valuesFinance receivables, net 172,386 199,781 Repossessed assets 805 1,340 Operating lease right-of-use assets 2,940 2,598 Other assets 5,015 10,415 Total assets $ 214,693 $ 238,818 Credit facility, net of debt issuance costs $ 91,547 $ 124,255 Note payable 3,244 - Operating lease liabilities 2,929 2,652 Other liabilities 3,513 4,332 Total liabilities 101,233 131,239 Shareholders? equity 113,460 107,579 Total liabilities and shareholders? equity $ 214,693 $ 238,818 Book value per share $ 14.69 $ 13.78

Threemonthsended Ninemonthsended December 31, December 31, (In thousands) (In thousands) Portfolio Summary 2020 2019 2020 2019 Average finance receivables $ 192,966 $ 219,618 $ 203,996 $ 230,527 (1)Average indebtedness (2) $ 101,522 $ 119,518 $ 112,476 $ 136,164 Interest and fee income on $ 13,180 $ 14,973 $ 41,395 $ 47,199 finance receivablesInterest expense 1,442 1,886 4,660 6,672 Net interest and fee income $ 11,738 $ 13,087 $ 36,735 $ 40,527 on finance receivablesPortfolio yield (3) 27.32 % 27.27 % 27.06 % 27.30 %Interest expense as apercentage of average 2.99 % 3.44 % 3.05 % 3.86 %finance receivablesProvision for credit lossesas a percentage of average 1.35 % 8.37 % 4.58 % 7.51 %finance receivablesNet portfolio yield (3) 22.98 % 15.46 % 19.43 % 15.93 %Operating expenses as apercentage of average 15.35 % 14.48 % 14.96 % 14.95 %finance receivablesPre-taxyield as apercentage of average 7.63 % 0.98 % 4.47 % 0.98 %finance receivables (4)Netcharge-offpercentage 6.30 % 8.84 % 5.94 % 9.63 %(5)Finance receivables $ 188,626 $ 211,813 Allowance percentage (6) 4.81 % 6.27 %Total reserves percentage 8.76 % 10.35 %(7)

Note: All three-month and nine-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, annualized for 12 months.(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 December 31, $ 174,170 $ 12,914 $ 4,955 $ 2,117 $ 28 $ 20,014 2020 7.41 % 2.84 % 1.22 % 0.02 % 11.49 %December 31, $ 200,092 $ 16,748 $ 5,993 $ 2,279 $ 47 $ 25,067 2019 8.37 % 3.00 % 1.14 % 0.02 % 12.53 % Direct Loans Balance Outstanding 30?59days 60?89days 90?119days 120+ Total December 31, $ 14,227 $ 442 $ 188 $ 110 $ 4 $ 744 2020 3.11 % 1.32 % 0.77 % 0.03 % 5.23 %December 31, $ 11,423 $ 331 $ 123 $ 68 $ 3 $ 525 2019 2.90 % 1.08 % 0.60 % 0.03 % 4.60 %

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

Contracts Direct Loans Threemonthsended Threemonthsended December 31, December 31, (Purchasesinthousands) (Originationsinthousands) 2020 2019 2020 2019 Purchases/ $ 15,285 $ 17,880 $ 4,605 $ 4,490 OriginationsAverage APR 23.4 % 23.3 % 30.9 % 28.4 %Average 7.5 % 7.6 % N/A N/A discountAverage term 46 47 22 24 (months)Averageamount $ 10,307 $ 10,200 $ 3,641 $ 3,949 financedNumber of 1,483 1,753 1,265 1,137 contracts Contracts Direct Loans Ninemonthsended Ninemonthsended December 31, December 31, (Purchasesinthousands) (Originationsinthousands) 2020 2019 2020 2019 Purchases/ $ 49,388 $ 57,038 $ 10,864 $ 9,534 OriginationsAverage APR 23.5 % 23.4 % 29.6 % 28.0 %Average 7.4 % 7.9 % N/A N/A discountAverage term 46 47 24 24 (months)Averageamount $ 10,132 $ 10,089 $ 4,054 $ 3,919 financedNumber of 4,878 5,656 2,744 2,422 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 December 31, December 31, Portfolio 2020 2019 2020 2019 Average APR 22.7 % 22.7 % 28.4 % 27.0 %Average 7.6 % 7.7 % N/A N/A discountAverageterm 51 51 26 26 (months)Number ofactive 23,388 25,995 4,126 3,376 contracts

Contact: Irina NashtatikCFOPh # (727)-726-0763