GlobeNewswire Inc | Jun 2, 2021 07:30AM EDT

June 02, 2021

-- Income year-over-year before income taxes for the three months ended March 31, 2021 increased by 399.6% compared to prior year fourth quarter -- Pre-tax yield as a percentage of average finance receivables for the three months ended March 31, 2021 increased to 4.92% compared to 1.03% during the prior year fourth quarter -- Net Portfolio Yield for the three months ended March 31, 2021 increased to 24.22% compared to 17.10% during the prior year fourth quarter -- Contracts purchased year-over-year for the three months ended March 31, 2021 increased by 25.3% compared to prior year fourth quarter -- Amount financed year-over-year on Direct Loans for the three months ended March 31, 2021 increased by 5.8% compared to prior year fourth quarter -- Accounts 60+ days delinquent decreased to 1.9%, excluding Chapter 13 bankruptcy accounts, compared to 2.9% as of the prior year fourth quarter

CLEARWATER, Fla., June 02, 2021 (GLOBE NEWSWIRE) -- Nicholas Financial, Inc. (NASDAQ: NICK) announced net income for the three months ended March 31, 2021 of $1.9 million compared to $2.3 million for the three months ended March 31, 2020. Diluted net income per share was $0.24 for the three months ended March 31, 2021 as compared to $0.29 for the three months ended March 31, 2020. Total revenue decreased 10.8% to $13.3 million for the three months ended March 31, 2021 as compared to $14.9 million for the three months ended March 31, 2020, which included gains of $0.5 million on equity investments during the three months ended March 31, 2021. The Company reported income before income taxes for the three months ended March 31, 2021 of $2.8 million compared to $0.6 million for the three months ended March 31, 2020. The Company recorded an income tax expense of approximately $0.9 million during the three months March 31, 2021 compared to an income tax benefit of $1.7 million during the three months ended March 31, 2020.

The Company announced net income for the year ended March 31, 2021 of $8.4 million compared to $3.5 million for the year ended March 31, 2020. Diluted net income per share was $1.09 for the year ended March 31, 2021 as compared to $0.45 for the year ended March 31, 2020. Total revenue decreased 9.8% to $56.0 million for the year ended March 31, 2021 as compared to $62.1 million for the year ended March 31, 2020, which included gains of $1.8 million on equity investments during the year ended March 31, 2021. The Company reported income before income taxes for the year ended March 31, 2021 of $10.9 million compared to $2.2 million for the year ended March 31, 2020. The Company recorded an income tax expense of approximately $2.6 million during the year ended March 31, 2021 compared to an income tax benefit of $1.2 million during the year ended March 31, 2020.

For the year ended March 31, 2021, the Company originated $88.2 million in finance receivables, collected $118.6 million in principal payments, reduced debt by a net amount of $35.3 million, repurchased $0.9 million of common stock, and increased cash by $8.3 million.

We are very pleased with our 4th Quarter and overall Fiscal Year-end results, commented Doug Marohn, President and CEO of Nicholas Financial, Inc. We continue to produce excellent portfolio performance, recognizing very low delinquency and net write-offs, the likes of which we have not seen in years. We were also able to enjoy year-over-year increases in both Indirect and Direct originations and loan volumes. The year-over-year increase on Indirect originations was the first we have seen since my return to Nicholas, and it was especially gratifying to see this during the pandemic.

The ability to once again report substantially increased earnings is a testament to our core business strategy as well as to the hard-working men and women who execute that strategy every day, Marohn continued. Our commitment to the branch-based model with a local office in every market we service allows us to better support our dealer partners and our borrowing customers. This approach has also facilitated the expansion of our Direct Loan products to virtually every NFI branch office. As we continue to increase our core product market share in the existing branch markets, we remain focused on growing the Direct Loan business, as well as expanding our branch network in Western States.

Key Performance Indicators on Contracts Purchased (Purchases in thousands) Numberof Principal Average Fiscal Contracts Amount Amount Average Average Average Year/Quarter Purchased Purchased# Financed* APR* Discount%* Term* ^2021 7,307 $ 74,025 $ 10,135 23.4 % 7.5 % 46 4 2,429 24,637 10,143 23.2 % 7.5 % 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 Average Fiscal Loans Amount Amount Average Average Year/Quarter Originated Originated Financed* APR* Term* ^2021 3,497 $ 14,148 $ 4,131 29.6 % 25 4 753 3,284 4,362 29.6 % 25 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 Twelvemonthsended March 31, March 31, 2021 2020 2021 2020 Revenue: Interest andfee income $ 12,816 $ 14,896 $ 54,211 $ 62,095 on financereceivablesGain onequity 470 - 1,809 - investmentsTotal 13,286 14,896 56,020 62,095 revenueExpenses: Operating 8,963 8,583 31,844 34,432 expensesProvisionfor credit 250 3,919 7,250 16,901 lossesInterest 1,320 1,843 5,980 8,515 expenseTotal 10,533 14,345 45,074 59,848 expensesIncomebefore 2,753 551 10,946 2,247 income taxesIncome taxexpense 884 (1,744 ) 2,595 (1,219 )(benefit)Net income $ 1,869 $ 2,295 $ 8,351 $ 3,466 Earnings per share:Basic $ 0.24 $ 0.29 $ 1.09 $ 0.45 Diluted $ 0.24 $ 0.29 $ 1.09 $ 0.45

Condensed Consolidated Balance Sheets(Unaudited, In Thousands)

March 31, March31, 2021 2020 Cash and restricted cash $ 32,977 $ 24,684 Finance receivables, net 170,318 199,781 Repossessed assets 685 1,340 Operating lease right-of-use assets 3,392 2,598 Other assets 5,066 10,415 Total assets $ 212,438 $ 238,818 Credit facility, net of debt issuance costs $ 86,154 $ 124,255 Note payable 3,244 - Operating lease liabilities 3,367 2,652 Other liabilities 4,451 4,332 Total liabilities 97,216 131,239 Shareholders? equity 115,222 107,579 Total liabilities and shareholders? equity $ 212,438 $ 238,818 Book value per share $ 14.95 $ 13.78

Threemonthsended Twelvemonthsended March 31, March 31, (In thousands) (In thousands) Portfolio Summary 2021 2020 2021 2020 Average finance receivables $ 185,750 $ 213,666 $ 199,102 $ 226,541 (1)Average indebtedness (2) $ 92,761 $ 121,733 $ 107,615 $ 132,552 Interest and fee income on $ 12,816 $ 14,896 $ 54,211 $ 62,095 finance receivablesInterest expense 1,320 1,843 5,980 8,515 Net interest and fee income $ 11,496 $ 13,053 $ 48,231 $ 53,580 on finance receivablesPortfolio yield (3) 27.60 % 27.89 % 27.23 % 27.41 %Interest expense as apercentage of average 2.84 % 3.45 % 3.00 % 3.76 %finance receivablesProvision for credit lossesas a percentage of average 0.54 % 7.34 % 3.64 % 7.46 %finance receivablesNet portfolio yield (3) 24.22 % 17.10 % 20.59 % 16.19 %Operating expenses as apercentage of average 19.30 % 16.07 % 15.99 % 15.20 %finance receivablesPre-taxyield as apercentage of average 4.92 % 1.03 % 4.60 % 0.99 %finance receivables (4)Netcharge-offpercentage 6.83 % 11.29 % 6.16 % 10.01 %(5)Finance receivables $ 184,237 $ 219,366 Allowance percentage (6) 3.34 % 5.09 %Total reserves percentage 7.49 % 9.18 %(7)

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. Portfolio yield represents interest and fee income on finance receivables as a percentage of average finance receivables. Net portfolio yield(3) 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. Netcharge-offpercentage represents net charge-offs (charge-offs less(5) 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. Total reserves percentage represents the allowance for credit losses,(7) 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 March 31, $ 170,195 $ 6,289 $ 2,430 $ 896 $ 42 $ 9,657 2021 3.70 % 1.43 % 0.53 % 0.02 % 5.67 %March 31, $ 207,247 $ 14,977 $ 4,290 $ 1,893 $ 19 $ 21,179 2020 7.23 % 2.07 % 0.91 % 0.01 % 10.22 % Direct Loans Balance Outstanding 30?59days 60?89days 90?119days 120+ Total March 31, $ 13,909 $ 253 $ 101 $ 81 $ 10 $ 445 2021 1.82 % 0.73 % 0.58 % 0.07 % 3.20 %March 31, $ 11,844 $ 344 $ 136 $ 59 $ 0 $ 539 2020 2.90 % 1.15 % 0.50 % 0.00 % 4.55 %

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

Contracts Direct Loans Threemonthsended Threemonthsended March 31, March 31, (Purchasesinthousands) (Originationsinthousands) 2021 2020 2021 2020 Purchases/ $ 24,637 $ 19,658 $ 3,284 $ 3,104 OriginationsAverage APR 23.2 % 23.5 % 29.6 % 28.6 %Average 7.5 % 7.9 % N/A N/A discountAverage term 46 46 25 25 (months)Averageamount $ 10,143 $ 9,873 $ 4,362 $ 4,310 financedNumber of 2,429 1,991 753 720 contracts Contracts Direct Loans Twelvemonthsended Twelvemonthsended March 31, March 31, (Purchasesinthousands) (Originationsinthousands) 2021 2020 2021 2020 Purchases/ $ 74,025 $ 76,696 $ 14,148 $ 12,638 OriginationsAverage APR 23.4 % 23.4 % 29.6 % 28.2 %Average 7.5 % 7.9 % N/A N/A discountAverage term 46 47 25 25 (months)Averageamount $ 10,135 $ 10,035 $ 4,131 $ 4,017 financedNumber of 7,307 7,647 3,497 3,142 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 March 31, March 31, Portfolio 2021 2020 2021 2020 Average APR 22.8 % 22.6 % 28.5 % 27.3 %Average 7.6 % 7.6 % N/A N/A discountAverageterm 51 52 26 26 (months)Number ofactive 22,760 26,894 4,017 3,481 contracts

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