• 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)
				Number of								Average
Fiscal Year				Contracts				Principal Amount				Amount				Average					Average					Average
/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)
		Number of				Principal
Fiscal Year		Loans				Amount				Average Amount				Average					Average
/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, Inc’s 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 Company’s 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 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, 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)

	Three months ended									Nine months ended
		December 31,								December 31,
		2020				2019				2020				2019
Revenue:
Interest and fee income on finance receivables		$	13,180			$	14,973			$	41,395				$	47,199
Realized gain on equity investments			238				-				238					-
Unrealized gain on equity investments			1,056				-				1,101					-
Total revenue			14,474				14,973				42,734					47,199
Expenses:
Operating expenses			7,407				7,950				22,881					25,848
Provision for credit losses			650				4,597				7,000					12,982
Interest expense			1,442				1,886				4,660					6,672
Total expenses			9,499				14,433				34,541					45,502
Income before income taxes			4,975				540				8,193					1,697
Income tax expense			1,190				229				1,711					527
Net 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 31,				March 31,
		2020				2020
Cash and restricted cash		$	29,261			$	24,684
Equity investments with readily determinable fair values			4,286				-
Finance 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

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

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-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, 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 – 59 days				60 – 89 days					90 – 119 days					120+					Total
December 31, 2020		$	174,170			$	12,914			$	4,955				$	2,117				$	28				$	20,014
							7.41		%		2.84		%			1.22		%			0.02		%			11.49		%
December 31, 2019		$	200,092			$	16,748			$	5,993				$	2,279				$	47				$	25,067
							8.37		%		3.00		%			1.14		%			0.02		%			12.53		%
Direct Loans		Balance
		Outstanding				30 – 59 days				60 – 89 days					90 – 119 days					120+					Total
December 31, 2020		$	14,227			$	442			$	188				$	110				$	4				$	744
							3.11		%		1.32		%			0.77		%			0.03		%			5.23		%
December 31, 2019		$	11,423			$	331			$	123				$	68				$	3				$	525
							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
		Three months ended								Three months ended
		December 31,								December 31,
		(Purchases in thousands)								(Originations in thousands)
		2020				2019				2020				2019
Purchases/Originations		$	15,285			$	17,880			$	4,605				$	4,490
Average APR			23.4		%		23.3		%		30.9		%		28.4			%
Average discount			7.5		%		7.6		%	N/A					N/A
Average term (months)			46				47				22					24
Average amount financed		$	10,307			$	10,200			$	3,641				$	3,949
Number of contracts			1,483				1,753				1,265					1,137
		Contracts								Direct Loans
		Nine months ended								Nine months ended
		December 31,								December 31,
		(Purchases in thousands)								(Originations in thousands)
		2020				2019				2020				2019
Purchases/Originations		$	49,388			$	57,038			$	10,864				$	9,534
Average APR			23.5		%		23.4		%		29.6		%			28.0		%
Average discount			7.4		%		7.9		%	N/A					N/A
Average term (months)			46				47				24					24
Average amount financed		$	10,132			$	10,089			$	4,054				$	3,919
Number of contracts			4,878				5,656				2,744					2,422

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 discount			7.6		%		7.7		%	N/A					N/A
Average term (months)			51			51				26					26
Number of active contracts			23,388				25,995				4,126					3,376

Contact:
Irina Nashtatik
CFO
Ph # (727)-726-0763

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.