Nicholas Financial Reports 3rd Quarter Results

Nicholas Financial Reports 3rd Quarter Results

CLEARWATER, Fla., Feb. 4, 2014 (GLOBE NEWSWIRE) -- Nicholas Financial, Inc.
(Nasdaq:NICK) announced that for the three months ended December 31, 2013 net
earnings decreased 17% to $3,827,000 as compared to $4,596,000 for the three
months ended December 31, 2012. Per share diluted net earnings decreased 18%
to $0.31 as compared to $0.38 for the three months ended December 31, 2012.
Revenue increased 1% to $20,761,000 for the three months ended December 31,
2013 as compared to $20,605,000 for the three months ended December 31, 2012.

For the nine months ended December 31, 2013 net earnings decreased 9% to
$13,844,000 as compared to $15,154,000 for the nine months ended December 31,
2012. Per share diluted net earnings decreased 9% to $1.13 as compared to
$1.24 for the nine months ended December 31, 2012. Revenue increased 1% to
$62,186,000 for the nine months ended December 31, 2013 as compared to
$61,738,000 for the nine months ended December 31, 2012.

"Our results for the three months ended December 31, 2013 were adversely
affected by a reduction in the gross portfolio yield and professional fees of
$821,000 associated with the previously announced sale of the Company. Also,
after-tax earnings were increasingly impacted as a significant portion of the
professional fees were not deductible for income tax purposes resulting in a
higher effective tax rate and after-tax impact of $0.07 per share. Our results
for the three months ended December 31, 2012 were affected by an after-tax
charge of $747,000 or $0.06 per share related to a 5% withholding tax
associated with the one-time special cash dividend of $2.00 per share paid in
December 2012," stated Peter L. Vosotas, Chairman and CEO. "We continue to
develop additional markets and expect to open one additional location during
the fourth quarter, which ends March 31, 2014."

Nicholas Financial, Inc. is one of the largest publically traded specialty
consumer finance companies in North America. The Company operates branch
locations in both the Southeastern and the Midwestern states. The Company has
approximately 12,200,000 shares of common stock outstanding. For an index of
Nicholas Financial, Inc. news releases and public filings please visit our web
site at www.nicholasfinancial.com.

Except for the historical information contained herein, the matters discussed
in this news release include forward-looking statements that involve risks and
uncertainties including general economic conditions, access to bank financing,
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, 2013. Such statements
are based on the beliefs of the Company's management as well as assumptions
made by and information currently available to Company management. Actual
events or results may differ materially. All forward looking statements and
cautionary statements included in this document are made as of the date hereby
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,
                                  2013       2012       2013       2012
Revenue:                                                         
Interest and fee income on finance $20,756    $20,595    $62,169    $61,709
receivables
Sales                              5          10         17         29
                                  20,761     20,605     62,186     61,738
Expenses:                                                        
Operating                          7,515      6,933      22,498     20,814
Dividend taxes                     --         1,287      143        1,419
Professional fees                  1,061      187        2,012      639
Provision for credit losses        4,183      3,485      10,798     9,850
Interest expense                   1,441      1,275      4,289      3,717
Change in fair value of interest   (99)       (37)       (682)      646
rate swap agreements
                                  14,101     13,130     39,058     37,085
                                                                
Operating income before income     6,660      7,475      23,128     24,653
taxes
Income tax expense                 2,833      2,879      9,284      9,499
Net income                         $3,827     $4,596     $13,844    $15,154
                                                                
Earnings per share:                                              
Basic                              $0.32      $0.38      $1.15      $1.27
Diluted                            $0.31      $0.38      $1.13      $1.24
Dividends declared per share       --         $2.12      $0.24      $2.34
                                                                
Weighted average shares            12,109,000 11,982,000 12,089,000 11,962,000
                                                                
Weighted average shares and        12,334,000 12,193,000 12,286,000 12,192,000
assumed dilution

                                                      
Condensed Consolidated Balance Sheets
(Unaudited, In Thousands)
                                                      
                                          December 31, March 31,
                                          2013         2013
Cash                                       $4,089       $2,798
Finance receivables, net                   261,254      249,826
Other assets                               10,743       11,211
                                                      
Total assets                               $276,086     $263,835
                                                      
Line of credit                             $127,000     $125,500
Other liabilities                          10,271       11,370
                                                      
Total liabilities                          137,271      136,870
                                                      
Shareholders' equity                       138,815      126,965
                                                      
Total liabilities and shareholders' equity $276,086     $263,835

                                                 
                     Three months ended           Nine months ended
                     December 31,                 December 31,
Portfolio Summary     2013           2012          2013          2012
Average finance
receivables, net of   $291,620,270   $281,553,866  $289,110,042  $281,242,951
unearned interest
(1)
Average indebtedness  $128,500,000   $114,131,239  $127,545,256  $111,293,746
(2)
Interest and fee
income on finance     $20,756,034    $20,594,614   $62,168,566   $61,708,812
receivables (3)*
Interest expense      1,441,175      1,275,015     4,288,979     3,717,386
Net interest and fee
income on finance     $19,314,859    $19,319,599   $57,879,587   $57,991,426
receivables*
Weighted average      23.33%         23.34%        23.20%        23.55%
contractual rate (4)
Average cost of       4.49%          4.47%         4.48%         4.45%
borrowed funds (2)
Gross portfolio yield 28.47%         29.26%        28.67%        29.26%
(5)*
Interest expense as a
percentage of average
finance receivables,  1.98%          1.81%         1.98%         1.76%
net of unearned
interest
Provision for credit
losses as a
percentage of average 5.74%          4.95%         4.98%         4.67%
finance receivables,
net of unearned
interest*
Net portfolio yield   20.75%         22.50%        21.71%        22.83%
(5)*
Marketing, salaries,
employee benefits,
depreciation,
administrative and
professional expenses 11.68%         11.86%        11.29%        10.76%
and dividend taxes as
a percentage of
average finance
receivables, net of
unearned interest (6)
Pre-tax yield as a
percentage of average
finance receivables,  9.07%          10.64%        10.42%        12.07%
net of unearned
interest (7)*
Write-off to          7.62%          7.94%         7.24%         6.82%
liquidation (8)
Net charge-off        6.34%          6.75%         6.20%         5.74%
percentage (9)
                                                             
Note: All three and nine month key performance indicators expressed as
percentages have been annualized.
(1) Average finance receivables, net of unearned interest, represents the
average of gross finance receivables, less unearned interest throughout the
period.
(2) Average indebtedness represents the average outstanding borrowings under
the Line. Average cost of borrowed funds represents interest expense as a
percentage of average indebtedness.
(3) Interest and fee income on finance receivables does not include revenue
generated by Nicholas Data Services, Inc., ("NDS") the wholly-owned software
subsidiary of Nicholas Financial, Inc.
(4) Weighted average contractual rate represents the weighted average annual
percentage rate (APR) of all automobile finance installment contracts
purchased and direct consumer loans originated during the period.
(5) Gross portfolio yield represents interest and fee income on finance
receivables as a percentage of average finance receivables, net of unearned
interest. Net portfolio yield represents interest and fee income on finance
receivables minus (a) interest expense and (b) the provision for credit losses
as a percentage of average finance receivables, net of unearned interest.
(6)Administrative expenses included in the calculation above are net of
administrative expenses associated with NDS which approximated $58,000 and
$54,000 during the three-month periods ended December 31, 2013 and 2012 and
$161,000 and $172,000 during the nine-month periods ended December 31, 2013
and 2012, respectively.For the three and nine months ended December 31, 2013,
the numerators include expenses associated with the potential sale of the
Company. Absent these expenses, the percentages would have been 10.55% and
10.75%, respectively. For the three and nine months ended December 31, 2012,
the numerators include a tax associated with cash dividends. Absent the
dividend tax, the percentages would have been 10.03% and 10.08%, respectively.
(7) Pre-tax yield represents net portfolio yield minus administrative expenses
as a percentage of average finance receivables, net of unearned interest.
(8) Write-off to liquidation percentage is defined as net charge-offs divided
by liquidation. Liquidation is defined as beginning gross receivable balance
plus current period purchases minus voids and refinances and ending gross
receivable balance.
(9) Net charge-off percentage represents net charge-offs divided by average
finance receivables, net of unearned interest, outstanding during the period.
* The amounts for the three and nine months periods ended December 31, 2012
have been revised as discussed in Note 2 to the consolidated financial
statements.

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"):

                            Delinquencies
Contracts       Gross Balance 31 – 60 days 61 – 90 days 90 + days  Total
                Outstanding
December 31,    $399,785,114  $18,740,543  $5,200,159   $5,194,114 $29,134,816
2013
                            4.69%        1.30%        1.30%      7.29%
December 31,    $380,519,395  $17,287,813  $4,529,766   $2,254,123 $24,071,702
2012
                            4.54%        1.19%        0.59%      6.32%
Direct Loans    Gross Balance 31 – 60 days 61 – 90 days 90 + days  Total
                Outstanding
December 31,    $11,319,887   $176,446     $40,887      $42,592    $259,925
2013
                            1.56%        0.36%        0.38%      2.30%
December 31,    $8,861,098   $116,251     $29,295      $22,501    $168,047
2012
                            1.31%        0.33%        0.25%      1.89%

The following table presents selected information on Contracts purchased by
the Company, net of unearned interest: 

                            Three months ended      Nine months ended
                            December 31,            December 31,
Contracts                    2013        2012        2013         2012
Purchases                    $36,241,261 $31,417,597 $120,082,490 $107,893,529
Weighted APR                 23.05%      23.10%      22.96%       23.37%
Average discount             8.58%       8.64%       8.47%        8.59%
Weighted average term        52          50          52           49
(months)
Average loan                 $10,578     $10,549     $10,638      $10,228
Number of contracts          3,426       3,004       11,288       10,549

CONTACT: Ralph Finkenbrink
         Sr. Vice President, CFO
         Ph # 727-726-0763
         Web site: www.nicholasfinancial.com

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