August 2, 2012

Nicholas Financial Reports Record 1st Quarter Results

Clearwater, Florida, - August 2, 2012 - Nicholas Financial, Inc. (NASDAQ: NICK), announced that for the three months ended June 30, 2012 net earnings increased 1% to $5,374,000 as compared to $5,303,000 for the three months ended June 30, 2011. Per share diluted net earnings was $0.44 for each of the three-month periods ended June 30, 2012 and 2011, respectively. Revenue increased 4% to $17,280,000 for the three months ended June 30, 2012 as compared to $16,634,000 for the three months ended June 30, 2011.

According to CEO, Peter Vosotas, “In the past 12 months our company continued its organic expansion and has opened 7 new branches bringing the total to 63 in 15 states. We are confident that in spite of the corresponding increase in operating expenses associated with this significant expansion that we will enjoy increased revenues in the months and years ahead.”

The Company will hold its Annual Shareholders Meeting on August 7th at 11:00am.

Nicholas Financial, Inc. is a publicly traded specialty consumer finance company. The company presently operates branch locations in both the Southeastern and the Midwestern states. For an index of Nicholas Financial, Inc.’s news releases or to obtain a specific release, visit ourweb site at www.nicholasfinancial.com.


Exceptfor 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, 2012. 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 Per Share Amounts)
     
  Three months ended
June 30,
  2012      2011     
Revenue
  Interest and fee income on finance receivables $17,270  $16,624 
  Sales 10  10 
  17,280  16,634 
Expenses
  Operating 7,134  6,701 
  Provision for credit losses 10  73
  Interest Expense 1,192  1,229 
  Change in fair value of interest rate swaps 209  - 
  8,545  8,003 
 
Operating income before income taxes 8,735  8,631 
  Income tax expense 3,361  3,328 
    Net income $5,374  $5,303 
 
Earnings Per share:
    Basic $  0.45  $  0.46 
    Diluted $  0.44  $  0.44 
 
Weighted average shares 11,940,000  11,651,000 
 
Weighted average shares 12,179,000  11,965,000 
 

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Dollars in Thousands)
  June 30, March 31,
  2012 2012
Cash $   5,049  $   2,803 
Finance receivables, net 244,597  242,349 
Other assets 11,989  12,084 
     
  Total assets $261,635  $257,236 
     
Line of credit $109,000  $112,000 
Other Liabilities 12,166  9,297 
 
  Total Liabilities 121,166  121,297 
 
Shareholders' equity 140,469  135,939 
 
Total Liabilities and hareholders' equity $261,635   $257,236  
 

Portfolio Summary Three months ended
June 30,
  2012  2011 
Average finance receivables, net of unearned interest (1) $279,750,283  $269,138,821 
Average indebtedness (2) $110,750,000  $117,500,000 
Interest and fee income on finance receivables (3) $  17,270,088  $  16,623,588 
Interest Expense 1,192,140  1,228,978 
Net Interest and fee income on finance receivables $16,077,948  $15,394,610 
Weighted average contractual rate (4) 23.81%  23.88% 
Average cost of borrowed funds (2) 4.31%  4.18% 
Gross portfolio yield (5) 24.69% 24.71% 
Interest expense as a percentage of average finance
  receivables, net of unearned interest		 1.70%  1.83% 

Provision for credit losses as a percentage of average
  finance receivables, net of unearned interest		 0.01%  0.12% 
Net portfolio yield (5) 22.98%  22.76%
Marketing, salaries, employee benefits, depreciation and administrative expenses
  as a percentage of average   finance receivables, net of unearned interest (6)		 10.10%  9.86% 
Pre-tax yield as a percentage of average finance  receivables, net of unearned interest (7) 12.88%  12.90% 
Write-off to liquidation (8) 4.93%  4.72% 
Net charge-off percentage (9) 4.07%  3.62% 
 
Note:  All three 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 & 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 $67,000 and $60,000 during the three months ended June 30, 2012 and 2011, respectively.
(7)     Pre-tax yield represents net portfolio yield minus operating 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
           receivable balance plus current period purchases minus voids and refinances minus ending 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 following tables present certain information regarding the delinquency rates experienced by the Company with respect to Contracts and under its direct loan program:
 
  Delinquencies
Contracts  Gross Balance
Outstanding		 31 - 60 days 61 - 90 days Over 90 Total
June 30, 2012 $385,611,683 $12,745,275 $3,216,955 $ 804,930 $16,767,160
    3.31% 0.83% 0.21% 4.35%
   
June 30, 2011 $375,073,481 $9,690,976 $2,286.127 $607,566 $12,548,669
    2.59% 0.61% 0.16% 3.36%
Direct Loans  Gross Balance
Outstanding		 31 - 60 days 61 - 90 days Over 90 Total
June 30, 2012 $7,095,917 $ 78,044 $ 19,390 $ 4,226 $ 101,660
    1.10% 0.27% 0.06% 1.43%
   
June 30, 2011 $5,151,901 $53,069 $17,219 $92 $70,380
    1.03% 0.34% 0.00% 1.37%
           

The following table presents selected information on Contracts purchased by the Company,
net of unearned interest:
     
  Three months ended
June 30,
Contracts 2012      2011     
Purchases $37,231,933  $36,462,440 
Weighted APR 23.67%  23.78% 
Average Discount 8.28%  8.51% 
Weighted average term (months) 49  49 
Average Loan $    9,918  $    9,879 
Number of contracts 3,754  3,691