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Nicholas Financial Inc. Reports Operating Results (10-Q)

February 11, 2011 | About:
10qk

10qk

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Nicholas Financial Inc. (NICK) filed Quarterly Report for the period ended 2010-12-31.

Nicholas Financial Inc. has a market cap of $142.1 million; its shares were traded at around $12.312 with a P/E ratio of 9.2 and P/S ratio of 2.5. Nicholas Financial Inc. had an annual average earning growth of 4.7% over the past 10 years.Hedge Fund Gurus that owns NICK: Glenn Greenberg of Brave Warrior Capital, Inc., Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Consolidated net income increased 55% to approximately $4.5 million for the three-month period ended December 31, 2010 as compared to $2.9 million for the corresponding period ended December 31, 2009. Diluted earnings per share increased 52% to $0.38 for the three months ended December 31, 2010 as compared to $0.25 for the three months ended December 31, 2009. Consolidated net income increased to approximately $12.0 million for the nine-month period ended December 31, 2010 as compared to $7.6 million for the corresponding period ended December 31, 2009. Diluted earnings per share increased 55% to $1.01 for the nine months ended December 31, 2010 as compared to $0.65 for the nine months ended December 31, 2009.

Interest and fee income on finance receivables, predominately finance charge income, increased 11% to approximately $16.0 million for the three-month period ended December 31, 2010 from $14.4 million for the corresponding period ended December 31, 2009. Average finance receivables, net of unearned interest equaled approximately $255.6 million for the three-month period ended December 31, 2010, an increase of 13% from $226.3 million for the corresponding period ended December 31, 2009. The primary reason average finance receivables, net of unearned interest, increased was the increase in the receivable base of several existing branches in younger markets and also the opening of new branch locations (see Contract Procurement and Loan Origination below). The gross finance receivable balance increased 14% to approximately $359.2 million as of December 31, 2010, from $316.3 million as of December 31, 2009. The primary reason interest income increased was the increase in the outstanding loan portfolio. The gross portfolio yield decreased to 25.02% for the three-month period ended December 31, 2010 from 25.37% for the three-month period ended December 31, 2009. The net portfolio yield increased to 20.98% for the corresponding period ended December 31, 2010 from 18.12% for the three-month period ended December 31, 2009. The gross portfolio yield decreased primarily due to a lower weighted APR earned on finance receivables. The net portfolio yield increased primarily due to a decrease in the net charge-off percentage and a corresponding decrease in the provision for credit losses which are discussed at note 4 Allowance for Credit Losses. See also Analysis of Credit Losses below.

Interest expense increased to approximately $1.4 million for the three-month period ended December 31, 2010 from $1.1 million for the three-month period ended December 31, 2009. The following table summarizes the Companys average cost of borrowed funds:

Interest and fee income on finance receivables, predominately finance charge income, increased 10% to approximately $46.6 million for the nine-month period ended December 31, 2010 from $42.2 million for the corresponding period ended December 31, 2009. Average finance receivables, net of unearned interest equaled approximately $247.7 million for the nine-month period ended December 31, 2010, an increase of 12% from $221.6 million for the corresponding period ended December 31, 2009. The primary reason average finance receivables, net of unearned interest, increased was the increase in the receivable base of several existing branches in younger markets and also the opening of new branch locations (see Contract Procurement and Loan Origination below). The gross finance receivable balance increased 14% to approximately $359.2 million as of December 31, 2010, from $316.3 million as of December 31, 2009. The primary reason interest income increased was the increase in the outstanding loan portfolio. The gross portfolio yield decreased to 25.12% for the nine-month period ended December 31, 2010 from 25.37% for the nine-month period ended December 31, 2009. The net portfolio yield increased to 20.34% for the corresponding period ended December 31, 2010 from 17.41% for the nine-month period ended December 31, 2009. The gross portfolio yield decreased primarily due to a lower weighted APR earned on finance receivables. The net portfolio yield increased primarily due to a decrease in the net charge-off percentage and a corresponding decrease in the provision for credit losses which are discussed at note 4 Allowance for Credit Losses. See also Analysis of Credit Losses below.

Marketing, salaries, employee benefits, depreciation and administrative expenses increased to approximately $18.7 million for the nine-month period ended December 31, 2010 from approximately $17.4 million for the corresponding period ended December 31, 2009. The increase of 7% was primarily attributable to salaries expense. The Company opened additional branches and average increased headcount to 267 as of December 31, 2010 from 251 as of December 31, 2009. Marketing, salaries, employee benefits, depreciation, and administrative expenses as a percentage of finance receivables, net of unearned interest, decreased to 9.99% for the nine-month period ended December 31, 2010 from 10.38% for the nine-month period ended December 31, 2009.

Interest expense increased to approximately $4.4 million for the nine-month period ended December 31, 2010 from $3.6 million for the nine-month period ended December 31, 2009. The following table summarizes the Companys average cost of borrowed funds for the nine-month period ended December 31:

Read the The complete Report

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