Nicholas Financial is looking to expand its direct lending footprint into Ohio.
Clearwater, Fla.-based Nicholas already offers a direct loan product in three states. “We have not only been able to increase our focus on direct loan production in Florida and North Carolina, but we are now writing direct loans in the state of Georgia and have applied for our license to conduct this business in the state of Ohio,” President and CEO Doug Marohn said in an earnings statement yesterday. “Nicholas will continue to evaluate other states in our network for expansion of the direct loan product. We believe this product line compliments our core business well and aligns extremely well with our branch-based model.”
Meanwhile, Nicholas’s indirect loan volume has declined or 24.5%, to $40 million, for the six months ended Sept. 30.
The company started to modify underwriting guidelines midway through the year to improve the quality of the contracts it purchased. These modifications included an enhanced review process for approved applications and the use of alternative data. By tightening underwriting guidelines, credit losses improved 17.5% year-over-year.
“Our renewed focus on financing primary transportation to and from work for subprime customers is continuing to have a positive impact,” Marohn said. “Prior [consumer] pools are still presenting a challenge and continue to produce losses of greater severity and frequency than more recent pools, however, we are happy overall with even the prior pools’ performance due to improved servicing and operational controls.”
Net income for the September quarter increased 69% year over year, to $582,000. Accounts 61-or-more days delinquent decreased to 4.1% YOY, excluding Chapter 13 bankruptcy accounts.
“The key performance indicators on our purchases over the last three quarters continue to reflect our disciplined approach regarding proper pricing and structure on purchases,” Marohn said.