Aggressive competition is putting pressure on margins and making it more difficult to acquire new business that’s consistent with lender Nicholas Financial Inc.’s internal guidelines, according to President and CEO Ralph T. Finkenbrink.
Finkenbrink made that statement today in the company’s earnings release, which showed 2Q 2014 originations falling to $41 million, down from $42 million the same time last year. Meanwhile, average receivables were $309.8 million, up from the $290.1 million the same time last year.
For the six months ended Sept. 30, net earnings decreased 8% to $9.2 million, compared with $10 million for the six months ended Sept. 30, 2013.
The company said its results for the three months ended September 30, 2014 were adversely affected by a reduction in its gross portfolio yield and an increase in the provision for losses compared with the corresponding period ended Sept. 30, 2013. Meanwhile, results were favorably impacted by a change in fair value of the interest rate swap agreements, which resulted in a gain of $251,000, compared with a loss of $250,000 for the comparable three-month period.
This past Oct. 21, the company’s board said it was considering various strategic financial initiatives to increase return on shareholder investment, including (but not limited to) undertaking a share repurchase program or self-tender offer, initiating a cash dividend program, increasing its existing credit facility and/or exploring potential expansion opportunities.
In today’s report, Finkenbrink said Nicholas will continue to develop additional markets and may open additional branch locations during the remainder of its current fiscal year, which ends March 31, 2015.
