“All 2,176 accounts were onboarded last night and are now on our servicing platform and balance sheet,” Nicholas Financial Chief Executive Doug Marohn told Auto Finance News. This acquisition is Nicholas Financial’s third bulk portfolio purchase of Platinum Auto Finance’s receivable base in the last two months, Marohn added. The first purchases were $1.1 million and $900,000, respectively.
The acquisition increases Nicholas Financial’s indirect auto portfolio by 10%. The lender had a $270.1 million auto portfolio as of fiscal year ended March 31, 2019.
“Having done two smaller bulk purchases of their portfolio in the previous two months allowed us to get the logistics down pat,” Marohn said. “So once we closed on the deal and executed all of the paperwork, funding, etc. we were immediately able to onboard.”
Moving forward, Nicholas Financial will immediately start servicing the purchased accounts from Platinum Auto Finance.
“We bought active loans and Platinum is still an ongoing entity,” Marohn noted. “Platinum is assisting us with the notification of customers by mail, phone, etc. and we are doing the same. We will, of course, advise our new customers about all of our services and we definitely expect to be able to provide direct loans, auto financing on their next vehicle to many of these former Platinum customers.”
Further, Nicholas Financial has been working with Platinum Auto Finance on several joint ventures, including cross-marketing and application pass-throughs. The lenders have already started testing a couple of new products and have been for about a month.
Nicholas Financial has been bullish on growing its book of business to bring value to shareholders. On April 30, 2019, the lender closed its acquisition of Metrolina Credit Company, adding more than $22 million of performing receivables to its portfolio.
Additionally, the acquisition “removed a direct competitor from the Carolinas,” Marohn noted.
Marohn was the former president and chief executive of Metrolina from 2014 through 2017, he wrote in Nicholas Financial’s 2019 annual report. Platinum Auto Finance could not be immediately reached for comment before press time today.
Nicholas Financial’s stock (NYSE: NICK) was trading at $8.00 per share at press time. The company has a market capitalization of $63.2 million.
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