Nicholas Financial Closes Three Branches in Its Second Quarter

Nicholas Financial closed three branch locations in the second quarter ended Sept. 30, due to those respective markets not meeting the company’s expectations, Ralph Finkenbrink, the company’s president and chief executive, said in its report filed today with the SEC.

Additionally, the auto lender moved all loan-servicing operations from its branch locations to a centralized location within its corporate headquarters in Clearwater, Fla. as of Oct. 1, according to the report.

“We continue to evaluate the various markets in which we operate; however, we do not expect any significant changes to the number of branches or other operations during our third quarter which ends Dec. 31,” Finkenbrink said.

Nicholas Financial reported less than 1% growth in its loan portfolio — $312.7 million in 2Q, up from $311.8 million from the previous quarter ended March 31, according to the report. The company also reported that total delinquencies, 31-plus days, hit 9.76% for the second quarter ended Sept. 30, up from 5.88% at the same time a year prior.

“During our second quarter, new loan originations continued to be below company expectations due to numerous companies looking to acquire automobile retail installment contracts,” Finkenbrink said in the report. “Some of these companies are willing to acquire loans at riskier pricing, which we believe will ultimately leave those companies with unprofitable portfolios.”

Nicholas Financial, founded in 1986, provides direct consumer loans and purchases installment sales contracts from automobile dealers for used cars and light trucks. It also sells computer application software for small businesses. The company has 64 branch locations across the southeastern and midwestern states, according to its website.