July 27, 2011

Nicholas Financial Reports Record 1st Quarter Results
Annual Shareholders Meeting August 9, 2011

Clearwater, Florida, - July 27, 2011 - Nicholas Financial, Inc. (NASDAQ: NICK), announced that for the three months ended June 30, 2011 net earnings increased 48% to $5,303,000 as compared to $3,576,000 for the three months ended June 30, 2010. Per share diluted net earnings increased 47% to $0.44 as compared to $0.30 for the three months ended June 30, 2010. Revenue increased 11% to $16,634,000 for the three months ended June 30, 2011 as compared to $14,952,000 for the three months ended June 30, 2010.

“Our strong growth in earnings per share for the first quarter ended June 30, 2011 were favorably impacted by an increase in the average finance receivables and a reduction in the net charge-off rate,” stated Peter L. Vosotas, Chairman and CEO. “We recently opened our 57th branch location in Charleston, SC and continue to develop additional markets. The Company will also continue to evaluate new markets for future branch locations and we remain open to acquisitions should an opportunity present itself”, added Vosotas.

The Company will hold its Annual Shareholders Meeting at the Innisbrook Resort Island Course Club House in Palm Harbor, Florida on Tuesday, August 9th at 10:00am.

Nicholas Financial, Inc. is one of the largest publicly traded specialty consumer finance companies based in the Southeastern states. The Company presently operates 57 branch locations in both the Southeastern and the Midwestern states. The Company has approximately 12,000,000 shares of common stock outstanding. For an index of Nicholas Financial, Inc.’s news releases or to obtain a specific release, visit our web site at www.nicholasfinancial.com.


Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that involve risks and uncertainties including general economic conditions, access to bank financing, and other risks detailed from time to time in the Company’s filings and reports with the Securities and Exchange Commission including the Company’s Annual Report on Form 10-K for the year ended March 31, 2011. Such statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to Company management. Actual events or results may differ materially. All forward looking statements and cautionary statements included in this document are made as of the date hereby based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward looking statement or cautionary statement.

NICHOLAS FINANCIAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, Dollars in Thousands, Except Per Share Amounts)
     
  Three months ended
June 30,
  2011      2010     
Revenue
  Interest and fee income on finance receivables $16,624  $14,943 
  Sales 10 
  16,634  14,952 
Expenses
  Operating 6,701  6,249 
  Provision for credit losses 73  1,596 
  Interest Expense 1,229  1,539 
  Change in fair value of interest rate swaps - (244) 
  8,003  9,140 
 
Operating income before income taxes 8,631  5,812 
  Income tax expense 3,328  2,236 
    Net income $5,303  $3,576 
 
Earnings Per share:
    Basic $  0.46  $  0.31 
    Diluted $  0.44  $  0.30 
 
Weighted average shares 11,651,000  11,555,000 
 
Weighted average shares 11,965,000  11,807,000 
 

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Dollars in Thousands)
  June 30, March 31,
  2011 2011
Cash $   2,989  $   2,018 
Finance receivables, net 234,688  230,164 
Other assets 12,223  11,461 
     
  Total assets $249,900  $243,643 
     
Line of credit $116,000  $118,000 
Other Liabilities 12,574  10,430 
 
  Total Liabilities 128,574  128,430 
 
Shareholders' equity 121,326  115,213 
 
Total Liabilities and hareholders' equity $249,900   $243,643  
 

Portfolio Summary Three months ended
June 30,
  2011  2010 
Average finance receivables, net of unearned interest (1) $269,138,821  $238,314,417 
Average indebtedness (2) $117,500,000  $108,246,360 
Interest and fee income on finance receivables (3) $  16,623,588  $  14,942,905 
Interest Expense 1,228,978  1,539,373 
Net Interest and fee income on finance receivables $15,394,610  $13,403,532 
Weighted average contractual rate (4) 23.88%  23.54% 
Average cost of borrowed funds (2) 4.18%  5.69% 
Gross portfolio yield (5) 24.71% 25.08% 
Interest expense as a percentage of average finance
  receivables, net of unearned interest
1.83%  2.58% 

Provision for credit losses as a percentage of average
  finance receivables, net of unearned interest
0.12%  2.68% 
Net portfolio yield (5) 22.76%  19.82% 
Marketing, salaries, employee benefits, depreciation and administrative expenses
  as a percentage of average   finance receivables, net of unearned interest (6)
9.86%  10.39% 
Pre-tax yield as a percentage of average finance  receivables, net of unearned interest (7) 12.90%  9.43% 
Write-off to liquidation (8) 4.72%  6.49% 
Net charge-off percentage (9) 3.62%  4.59% 
 
Note:  All three key performance indicators expressed as percentages have been annualized.
(1)     Average finance receivables, net of unearned interest, represents the average of gross finance receivables, less unearned
           interest throughout the period.
(2)     Average indebtedness represents the average outstanding borrowings under the Line. Average cost of borrowed funds
           represents interest expense as a percentage of average indebtedness.
(3)     Interest & fee income on finance receivables does not include revenue generated by Nicholas Data Services, Inc. (NDS) the
            wholly-owned software subsidiary of Nicholas Financial, Inc.
(4)     Weighted average contractual rate represents the weighted average annual percentage rate (APR) of all automobile finance
           installment contracts purchased and direct consumer loans originated during the period.

(5)     Gross portfolio yield represents interest and fee income on finance receivables as a percentage of average finance receivables, net of
            unearned interest. Net portfolio yield represents interest and fee income on finance receivables minus (a) interest expense and (b) the
            provision for credit losses as a percentage of average finance receivables, net of unearned interest.

(6)     Administrative expenses included in the calculation above are net of administrative expenses associated with NDS which
           approximated $60,000 and $58,000 during the three months ended June 30, 2011 and 2010, respectively.
(7)     Pre-tax yield represents net portfolio yield minus operating expenses as a percentage of average finance receivables, net of
            unearned interest.
(8)     Write-off to liquidation percentage is defined as net charge-offs divided by liquidation. Liquidation is defined as beginning
           receivable balance plus current period purchases minus voids and refinances minus ending receivable balance.
(9)     Net charge-off percentage represents net charge-offs divided by average finance receivables, net of unearned interest,
            outstanding during the period.
 

The following tables present certain information regarding the delinquency rates experienced by the Company with respect to automobile finance installment contracts ("Contracts") and direct consumer loans ("Direct Loans"):
 
  Delinquencies
Contracts  Gross Balance
Outstanding
30 - 59 days 60 - 89 days 90 +days Total
June 30, 2011 $375,073,481 $9,690,976 $2,286,127 $ 607,566 $12,584,669
    2.59% 0.61% 0.16% 3.36%
   
June 30, 2010 $335,892,581 9,381,762 2,728.739 754,662 12,865,163
    2.79% 0.81% 0.23% 3.83%
Direct Loans  Gross Balance
Outstanding
30 - 59 days 60 - 89 days 90 +days Total
June 30, 2011 $5,151,901 $ 53,069 $ 17,219 $ 92 $ 70,380
    1.03% 0.34% 0.00% 1.37%
   
June 30, 2010 $4,845,178 68,939 27,950 16,014 112,903
    1.42% 0.58% 0.33% 2.33%
           

The following table presents selected information on Contracts purchased by the Company,
net of unearned interest:
     
  Three months ended
June 30,
Contracts 2011      2010     
Purchases $36,462,440  $35,574,106 
Weighted APR 23.78%  23.44% 
Average Discount 8.51%  8.91% 
Weighted average term (months) 49  49 
Average Loan $    9,879  $    9,860 
Number of contracts 3,691  3,608