This year marked our 26th year in business and our 24th year as a publicly traded company. We had a great year. Virtually every aspect of our business was working smoothly and we are extremely proud of the performance that our employees delivered during the past fiscal year. Today Nicholas Financial has grown to 56 branch offices in 14 states. As of March 31, 2011 we had $372,950,000 in gross receivables outstanding. In each sequential quarter during the year, we reported increased               Peter L. Vosotas, CEO & President revenues, reduced credit losses
and increased profits. Year over year our common stock share price rose 61% from $7.57 to $12.20. By virtually every measure we had an excellent year. I reported this very same thing last year and we hope to repeat the same results next year.

Our Company achieved outstanding financial results by recording its 21st consecutive year of record revenues. Net income for the year ended March 31, 2011 increased 55% to $16,805,000 as compared to $10,865,000 for the fiscal year ended March 31, 2010. Earnings per share increased 52% to $1.41 as compared to $0.93. Revenue for the year increased 11% to $62,774,000 as compared to $56,472,000. Shareholder’s equity grew 18% to $115,213,000 from $97,437,000. These results were primarily driven by an increase in revenues and a reduction in the charge off rate.

During the 2011 fiscal year, we added six new locations to our branch office network. With the addition of these new offices, the Company now operates 56 branches in 14 states. We will continue to evaluate additional markets for future branch locations, and subject to market conditions, we may open several new branch locations during the coming year.

Our plan is to open branch locations in a large metro area in states that we believe are favorable to our specialty vehicle and consumer finance business. We intend to stick to this recipe that has been tested over the past 21 years. We remain convinced that providing auto and light truck financing for Americans who for any numbers of reasons, find themselves with poor credit, will be a strong business for years to come as long as cars and trucks remain the main form of transportation,

For many years I have made the same statement regarding our accomplishments: “Our consistent financial performance hasn’t happened by accident. It is the result of many people working very hard over a long period of time. The automobiles of our employees are usually the first to arrive in the parking lot each morning and invariably the last to drive away at night.” To the credit of our employees, this statement rings as true today as when it was first written. We, like all companies, have a challenge to find good, hardworking, and qualified people. When we do, we try our best to keep those who work hard and produce results.

We reward our employees with decent benefits, including performance-based bonuses and excellent career opportunities. Our ability to mold and retain a veteran team is one of the primary reasons for our success. Several of our senior managers, accounting staff and data processing staff have been with the Company since its inception in the late 1980’s.

We look forward with optimism toward the coming year. Any company that can say, “Our potential market is over $250 billion dollars a year and growing”, should be excited about its business prospects. Our intention is to continue our strategy of controlled growth by increasing our existing branch loan portfolio and building new branch offices. We intend to continue growing our company organically. However, we will stay alert to possible acquisition opportunities that may come to our attention. The independent members of our Board of Directors have always diligently embraced their fiduciary responsibilities. They take their responsibilities to heart. We are fortunate to have been able to attract these talented individuals. Charlie Neal, Scott Fink and Stephen Bragin are terrific board members. They have taken the time to know our business and to give us excellent business guidance.

We are very proud of all our employees whose dedication, talent and loyalty have made Nicholas an important force in automobile financing. We are grateful for the support of our customers, bankers, vendors and shareholders. We remain determined to increase the value of our publicly traded stock. We are convinced that our shareholders will be rewarded if we continue to build the net worth of our Company each year as we have done for the past 21 consecutive years.

On a final note we were thrilled to be invited to ring the closing bell for the Nasdaq Market System last August. It was a great honor for us as we like many other bell ringers have very humble beginnings. What a wonderful event for our company to take part in. All of our customer, suppliers and employees made this thrilling experience possible. I cannot thank them enough.

To all of you who have invested in Nicholas, we wish to thank you for having continued faith in our Company. On behalf of our Board of Directors and our employees, we thank you for the confidence that you have entrusted in us.

Peter L. Vosotas
Chairman, CEO & President
June 2011