Nicholas Financial Reports Results for the 1st Quarter Ended June 30, 2009

CLEARWATER, Fla., July 30 /PRNewswire-FirstCall/ -- Nicholas Financial, Inc.
(Nasdaq: NICK) announced that for the three months ended June 30, 2009, net
earnings, excluding non-cash unrealized mark-to-market gain on interest rate
swaps increased 34% to $2,081,000 as compared to $1,558,000 for the three
months ended June 30, 2008. Per share diluted net earnings, excluding non-cash
unrealized mark-to-market gain on interest rate swaps, increased 33% to $0.20
for the three months ended June 30, 2009 as compared to $0.15 for the three
months ended June 30, 2008. See reconciliations of the non-GAAP measures on
page 2. Revenue increased 4% to $13,694,000 for the three months ended June
30, 2009 as compared to $13,119,000 for the three months ended June 30, 2008.

According to Peter L. Vosotas, Chairman and CEO, "We are pleased with our
solid first quarter results. We concentrated on basic careful lending and
collecting fundamentals and will continue to do so. Our results were favorably
impacted by a reduction in the net charge-off rate, lower operating expenses
as a percentage of average net receivables and a reduction in the cost of
borrowed funds. While we remain cautious, we are encouraged that the economy
is showing some signs of stability and we feel comfortable proceeding with our
planned expansion. This expansion will include new branch locations in Akron,
Ohio and in Gastonia, North Carolina, which will bring our number of branch
locations to 50 in 12 states. The Company remains open to acquisitions should
an opportunity present itself," added Vosotas.

Nicholas Financial, Inc. is one of the largest publicly traded specialty
consumer finance companies based in the Southeast. The Company presently
operates out of 48 branch locations in both the Southeast and the Mid-West
States. The Company has approximately 10,500,000 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, 2009. 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.

This press release contains disclosures of non-GAAP financial measures
including: net earnings, excluding non-cash unrealized mark-to-market gain on
interest rate swaps and per share diluted net earnings, excluding non-cash
unrealized mark-to-market gain on interest rate swaps. These measures utilize
the GAAP terms "net income" and "diluted earnings per share" and adjust the
GAAP terms to exclude the effect of mark to market adjustments and
reclassifications of previously recorded accumulated comprehensive losses
associated with interest rate swaps. Management believes this presentation
provides additional and meaningful measures for the assessment of the
Company's ongoing results and performance. Because the Company has
historically reported mark-to-market (interest rate swaps) through other
comprehensive income under hedge accounting, management believes that the
inclusion of this non-GAAP measure provides consistency in its financial
reporting and facilitates investors' understanding of the Company's historic
operating trends by providing an additional basis for comparisons to prior
periods. Management recognizes that the use of non-GAAP measures has
limitations, including the fact that they may not be directly comparable with
similar non-GAAP financial measures used by other companies. All non-GAAP
financial measures are intended to supplement the applicable GAAP disclosures
and should not be considered in isolation from, or as substitute for,
financial information prepared in accordance with GAAP. For a reconciliation
of non-GAAP measures from GAAP reported amounts, please see the supplemental
information included with this press release.

Nicholas Financial, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

The following tables include reconciliations of GAAP reported net income
to the non-GAAP measure, net earnings, excluding non-cash unrealized
mark-to-market gain on interest rate swaps as well as GAAP reported diluted
earnings per share to the non-GAAP measure, per share diluted net earnings,
excluding non-cash unrealized mark-to-market gain on interest rate swaps. The
non-GAAP measures exclude the effect of mark-to-market adjustments and
reclassifications of previously recorded accumulated comprehensive losses
associated with interest rate swaps.

Three months ended
June 30,
2009 2008
---- ----
Net income, GAAP $2,263,899 $1,557,693
Mark-to-market gain on interest rate
swaps, net of tax expense of $114,441 (182,863) -
---------- ----------
Net earnings, excluding non-cash
unrealized mark-to-market gain on
interest rate swaps (a) $2,081,036 $1,557,693
========== ==========

Three months ended
June 30,
2009 2008
---- ----
Diluted earnings per share, GAAP $0.22 $0.15
Per diluted share mark-to-market gain
on interest rate swaps $(0.02) $ -
----- -----
Per share diluted net earnings,
excluding non-cash unrealized
mark-to-market gain on interest rate
swaps (a) $0.20 $0.15
===== =====

(a) Represents a non-GAAP financial measure. See information on non-GAAP
financial measures above.

Nicholas Financial, Inc.
Condensed Consolidated Statements of Income
(Unaudited, Dollars in Thousands, Except Per Share Amounts)

Three months ended
June 30,
2009 2008
---- ----
Revenue:
Interest and fee income on finance
receivables $13,673 $13,104
Sales 21 15
------ ------
13,694 13,119
Expenses:
Operating 5,714 5,849
Provision for credit losses 3,323 3,402
Interest expense 1,273 1,409
Unrealized mark to market gain on
interest rate swaps (297) -
------ ------
10,013 10,660

Operating income before income taxes 3,681 2,459
Income tax expense 1,417 901
----- -----
Net income $2,264 $1,558
====== ======

Earnings per share:
Basic $0.22 $0.15
===== =====
Diluted $0.22 $0.15
===== =====

Weighted average shares 10,364,000 10,187,000
========== ==========

Weighted average shares and assumed
dilution 10,505,000 10,393,000
========== ==========

Condensed Consolidated Balance Sheets
(Unaudited, In Thousands)

June 30, March 31,
2009 2009
---- ----
Cash $1,931 $1,733
Finance receivables, net 192,076 186,694
Other assets 9,554 9,355
-------- --------

Total assets $203,561 $197,782
======== ========

Line of credit $103,961 $102,030
Other liabilities 12,025 10,734
-------- --------

Total liabilities 115,986 112,764

Shareholders' equity 87,575 85,018
------ ------

Total liabilities and
shareholders' equity $203,561 $197,782
======== ========

Three months ended
June 30,
Portfolio Summary 2009 2008
----------------- ---- ----
Average finance receivables, net of
unearned interest (1) $215,721,582 $203,328,823
============ ============
Average indebtedness (2) $102,991,423 $101,856,230
============ ============
Finance revenue (3) $13,673,272 $13,103,966
Interest expense 1,272,677 1,409,336
--------- ---------
Net finance revenue $12,400,595 $11,694,630
=========== ===========
Weighted average contractual rate (4) 23.93% 24.28%
===== =====
Average cost of borrowed funds (2) 4.94% 5.53%
==== ====
Gross portfolio yield (5) 25.35% 25.78%

Interest expense as a percentage of
average finance receivables, net of
unearned interest 2.36% 2.77%

Provision for credit losses as a
percentage of average finance
receivables, net of unearned interest 6.16% 6.69%
==== ====
Net portfolio yield (5) 16.83% 16.32%

Marketing, salaries, employee benefits,
depreciation and administrative
expenses as a percentage of average
finance receivables, net of unearned
interest (6) 10.49% 11.10%
----- -----
Pre-tax yield as a percentage of average
finance receivables, net of unearned
interest (7) 6.34% 5.22%
==== ====
Write-off to liquidation (8) 10.80% 11.24%

Net charge-off percentage (9) 7.72% 9.39%

Note: All three month 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) Finance revenue 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 Contracts purchased and direct
loans originated during the period.
(5) Gross portfolio yield represents finance revenues as a percentage of
average finance receivables, net of unearned interest. Net portfolio
yield represents finance revenue 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
$52,000 and $202,000 during the three-month periods ended June 30,
2009 and 2008, 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 Contracts and under its
direct loan program:

June 30,
2009 2008
---- ----
Contracts
---------
Gross balance
outstanding $301,549,799 $282,828,447
============ ============

Delinquencies
-------------

30 to 59 days $9,603,430 3.18% $7,066,773 2.50%
60 to 89 days 3,739,568 1.24% 2,734,258 0.97%
90 + days 1,080,901 0.36% 1,106,775 0.39%
--------- ---- --------- ----

Total delinquencies $14,423,899 4.78% $10,907,806 3.86%
=========== ==== =========== ====

Direct Loans
------------
Gross balance
outstanding $6,311,182 $9,275,896
========== ==========

Delinquencies

30 to 59 days $137,623 2.18% $123,548 1.33%
60 to 89 days 103,786 1.64% 61,820 0.67%
90 + days 37,232 0.59% 44,009 0.47%
------ ---- ------ ----

Total delinquencies $278,641 4.41% $229,377 2.47%
======== ==== ======== ====

The following table presents selected information on Contracts purchased
by the Company, net of unearned interest:

Three months ended
June 30,

Contracts 2009 2008
--------- ---- ----

Purchases $30,089,267 $33,324,451
Weighted APR 23.83% 24.19%
Average discount 9.29% 8.87%
Weighted average term
(months) 49 49
Average loan $9,444 $9,554
Number of contracts 3,186 3,488
------------------- ----- -----

SOURCE Nicholas Financial, Inc.

Ralph Finkenbrink, Sr. Vice President, CFO, Nicholas Financial, Inc.,
+1-727-726-0763