While the pandemic has hindered face-to-face contact in many ways, Nicholas Financial reiterated that its branch-model system and how the subprime finance company interacts with dealers and consumers again helped its quarterly performance.

Nicholas reported figures from the first quarter of its 2022 fiscal year, highlighting that its net income for the three months that ended June 30 came in at $1.4 million compared to $0.6 million during the opening quarter of the previous fiscal year.

The company said its diluted net income per share grew year-over-year from $0.07 to $0.18.

Nicholas acknowledged its revenue softened 15.0% to $14.2 million to start the 2022 fiscal year after the previous year began with $16.6 million in revenue.

During the quarter, the company said it originated $19.2 million in finance receivables, collected $28.4 million in principal payments, reduced debt by $4.6 million and increased cash by $7.6 million.

Nicholas also highlighted accounts 60 days or more delinquent decreased to 2.5%, excluding Chapter 13 bankruptcy accounts, compared to 3.0% as of the prior year first quarter.

The company went on to mention net portfolio yield during Q1 increased to 17.2% compared to 16.6% during the first quarter of the previous fiscal year.

“There is no doubt that the COVID-19 pandemic had an impact on our operations overall and particularly on our new loan originations,” Nicholas’ president and chief executive officer Doug Marohn said in a news release. “However, times like these prove out our business concepts and validate our branch-based model nicely. 

“We finance primary transportation to and from work for the subprime borrower through the local independent dealer,” Marohn continued. “Our loans tend to be smaller than most of our competitors and therefore payments are lower and exposure on those accounts is shorter. The vehicle is one that they need — not just want — and the payments are affordable even in times of economic crisis.  Our local presence allows us to maintain a better relationship with the customer, as well.”

Marohn also shared how Nicholas gained momentum as its Q1 closed.

“Although the pandemic had an early negative impact on new loans and originations in April and May, we were able to outproduce both 2018’s and 2019’s loan volume for the month of June,” he said. “From a portfolio management perspective, we enjoyed decreases in 31+ delinquency, 61+ delinquency, repossessions and losses.

“Out of an abundance of caution we added over $3 million of provision expense to bolster our reserves in case the pandemic has a more negative impact on our receivables in the upcoming quarters,” Marohn went on to say. “Even with the $3 million of provision expense, we were able to turn out the best earnings quarter in recent history.”