Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 10-Q

 

 

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

September 30, 2011 FOR THE QUARTERLY PERIOD ENDED September 30, 2011

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM             TO             .

Commission file number: 0-26680

 

 

NICHOLAS FINANCIAL, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

British Columbia, Canada   8736-3354

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

2454 McMullen Booth Road, Building C

Clearwater, Florida

  33759
(Address of Principal Executive Offices)   (Zip Code)

(727) 726-0763

(Registrant’s telephone number, including area code)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 and 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x     No   ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).    Yes   x     No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ¨    Accelerated filer   x
Non-accelerated filer   ¨    Smaller reporting company   ¨

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes   ¨     No   x

As of October 28, 2011, the registrant had 11,965,585 shares of common stock outstanding.

 

 

 

Table of Contents

NICHOLAS FINANCIAL, INC.

FORM 10-Q

TABLE OF CONTENTS

 

          Page
Part I. Financial Information     
Item 1.    Financial Statements (Unaudited)   
   Condensed Consolidated Balance Sheets as of September 30, 2011 and as of March 31, 2011    2
   Condensed Consolidated Statements of Income for the three and six months ended September 30, 2011 and 2010    3
   Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2011 and 2010    4
   Notes to the Condensed Consolidated Financial Statements    5
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations    12
Item 3.    Quantitative and Qualitative Disclosures about Market Risk    20
Item 4.    Controls and Procedures    20
Part II. Other Information   
Item 1A.    Risk Factors    20
Item 6.    Exhibits    20

 

1

Table of Contents

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

Nicholas Financial, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

 

     September 30,
2011
(Unaudited) 		     March 31,
2011 		 

Assets

     

Cash

   $ 2,719,693       $ 2,017,540   

Finance receivables, net

     236,932,524         230,163,854   

Assets held for resale

     1,472,982         1,055,140   

Income taxes receivable

     659,497         —     

Prepaid expenses and other assets

     611,034         680,615   

Property and equipment, net

     828,169         771,311   

Deferred income taxes

     9,142,387         8,954,665   
  

 

 

    

 

 

 

Total assets

   $ 252,366,286       $ 243,643,125   
  

 

 

    

 

 

 

Liabilities and shareholders’ equity

     

Line of credit

   $ 117,000,000       $ 118,000,000   

Drafts payable

     1,393,773         1,878,609   

Accounts payable and accrued expenses

     6,768,489         7,209,387   

Income taxes payable

     —           233,754   

Deferred revenues

     1,070,846         1,107,907   
  

 

 

    

 

 

 

Total liabilities

     126,233,108         128,429,657   

Shareholders’ equity

     

Preferred stock, no par: 5,000,000 shares authorized; none issued

     —           —     

Common stock, no par: 50,000,000 shares authorized; 11,965,585 and 11,806,660 shares issued and outstanding, respectively

     27,631,458         26,337,731   

Retained earnings

     98,501,720         88,875,737   
  

 

 

    

 

 

 

Total shareholders’ equity

     126,133,178         115,213,468   
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 252,366,286       $ 243,643,125   
  

 

 

    

 

 

 

See accompanying notes.

 

2

Table of Contents

Nicholas Financial, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

 

     Three months ended
September 30, 		    Six months ended
September 30, 		 
     2011      2010     2011      2010  

Revenue:

          

Interest and fee income on finance receivables

   $ 17,199,730       $ 15,721,876      $ 33,823,318       $ 30,664,781   

Sales

     11,269         9,977        21,986         19,219   
  

 

 

    

 

 

   

 

 

    

 

 

 
     17,210,999         15,731,853        33,845,304         30,684,000   

Expenses:

          

Cost of sales

     2,843         3,411        5,599         6,317   

Marketing

     304,033         310,423        602,829         629,082   

Salaries and employee benefits

     4,366,502         3,981,210        8,758,312         7,914,721   

Administrative

     2,032,748         1,880,234        3,962,131         3,807,240   

Provision for credit losses

     178,029         1,711,873        257,444         3,307,534   

Depreciation

     72,996         66,306        145,537         133,399   

Interest expense

     1,236,893         1,449,757        2,465,871         2,989,130   

Change in fair value of interest rate swaps

     —           (137,828 )      —           (382,193 ) 
  

 

 

    

 

 

   

 

 

    

 

 

 
     8,194,044         9,265,386        16,197,723         18,405,230   
  

 

 

    

 

 

   

 

 

    

 

 

 

Operating income before income taxes

     9,016,955         6,466,467        17,647,581         12,278,770   

Income tax expense

     3,496,851         2,484,123        6,824,684         4,720,588   
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income

   $ 5,520,104       $ 3,982,344      $ 10,822,897       $ 7,558,182   
  

 

 

    

 

 

   

 

 

    

 

 

 

Earnings per share:

          

Basic

   $ 0.47       $ 0.34      $ 0.92       $ 0.65   
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted

   $ 0.46       $ 0.34      $ 0.90       $ 0.64   
  

 

 

    

 

 

   

 

 

    

 

 

 

Dividends declared per share

   $ 0.10         —        $ 0.10         —     
  

 

 

    

 

 

   

 

 

    

 

 

 

See accompanying notes.

 

3

Table of Contents

Nicholas Financial, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

    

Six months ended

September 30,

 
     2011     2010  

Cash flows from operating activities

    

Net income

   $ 10,822,897      $ 7,558,182   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation

     145,537        133,399   

Gain on sale of property and equipment

     (4,026 )      (3,648 ) 

Provision for credit losses

     257,444        3,307,534   

Deferred income taxes

     (187,722 )      (855,856 ) 

Share-based compensation

     234,911        309,140   

Change in fair value of interest rate swaps

     —          (382,193 ) 

Changes in operating assets and liabilities:

    

Prepaid expenses and other assets

     69,581        268,100   

Accounts payable and accrued expenses

     (440,898 )      277,667   

Income taxes receivable/payable

     (893,251 )      (300,664 ) 

Deferred revenues

     (37,061 )      (657 ) 
  

 

 

   

 

 

 

Net cash provided by operating activities

     9,967,412        10,311,004   
  

 

 

   

 

 

 

Cash flows from investing activities

    

Purchase and origination of finance contracts

     (65,826,689 )      (66,741,246 ) 

Principal payments received

     58,800,575        46,358,898   

Increase in assets held for resale

     (417,842 )      (275,751 ) 

Purchase of property and equipment

     (219,019 )      (174,448 ) 

Proceeds from sale of property and equipment

     20,650        14,255   
  

 

 

   

 

 

 

Net cash used in investing activities

     (7,642,325 )      (20,818,292 ) 
  

 

 

   

 

 

 

Cash flows from financing activities

    

Net (repayment) proceeds from line of credit

     (1,000,000 )      9,725,029   

(Decrease) increase in drafts payable

     (484,836 )      151,580   

Payment of cash dividend

     (1,196,914 )      —     

Proceeds from exercise of stock options

     699,159        49,390   

Excess tax benefits from exercise of stock options and issuance of other share awards

     359,657        56,060   
  

 

 

   

 

 

 

Net cash (used) provided by financing activities

     (1,622,934 )      9,982,059   
  

 

 

   

 

 

 

Net increase (decrease) in cash

     702,153        (525,229 ) 

Cash, beginning of period

     2,017,540        1,533,894   
  

 

 

   

 

 

 

Cash, end of period

   $ 2,719,693      $ 1,008,665   
  

 

 

   

 

 

 
    

See accompanying notes.

 

4

Table of Contents

Nicholas Financial, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

The accompanying condensed consolidated balance sheet as of March 31, 2011, which has been derived from audited financial statements, and the accompanying unaudited interim condensed consolidated financial statements of Nicholas Financial, Inc. (including its subsidiaries, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q pursuant to the Securities and Exchange Act of 1934, as amended in Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements, although the Company believes that the disclosures made are adequate to ensure the information is not misleading. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year ending March 31, 2012. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2011 as filed with the Securities and Exchange Commission on June 14, 2011. The March 31, 2011 condensed consolidated balance sheet included herein has been derived from the March 31, 2011 audited consolidated balance sheet included in the aforementioned Form 10-K.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses on finance receivables, and the net realizable value of assets held for resale.

2. Revenue Recognition

Finance receivables consist of automobile finance installment contracts (“Contracts”) and direct consumer loans (“Direct Loans”). Interest income on finance receivables is recognized using the interest method. Accrual of interest income on finance receivables is suspended when a loan is contractually delinquent for 60 days or more or the collateral is repossessed, whichever is earlier.

The amount of future unearned income is computed as the product of the Contract rate, the Contract term, and the Contract amount.

Deferred revenues consist primarily of commissions received from the sale of ancillary products. These products include automobile warranties, roadside assistance programs, accident and health insurance, credit life insurance and forced placed automobile insurance. These commissions are amortized over the life of the contract using the interest method.

The Company’s net fees charged for processing a loan are recognized as an adjustment to the yield and are amortized over the life of the loan using the interest method.

The Company attributes its entire dealer discount to a reserve for credit losses. A dealer discount represents the difference between the finance receivable, net of unearned interest of a Contract, and the amount of money the Company actually paid for the Contract. After the analysis of purchase date accounting is complete, any uncollectable amounts would be contemplated in estimating the allowance for loan losses.

Sales relate principally to telephone support agreements and the sale of business forms to small businesses located primarily in the Southeastern United States. The aforementioned sales of the Nicholas Data Services, Inc. subsidiary, (“NDS”) represent less than 1% of the Company’s consolidated revenues.

 

5

Table of Contents

Nicholas Financial, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements (Continued)

(Unaudited)

 

3. Earnings Per Share

Basic earnings per share is calculated by dividing the reported net income for the period by the weighted average number of shares of common stock outstanding. Diluted earnings per share includes the effect of dilutive options and other share awards. Basic and diluted earnings per share have been computed as follows:

 

     Three months ended
September 30, 		     Six months ended
September 30, 		 
     2011      2010      2011      2010  

Numerator for earnings per share – net income

   $ 5,520,104       $ 3,982,344       $ 10,822,897       $ 7,558,182   
  

 

 

    

 

 

    

 

 

    

 

 

 

Denominator:

           

Denominator for basic earnings per share – weighted average shares

     11,772,819         11,607,523         11,709,875         11,606,505   

Effect of dilutive securities:

Stock options and other share awards

     254,642         242,556         291,914         236,010   
  

 

 

    

 

 

    

 

 

    

 

 

 

Denominator for diluted earnings per share

     12,027,461         11,850,079         12,001,789         11,842,515   
  

 

 

    

 

 

    

 

 

    

 

 

 

Earnings per share:

           

Basic

   $ 0.47       $ 0.34       $ 0.92       $ 0.65   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted

   $ 0.46       $ 0.34       $ 0.90       $ 0.64   
  

 

 

    

 

 

    

 

 

    

 

 

 

For the three and six months ended September 30, 2011 potential common stock from stock options totaling 55,000 and 72,300, respectively, were not included in the diluted earnings per share calculation because their effect is anti-dilutive. For the three and six months ended September 30, 2010 potential common stock from stock options totaling 124,100 in each period were not included in the diluted earnings per share calculation because their effect is anti-dilutive.

4. Finance Receivables

Finance receivables consist of automobile finance installment Contracts and Direct Loans and are detailed as follows:

 

     September 30,
2011 		    March 31,
2011 		 

Finance receivables, gross contract

   $ 383,019,564      $ 372,950,283   

Unearned interest

     (109,240,396 )      (106,512,562 ) 
  

 

 

   

 

 

 

Finance receivables, net of unearned interest

     273,779,168        266,437,721   

Allowance for credit losses

     (36,846,644 )      (36,273,867 ) 
  

 

 

   

 

 

 

Finance receivables, net

   $ 236,932,524      $ 230,163,854   
  

 

 

   

 

 

 

The terms of the finance receivables range from 12 to 72 months and the direct consumer loans range from 6 to 48 months. The receivables bear a weighted average interest rate of approximately 23.5% as of September 30, 2011 and March 31, 2011.

Finance receivables consist of Contracts and Direct Loans, each of which comprises a portfolio segment. Each portfolio segment consists of smaller balance homogeneous loans which are collectively evaluated for impairment.

The following table sets forth a reconciliation of the changes in the allowance for credit losses on Contracts:

 

     Three months ended
September 30, 		    Six months ended
September 30, 		 
     2011     2010     2011     2010  

Balance at beginning of period

   $ 36,534,432      $ 32,334,059      $ 35,895,449      $ 30,408,578   

Discounts acquired on new volume

     2,966,280        3,282,702        6,076,091        6,449,499   

Current period provision

     109,516        1,654,329        108,708        3,255,166   

Losses absorbed

     (3,777,929 )      (3,879,066 )      (6,794,563 )      (7,254,208 ) 

Recoveries

     542,240        558,914        1,105,108        1,138,526   

Discounts accreted

     (17,873 )      (28,207 )      (34,127 )      (74,830 ) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Balance at end of period

   $ 36,356,666      $ 33,922,731      $ 36,356,666      $ 33,922,731   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

6

Table of Contents

Nicholas Financial, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements (Continued)

(Unaudited)

 

4. Finance Receivables (continued)

 

The Company purchases Contracts from automobile dealers at a negotiated price that is less than the original principal amount being financed by the purchaser of the automobile. The Contracts are predominately for used vehicles. As of September 30, 2011, the average model year of vehicles collateralizing the portfolio was a 2005 vehicle. The average loan to value ratio, which expresses the amount of the Contract as a percentage of the average wholesale value of the automobile, is approximately 90%. A dealer discount represents the difference between the finance receivable, net of unearned interest, of a Contract, and the amount of money the Company actually pays for the Contract. The discount negotiated by the Company is a function of the credit quality of the customer, the wholesale value of the vehicle, and competition in any given market. In making decisions regarding the purchase of a particular Contract the Company considers the following factors related to the borrower: place and length of residence; current and prior job status; history in making installment payments for automobiles; current income; and credit history. In addition, the Company examines its prior experience with Contracts purchased from the dealer from which the Company is purchasing the Contract, and the value of the automobile in relation to the purchase price and the term of the Contract. For allowance purposes, the entire amount of discount is related to credit quality and is considered to be part of the credit loss reserve. The Company utilizes a static pool approach to track portfolio performance. A static pool retains an amount equal to 100% of the discount as a reserve for credit losses. Subsequent to the purchase, if the reserve for credit losses is determined to be inadequate for a static pool, then an additional charge to income through the provision is used to maintain adequate reserves based on management’s evaluation of the risk inherent in the loan portfolio, the composition of the portfolio, and current economic conditions. Such evaluation, considers among other matters, the estimated net realizable value or the fair value of the underlying collateral, economic conditions, historical loan loss experience, management’s estimate of probable credit losses and other factors that warrant recognition in providing for an adequate allowance for credit losses.

The average dealer discount associated with new volume for the three months ended September 30, 2011 and 2010 was 8.45% and 8.70%, respectively. The average dealer discount associated with new volume for the six months ended September 30, 2011 and 2010 was 8.48% and 8.78%, respectively.

The following table sets forth a reconciliation of the changes in the allowance for credit losses on Direct Loans:

 

     Three months ended
September 30, 		    Six months ended
September 30, 		 
     2011     2010     2011     2010  

Balance at beginning of period

   $ 447,271      $ 342,367      $ 378,418      $ 382,869   

Current period provision

     68,513        57,544        148,736        52,368   

Losses absorbed

     (32,648 )      (60,355 )      (51,094 )      (110,407 ) 

Recoveries

     6,842        11,754        13,918        26,480   
  

 

 

   

 

 

   

 

 

   

 

 

 

Balance at end of period

   $ 489,978      $ 351,310      $ 489,978      $ 351,310   
  

 

 

   

 

 

   

 

 

   

 

 

 

Direct Loans are loans originated directly between the Company and the consumer. These loans are typically for amounts ranging from $1,000 to $8,000 and are generally secured by a lien on an automobile, watercraft or other permissible tangible personal property. The majority of Direct Loans are originated with current or former customers under the Company’s automobile financing program. The typical direct loan represents a significantly better credit risk than our typical Contract due to the customer’s historical payment history with the Company. In deciding whether or not to make a loan, the Company considers the individual’s credit history, job stability, income and impressions created during a personal interview with a Company loan officer. Additionally, because most of the direct consumer loans made by the Company to date have been made to borrowers under Contracts previously purchased by the Company, the payment history of the borrower under the Contract is a significant factor in making the loan decision. As of September 30, 2011, loans made by the Company pursuant to its direct loan program constituted approximately 1% of the aggregate principal amount of the Company’s loan portfolio.

Changes in the allowance for credit losses for both Contracts and Direct Loans were driven by current economic conditions and trends over several reporting periods which are useful in estimating future losses and overall portfolio performance.

 

7

Table of Contents

Nicholas Financial, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements (Continued)

(Unaudited)

 

4. Finance Receivables (continued)

 

The following table is an assessment of the credit quality by creditworthiness. A performing account is defined as an account that is less than 60 days past due. A non-performing account is defined as an account that is contractually delinquent for 60 days or more and the accrual of interest income is suspended. When an account is 120 days contractually delinquent, the account is written off.

 

     September 30,
2011 		     September 30,
2010 		 
     Contracts      Direct Loans      Contracts      Direct Loans  

Non-bankrupt accounts

   $ 376,895,455       $ 5,721,768       $ 349,857,565       $ 5,007,919   

Bankrupt accounts

     402,341         —           485,420         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 377,297,796       $ 5,721,768       $ 350,342,985       $ 5,007,919   
  

 

 

    

 

 

    

 

 

    

 

 

 

Performing accounts

   $ 373,068,536       $ 5,685,981       $ 346,081,444       $ 4,952,479   

Non-performing accounts

     4,229,260         35,787         4,261,541         55,440   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 377,297,796       $ 5,721,768       $ 350,342,985       $ 5,007,919   
  

 

 

    

 

 

    

 

 

    

 

 

 

The following tables present certain information regarding the delinquency rates experienced by the Company with respect to Contracts and under its direct consumer loan program:

 

            Delinquencies  

Contracts

  

Gross Balance
Outstanding

    

30 – 59 days

   

60 – 89 days

   

90 + days

   

Total

 

September 30, 2011

   $ 377,297,796       $ 10,934,539      $ 3,188,022      $ 1,041,238      $ 15,163,799   
        2.90 %      0.84 %      0.28 %      4.02 % 

September 30, 2010

   $ 350,342,985       $ 8,987,387      $ 3,288,209      $ 973,332      $ 13,248,928   
        2.56 %      0.94 %      0.28 %      3.78 % 

Direct Loans

  

Gross Balance
Outstanding

    

30 – 59 days

   

60 – 89 days

   

90 + days

   

Total

 

September 30, 2011

   $ 5,721,768       $ 22,229      $ 20,229      $ 15,558      $ 58,016   
        0.39 %      0.35 %      0.27 %      1.01 % 

September 30, 2010

   $ 5,007,919       $ 59,277      $ 41,963      $ 13,477      $ 114,717   
        1.18 %      0.84 %      0.27 %      2.29 % 

The delinquency percentage for Contracts more than thirty days past due as of September 30, 2011 was 4.02% as compared to 3.78% as of September 30, 2010. The delinquency percentage for Direct Loans more than thirty days past due as of September 30, 2011 was 1.01% as compared to 2.29% as of September 30, 2011.

When the Company receives a payment for a Contract that was contractually delinquent for more than 60 days, the payment is posted to the account. At the time of the payment, the interest that was paid is recorded as income by the Company and the Contract is no longer considered over 60 days contractually delinquent; therefore, the accruing of interest is resumed.

5. Line of Credit

Prior to September 1, 2011, the Company had a $140,000,000 line of credit facility expiring on November 30, 2011.

On September 1, 2011, the Company executed a new agreement with its consortium of lenders that increases the size of the line of credit facility (the “Line”) from $140,000,000 to $150,000,000. The pricing of the Line, which expires on November 30, 2013, is 300 basis points above 30-day LIBOR (4.00% at September 30, 2011 and March 31, 2011) with a 1% floor on LIBOR or at the prime rate. Prime rate borrowings are generally less than $5.0 million. Pricing is the same as it was under the previous facility. Pledged as collateral for this credit facility are all of the assets of the Company. The outstanding amount of the credit facility was approximately $117,000,000 and $118,000,000 as of September 30, 2011 and March 31, 2011, respectively. The amount available under the line of credit was approximately $33,000,000 and $22,000,000 as of September 30, 2011 and March 31, 2011, respectively.

 

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Nicholas Financial, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements (Continued)

(Unaudited)

 

5. Line of Credit (continued)

 

The facility requires compliance with certain financial ratios and covenants and satisfaction of specified financial tests, including maintenance of asset quality and performance tests. Dividends do not require consent in writing by the agent and majority lenders under the new facility as long as the Company is in compliance with a net income covenant. As of September 30, 2011, the Company was in full compliance with all debt covenants.

6. Interest Rate Swap Agreements

As of September 30, 2011 and March 31, 2011, the Company did not have any outstanding interest rate swap agreements. Based on market conditions, the Company may or may not enter into new interest rate swap agreements during the current fiscal year. The swap agreements, in effect, converted a portion of the floating rate debt to a fixed rate, more closely matching the interest rate characteristics of finance receivables.

The following table summarizes the activity in the notional amounts of interest rate swaps:

 

     Six months ended September 30,  
     2011      2010  

Notional amounts at April 1

   $ —         $ 50,000,000   

New contracts

     —           —     

Matured contracts

     —           (30,000,000 ) 
  

 

 

    

 

 

 

Notional amounts at September 30

   $ —         $ 20,000,000   
  

 

 

    

 

 

 

These interest rate swaps were previously designated as cash flow hedges. Based on credit market events that transpired in October 2008, the Company made an economic decision to elect the prime rate pricing option available under the Line for the month of October 2008. As a result, the critical terms of the interest rate swaps and hedged interest payments were no longer identical and the Company undesignated its interest rate swaps as cash flow hedges. Consequently, beginning in October 2008 changes in the fair value of interest rate swaps (unrealized gains and losses) were recorded in earnings. Unrealized losses previously recorded in accumulated other comprehensive loss were reclassified into earnings as interest payments on the Line affected earnings over the remaining term of the respective swap agreements. The Company did not use interest rate swaps for speculative purposes.

The locations and amounts of losses recognized in income are as follows:

 

     Three months ended
September 30, 		    Six months ended
September 30, 		 
     2011      2010     2011      2010  

Periodic change in fair value of interest rate swaps

   $ —         $ 228,319      $ —         $ 621,517   

Losses reclassified from accumulated other comprehensive loss

     —           (90,491 )      —           (239,324 ) 
  

 

 

    

 

 

   

 

 

    

 

 

 
     —           137,828        —           382,193   

Periodic settlement differentials included in interest expense

     —           (245,755 )      —           (638,111 ) 
  

 

 

    

 

 

   

 

 

    

 

 

 

Pre-tax loss recognized in income

   $ —         $ (107,927 )    $ —         $ (255,918 ) 
  

 

 

    

 

 

   

 

 

    

 

 

 

The Company recorded net realized gains and losses from the swap agreements in the interest expense line item of the consolidated statement of income. The following table summarizes the average variable rates received and average fixed rates paid under the swap agreements.

 

     Three months  ended
September 30, 		    Six months  ended
September 30, 		 
     2011      2010     2011      2010  

Average variable rate received

     —           0.31 %      —           0.30 % 

Average fixed rate paid

     —           3.86 %      —           3.96 % 

 

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Nicholas Financial, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements (Continued)

(Unaudited)

 

6. Interest Rate Swap Agreements (continued)

 

The following table reconciles net income with comprehensive income:

 

     Three months ended
September 30, 		     Six months ended
September 30, 		 
     2011      2010      2011      2010  

Net income

   $ 5,520,104       $ 3,982,344       $ 10,822,897       $ 7,558,182   

Reclassification adjustment for loss included in net income, net of tax benefit of $34,640 and $91,620, respectively.

     —           55,851         —           147,704   
  

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income

   $ 5,520,104       $ 4,038,195       $ 10,822,897       $ 7,705,886   
  

 

 

    

 

 

    

 

 

    

 

 

 

7. Fair Value Disclosures

The Company measures specific assets and liabilities at fair value, which is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When applicable, the Company utilizes market data or assumptions that market participants would use in pricing the asset or liability under a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The Company may be required, from time to time, to measure certain assets and liabilities at fair value on a recurring basis. The Company does not currently have any assets or liabilities measured at fair value on a recurring basis.

Financial Instruments Not Measured at Fair Value

The Company’s financial instruments, consist of cash, finance receivables, accrued interest, line of credit, and accounts payable. For each of these financial instruments the carrying value approximates fair value. The carrying value of cash approximates the fair value due to the nature of these accounts. Finance receivables, net approximates fair value based on the price paid to acquire indirect loans. The price paid reflects competitive market interest rates and purchase discounts for the Company’s chosen credit grade in the economic environment. This market is highly liquid as the Company acquires individual loans on a daily basis from dealers. The initial terms of the indirect finance receivables range from 12 to 72 months. The initial terms of the direct finance receivables range from 6 to 48 months. In addition, there have been minimal changes in interest rates and purchase discounts related to these types of loans. If liquidated outside of the normal course of business, the amount received may not be the carrying value. The Line was amended within the quarter ended September 30, 2011. Based on current market conditions, any new or renewed credit facility would contain pricing that approximates the Company’s current Line. Based on these market conditions, the fair value of the Line as of September 30, 2011 was estimated to be equal to the book value. Accrued interest is paid monthly. As a result of the short-term nature of this activity, the carrying value of the accrued interest approximates fair value. The interest rate for the line of credit is a variable rate based on LIBOR pricing options or at the prime rate.

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain assets and liabilities at fair value on a nonrecurring basis. The Company does not currently have any assets or liabilities measured at fair value on a nonrecurring basis.

 

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Nicholas Financial, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements (Continued)

(Unaudited)

 

8. Recently Issued Accounting Standards

 

The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-02: “Receivables (Topic 310) – A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring” in April 2011. The ASU’s main objective is to provide greater transparency regarding whether additional guidance or clarification is needed to help creditors in determining whether a creditor has granted a concession and whether a debtor is experiencing financial difficulties for purposes of determining whether a restructuring constitutes a troubled debt restructuring. The guidance is effective for interim and annual periods beginning on or after June 15, 2011. The guidance did not have an impact on the Company’s consolidated financial statements.

The FASB issued ASU 2011-05: “Comprehensive Income (Topic 220) – Presentation of Comprehensive Income” in June 2011. The ASU’s main objective is to show the components of comprehensive income to provide a better understanding of the entity’s activities. The guidance is effective for interim and annual periods beginning after December 15, 2011. Other than financial statement display, the update will have no impact on the reported amounts in the Company’s consolidated financial statements.

9. Cash Dividend

On August 30, 2011, the Company’s Board of Directors announced a quarterly cash dividend of $.10 per share of common stock paid on September 20, 2011.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Information

This report on Form 10-Q contains various statements, other than those concerning historical information, that are based on management’s beliefs and assumptions, as well as information currently available to management, and should be considered forward-looking statements. This notice is intended to take advantage of the safe harbor provided by the Private Securities Litigation Reform Act of 1995 with respect to such forward-looking statements. When used in this document, the words “anticipate”, “estimate”, “expect”, and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on the Company’s operating results are fluctuations in the economy, the ability to access bank financing, the degree and nature of competition, demand for consumer financing in the markets served by the Company, the Company’s products and services, increases in the default rates experienced on Contracts, adverse regulatory changes in the Company’s existing and future markets, the Company’s ability to expand its business, including its ability to complete acquisitions and integrate the operations of acquired businesses, to recruit and retain qualified employees, to expand into new markets and to maintain profit margins in the face of increased pricing competition. All forward looking statements included in this report are based on information available to the Company on the date hereof, and the Company assumes no obligations to update any such forward looking statement. You should also consult factors described from time to time in the Company’s filings made with the Securities and Exchange Commission, including its reports on Forms 10-K, 10-Q, 8-K and annual reports to shareholders.

Critical Accounting Policy

The Company’s critical accounting policy relates to the allowance for credit losses. It is based on management’s opinion of an amount that is adequate to absorb losses in the existing portfolio. The allowance for credit losses is established through allocations of dealer discount and a provision for losses based on management’s evaluation of the risk inherent in the loan portfolio, the composition of the portfolio, and current economic conditions. Such evaluation, considers among other matters, the estimated net realizable value or the fair value of the underlying collateral, economic conditions, historical loan loss experience, management’s estimate of probable credit losses and other factors that warrant recognition in providing for an adequate credit loss allowance.

Because of the nature of the customers under the Company’s Contracts and its direct loan program, the Company considers the establishment of adequate reserves for credit losses to be imperative. The Company segregates its Contracts into static pools for purposes of establishing reserves for losses. All Contracts purchased by a branch during a fiscal quarter comprise a static pool. The Company pools Contracts according to branch location because the branches purchase Contracts in different geographic markets. This method of pooling by branch and quarter allows the Company to evaluate the different markets where the branches operate. The pools also allow the Company to evaluate the different levels of customer income, stability, credit history, and the types of vehicles purchased in each market. Each such static pool consists of the Contracts purchased by a branch office during the fiscal quarter.

Contracts are purchased from many different dealers and are all purchased on an individual Contract by Contract basis. Individual Contract pricing is determined by the automobile dealerships and is generally the lesser of state maximum interest rates or the maximum interest rate the customer will accept. In certain markets, competitive forces will drive down Contract rates from the maximum rate to a level where an individual competitor is willing to buy an individual Contract. The Company only buys Contracts on an individual basis and never purchases Contracts in batches, although the Company may consider portfolio acquisitions as part of its growth strategy.

The Company has detailed underwriting guidelines it utilizes to determine which Contracts to purchase. These guidelines are specific and are designed to cause all of the Contracts that the Company purchases to have common risk characteristics. The Company utilizes its District Managers to evaluate their respective branch locations for adherence to these underwriting guidelines. The Company also utilizes an internal audit department to assure adherence to its underwriting guidelines. The Company utilizes the branch model, which allows for Contract purchasing to be done on the branch level. Each Branch Manager may interpret the guidelines differently, and as a result, the common risk characteristics tend to be the same on an individual branch level but not necessarily compared to another branch.

 

12

Table of Contents

A dealer discount represents the difference between the finance receivable, net of unearned interest, of a Contract, and the amount of money the Company actually pays for the Contract. The discount negotiated by the Company is a function of the credit quality of the customer, the wholesale value of the vehicle, and competition in any given market. The automotive dealer accepts these terms by executing a dealer agreement with the Company. For allowance purposes, the Company considers the entire amount of discount to be related to credit quality and is part of the credit loss reserve. The Company utilizes a static pool approach to track portfolio performance. A static pool retains an amount equal to 100% of the discount as a reserve for credit losses.

Subsequent to the purchase, if the reserve for credit losses is determined to be inadequate for a static pool which is not fully liquidated, then an additional charge to income through the provision is used to reestablish adequate reserves. If a static pool is fully liquidated and has any remaining reserves, the excess discounts are immediately recognized into income and the excess provision is immediately reversed during the period. For static pools not fully liquidated that are determined to have excess discounts, such excess amounts are accreted into income over the remaining life of the static pool. For static pools not fully liquidated that are deemed to have excess reserves, such excess amounts are reversed against provision for credit losses during the period.

In analyzing a static pool, the Company considers the performance of prior static pools originated by the branch office, the performance of prior Contracts purchased from the dealers whose Contracts are included in the current static pool, the credit rating of the customers under the Contracts in the static pool, and current market and economic conditions. Each static pool is analyzed monthly to determine if the loss reserves are adequate and adjustments are made if they are determined to be necessary.

Introduction

Consolidated net income increased 38% to approximately $5.5 million for the three-month period ended September 30, 2011 as compared to $4.0 million for the corresponding period ended September 30, 2010. Diluted earnings per share increased 35% to $0.46 for the three months ended September 30, 2011 as compared to $0.34 for the three months ended September 30, 2010. Consolidated net income increased to approximately $10.8 million for the six-month period ended September 30, 2011 as compared to $7.6 million for the corresponding period ended September 30, 2010. Diluted earnings per share increased 42% to $0.90 for the six months ended September 30, 2011 as compared to $0.64 for the six months ended September 30, 2010.

Earnings were favorably impacted primarily by an increase in average finance receivables, a decrease in operating expenses as a percentage of average finance receivables, net of unearned interest, and a decrease in the net charge off percentage and a reduction in the provision for credit losses. The Company’s software subsidiary, Nicholas Data Services, did not contribute significantly to consolidated operations in the three or six months ended September 30, 2011 or 2010.

 

13

Table of Contents
     Three months ended
September 30, 		    Six months  ended
September 30, 		 
Portfolio Summary    2011     2010     2011     2010  

Average finance receivables, net of unearned interest (1) 

   $ 272,906,536      $ 249,065,668      $ 271,022,679      $ 243,690,043   
  

 

 

   

 

 

   

 

 

   

 

 

 

Average indebtedness (2)

   $ 116,505,921      $ 113,324,542      $ 117,002,960      $ 110,785,451   
  

 

 

   

 

 

   

 

 

   

 

 

 

Interest and fee income on finance receivables (3)

   $ 17,199,730      $ 15,721,876      $ 33,823,318      $ 30,664,781   

Interest expense

     1,236,893        1,449,757        2,465,871        2,989,130   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest and fee income on finance receivables

   $ 15,962,837      $ 14,272,119      $ 31,357,447      $ 27,675,651   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average contractual rate (4)

     23.94 %      23.56 %      23.91 %      23.55 % 
  

 

 

   

 

 

   

 

 

   

 

 

 

Average cost of borrowed funds (2)

     4.25 %      5.12 %      4.22 %      5.40 % 
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross portfolio yield (5)

     25.21 %      25.25 %      24.96 %      25.17 % 

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

     1.81 %      2.33 %      1.82 %      2.45 % 

Provision for credit losses as a percentage of average finance receivables, net of unearned interest

     0.26 %      2.75 %      0.19 %      2.71 % 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net portfolio yield (5)

     23.14 %      20.17 %      22.95 %      20.01 % 

Marketing, salaries, employee benefits, depreciation and administrative expenses as a percentage of average finance receivables, net of unearned interest (6)

     9.85 %      9.93 %      9.85 %      10.15 % 
  

 

 

   

 

 

   

 

 

   

 

 

 

Pre-tax yield as a percentage of average finance receivables, net of unearned interest (7)

     13.29 %      10.24 %      13.10 %      9.86 % 
  

 

 

   

 

 

   

 

 

   

 

 

 

Write-off to liquidation (8)

     5.93 %      7.18 %      5.34 %      6.85 % 

Net charge-off percentage (9)

     4.74 %      5.31 %      4.18 %      4.96 % 

Note: All three and six 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) Interest and 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 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 $56,000 and $53,000 during the three-month periods ended September 30, 2011 and 2010 and $116,000 and $111,000 during the six-month periods ended September 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.

 

14

Table of Contents

Three months ended September 30, 2011 compared to three months September 30, 2010

Interest Income and Loan Portfolio

Interest and fee income on finance receivables, predominately finance charge income, increased 10% to approximately $17.2 million for the three-month period ended September 30, 2011 from $15.7 million for the corresponding period ended September 30, 2010. Average finance receivables, net of unearned interest equaled approximately $272.9 million for the three-month period ended September 30, 2011, an increase of 10% from $249.1 million for the corresponding period ended September 30, 2010. The primary reason average finance receivables, net of unearned interest, increased was the increase in the receivable base of several existing branches in younger markets and also the opening of new branch locations (see “Contract Procurement” and “Loan Origination” below). The gross finance receivable balance increased 8% to approximately $383.0 million as of September 30, 2011, from $355.4 million as of September 30, 2010. The primary reason interest income increased was the increase in the outstanding loan portfolio. The gross portfolio yield decreased to 25.21% for the three-month period ended September 30, 2011 from 25.25% for the three-month period ended September 30, 2010. The net portfolio yield increased to 23.14% for the corresponding period ended September 30, 2011 from 20.17% for the three-month period ended September 30, 2010. The gross portfolio yield remained relatively flat primarily due to an unchanged weighted APR earned on finance receivables. The net portfolio yield increased primarily due to a decrease in the actual and expected net charge-offs and a corresponding decrease in the provision for credit losses which are discussed below in “Analysis of Credit Losses.”

Marketing, Salaries, Employee Benefits, Depreciation, and Administrative Expenses

Marketing, salaries, employee benefits, depreciation and administrative expenses increased to approximately $6.7 million for the three-month period ended September 30, 2011 from approximately $6.2 million for the corresponding period ended September 30, 2010. The increase of 8% was primarily attributable to salaries expense. The Company opened additional branches and increased average headcount to 288 for the three-month period ended September 30, 2011 from 272 for the three-month period ended September 30, 2010. Marketing, salaries, employee benefits, depreciation, and administrative expenses as a percentage of finance receivables, net of unearned interest, decreased to 9.85% for the three-month period ended September 30, 2011 from 9.93% for the three-month period ended September 30, 2010.

Interest Expense

Interest expense decreased to approximately $1.2 million for the three-month period ended September 30, 2011 from $1.4 million for the three-month period ended September 30, 2010. All interest rate swaps agreements matured during fiscal 2011 and no new agreements were entered into. The following table summarizes the Company’s average cost of borrowed funds:

 

     Three months ended
September 30, 		 
     2011     2010  

Variable interest under the line of credit facility

     0.47 %      0.57 % 

Settlements under interest rate swap agreements

     0.00 %      0.87 % 

Credit spread under the line of credit facility

     3.78 %      3.68 % 
  

 

 

   

 

 

 

Average cost of borrowed funds

     4.25 %      5.12 % 
  

 

 

   

 

 

 

The primary reason that the Company’s average cost of funds decreased is attributed to the costs associated with settlements under interest rate swap agreements during the three months ended September 30, 2010.

The weighted average notional amount of interest rate swaps was $27.2 million at a weighted average fixed rate of 3.86% for the three months ended September 30, 2010. For further discussions regarding the effect of interest rate swap agreements see note 6 – “Interest Rate Swap Agreements”.

 

15

Table of Contents

Six months ended September 30, 2011 compared to six months ended September 30, 2010

Interest Income and Loan Portfolio

Interest and fee income on finance receivables, predominately finance charge income, increased 10% to approximately $33.8 million for the six-month period ended September 30, 2011 from $30.7 million for the corresponding period ended September 30, 2010. Average finance receivables, net of unearned interest equaled approximately $271.0 million for the six-month period ended September 30, 2011, an increase of 11% from $243.7 million for the corresponding period ended September 30, 2010. The primary reason average finance receivables, net of unearned interest, increased was the increase in the receivable base of several existing branches in younger markets and also the opening of new branch locations (see “Contract Procurement” and “Loan Origination” below). The gross finance receivable balance increased 8% to approximately $383.0 million as of September 30, 2011, from $355.4 million as of September 30, 2010. The primary reason interest income increased was the increase in the outstanding loan portfolio. The gross portfolio yield decreased to 24.96% for the six-month period ended September 30, 2011 from 25.17% for the six-month period ended September 30, 2010. The net portfolio yield increased to 22.95% for the corresponding period ended September 30, 2011 from 20.01% for the six-month period ended September 30, 2010. The gross portfolio yield decreased primarily due to a slight decrease in the weighted APR earned on finance receivables. The net portfolio yield increased primarily due to a decrease in the actual and expected net charge-offs and a corresponding decrease in the provision for credit losses.

Marketing, Salaries, Employee Benefits, Depreciation, and Administrative Expenses

Marketing, salaries, employee benefits, depreciation and administrative expenses increased to approximately $13.5 million for the six-month period ended September 30, 2011 from approximately $12.5 million for the corresponding period ended September 30, 2010. The increase of 8% was primarily attributable to salaries expense. The Company opened additional branches and increased headcount to 293 for the three-month period ended September 30, 2011 from 272 for the three-month period ended September 30, 2010. Marketing, salaries, employee benefits, depreciation, and administrative expenses as a percentage of finance receivables, net of unearned interest, decreased to 9.85% for the six-month period ended September 30, 2011 from 10.15% for the six-month period ended September 30, 2010.

Interest Expense

Interest expense decreased to approximately $2.5 million for the six-month period ended September 30, 2011 from $3.0 million for the six-month period ended September 30, 2010. The following table summarizes the Company’s average cost of borrowed funds for the six-month period ended September 30:

 

     Six months ended
September 30, 		 
     2011     2010  

Variable interest under the line of credit facility

     0.44 %      0.55 % 

Settlements under interest rate swap agreements

     0.00 %      1.15 % 

Credit spread under the line of credit facility

     3.78 %      3.70 % 
  

 

 

   

 

 

 

Average cost of borrowed funds

     4.22 %      5.40 % 
  

 

 

   

 

 

 

The primary reason that the Company’s average cost of funds decreased is attributed to the costs associated with settlements under interest rate swap agreements during the six months ended September 30, 2010.

The weighted average notional amount of interest rate swaps was $36.2 million at a weighted average fixed rate of 3.96% for the six months ended September 30, 2010. For further discussions regarding the effect of interest rate swap agreements see note 6 – “Interest Rate Swap Agreements”.

 

16

Table of Contents

Contract Procurement

The Company purchases Contracts in the fifteen states listed in the table below. The Contracts purchased by the Company are predominately for used vehicles; for the three-month and six-month periods ended September 30, 2011 and 2010, less than 2% were for new vehicles.

The following tables present selected information on Contracts purchased by the Company, net of unearned interest.

 

     Three months ended
September 30, 		     Six months ended
September 30, 		 

State

   2011      2010      2011      2010  

FL

   $ 10,621,214       $ 12,176,123       $ 22,032,974       $ 24,401,790   

GA

     3,614,109         4,782,217         7,899,035         8,811,638   

NC

     3,139,984         3,971,706         6,728,124         7,318,021   

SC

     561,702         507,943         1,291,773         997,803   

OH

     4,652,242         5,381,608         9,258,582         10,429,292   

MI

     1,563,293         1,395,616         3,095,815         2,834,109   

VA

     734,582         1,233,552         1,613,656         2,652,687   

IN

     2,541,495         2,482,458         4,492,023         4,727,425   

KY

     2,170,369         2,378,840         4,454,972         4,828,135   

MD

     314,824         430,883         740,466         888,501   

AL

     1,793,660         1,535,109         3,436,001         2,830,705   

TN

     1,326,270         1,478,861         2,439,813         2,760,612   

IL

     856,456         —           1,656,376         —     

MO

     1,081,322         —           2,182,535         —     

KS

     121,967         —           233,784         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 35,093,489       $ 37,754,916       $ 71,555,929       $ 73,480,718   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Three months ended
September 30, 		    Six months ended
September 30, 		 

Contracts

   2011     2010     2011     2010  

Purchases

   $ 35,093,489      $ 37,754,916      $ 71,555,929      $ 73,480,718   

Weighted APR

     23.83 %      23.46 %      23.80 %      23.45 % 

Average discount

     8.45 %      8.70 %      8.48 %      8.78 % 

Weighted average term (months)

     49        49        49        49   

Average loan

   $ 9,922      $ 9,860      $ 9,900      $ 9,880   

Number of Contracts

     3,537        3,829        7,228        7,437   

Loan Origination

The following table presents selected information on Direct Loans originated by the Company, net of unearned interest.

 

     Three months ended
September 30, 		    Six months ended
September 30, 		 

Direct Loans Originated

   2011     2010     2011     2010  

Originations

   $ 1,634,237      $ 1,251,446      $ 2,948,003      $ 2,413,327   

Weighted APR

     26.36 %      26.66 %      26.57 %      26.59 % 

Weighted average term (months)

     26        24        25        24   

Average loan

   $ 3,043      $ 2,838      $ 2,954      $ 2,813   

Number of loans

     537        441        998        858   

 

17

Table of Contents

Analysis of Credit Losses

As of September 30, 2011, the Company had 1,222 active static pools. The average pool upon inception consisted of 61 Contracts with aggregate finance receivables, net of unearned interest, of approximately $598,000.

The Company anticipates losses absorbed as a percentage of liquidation will be in the 5%-8% range during the remainder of the current fiscal year; however, no assurances can be given that the actual losses absorbed may not be higher as a result of further economic weakness. The longer-term outlook for portfolio performance will depend on the overall economic conditions, the unemployment rate, and the price of oil which impacts the cost of gasoline, food and many other items used or consumed by the average person. Also, the Company’s ability to monitor, manage and implement its underwriting philosophy in additional geographic areas as it strives to continue its expansion will impact future portfolio performance. The Company does not believe there have been any significant changes in loan concentrations or terms of Contracts purchased during the three and six months ended September 30, 2011.

The provision for credit losses decreased in each period, largely due to the decrease in the net charge-off rate. The net charge-off rate was 4.74% for the three months ended September 30, 2011 as compared to 5.31% for the three months ended September 30, 2010. The net charge-off rate was 4.18% for the six months ended September 30, 2011 as compared to 4.96% for the six months ended September 30, 2010. Also, the Company has experienced favorable variances between projected write offs and actual write-offs on certain pools which has resulted in an increase in expected future cash flows. This resulted in the reversal of provision on certain seasoned static pools which offset the provision on other static pools. As a result, the provision for credit losses was less than write offs during the current period.

In accordance with our policies and procedures, certain borrowers qualify for, and the Company offers, one-month principal payment deferrals on Contracts. For the three months ended September 30, 2011 and September 30, 2010 the Company granted deferrals to approximately 6.71% and 7.96%, respectively, of total Contracts. For the six months ended September 30, 2011 and September 30, 2010 the Company granted deferrals to approximately 12.47% and 13.78%, respectively, of total Contracts. The number of deferrals is influenced by portfolio performance, general economic conditions and the unemployment rate.

The Company’s losses as a percentage of liquidation decreased to 5.93% from 7.18% for the three months ended September 30, 2011 and 2010, respectively. The Company’s losses as a percentage of liquidation decreased to 5.34% from 6.85% for the six months ended September 30, 2011 and 2010, respectively. The Company has seen improvements in the performance of its Contracts. The Company has also experienced reduced losses in part due to an increase in auction proceeds from repossessed vehicles. These proceeds are dependent upon several variables including the general market for repossessed vehicles. During the three months ended September 30, 2011 and 2010 auction proceeds from the sale of repossessed vehicles averaged approximately 57% and 50%, respectively of the related principal balance. During the six months ended September 30, 2011 and 2010 auction proceeds from the sale of repossessed vehicles averaged approximately 58% and 50%, respectively of the related principal balance.

Recoveries as a percentage of charge-offs decreased to approximately 15.22% for the three months ended September 30, 2011 from approximately 16.05% for the three months ended September 30, 2010. Recoveries as a percentage of charge-offs decreased to approximately 17.23% for the six months ended September 30, 2011 from approximately 17.94%. Historically, recoveries as a percentage of charge-off’s fluctuate from period to period, and the Company does not attribute this decrease to any particular change in operational strategy or economic event.

The Company believes delinquency trends over several reporting periods are useful in estimating future losses and overall portfolio performance. The Company also estimates future portfolio performance by considering various factors, the most significant of which are described as follows. The Company analyzes historical static pool performance for each branch location when determining appropriate reserve levels. Additionally, the Company utilizes results from internal branch audits as an indicator of future static pool performance. The Company also considers such things as the current unemployment rate in markets the Company operates in, the percentage of voluntary repossessions as compared to prior periods, the percentage of bankruptcy filings as compared to prior periods and other leading economic indicators. See note 4 – “Finance Receivables” for changes in allowance for credit losses, credit quality and delinquencies.

Income Taxes

Driven by increases in operating income, the provision for income taxes increased to approximately $3.5 million for the three months ended September 30, 2011 from approximately $2.5 million for the three months ended September 30, 2010. The provision for income taxes increased to approximately $6.8 million for the six months ended September 30, 2011 from approximately $4.7 million for the six months ended September 30, 2010. The Company’s effective tax rate remained consistent increasing slightly to 38.78% for the three months ended September 30, 2011 from 38.45% for the three months ended September 30, 2010. The Company’s effective tax rate remained consistent increasing slightly to 38.67% for the six months ended September 30, 2011 from 38.45% for the six months ended September 30, 2010.

 

18

Table of Contents

Liquidity and Capital Resources

The Company’s cash flows are summarized as follows:

 

     Six months ended
September 30, 		 
     2011     2010  

Cash provided by (used in):

    

Operating activities

   $ 9,967,412      $ 10,311,004   

Investing activities (primarily purchase of Contracts)

     (7,642,325 )      (20,818,292 )  

Financing activities

     (1,622,934 )      9,982,059   
  

 

 

   

 

 

 

Net increase (decrease) in cash

   $ 702,153      $ (525,229 ) 
  

 

 

   

 

 

 

The Company’s primary use of working capital during the six months ended September 30, 2011 was the funding of the purchase of Contracts which are financed substantially through borrowings under the Company’s Line. On September 1, 2011, the Company increased the size of the Line and extended the maturity date to November 30, 2013. The Line is secured by all of the assets of the Company. The Company may borrow up to $150.0 million. Borrowings under the Line may be under various LIBOR pricing options plus 300 basis points with a 1% floor on LIBOR or at the prime rate. Prime rate based borrowings are generally less than $5.0 million. As of September 30, 2011, the amount outstanding under the Line was approximately $117.0 million, and the amount available under the Line was approximately $33.0 million.

The Company will continue to depend on the availability of the Line, together with cash from operations, to finance future operations. Amounts outstanding under the Line have decreased by approximately $1.0 million during the six months ended September 30, 2011. The decrease of the Line is principally related to the fact that cash received from operations exceeded cash needed to fund new contracts. The amount of debt the Company incurs from time to time under these financing mechanisms depends on the Company’s need for cash and ability to borrow under the terms of the Line. The Company believes that borrowings available under the Line as well as cash flow from operations will be sufficient to meet its short-term funding needs.

The Line requires compliance with certain debt covenants including financial ratios, asset quality and other performance tests. The Company is currently in compliance with all of its debt covenants but, during the current economic slowdown, a breach of one or more of these covenants could occur prior to the maturity date of the Line, which is November 30, 2013. The Company’s consortium of lenders could place the Company in default if certain covenants were breached and take one or more of the following actions: increase the Company’s borrowing costs; restrict the Company’s ability to obtain additional borrowings under the Line; accelerate all amounts outstanding under the Line; or enforce its interests against collateral securing the Line. The Company believes its lenders will continue to allow it to operate in the event of a condition of default; however no assurance can be given that this would occur.

On August 30, 2011, the Company’s Board of Directors announced a quarterly cash dividend of $.10 per share of common stock paid on September 20, 2011. The Company intends to continue to pay quarterly cash dividends for the foreseeable future, provided its future earnings meet expectations. Any payment of future cash dividends and the amounts thereof will be dependent upon the Company’s earnings, financial requirements, requirements of its lenders and other factors deemed relevant by the Company’s Board of Directors.

Contractual Obligations

The following table summarizes the Company’s material obligations as of September 30, 2011.

 

     Payments Due by Period  
     Total      Less than
1 year 		     1 to 3
years 		     3 to 5
years 		     More than
5 years 		 

Operating leases

   $ 2,752,650       $ 1,524,943       $ 1,145,405       $ 82,302       $ —     

Line of credit

     117,000,000         —           117,000,000         —           —     

Interest on line of credit 1

     9,530,625         4,972,500         4,558,125         —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 129,283,275       $ 6,497,443       $ 122,703,530       $ 82,302       $ —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

1  

Interest on outstanding borrowings under the Line as of September 30, 2011 is based on an effective interest rate of 4.25% and the Company’s current credit line, which matures on November 30, 2013. The effective interest rate used in the above table does not contemplate the possibility of entering into interest rate swap agreements in the future.

 

19

Table of Contents

Future Expansion

The Company currently operates a total of fifty-eight branch locations in fourteen states, including nineteen in Florida; seven in Ohio; six in North Carolina and Georgia; three in Kentucky, Indiana and Alabama; two in Virginia, Michigan, Tennessee and South Carolina; and one each in Maryland, Illinois, and Missouri. Each office is budgeted (size of branch, number of employees and location) to handle up to 1,000 accounts and up to $7.5 million in gross finance receivables. To date, fourteen of our branches meet this capacity. The Company continues to evaluate additional markets for future branch locations, and subject to market conditions, would expect to open additional branch locations during fiscal 2012. The Company remains open to acquisitions should an opportunity present itself.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risks relating to the Company’s operations result primarily from changes in interest rates. The Company does not engage in speculative or leveraged transactions, nor does it hold or issue financial instruments for trading purposes.

Interest rate risk

Management’s objective is to minimize the cost of borrowing through an appropriate mix of fixed and floating rate debt. Derivative financial instruments, such as interest rate swap agreements, may be used for the purpose of managing fluctuating interest rate exposures that exist from ongoing business operations. The Company does not use interest rate swaps for speculative purposes.

 

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures . In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s management evaluated, with the participation of the Company’s President and Chief Executive Officer and Senior Vice President and Chief Financial Officer, the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon their evaluation of these disclosure controls and procedures, the President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of the date of such evaluation to ensure that material information relating to the Company, including its consolidated subsidiaries, was made known to them by others within those entities, particularly during the period in which this Quarterly Report on Form 10-Q was being prepared.

Changes in internal controls . There have been no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

 

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended March 31, 2011, which could materially affect our business, financial condition or future results. The risks described in the Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 6. EXHIBITS

See exhibit index following the signature page.

 

20

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

NICHOLAS FINANCIAL, INC.

(Registrant)

 

Date: November 9, 2011          

/s/ Peter L. Vosotas

     

Peter L. Vosotas

Chairman of the Board, President,

Chief Executive Officer and Director

 

Date: November 9, 2011            

/s/ Ralph T. Finkenbrink

     

Ralph T. Finkenbrink

Senior Vice President,

Chief Financial Officer and Director

 

21

Table of Contents

EXHIBIT INDEX

 

Exhibit No.

 

Description

10.1.1   Amendment No. 1 to Second Amended and Restated Loan and Security Agreement, dated September 1, 2011.
10.9   Form of Dealer Agreement and Schedule thereto listing dealers that are parties to such agreements
31.1   Certification of the President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2   Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*   Certification of the Chief Executive Officer Pursuant to 18 U.S.C. § 1350
32.2*   Certification of the Chief Financial Officer Pursuant to 18 U.S.C. § 1350
101.INS**   XBRL Instance Document
101.SCH**   XBRL Taxonomy Extension Schema Document
101.CAL**   XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB**   XBRL Taxonomy Extension Labels Linkbase Document
101.PRE**   XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF**   XBRL Taxonomy Extension Definition Linkbase Document

 

*This certification accompanies the Quarterly Report on Form 10-Q and is not filed as part of it.

**Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 

22

Exhibit 10.1.1

AMENDMENT NO. 1 TO LOAN AGREEMENT

THIS AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated as of September 1, 2011 (this “ Amendment ”), is among NICHOLAS FINANCIAL, INC., a Florida corporation (the “ Borrower ”), BANK OF AMERICA, N.A., in its capacity as agent (in such capacity, the “ Agent ”), and each of the Lenders party hereto.

RECITALS:

A. The Borrower, the lenders from time to time party thereto (collectively, the “ Lenders ”) and the Agent have entered into a Second Amended and Restated Loan and Security Agreement dated as of January 12, 2010 (the “ Loan Agreement ”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement.

B. The Borrower has requested that the Agent and the Lenders amend certain provisions of the Loan Agreement.

C. Subject to the terms and conditions set forth below, the Agent and the Lenders party hereto are willing to so amend the Loan Agreement.

In furtherance of the foregoing, the parties agree as follows:

Section 1. AMENDMENTS. Subject to the covenants, terms and conditions set forth herein and in reliance upon the representations and warranties set forth herein, the Loan Agreement is amended as follows:

(a) The following new definition is inserted in Section 1.2 in the appropriate alphabetical position therein:

“ Adjusted Availability ” means, at any time, an amount equal to (a) the Borrowing Base determined by reference to the most recent Collateral and Loan Status Report delivered to the Agent without giving effect to the Maximum Revolver Amount minus (b) the Aggregate Revolver Outstandings after giving effect to any Revolving Loans and Pending Revolving Loans made or requested at such time.

(b) The existing definitions of “ Maximum Revolver Amount ” and “ Stated Termination Date ” in Section 1.2 are deleted in their entirety and the following definitions are inserted in lieu thereof:

“ Maximum Revolver Amount ” means $150,000,000.00.

“ Stated Termination Date ” means November 30, 2013.

(c) The last sentence of Section 4.2 is deleted in its entirety and the following is inserted in lieu thereof:

If this Agreement is terminated at any time prior to the Stated Termination Date, whether pursuant to this Section or pursuant to Section 11.2 , the Borrower shall pay to the Agent, for the account of the Lenders, an early termination fee determined in accordance with the following table:

 

Period during which

early termination

occurs

  

Early Termination

Fee

On or prior to November 30, 2012    One half of one percent (  1 / 2 %) of the Maximum Revolver Amount.
After November 30, 2012 but prior to November 30, 2013    One quarter of one percent (  1 / 4 %) of the Maximum Revolver Amount.

(d) The existing Section 9.6 is deleted in its entirety and the following is inserted in lieu thereof:

9.6 Distributions and Capital Change . The Borrower shall not (a) directly or indirectly declare or make or incur any liability to make any Distribution or (b) make any change to its capital structure, except, so long as no Default or Event of Default then exists or would occur as a result of any of the following, the Borrower may (i) purchase, redeem or otherwise acquire for cash the capital stock (or any options or warrants for such stock) of the Borrower in an aggregate amount not to exceed $15,000,000 on or prior to September 1, 2012; and (ii) declare or pay cash dividends to its stockholders and purchase, redeem or otherwise acquire for cash the capital stock (or any options or warrants for such stock) of the Borrower if after giving effect thereto (A) the aggregate amount of such dividends, purchases, redemptions and acquisitions paid or made during a fiscal quarter would be less than 50% of the Borrower’s Adjusted Net Earnings from Operations for the fiscal quarter immediately preceding the fiscal quarter in which such dividend, purchase, redemption or acquisition is paid or made, (B) the aggregate amount of such dividends, purchases, redemptions and acquisitions paid or made during the immediately preceding four fiscal-quarter period would be less than 50% of the Borrower’s Adjusted Net Earnings from Operations for such period, and (C) Adjusted Availability exceeds 20% of the Aggregate Revolver Outstandings as of the date of such Distribution, after giving effect to any Revolving Loans and Pending Revolving Loans made or requested on such date.

(e) The last sentence of Section 9.11 is deleted in its entirety and the following is inserted in lieu thereof:

Notwithstanding the foregoing, so long as no Default or Event of Default then exists or would occur as a result of any of the following, Borrower may (i) repay Debt (including

 

2

interest) owing to Peter L. Vosotas and permitted under Section 9.9(d) and (ii) make Distributions permitted by Section 9.6 .

The amendments to the Loan Agreement are limited to the extent specifically set forth above and no other terms, covenants or provisions of the Loan Agreement are intended to be affected hereby.

Section 2. CONDITIONS PRECEDENT. The parties hereto agree that the amendments set forth in Section 1 above shall not be effective until the satisfaction of each of the following conditions precedent:

(a) Documentation . The Agent shall have received (i) a counterpart of this Amendment, duly executed and delivered by the Borrower and all of the Lenders then party to the Loan Agreement, (ii) a resolution from the Board of Directors of the Borrower authorizing this Amendment and the transactions contemplated hereby, (iii) a legal opinion in form and substance satisfactory to the Agent from counsel to the Borrower and (iv) such other documents and certificates as the Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Borrower, the authorization of this Amendment and any other legal matters relating to the Borrower or the transactions contemplated hereby.

(b) Fees and Expenses. All fees and expenses of counsel to the Agent estimated to date shall have been paid in full (without prejudice to final settling of accounts for such fees and expenses).

Section 3. REPRESENTATIONS AND WARRANTIES .

(a) In order to induce the Agent and the Lenders to enter into this Amendment, the Borrower represents and warrants to the Agent and the Lenders as follows:

(i) The representations and warranties made by the Borrower in Article 8 of the Loan Agreement are true and correct on and as of the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date in which case such representations and warranties are true and correct on and as of such earlier date.

(ii) Since the date of the Financial Statements delivered to the Lenders, no material adverse change has occurred in the Borrower’s property, business, operations or conditions (financial or otherwise).

(iii) No Default or Event of Default has occurred and is continuing or will exist after giving effect to this Amendment.

(b) In order to induce the Agent and the Lenders to enter into this Amendment, the Borrower represents and warrants to the Agent and the Lenders that this Amendment has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation.

 

3

Section 4. MISCELLANEOUS

(a) Ratification and Confirmation of Loan Documents . The Borrower hereby consents, acknowledges and agrees to the amendments set forth herein and hereby confirms and ratifies in all respects the Loan Documents to which the Borrower is a party.

(b) Fees and Expenses . The Borrower shall pay on demand all reasonable costs and expenses of the Agent in connection with the preparation, reproduction, execution, and delivery of this Amendment and any other documents prepared in connection herewith, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent.

(c) Headings . Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

(d) Governing Law; Waiver of Jury Trial . This Amendment shall be governed by and construed in accordance with the laws of the State of New York, and shall be further subject to the provisions of Sections 15.3 and 15.4 of the Loan Agreement.

(e) Counterparts . This Amendment may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original, and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or electronic transmission (including .pdf file) shall be effective as delivery of a manually executed counterpart hereof.

(f) Entire Agreement . This Amendment, together with all the Loan Documents (collectively, the “ Relevant Documents ”), sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof and supersedes any prior negotiations and agreements among the parties relating to such subject matter. No promise, condition, representation or warranty, express or implied, not set forth in the Relevant Documents shall bind any party hereto, and no such party has relied on any such promise, condition, representation or warranty. Each of the parties hereto acknowledges that, except as otherwise expressly stated in the Relevant Documents, no representations, warranties or commitments, express or implied, have been made by any party to the other. None of the terms or conditions of this Amendment may be changed, modified, waived or canceled orally or otherwise except in a writing signed by the Agent for such purpose.

(g) Enforceability . Should any one or more of the provisions of this Amendment be determined to be illegal or unenforceable as to one or more of the parties hereto, all other provisions nevertheless shall remain effective and binding on the parties hereto.

 

4

(h) Successors and Assigns . This Amendment shall be binding upon and inure to the benefit of the Borrower, the Agent, each Lender and their respective successors and assigns (subject to Section 13.2 of the Loan Agreement).

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

5

The following parties have caused this Amendment No. 1 to Loan Agreement to be executed as of the date first written above.

 

         

“BORROWER”

Nicholas Financial, Inc.

 

      By                                                                                                                         
      Title:                                                                                                                         
     

“AGENT”

 

Bank of America, N.A., as the Agent

 

      By                                                                                                                         
                                                                                                , Vice President

Commitment: $53,750,000

Pro Rata Share: 35.833333333%

     

“LENDERS”

 

Bank of America, N.A., as a Lender

 

      By                                                                                                                         
                                                                                              , Vice President

Commitment: $29,500,000

Pro Rata Share: 19.666666667%

     

Capital One, N.A., as a Lender

 

      By:                                                                                                                         
                                                                                              , Vice President

Commitment: $26,750,000

Pro Rata Share: 17.8333333333%

     

First Tennessee Bank National Association, as a

Lender

 

      By:                                                                                                                         
                                                                                              , Vice President

Commitment: $16,000,000

Pro Rata Share: 10.666666667%

     

BMO Harris Bank, N.A., as successor to Harris N.A., as a Lender

 

      By:                                                                                                                         
                                                                                              , Vice President

Commitment: $24,000,000

Pro Rata Share: 16.000000000%

     

Wells Fargo Preferred Capital, Inc., as a Lender

 

      By:                                                                                                                         
                                                                                , Senior Vice President

Signature Page to Amendment No. 1 to

Loan Agreement

Exhibit 10.9

LOGO   

NICHOLAS FINANCIAL, INC.

 

   Automobile Dealer Retail Agreement

Non-Recourse Dealer Retail Agreement

The undersigned Dealer proposes to sell to the undersigned Nicholas Financial, Inc. (NFI), from time to time, Promissory Notes, Security Agreements, Retail Installment contracts, Conditional Sales Contracts, or other instruments hereinafter referred to as “Contracts”, evidencing installment payment obligations owing Dealer arising from the time sale of motor vehicle(s) and secured by such Contracts. It is understood that NFI shall have the sole discretion to determine which Contracts it will purchase from Dealer.

 

1. Dealer represents and warrants that Contracts submitted to NFI for purchase shall represent valid, bona fide sales for the respective amount therein set forth in such Contracts and that such Contracts represent sales of motor vehicles owned by the Dealer and are free and clear of all liens and encumbrances.

 

2. Upon purchase by NFI of any contracts hereunder from dealer, dealer shall endorse and assign to NFI the obligations and all pertinent security, security instruments, along with such provisional endorsements as may be stipulated for such contracts purchased by NFI.

 

3. This Agreement, and sums payable hereunder, may not be assigned by Dealer without written consent of NFI.

 

4. Dealer acknowledges that NFI charges an acquisition fee and a $75.00 loan processing charge on all contracts purchased and funded by NFI. The acquisition fee and loan processing charge are taken from Dealer Proceeds and are Non-Refundable. The amount is disclosed on each transaction and is set by Nicholas Financial, Inc.

 

5. Perfection of Security Interest: For each Contract purchased by NFI, Dealer shall, within 20 days of the date of the Contract or within a lesser time period if required by applicable law, file and record all documents necessary to properly perfect the valid and enforceable first priority security interest of NFI in the Vehicle and shall send NFI all security interest filing receipts. A Contract shall be subject to Repurchase for the life of the Contract if NFI suffers a loss due to the Dealership’s failure to (1) file and record, within 20 days of the date of the Contract or within a lesser time period if required by applicable law, all documents required to properly perfect the valid and enforceable first priority security interest of NFI in the Vehicle; (2) send NFI the filing receipts reflecting said perfection.

 

6. Indemnity : As a separate and cumulative obligation, Dealer shall defend and hold NFI harmless from any and all claims, defenses, offsets, damages, suits, administrative or other proceedings, cost (including reasonable attorney’s fees), expenses, losses, and liabilities. (Collectively Claims) arising out of connected with or relating to the Contract or the goods or services sold there under. Timing of indemnification is within 7 days of demand by NFI.

 

7. Add-on Products and Services:

 

  a. Defined . “Add-on Products and Services,” or “APS,” shall mean service contracts, mechanical breakdown contracts, GAP contracts, credit life and credit accident and health insurance. In addition, the term shall include other products and services acceptable to and approved in writing by NFI from time to time.

 

  b. Cancellation of APS . If APS has been sold by the Dealer and financed in a Contract purchased by NFI, Dealer agrees that such APS shall be cancelable upon demand by Buyer. Upon such cancellation, Dealer shall immediately notify NFI that the Buyer has canceled the APS. Upon cancellation, Buyer shall be entitled to a refund of the unearned portion of the cash price of the APS as provided in the APS Contract or as may otherwise be required by law, whichever is greater. As between NFI and Dealer, Dealer agrees to pay to NFI, as appropriate, any refund due to Buyer under the terms of an APS Contract. Dealer’s liability under this Section shall be limited to the amount Dealer collected and retained or otherwise received, directly or indirectly, in connection with the sale of the APS.

 

8. Privacy: Dealer shall not make any unauthorized disclosure of, or use any personal information of individual consumers which it receives from NFI or on NFI’s behalf other than to carry out the purposes for which such information is received. NFI and Dealer shall comply in all respects with all applicable requirements of Title V of the Gramm-Leach-Bliley Act of 1999 and its implementing regulations.

 

9. No Provisions hereof may be modified, changed or supplemented, unless both parties agree to the amendment in writing.

 

Nicholas Financial, Inc.

      Dealer:  

 

By:  

 

    By:  

 

Date:  

 

    Date:  

 

DEALER NAME

1ST CLASS AUTO SALES
1ST CLASS AUTOS
1ST FINANCIAL SERVICES
1ST PLACE AUTO SALES, INC
31 W AUTO BROKERS INC
32 FORD MERCURY, INC.
4042 MOTORS LLC
44 AUTO MART
5 STARR AUTO
60 WEST AUTO SALES LLC
72 WEST MOTORS LLC
A & M CLASSIC AUTO RESTORATION
A & M MOTORS
A.R.J.’S AUTO SALES, INC
AAA AUTOMOTIVE LLC
AACC AUTO CAR SALES, INC
ABBY’S AUTOS, INC.
ABC AUTOTRADER LLC
ACTION AUTO SALES INC
ACTION DIRECT USA
ACURA OF ORANGE PARK
ADAMS AUTO GROUP
ADAMSON FORD LLC
ADRIAN DODGE CHRYSLER JEEP
ADVANCED AUTO BROKERS, INC.
ADVANCED AUTO SALES LLC
ADVENTURE CHRYSLER JEEP
AFFINITY AUTOMOTIVE REPAIRS &
AFFORDABLE AUTOS
AFFORDABLE MOTORS
AFFORDABLE USED CARS & TRUCKS
AIR CITY MOTORS
AIRPORT CHRYSLER DODGE JEEP
AJ’S AUTO
AL BAUMANN CHEV BUICK
AL PIEMONTE’S ARLINGTON HEIGHT
ALB USA AUTO INC
ALBION MOTORS, INC.
ALFA MOTORS
ALL CREDIT CAR SALES LLC
ALLAN VIGIL FORD
ALLEN TURNER AUTOMOTIVE
ALTERNATIVES
ALTO PASS AUTO LLC
AMERICAN FINANCIAL SERVICES &
AMG AUTO SALES INC
AMG COLLECTION, INC.
ANDERSON AUTOMOTIVE GROUP INC
ANDY CHEVROLET COMPANY
ANDY MOHR BUICK PONTIAC GMC
ANDY MOHR CHEVROLET, INC.
ANDY MOHR FORD, INC.
ANDY MOHR NISSAN, INC.
ANDY MOHR TOYOTA

DEALER NAME

ANN SCHMIDT CHRYSLER

ANTHONYS AUTO MALL LLC

ANTWERPEN CHRYSLER JEEP

ANTWERPEN NISSAN, INC.

ANY CREDIT AUTO SALES LLC

APPROVAL AUTO CREDIT INC.

AR MOTORSPORTS INC

ARA AUTO AIR & ELECTRIC

ARB WHOLESALE CARS INC

ARBOGAST BUICK PONTIAC GMC

ARCADIA CHEVROLET

ARCH ABRAHAM NISSAN LTD

ARES FINANCIAL SERVICES LLC

ARLINGTON TOYOTA INC.

ARMSTRONG FORD INC

ARRIGO DODGE

ART MOEHN CHEVROLET, CO.

ASANKA CARS.COM

ASHEBORO FORD LINCOLN

ASTRO LINCOLN MERCURY, INC.

ATCHINSON FORD SALES

ATHENS AUTO SALES

ATLANTA AUTO BROKERS

ATLANTA LUXURY MOTORS

ATLANTA LUXURY MOTORS INC

ATLANTA SPORTS & IMPORTS

ATLANTIC BEACH AUTO SALES

ATLANTIS RENT A CAR AND

AURORA CHRYSLER PLYMOUTH

AUSTIN MOTORS, INC

AUTO ADVANTAGE AUTO SALES LLC

AUTO AMERICA

AUTO BRITE AUTO SALES

AUTO CITY LLC

AUTO CORRAL, INC.

AUTO COUNTRY LLC

AUTO CREDIT CENTER INC

AUTO DEPOT LLC

AUTO DIRECT

AUTO DIRECT COLUMBUS OH

AUTO ENTERPRISE

AUTO EXCHANGE

AUTO EXPECTATIONS LLC

AUTO EXPRESS CREDIT INC

AUTO EXPRESSIONS

AUTO FINDERS OF VIRGINIA

AUTO HOUSE OF SALISBURY INC

AUTO KING

AUTO LAND AUTO SALES INC

AUTO LINE, INC.

AUTO LINK INC

AUTO LIQUIDATORS OF TAMPA, INC

AUTO MART, INC.

AUTO MASTERS

 

DEALER NAME

AUTO MAX

AUTO NETWORK, INC.

AUTO PLAZA

AUTO PLAZA FORD

AUTO PLAZA USA

AUTO POINT USED CAR SALES

AUTO PROFESSIONAL CAR SALES

AUTO RANCH INC

AUTO RESOURCE LLC

AUTO RITE, INC

AUTO SELECT

AUTO SOURCE OF GEORGIA

AUTO SPECIALISTS

AUTO SPORT, INC.

AUTO SPOT ORLANDO

AUTO WISE OF SHELBYVILLE

AUTO WORLD

AUTODRIVE, LLC

AUTOHOUSE, US

AUTOMACKS, INC.

AUTOMAX

AUTOMOTION

AUTOMOTIVE CONNECTION

AUTOPLEX IMPORT

AUTOPLEX, LLC

AUTOPRO INC

AUTOQUICK, INC.

AUTORAMA PREOWNED CARS

AUTOS ONLINE

AUTOSHOW SALES AND SERVICE

AUTOVILLE, USA

AUTOWAY FORD OF BRADENTON

AUTOWAY FORD OF ST PETE

AUTOWAY LINCOLN-MERCURY

AUTOWISE LLC

AUTOWORLD

AUTOWORLD USA

AXELROD PONTIAC

B & B AUTO SALES

B & B TRUCK CORRAL

B & W MOTOR CARS

B & W MOTORS

BAKARS INC

BALES MOTOR COMPANY INC

BALLAS BUICK GMC

BALTIMORE WASHINGTON AUTO

BANK AUTO SALES

BARATTINI QUALITY CARS &

BARBIES AUTOS CORPORATION

BARGAIN SPOT CENTER

BARRETT & SONS USED CARS

BASELINE AUTO SALES, INC.

BASIC AUTO SALES

BATTLEGROUND KIA

DEALER NAME

BBS AUTO SALES

BECK CHRYSLER, PONTIAC, DODGE,

BEDFORD AUTO WHOLESALE

BEDFORD NISSAN INC

BEECHMONT FORD

BELLAMY AUTOMOTIVE GROUP, INC

BELL’S AUTO SALES

BEN DAVIS CHEVROLET OLDSMOBILE

BEN MYNATT PONTIAC BUICK

BENSON FORD MERCURY

BEREA AUTO MALL

BERGER CHEVROLET

BERT SMITH INTERNATIONAL

BESSEMER AL AUTOMOTIVE LLC

BEST CARS KC INC

BEST DEAL AUTO SALES

BEST DEALS ON WHEELS AUTO

BETTEN BAKER CHEVROLET PONTIAC

BICKEL BROTHERS AUTO SALES INC

BIG BLUE AUTOS, LLC

BIG BOYS TOYS FLORIDA LLC

BIG JOHNS CARZ AN TRUCKS

BIG O DODGE OF GREENVILLE, INC

BIGELOW AUTO CENTER

BILL BLACK CHEVROLET,

BILL BRANCH CHEVROLET

BILL BUCK CHEVROLET, INC

BILL COLE NISSAN

BILL ESTES CHEVROLET

BILL JACOBS ENTERPRISES INC

BILL KAY CHYRSLER PLYMOUTH OF

BILL MAC DONALD FORD INC

BILL MARINE FORD INC

BILL THOMPSON’S AUTO AGENCY LL

BILLS AUTO SALES & LEASING,LTD

BILLY HOWELL FORD-LINCOLN-

BILLY RAY TAYLOR AUTO SALES

BLACKWELL MOTORS INC

BLAKE HOLLENBECK AUTO SALES IN

BLOOMINGTON AUTO CENTER

BLUE PARROT AUTO SALES LLC

BLUE RIDGE MAZDA

BOB DANCE KIA

BOB KING MITSUBISHI

BOB PFORTE MOTORS

BOB PRICE MOTORS, INC

BOB STEELE CHEVROLET INC.

BOBB SUZUKI

BOBBY LAYMAN CHEVROLET, INC.

BOBBY MURRAY TOYOTA

BONITA AUTO CENTER INC

BOOMDOX AUTO GROUP LLC

BOOMERS TRUCKS & SUVS LLC

BORCHERDING ENTERPRISE, INC

 

DEALER NAME

BOULEVARD PREOWNED, LLC

BOWDEN MOTORS INC

BOYD’S AUTO SALES

BRADLEY CHEVROLET, INC.

BRAD’S USED CARS

BRADSHAW ACURA

BRAMLETT PONTIAC INC

BRANDON HONDA

BRANDT AUTO BROKERS

BRANNON HONDA

BREAKAWAY HONDA

BRECKENRIDGE MOTORS EAST LLC

BREMEN MOTORS

BRENTWOOD AUTO SALES

BREVARD TRUCK & AUTO CENTER

BRIANS AUTO COMPANY

BRIGHT AUTO SALES LLC

BROADWAY AUTO SALES & SERVICE

BROCKMAN AUTOMOTIVE

BROMLEY AUTO SALES, LLC

BRONDES FORD MAUMEE LTD

BRONDES FORD, INC

BROTHER’S AUTO SALES

BROTHERS CHEVROLET OLDSMOBILE

BROWN MOTOR SALES

BRUCE WALTERS FORD LINCOLN MER

BUCKEYE FORD LINCOLN MERC OF O

BUCKEYE NISSAN, INC.

BUDDY STASNEY’S BUICK PONTIAC

BUDGET CAR SALES OF SW FLORIDA

BURNT STORE AUTO AND TRAILER

BURTON’S USED CARS

BUSH AUTO PLACE

BUTLER FORD MERCURY HONDA INC.

BUTLER MOTOR CO. INC

BUY RIGHT AUTO SALES INC

BYERLY FORD-NISSAN, INC

BYERS DELAWARE

C & C MOTORS

C F AUTO SALES

CADILLAC OF FAYETTEVILLE

CADILLAC SAAB OF ORANGE PARK

CALDERONE CAR AND TRUCK

CALVARY CARS & SERVICE, INC

CAMPBELL MOTORS, INC.

CANTON CAR COMPLEX

CAPEHARTS WHOLESALE

CAPITAL BOULEVARD AUTO SALES

CAPITAL EUROCARS, INC

CAPITAL FORD INC

CAPITAL MOTORS

CAPITOL AUTO

CAPITOL AUTO SALES, INC.

CAR CHOICE

DEALER NAME

CAR COLLECTION INC

CAR CONNECTION

CAR CORNER

CAR CORRAL

CAR CREDIT INC

CAR DEALZ

CAR NET USA

CAR SENSE INC

CAR SOURCE, LLC.

CAR ZONE

CARDINAL CHRYSLER JEEP DODGE

CARDINAL MOTORS INC

CARENA MOTORS, CO.

CARL BLACK BUICK, PONTIAC, GMC

CARL GREGORY CHRYSLER-DODGE-

CARN AUTO SALES, INC.

CAROLINA AUTO EXCHANGE

CAROLINA HYUNDAI OF FORT MILL

CARPORT SALES & LEASING, INC.

CARRIAGE MITSUBISHI

CARRIAGE NISSAN

CARROLLTON MOTORS

CARS & CREDIT OF FLORIDA

CARS & TRUCKS

CARS 4 U

CARS AND CARS, INC.

CARS DIRECT

CARS OF SARASOTA LLC

CARS TO GO AUTO SALES AND

CARS UNLIMITED

CARSMART

CARSMART AUTO SALES LLC

CARSMART, INC.

CASCADE AUTO GROUP, LTD

CASTLE AUTO OUTLET, LLC

CASTLE USED CARS

CAVALIER AUTO SALES INC

CBS QUALITY CARS, INC.

CECIL CLARK CHEVROLET,INC.

CENTER POINT USED CARS

CENTRAL 1 AUTO BROKERS

CENTRAL CAROLINA PRE-OWNED

CENTRAL RALEIGH AUTO SALES

CENTURY BUICK

CENTURY SALES INC

CHAMBERLAIN AUTO SALES INC

CHAMPION CHEVROLET INC.

CHAMPION OF DECATUR, INC.

CHAMPION PREFERRED AUTOMOTIVE

CHANDLER CHEVROLET INC

CHARLES BARKER PREOWNED OUTLET

CHEIFS WHOLESALE AUTOS

CHEROKEE HYUNDAI OF KENNESAW L

CHEVROLET BUICK OF QUINCY INC.

 

DEALER NAME

CHOICE AUTO SALES

CHRIS LEITH CHEVROLET

CHRIS LEITH DODGE

CHRIS SPEARS PRESTIGE AUTO

CHRONIC INC.

CHRYSLER JEEP OF DAYTON

CHUCK CARLSON AUTO SALES INC

CHUCK REYNOLDS CAR COMPANY INC

CINCI MOTORS LLC

CINCINNATI USED AUTO SALES

CINCY IMPORTS

CIRCLE CITY ENTERPRISES, INC.

CITRUS CHRYSLER JEEP DODGE

CITY CHEVROLET

CITY HYUNDAI

CITY LINE AUTO & TRUCK

CITY TO CITY AUTO SALES, LLC

CITY USED CARS, INC

CITY VIEW AUTO SALES

CJ’S AUTO STORE

CLASSIC ASIAN IMPORTS, LLC

CLASSIC CHEVROLET BMW

CLASSIC FORD LINCOLN MERCURY

CLASSIC LEXUS

CLASSIC SUZUKI OF BIRMINGHAM

CLASSY CYCLES

CLEARWATER TOYOTA

CLINTON FAMILY FORD

CLONINGER FORD, INC.

COAST TO COAST AUTO SALES

COASTAL AUTO GROUP INC. DBA

COASTAL AUTOMOTIVE INC

COASTAL CARS, INC.

COASTAL CHEVROLET, INC.

COASTAL MITSUBISHI

COATS AUTO SALES

COCONUT CREEK HYUNDAI

COGGIN CHEVROLET AT

COGGIN HONDA

COGGIN MOTOR MALL

COLLEGE CHEVROLET BUICK

COLONIAL PONTIAC

COLUMBUS AUTO RESALE, INC

COLVIN AUTO SALES & SERVICE

COMBS AUTO SALES

CONEXION AUTO SALES

CONSUMER AUTO BROKERS

CONYERS AUTOMAX

COOK & REEVES CARS INC

COOK MOTOR COMPANY

COPPUS MOTORS - CHRYSLER,JEEP

CORAL PALM AUTO SALES

CORAL SPRINGS OLDSMOBILE, INC

CHOICE AUTO SALES

CORLEW CHEVROLET CADILLAC OLDM

DEALER NAME

CORNERSTONE MOTORS

CORTEZ MOTORS

COUGHLIN AUTOMOTIVE OF

COUGHLIN AUTOMOTIVE- PATASKALA

COUGHLIN CHEVROLET OF

COUGHLIN FORD OF CIRCLEVILLE

COUGHLIN LONDON AUTO INC

COUNTRY HILL MOTORS INC

COUNTRYSIDE FORD OF CLEARWATER

COURTESY AUTO GROUP INC.

COURTESY CHRYSLER JEEP DODGE

COURTESY FORD

COURTESY NISSAN

COURTESY PALM HARBOR HONDA

COX AUTO SALES

COX CHEVROLET INC

CRAIG & BISHOP, INC.

CRAIG & LANDRETH INC

CREDIT UNION REMARKETING

CRESCENT FORD, INC

CRESTMONT CADILLAC

CRM MOTORS, INC.

CRONIC CHEVROLET OLDSMOBILE

CRONIC CHEVROLET, OLDSMOBILE-

CROSS AUTOMOTIVE

CROSSROADS AUTO SALES INC

CROSSWALK AUTO

CROWN AUTO DEALERSHIPS INC.

CROWN HONDA

CROWN KIA

CROWN NISSAN

CROWN NISSAN GREENVILLE

CURRIE MOTORS DRIVERS EDGE

CURRY HONDA

CUSTOM CAR CARE

D & B AUTO BROKERS LLC

DALLAS CPDJ

DAN TOBIN PONTIAC BUICK GMC

DAN TUCKER AUTO SALES

DARCARS WESTSIDE PRE-OWNED

DAVE EDWARDS HYUNDAI, INC.

DAVE EDWARDS TOYOTA

DAVID HODGES CARS & TRUCKS INC

DAVID SMITH AUTOLAND, INC.

DAVIS MOTORS, INC.

DAWSONS AUTO & TRUCK SALES INC

DAYTON ANDREWS DODGE

DAYTON ANDREWS INC.

DAYTONA AUTO SPORT

DAYTONA DODGE

DEACON JONES AUTO PARK

DEACONS CHRYSLER JEEP

DEALS FOR WHEELS

DEALS ON WHEELS

DEALS ON WHEELS AUTO MART

 

DEALER NAME

DEALZ AUTO TRADE

DEAN SELLERS, INC.

DECENT RIDE.COM

DEECO’S AUTO SALES INC

DEFINITIVE MOTORCRS INC

DELRAY IMPORTS, INC

DELTA TRADE INC

DELUCA TOYOTA INC

DENNIS AUTO POINT

DENNY’S AUTO SALES, INC.

DEREK MOTORCAR CO INC

DESTINYS AUTO SALES

DETROIT II AUTOMOBILES

DETROIT II AUTOMOBILES, INC

DEWITT MOTORS

DIAMOND II AUTO SALES, INC.

DICK BROOKS HONDA

DICK SCOTT NISSAN, INC.

DICK SMITH MUTSUBISHI

DIRECT AUTO BROKERS INC

DIRECT AUTO SOURCE

DIRECT SALES & LEASING

DISCOUNT AUTO OUTLET CORP. OF

DISCOUNT AUTO SALES

DISCOVERY AUTO CENTER LLC

DISCOVERY AUTO SALES

DIVINE AUTO SALES

DIXIE IMPORT INC

DIXIE MOTORS INC

DIXON’S AUTOMOTIVE LLC

DM MOTORS, INC.

DNH AUTO

DOLLARS PLUS CAR II

DOMESTIC ACQUISITIONS

DON HINDS FORD, INC.

DON JACKSON CHRYSLER DODGE

DON MEALEY CHEVROLET

DON MOORE CHEVROLET CADILLAC

DON REID FORD INC.

DON SEELYE DAEWOO

DORAL CARS OUTLET

DORMAN CADILLAC GMC TRUCK INC

DOTSON BROS CHRYS DODGE PLYM

DOUG MARINE MOTORS INC

DOUGLASVILLE KIA

DOWN HOME MOTORS LLC

DOWNEY & WALLACE AUTO SALES

DOWNTOWN BEDFORD AUTO

DOWNTOWN MOTORS

DREAMS AUTO SALES

DRIVE AWAY AUTO SALES

DRIVE NOW AUTO SALES

DRIVERIGHT AUTO SALES, INC.

DRIVEWAYCARS.COM

DRY RIDGE TOYOTA

DEALER NAME

D’S AUTO OUTLET LLC

DSTD INC

DUBLIN CADILLAC NISSAN GMC

DUGAN CHEVROLET PONTIAC

DUNN PONTIAC BUICK GMC

DURHAM AUTOMOTIVE CO

DUVAL ACURA

DUVAL HONDA

E & R AUTO SALES INC

EAGLE ONE AUTO SALES

EASLEY MITSUBISHI

EAST ANDERSON AUTO SALES

EAST CHARLOTTE NISSAN

EAST COAST SPORTS AND IMPORTS

EASY AUTO SALES

ECONOMIC AUTO SALES INC

ED KOEHN FORD OF WAYLAND

ED MARTIN INC

ED MORSE AUTO PLAZA

ED SCHMID FORD INC

ED SCHMIDT PONTIAC-GMC

ED TILLMAN AUTO SALES

ED VOYLES HONDA

ED VOYLES HYUNDAI

EDGE MOTORS

EDWARDS CHEVROLET CO

EJ’S QUALITY AUTO SALES, INC.

ELHART NISSAN INC

ELITE AUTO GROUP

ELITE AUTO SALES

ELITE AUTO SERVICES LLC

ELITE CAR OUTLET INC

ELITE CAR SALES WEST INC

ELITE MOTORCARS

ELYRIA FORD

ELYRIA HYUNDAI, INC.

EMPIRE AUTOMOTIVE GROUP

ENTERPRISE

ENTERPRISE CAR SALES

ENTERPRISE CAR SALES

ENTERPRISE LEASING CO OF

ENTERPRISE LEASING COMPANY

ERNEST MOTORS, INC.

EVEREST AUTOMOTIVE GROUP, INC

EVERYDAY AUTO SALES

EVOLUTION AUTO SALES LLC

EXCLUSIVE CARZ AND AUTO

EXCLUSIVE MOTORCARS LLC

EXECUTIVE AUTO BROKERS

EXPRESS AUTO SALES

EXTREME DODGE DODGE TRUCK

EXTREME IMPORTS

EZ AUTO SALES

FACTORY DIRECT AUTO

FAIRFIELD FORD

 

DEALER NAME

FAIRLANE FORD SALES, INC.
FAIRWAY FORD
FAMILY KIA
FAMILY MOTORS
FANELLIS AUTO
FANNIN LINC, MERC, TOY,
FANTASY AUTOMOTIVES
FBC AUTOMOTIVE LTD
FENWICK MOTORS
FERMAN CHEVROLET
FERMAN CHRYSLER PLYMOUTH
FIAT OF SOUTH ATLANTA
FIAT OF WINTER HAVEN
FIERGE BROS AUTO SALES
FIRKINS C.P.J.S.
FIRKINS NISSAN
FIRST CHOICE AUTOMOTIVE INC
FIRST CLASS RIDER LLC
FIRST STOP AUTO SALES
FITZGERALD MOTORS, INC.
FIVE STAR CAR SALES, INC.
FLAMMER FORD OF SPRINGHILL
FLETCHER CHRYSLER PRODUCTS INC
FLORENCE AUTO MART INC
FLORIDA AUTO EXCHANGE
FLORIDA GULF COAST, LLC
FLOW HONDA
FLOWERS AUTOMOTIVE LLC
FOLGER AUTOMOTIVE, LLC
FORD OF PORT RICHEY
FORT MYERS MITSUBISHI
FORT MYERS TOYOTA INC.
FORT WALTON BEACH
FORT WAYNE CREDIT CONNECTION I
FORT WAYNE NISSAN INFINITI
FORT WAYNE TOYOTA/LEXUS OF
FOUNTAIN AUTO MALL
FRANK MYERS AUTO SALES, INC
FRANKLIN PARK LINCOLN MERCURY
FRED CALDWELL CHEVROLET
FRED MARTIN FORD
FRED MARTIN MOTOR COMPANY
FREEDOM DODGE CHRYSLER JEEP
FREEDOM FORD, INC.
FRENSLEY CHRYSLER PLYMOUTH
FRIENDLY FINANCE AUTO SALES
FRIENDLY KIA & ISUZU
FRITZ ASSOCIATES
FRONTIER MOTORS INC
FRONTLINE AUTO SALES
FUCCILLO KIA OF CAPE CORAL
FULTONDALE AUTO SALES
FUTURE AUTOMOTIVE LLC
G & S AUTO SALES & RENTALS LLC

DEALER NAME

GAINESVILLE DODGE
GALARZA MOTORSPORT
GALEANA CHRYSLER PLYMOUTH
GANLEY BEDFORD IMPORTS INC
GANLEY CHEVROLET, INC
GANLEY DODGE
GANLEY EAST, INC
GANLEY HONDA/PONTIAC
GANLEY LINCOLN MERCURY
GANLEY, INC
GARY MATHEWS VW KIA
GARY YEOMANS FORD
GATE CITY MOTOR COMPANY, INC.
GATEWAY MOTORS OF TAMPA
GATOR CHRYSLER-PLYMOUTH, INC.
GATORLAND TOYOTA
GEN-X CORP
GEOFF ROGERS AUTOPLEX
GEORGE NAHAS ENTERPRISES INC
GEORGE WEBER CHEVROLET CO
GEORGES ENTERPRISES, INC.
GEORGIA AUTO BROKERS
GERALDA AUTO SALES
GERMAIN FORD
GERMAIN OF SARASOTA
GERMAIN TOYOTA
GERMAIN TOYOTA
GERRY WOOD HONDA
GETTEL NISSAN INC
GETTEL TOYOTA
GLADDING CHEVROLET, INC.
GLENBROOK DODGE, INC.
GLENBROOK HYUNDAI
GLOBAL MOTORIST
GOLDEN OLDIES
GOOD MOTOR COMPANY
GOOD MOTOR COMPANY LLC
GOOD SAM MOTORS INC
GORDON AUTO WHOLESALE
GORDON CHEVROLET, INC.
GRAHAM AUTO SALES
GRANT MOTORS CORP.
GRASS LAKE CHEVROLET
GRAY EPPERSON MAZDA
GREAT LAKES CHEVROLET BUICK
GREAT LAKES GMC BUICK
GREAT LAKES HYUNDAI, INC.
GREEN FORD, INC
GREENBRIER DODGE OF CHES, INC.
GREENE FORD COMPANY
GREENLIGHT MOTORS, LLC
GREENWAY FORD, INC
GREENWISE MOTORS
GREG SWEET CHEVY BUICK OLDS
 

DEALER NAME

GREG SWEET FORD INC
GRIFFIN FORD SALES, INC.
GROGANS TOWNE CHRYSLER
GROTE AUTOMOTIVE INC
GROUPCAR LLC
GULF ATLANTIC WHOLESALE INC
GULF COAST AUTO BROKERS, INC.
GWINNETT PLACE FORD
GWINNETT SUZUKI
H & H AUTO SALES
H H NISWANDER PONTIAC BUICK CA
HAASZ AUTO MALL, LLC
HAIMS MOTORS II, INC.
HAIMS MOTORS INC
HALEY TOYOTA CERTIFIED
HALEY TOYOTA OF RICHMOND
HAPPY AUTO MART
HAPPY CARS INC
HARBOR CITY AUTO SALES, INC.
HARDIE’S USED CARS, LLC
HARDIN COUNTY HONDA
HARDY CHEVROLET
HARPER AUTO SALE, LLC
HARRELSON NISSA
HATCHER’S AUTO SALES
HATFIELD HYUNDAI
HAWKINSON NISSAN LLC
HAYDOCY PONTIAC-GMC TRUCK INC
HAYES AUTO SALES
HAYES CHRYSLER D/J OF
HEADQUARTER HONDA
HEADQUARTER KIA
HEATH MOTORSPORTS
HEATHS TOYS AUTO SALES
HEBRON AUTO SALES
HENDRICK HONDA
HENDRICK HONDA
HENDRICK HYUNDAI
HENNESSY MAZDA PONTIAC
HENNESSY MAZDA PONTIAC GMC
HERB ADCOX CHEVROLET COMPANY
HERITAGE AUTO SALES, LLC
HERITAGE FORD
HIESTER PREOWNED CLEARANCE CTR
HIGHLINE IMPORTS, INC.
HILBISH MOTORS CO, INC
HILL NISSAN INC
HILLMAN MOTORS, INC.
HOGSTEN AUTO WHOLESALE
HOLLAND ROAD AUTO SALES,INC.
HOLLER CHEVROLET
HOLLER HYUNDAI
HOLLYWOOD CHRYSLER PLYMOUTH
HOLLYWOOD MOTOR CO #1

DEALER NAME

HOLLYWOOD MOTOR CO #3
HOMETOWN AUTO, INC.
HONDA CARS OF BRADENTON
HONDA CARS OF ROCK HILL
HONDA OF FORT MYERS
HONDA OF GAINESVILLE
HONDA OF MENTOR
HONDA OF OCALA
HONDA OF THE AVENUES
HONEST ENGINES
HOOVER AUTOMOTIVE LLC

HOOVER CHRYSLER PLYMOUTH

DODGE

HOOVER MITSUBISHI CHARLESTON
HOSS CERTIFIED PREOWNED VEHICL
HT MOTORS INC
HUBER AUTOMOTIVE
HUBLER CHEVROLET INC
HUBLER NISSAN, INC.
HUNT AUTOMOTIVE, LLC
HUNTLEY CHEVROLET BUICK
HURLEY CHRYSLER JEEP, INC.
HUSTON MOTORS INC.
HWY 150 BUYERS WAY, INC.
HYMAN AUTO OUTLET, LLC
HYUNDIA OF GREER
HYUNDIA OF ORANGE PARK
HZF PLAINWELL
IAD AUTO INC
IDEAL USED CARS INC
IGNITE AUTOMOTIVE
IMAGINE CARS
IMMACULATE AUTO
IMMKE AUTO GROUP, INC.
IMPERIAL MOTORS
IMPORT CARS R US
IMPORT MOTORSPORT, INC
IMPORT’S LTD
INDEPENDENCE AUTO SOLUTIONS LL
INDY’S UNLIMITED MOTORS
INFINITI OF BEDFORD
INFINITI OF COLUMBUS, LLC
INFINITI OF FT. MEYERS
INFINITI OF UNION CITY
INTEGRITY AUTO CONSULTANTS LLC
INTEGRITY AUTO SALES, INC.
INTEGRITY MOTORS, INC
INTERNATIONAL MOTORS CO.
ISLAND MOTOR SALES
IVAN LEONARD CHEVROLET
IVORY CHEVROLET, LLC
J & A AUTO STYLE INC
J & C AUTO SALES
J & M AFFORDABLE AUTO, INC.
 

DEALER NAME

J. FRANLKIN AUTO SALES INC
JACK DEMMER FORD, INC.
JACK PHELAN DODGE OF COUNTRYSI
JACKIE MURPHY’S USED CARS
JACKSON ACURA
JACKSONVILLE CHRYSLER
JADES AUTO SALE INC
JAKE SWEENEY CHEVROLET, INC
JAKE SWEENEY SMARTMART INC
JAKMAX
JARRARD PRE-OWNED VEHICLES
JARRETT FORD HAINES CITY
JARRETT FORD MERCURY
JARRETT FORD OF PLANT CITY
JASON HATFIELD AUTOMOTIVE
JAY HONDA
JAY’S USED CARS, LLC.
JB’S AUTO SALES OF PASCO, INC.
JC AUTOMAX
JC LEWIS FORD, LLC
JEEPSTERS, LLC
JEFF WYLER CHEVROLET, INC
JEFFERSON CHEVROLET CO.
JENKINS ACURA
JENKINS HYUNDAI OF BRADENTON
JENKINS NISSAN, INC.
JEREMY FRANKLINS SUZUKI OF KAN
JERRY ULM DODGE INC.
JERRY WILSON’S MOTOR CARS
JERRYS CHEVROLET
JIM BURKE NISSAN
JIM BUTLER SOUTH COUNTRY
JIM DOUGLAS SALES AND SERVICE
JIM KIRBY AUTOMOTIVE
JIM SKINNER FORD INC
JIM WOODS AUTOMOTIVE, INC.
JIMMIE VICKERS INC.
JKB AUTO SALES
JLP INVESTMENTS
JOEY D’S AUTO OUTLET
JOHN BLEAKLEY FORD
JOHN HIESTER CHEVROLET
JOHN HIESTER CHRYSLER DODGE
JOHN JENKINS, INC.
JOHN JONES CHEVY PONTIAC OLDS
JOHN M. LANCE FORD LLC
JOHNSON AUTOPLEX
JORDAN AUTO SALES INC
JORGENSEN FORD SALES
JOSEPH AUTO CENTER OF CINCINNA
JOSEPH CHEVROLET OLDSMOBILE CO
JOSEPH MOTORS
JOSEPH TOYOTA INC.
JT AUTO INC.

DEALER NAME

JULIANS AUTO SHOWCASE, INC.
JUPITER MOTORS GROUP, LLC
JUST WHEELS USED CARS INC
JUST-IN-TIME AUTO SALES INC
JW AUTO & TRUCK SALES, INC.
K & B FINANCIAL SERVICES INC
K & D AUTO SALES
K & M SUZUKI
K ASANTE AUTO SALES
K T AUTO SALES LLC
KACHAR’S USED CARS, INC.
KANSAS CITY MOTORS
KAR SMART
KARL FLAMMER FORD
KARZ DIRECT
KEFFER HYUNDAI
KEFFER OF MOORESVILLE, LLC
KEFFER PRE-OWNED SOUTH
KEITH HAWTHORNE FORD OF
KEITH HAWTHORNE HYUNDAI
KEITH HAWTHORNE HYUNDAI, LLC
KEITH HAWTORNE FORD
KEITH PIERSON TOYOTA
KELLEY BUICK GMC INC
KELLY & KELLY INVESTMENT CO IN
KELLY FORD
KEN GANLEY NISSAN INC
KEN STILLWELL FORD MERC INC
KENDALL AUTO SALES CORP
KENNYS AUTO SALES, INC
KEN’S AUTOS
KENS KARS
KERRY NISSAN, INC.
KEY CHRYLSER PLYMOUTH INC
KIA ATLANTA SOUTH
KIA AUTO SPORT
KIA OF BEFORD
KIA OF CLEVELAND
KIA OF CONYERS
KIA OF GREER
KIA OF NAPLES
KIA OF WESLEY CHAPEL
KINGDOM CHEVROLET INC
KINGDOM MOTOR CARS
KINGS FORD, INC
KINGS HONDA
KNAPP MOTORS
KNE MOTORS, INC.
KNH WHOLESALE
KNOX BUDGET CAR SALES & RENTAL
KOE-MAK CORP
KR MOTORS LLC
KRAFT MOTORCARS/NISSAN
KUHN HONDA VOLKSWAGON
 

DEALER NAME

LA AUTO STAR, INC.

LAFONTAINE AUTO GROUP

LAGRANGE MOTORS

LAKE KEOWEE CHRYSLER DODGE LLC

LAKE NISSAN SALES, INC.

LAKE PLACID MOTOR CAR, INC

LAKELAND CHRYSLER PLYMOUTH,INC

LAKELAND TOYOTA INC.

LAKESIDE AUTO SALES, INC.

LAKEWOOD AUTOSALES INC

LALLY ORANGE BUICK PONTIAC GMC

LAMAR COOKS AUTO CHOICE INC

LANCASTER MOTOR CO.

LANDERS MCLARTY CHEVROLET

LANDERS MCLARTY SUBARU

LANDMARK AUTO INC

LANDMARK CDJ OF MONROE, LLC

LANG CHEVROLET COMPANY

LARA AUTO SALES, INC.

LARRY HILL IMPORTS

LARRY JAY IMPORTS, INC

LARRY MONTRI MOTORS SALES

LARRY’S AUTO SALES

LARRY’S USED CARS

LASH AUTO SALES, INC.

LCA AUTO WHOLESALES, LTD

LEADER FORD

LEBANON FORD LINCOLN

LEE KIA

LEE NISSAN

LEE’S AUTO SALES, INC

LEGACY AUTO SALES, INC.

LEGACY NISSAN

LEGACY TOYOTA

LEIKIN OLDSMOBILE INC

LEITH LINCOLN MERCURY

LEXUS OF CLEARWATER

LIBERTY AUTO OUTLET INC

LIBERTY FORD LINCOLN MERC INC

LIBERTY FORD SOLON, INC.

LIBERTY FORD SOUTHWEST, INC

LIBRA AUTO

LIGHTNING MOTORS LLC

LIL ROB’S AUTO SALES

LIMA AUTO MALL, INC.

LIMBAUGH TOYOTA, INC.

LIPTON TOYOTA

LMN AUTO INC

LOGANVILLE FORD

LOMBARD AUTO EXCHANGE INC

LONDOFF JOHNNY CHEVROLET INC

LONGSTREET AUTO

LONGWOOD KIA MITSUBISHI

LOU BACHRODT CHEVROLET

DEALER NAME

LOU SOBH USED CARS & TRUCKS

LOUDON MOTORS, INC

LOWERY BROS. OVERSTOCK LLC

LOWEST PRICE AUTO BROKERS INC

LOWEST PRICE TRANSPORTATION

LUCKY SEVEN MOTORS INC

LUXURY AUTO SALES LLC

LUXURY CARS & FINANCIAL, INC.

LUXURY IMPORTS AUTO SALES

LYNN LAYTON CADILLAC NISSAN IN

M & D AUTO SALES LLC

M & L IMPORTS INC

M & L MOTOR COMPANY, INC.

M & M AUTO GROUP INC

M & M AUTO SUPER STORE

MACHADO AUTO SELL LLC

MACKENNEY AUTO SALES

MACON DEALS INC

MAHER CHEVROLET INC

MAIN STREET AUTO SALES

MALIBU MOTORS

MALPASS AUTO SALES INC

MANNING MOTORS, INC.

MANNIX MOTORS

MARANATHA CAR CO

MARCH MOTORS INC.

MARIETTA AUTO MALL CENTER

MARIETTA AUTO MART

MARK BRADLEY AUTO SALES

MARKAL MOTORS INC

MARLOZ OF STATESVILLE

MAROONE CHEVROLET

MAROONE CHEVROLET

MAROONE CHEVROLET

MAROONE CHEVROLET OF

MAROONE FORD OF MARGATE

MAROONE HONDA OF HOLLYWOOD

MARSHALL MOTORS OF FLORENCE

MARTINS USED CARS INC

MARTY FELDMAN CHEVY

MASHBURN MOTORS

MASON CAR COMPANY

MASTER CAR INTERNATIONAL, INC

MATHEWS BUDGET AUTO CENTER

MATHEWS FORD INC.

MATHEWS FORD OREGON, INC

MATT CASTRUCCI

MATTHEWS MOTOR COMPANY

MATTHEWS MOTORS INC.

MAXIMUM DEALS, INC.

MAXTON MOTORS OF BENTON

HARBOR

MAXTOWN MOTORS

MAZ AUTO INC

MAZDA SAAB OF BEDFORD

 

DEALER NAME

MCCLUSKEY CHEVROLET, INC
MCELVEEN PONTIAC BUICK GMC
MCGHEE AUTO SALES INC.
MCHUGH INC
MCJ AUTO SALES OF CENTRAL FLOR
MCKENNEY CHEVROLET
MCKENNEY DODGE LLC
MCKENNEY-SALINAS HONDA
MCPHAILS AUTO SALES
MCVAY MOTORS, INC.
MECHANICSVILLE HONDA
MECHANICSVILLE TOYOTA
MEDINA AUTO BROKERS
MENTOR IMPORTS,INC.
MERCEDES BENZ OF SARASOTA
MEROLLIS CHEVROLET SALES
METRO AUTO SALES, LLC
METRO HONDA
METROLINA S & H AUTO SALES INC
MICCO MOTORS
MICHAEL’S AUTO SALES CORP
MICHIGAN CAR & TRUCK, INC.
MICRO FINANCE LLC
MID AMERICA AUTO GROUP
MID FLORIDA WHOLESALERS INC
MIDDLE TENNESSEE AUTO MART LLC
MIDDLETON USED CARS
MIDDLETOWN FORD, INC
MIDFIELD MOTOR COMPANY, INC.
MID-LAKE MOTORS, INC.
MIDWEST AUTO GROUP LLC
MIDWESTERN AUTO SALES, INC.
MIKE BASS FORD
MIKE CASTRUCCI FORD OF ALEX
MIKE CASTRUCCI FORD SALES
MIKE PRUITT HONDA, INC
MIKE SHAD NISSAN
MIKE SWANEY BUICK GMC TRUCK
MIKE THOMAS AUTO SALES
MIKE WILSON CHEVROLET
MIKE’S AUTO FINANCE
MIKES TRUCKS AND CARS
MILESTONE MOTORS, L.L.C.
MILLEDGEVILLE HYUNDAI
MILLENIUM AUTOMOTIVE GROUP
MILLENNIUM AUTOMOTIVE SALES &
MILTON DODGE CHRYSLER JEEP
MINIVAN SOURCE, INC.
MIRACLE CHRYSLER DODGE JEEP
MISSION AUTOMOTIVE, LLC
MITCH SMITH CHEVROLET
MODERN CORP
MONROE DODGE/CHRYSLER INC.
MONTGOMERY MOTORS

DEALER NAME

MONTROSE FORD LINCOLN/MERCURY
MONTROSE TRI COUNTY KIA
MOODY MOTORS
MOORE NISSAN
MOORES AUTO CENTER INC
MOORING AUTOMOTIVE GROUP LLC
MORONI AUTO SALES INC
MORSE OPERATIONS INC.
MOSS ROBERTSON CADILLAC MAZDA
MOTOR CAR CONCEPTS II
MOTOR CARS HONDA
MOTOR NATION LLC
MOTORCARS TOYOTA
MOTORMAX OF GR
MOTORVATION, LLC
MR CARS, INC.
MULLINAX FORD OF PALM BEACH
MURPHY AUTO SALES
MURPHY MOTORS
MURRAY’S USED CARS
MY AUTO IMPORT CENTER
MYRTLE BEACH TNT AUTO SALES LL
N & H AUTO SALES LLC
N T I
NALLEY HONDA
NALLEY INFINITI
NAPLETON’S HYUNDAI
NAPLETON’S NORTH PALM AUTO PK
NAPLETON’S RIVER OAKS CHRYSLER
NAVIGATOR DEALER GROUP
NEW LIFE AUTO SALES
NEW LIFE AUTO SALES LLC
NEW WAY AUTOMOTIVE
NEWCOMBS SERVICE, INC
NEWTON’S AUTO SALES, INC.
NEXT GENERATION MOTORS, INC.
NEXT LEVEL MOTORCARS
NICHOLAS DATA
NICKS AUTO MART
NIMNICHT PONTIAC
NISSAN OF MELBOURNE
NISSAN OF SOUTH HOLLAND
NISSAN OF ST AUGUSTINE
NISSAN ON NICHOLASVILLE
NISSAN SOUTH
NORTH ATLANTA AUTO SUPERSTORE
NORTH BROTHERS FORD, INC
NORTH POINT CHRYSLER JEEP
NORTH SCOTT AUTO SALES
NORTH TAMPA CHRYSLER JEEP DODG
NORTHGATE AUTO SALES
NORTHGATE FORD LINCOLN MERCURY
NORTHWOOD AUTO SALES LLC
NXT CARS
 

DEALER NAME

O’DANIEL MOTOR SALES, INC.
ODELLS AUTO SALES INC
O’DONNELL LUTZ CARS & TRUCKS
OFF LEASE ONLY
OK MOTORS LLC
OLD SOUTH SALES INC.
OLIVER C. JOSEPH, INC.
ON THE ROAD AGAIN, INC.
ON TRACK AUTO MALL, INC.
ONE SOURCE AUTOMOTIVE SOLUTION
ORANGE PARK MITSUBISHI
ORDERACAR.COM INC
ORLANDO AUTO BROKERS, INC.
ORLANDO AUTOS
OSCAR MOTORS CORPORATION
OSMAN AUTOMOTIVE COMPANY INC
O’STEEN VOLVO VOLKSWAGON
OUTDOORS UNLIMITED
OUZTS MOTORS & USED CARS
OXMOOR FORD LINCOLN MERCURY
OXMOOR MAZDA
OXMOOR TOYOTA
P&L AUTO SALES
PACIFIC AUTO MART LLC
PALATKA FORD-MERCURY, INC.
PALM BAY MOTORS
PALM BEACH TOYOTA
PALM CHEVROLET
PALM TREE AUTO SALES
PALMER HUFFMAN AUTO OUTLET
PALMETTO FORD
PALMETTO PREOWNED
PALMETTO WHOLESALE MOTORS
PANHANDLE AUTOMOTIVE INC.
PAQUET AUTO SALES
PARK AUTO MALL, INC
PARKS AUTOMOTIVE, INC
PARKS CHEVROLET, INC
PARKWAY FORD, INC.
PARKWAY MOTORS INC
PARKWAY MOTORS INC
PARS IMPORTS, INC
PATRICK O’BRIEN JR, CHEV. INC.
PATRIOT AUTOMOTIVE SALES &
PATRIOT CHEVROLET
PAUL MILLER FORD, INC.
PAUL’S TRADING STATION LLC
PAYDAY MOTOR SALES
PEARCE AUTO SALES, INC
PEARSON FORD, INC.
PEARSON IMPORTS, INC.
PEDIGO’S HEARTLAND CROSSING
PELHAM’S AUTO SALES
PENSACOLA AUTO BROKERS, INC

DEALER NAME

PERFORMANCE CHEVROLET SUBARU
PETE MOORE CHEVROLET, INC
PETE MOORE IMPORTS, INC
PHILLIPS BUICK PONTIAC GMC INC
PHILLIPS CHRYSLER-JEEP, INC
PHILMARK INC
PIEDMONT AUTO SALES NETWORK
PILES CHEV-OLDS-PONT-BUICK
PINE ISLAND AUTO SALES
PINEVILLE IMPORTS
PINNACLE AUTO HOLDINGS
PINNACLE AUTO SALES
PIRTLE & HOWERTON AUTOMOTIVE
PLAINFIELD AUTO SALES, INC.
PLANET AUTO
PLANET MOTORS
PLANT CITY AUTOMALL
PLATINUM MOTOR CARS
PLATTNER’S
PLAZA LINCOLN MERCURY
PLAZA MOTORS, INC.
PLAZA PONTIAC BUICK GMC INC
POMOCO CHRYSLER/PLY OF HAMPTON
POMPANO AUTOMOTIVE ASSOCIATES
PORT MOTORS
POTAMKINS PLANET DODGE CHRYSLE
POWER PONTIAC GMC OLDSMOBILE
PREFERRED AUTO
PREMIER AUTO BROKERS, INC.
PREMIER DODGE CHRYSLER JEEP
PREMIER MOTORCAR GALLERY
PREMIERE CHEVROLET, INC.
PREMIUM AUTO SALES AND SERV
PREMIUM MOTORS LLC
PRESTIGE AUTO SALES & RENTALS
PRESTIGE CARS INC
PRESTON AUTO OUTLET
PRESTON HYUNDAI
PRICED RIGHT CARS, INC
PRIDE AUTO SALES LLC
PRIME MOTORS INC
PRIME MOTORS, INC.
PRO CAR II
PRO MOTION CO INC
PROCAR
PROFESSIONAL AUTO SALES
PROFESSIONAL AUTO SALES
PUGMIRE FORD LLC
PUGMIRE ISUZU
QUALITY BANK REPOS
QUALITY GENERAL AUTO SALES,INC
QUALITY IMPORTS
QUALITY IMPORTS, INC
R & B CAR COMPANY
 

DEALER NAME

R & N AUTO SALES INC
R.H. CARS, INC.
R.K. CHEVROLET
RANKL & RIES MOTORCARS, INC
RANSY WISE CHEVROLET BUICK
RAY PEARMAN LINCOLN MERCURY
RAY SKILLMAN CHEVROLET
RAY SKILLMAN EASTSIDE
RAY SKILLMAN FORD INC.
RAY SKILLMAN NORTHEAST BUICK G
RAY SKILLMAN NORTHEAST MAZDA
RAY SKILLMAN WESTSIDE
RAYMOND CHEVROLET KIA
RE BARBER FORD INC
RECKER AUTO SALES
REDMOND AUTOMOTIVE
REDSKIN AUTO SALES INC
REED LALLIER CHEVROLET
REEL’S AUTO SALES LLC
REGAL PONTIAC, INC.
REIDSVILLE NISSAN INC
RELIABLE TRUCK SALES
RELIABLE USED CARS
RICE TOYOTA
RICH MORTONS GLEN BURNIE
RICHARD ANDERSON MOTORS LLC
RICK CASE ATLANTA
RICK CASE MOTORS, INC.
RICK HENDRICK CHEVROLET
RIGHTWAY AUTOMOTIVE CREDIT
RIOS MOTORS
RIVER CITY AUTO CENTER
RIVER CITY AUTO SALES INC
RIVERCHASE KIA
RIVERGATE TOYOTA
RIVERSIDE MOTORS, INC
RIVERTOWN TOWN AUTO SALES INC
ROBERTS MOTORS
ROBKE CHEVROLET COMPANY
ROCK BOTTOM AUTO SALES, INC.
ROCK CITY AUTO SALES
ROCK SOLID AUTOMOTIVE INC
ROD HATFIELD CHEVROLET, LLC
ROD HATFIELD CHRYSLER DGE JEEP
ROGERS AUTO GROUP
ROSE AUTOMOTIVE INC
ROSE CITY MOTORS
ROSE CITY MOTORS
ROSE CITY MOTORS 2
ROSS’S AUTO SALES
ROSWELL AUTO IMPORT
ROUEN CHRYSLER DODGE JEEP INC
ROUEN MOTORWORKS LTD
ROUNTREE-MOORE INC

DEALER NAME

ROUTE 4 AUTO STORE
ROWE AUTOMOTIVE LLC
ROY O’BRIEN, INC
ROYAL 1 AUTO SALES, LLC
ROYAL AUTO SALES
ROYAL OAK FORD SALES, INC.
ROYAL PALM TOYOTA
RP CUSTOME INC
RPM AUTO SALES LLC
RYAN’S AUTO SALES
SABISTON MCCABE AUTO SOLUTIONS
SALTON MOTOR CARS INC
SAM GALLOWAY FORD INC.
SANDERSON AUTO SALES INC
SANSING CHEVROLET, INC
SANTACARS CORP.
SARASOTA FORD
SATURN OF GRAND RAPIDS
SATURN OF GREENSBORO
SAULS MOTOR COMPANY, INC.
SAV MOR AUTOS
SAVANNAH AUTO
SAVANNAH AUTOMOTIVE GROUP
SAVANNAH MOTORS
SCARRITT MOTORS INC
SCHULTZ AUTO BROKERS
SCHUMACHER AUTOMOBILE, INC
SCHUMACHER MOTOR SALES
SCOTT EVANS CHRYSLER PLYMOUTH
SELECT AUTO
SELECT IMPORTS
SELECT IMPORTS
SELECT MOTORS OF TAMPA INC.
SEMINOLE SUBARU INC.
SERPENTI CHEVROLET OF ORVILLE
SERPENTINI CHEVROLET OF
SERRA AUTOMOTIVE
SEXTON AUTO SALES, INC
SHAMBURG AUTO SALES
SHAN AUTO SALES
SHARPNACK FORD
SHAWNEE MOTORS GROUP
SHEEHAN PONTIAC
SHEEHY FORD INC
SHELBY MOTORS LLC
SHELBYVILLE AUTO SALES LLC
SHERMAN DODGE
SHERWOOD AUTO & CAMPER SALES
SHOALS UNIVERSITY KIA
SHOWDOWN MUSCLE CARS
SHULAK MOTORS LLC
SHUMAN MOTOR SALES INC
SHUTT ENTERPRISES
SIGNATURE FORD LINCOLN MERCURY
 

DEALER NAME

SLONE AUTOMOTIVE ENTERPIRSE
SMITH & CURRIE MOTOR CO
SMITH FIELD AUTO CENTER LLC
SOUTH 71 AUTO SALES
SOUTH ATLANTA INVESTMENTS INC
SOUTH I-75 CHRYSLER DODGE JEEP
SOUTH MOTOR COMPANY OF DADE
SOUTH OAK DODGE INC
SOUTHEAST JEEP EAGLE
SOUTHERN AUTOMOTIVE ENTERPRISE
SOUTHERN CAR SALES INC
SOUTHERN STATES NISSAN, INC.
SOUTHERN TRUST AUTO SALES
SOUTHERN USED CARS
SOUTHFIELD JEEP-EAGLE, INC.
SOUTHGATE FORD
SOUTHPORT MOTORS
SOUTHTOWNE ISUZU
SOUTHWEST AUTO SALES
SPARTAN LINCOLN MERCURY
SPARTANBURG CHRYSLER JEEP INC
SPITZER DODGE
SPITZER MOTOR CITY
SPORT MAZDA
SPORT MITSUBISHI
SPORTS & IMPORTS AUTOS INC
ST LOUIS CARS & CREDIT INC
STADIUM CHEVROLET BUICK
STADIUM MAZDA
STAN’S CAR SALES
STAR AUTO SALES
STARRS CARS AND TRUCKS, INC
STATELINE MOTOR COMPANY LLC
STEARNS MOTORS OF NAPLES
STEELE AUTO SALES LLC
STEPHEN A FINN AUTO BROKER
STEVE AUSTINS AUTO GROUP INC
STEVE CALDWELL AUTOMOTIVE LLC
STEVE MOORE CHEVROLET
STEVE RAYMAN CHEVROLET, LLC
STEWART AUTO GROUP OF
STEWART MOTORS
STIENER AUTOMOTIVE GROUP
STL AUTO BROKERS
STOKES HONDA CARS OF BEAUFORT
STOKES MITSUBISHI
STONE MOUNTAIN CHRYSLER JEEP
STOUT SALES
STRICKLAND AUTO SALES, INC.
STRIPLAND MOTOR COMPANY INC
STROM ALTMAN SUZUKI INC
STYKEMAIN CHEVROLET PONTIAC
SUBARU OF DAYTON
SUBARU OF JACKSONVILLE INC.

DEALER NAME

SUBARU SOUTH BLVD
SUBURBAN AUTO SALES
SUBURBAN CHRYSLER JEEP DODGE
SUBURBAN FORD OF STERLING
SUBURBAN MOTORS INC
SUBURBAN OF W. MICHIGAN
SULLIVAN BUICK GMC INC
SULLIVAN PONTIAC CADILLAC GMC
SUMITT PRE-OWNED OF DURHAM
SUMMIT PLACE KIA CANTON
SUMMIT PLACE KIA MT. CLEMENS
SUMMIT PRE-OWNED OF RALEIGH
SUN HONDA
SUN TOYOTA
SUNBELT CHRYSLER JEEP DODGE
SUNBELT’S FORD TWON OF ALBANY
SUNCOAST CHRYSLER PLYMOUTH
SUNCOAST KIA
SUNNY FLORIDA MOTORS, INC.
SUNRISE AUTOMOTIVE
SUNSET DODGE, INC
SUNSHINE AUTO BROKERS INC
SUNTRUP NISSAN VOLKSWAGEN
SUPERIOR ACURA
SUPERIOR AUTO SALES
SUPERIOR CHEVROLET
SUPERIOR CHRYSLER DODGE JEEP
SUPERIOR HONDA
SUPERIOR MOTORS
SUPERIOR MOTORS NORTH
SUPERIOR PONTIAC BUICK GMC,INC
SUPERSTORE BUYHERE PAYHERE LLC
SUPRA ENTERPRISES
SUSKIS AUTO SALES
SUTHERLIN NISSAN
SUTHERLIN NISSAN MALL OF GA.
SUTHERLIN NISSAN OF FT. MYERS
SUZUKI OF GLENVIEW
SUZUKI OF NASHVILLE
SWEENEY BUICK PONTIAC GMC
SWEENEY CHEVROLET
SWEENEY CHRYSLER DODGE JEEP
T & L AUTO SALES
T N S AUTO SALES, INC.
TAMERON AUTOMOTIVE EASTERN
TAMERON AUTOMOTIVE GROUP
TAMI AUTO SALES INC
TAMIAMI FORD, INC.
TAMPA AUTO SOURCE INC
TAMPA BAY AUTO FINANCE
TAMPA BAY TRADING INC
TAMPA HONDALAND
TAPPER AUTO SALES
TARGET AUTOMOTIVE
 

DEALER NAME

TATE DODGE CHRYSLER JEEP INC
TAYLOR AUTO SALES
TAYLOR AUTO SALES INC.
TAYLOR MORGAN INC
TAYLOR’S AUTO SALES
TEAM AUTOMOTIVE
TEAM HONDA
TEAM NISSAN OF MARIETTA
TED’S AUTO SALES, INC.
TEMPEST MOTORS
TENA AUTOMOTIVE LLC
TENNYSON CHEVROLET, INC.
TERRY LEE HONDA
TERRY REID KIA
TERRY’S AUTO SALES, INC.
THE 3445 CAR STORE, INC.
THE AUTO GROUP LLC
THE CAR AND TRUCK STORE LLC
THE CAR CABANA OF
THE CAR COMPANY SUZUKI
THE CAR CONNECTION, INC.
THE CAR MAN LLC
THE CAR SHOPPE LLC
THE CAR STORE
THE CAR STORE INC.
THE CARSMART GROUP LLC
THE KIA STORE
THE LUXURY AUTOHAUS INC.
THE MINIVAN PLACE
THE PEOPLES CAR COMPANY
THE PEOPLES PUBLIC AUTO AUCTIO
THOMAS & SON INC.
THOMAS AUTO MART, INC.
THOMAS CHEVROLET BUICK PONTIAC
THOMAS MOTORS OF ILLINOIS INC
THOMASVILLE TOYOTA
THOMPSON AUTO CENTER LLC
THOMPSON AUTOMOTIVE, INC.
THOMPSON FORD
THORNTON CHEVROLET, INC
THORNTON ROAD HYUNDAI
THRIFTY CAR SALES
THURSTON FLEET SALES
TICO & BORI AUTO SALES, INC.
TIFFIN FORD LINCOLN MERCURY
T-MOTOR SALES
TNT CHRYSLER DODGE JEEP
TOM BUSH AUTO PLEX
TOM GILL CHEVROLET
TOM HOLZER FORD
TOM KELLEY BUICK GMC PONTIAC
TOM WOOD FORD
TOM WOOD TOYOTA, INC.
TOMLINSON MOTOR COMPANY OF

DEALER NAME

TONY BETTEN & SONS FORD
TONY ON WHEELS, INC.
TOP GUN AUTO SALES LLC
TOTH BUICK
TOWN & COUNTRY AUTO & TRUCK
TOWN & COUNTRY AUTO SALES, LLC
TOWN & COUNTRY DODGE, INC
TOWN & COUNTRY FORD, INC.
TOWN & COUNTRY SELECT
TOWN CENTER KIA
TOWN CENTER NISSAN
TOWNE EAST AUTO
TOWNSEND IMPORTS
TOYOTA DIRECT
TOYOTA OF CINCINNATI CO, INC.
TOYOTA OF GREER
TOYOTA OF HOLLYWOOD
TOYOTA OF LOUISVILLE, INC.
TOYOTA OF MCDONOUGH
TOYOTA OF WINTER HAVEN
TOYOTA SOUTH
TOYOTA WEST/SCION WEST
TOYOTA-LEXUS OF MELBOURNE
TRADEWINDS MOTOR CENTER
TRIANGLE MOTORSPORTS
TRI-CITY MOTORS INC #2
TRI-COUNTY CHRYSLER PRODUCTS
TRI-COUNTY MOTORS
TRINITY AUTOMOTIVE
TROPIC AUTO & MARINE
TROPICAL AUTO SALES
TROY FORD INC
TRU AUTO BROKERS INC
TRUCK TOWN INC
TRYON AUTO MALL
TWO RIVERS USED CAR STORE
TYRONE SQUARE MAZDA
U RIDE AUTO SALES
U.S. AUTO GROUP, INC.
ULTIMATE IMAGE AUTO, INC
UNDERWOOD MOTORS INC
UNION CITY NISSAN
UNITED AUTO BROKERS
UNITED SALES AND LEASING, INC
UNIVERSAL AUTO SALES OF PLANT
UNIVERSITY HYUNDAI OF DECATUR
UNIVERSITY MOTORS
US 1 CHRYSLER DODGE JEEP
US AUTO MART INC
US AUTOS, INC.
US MOTORS
USA AUTO & LENDING INC
USA MOTORCARS
V AND E ENTERPRISES
 

DEALER NAME

VA BEACH AUTO SHOWCASE, INC.
VADEN NISSAN, INC.
VAN DEVERE, INC
VAN PAEMEL SALES
VANN GANNAWAY CHEVY, INC
VANN YORK NISSAN, INC.
VANN YORK PONTIAC BUICK GMC
VANN YORK PONTIAC, INC.
VARSITY LINCOLN MERCURY
VEHICLES 4 SALES, INC.
VELOCITY MOTORS INC
VETERANS FORD
VIC OSMAN LINCOLN MERCURY, INC
VICTORIA MOTORS, LLC
VICTORY CHEVROLET LLC
VICTORY NISSAN
VILLAGE AUTO OUTLET INC
VIN DEVERS, INC
VINCE WHIBBS PONTIAC-GMC
VOGUE MOTOR CO INC
VOLVO SALES & SERVICE CENTER I
VORDERMAN MOTOR WERKS INC
VW OF ORANGE PARK
W.P.B. AUTOMART/KIA
WADE FORD INC
WADE RAULERSON HONDA
WALDORF FORD, INC.
WALKER AUTO SALES
WALKER FORD CO., INC.
WALLACE MAZDA
WALLACE NISSAN
WALSH AUTO BODY, INC
WALSH HONDA
WARD AUTO SALES
WAYLAND MOTOR SALES
WAYNE AKERS FORD INC.
WAYNE AUTO WORLD, INC
WAYNESVILLE AUTO MART
WE NO KARS LLC
WEINLE AUTO SALES
WESH INC
WEST AUTO SALES LLC
WEST COAST CAR & TRUCK SALES
WEST END AUTO SALES & SERVICE
WEST SIDE TOYOTA
WESTON NISSAN VOLVO
WESTSIDE AUTO
WHEELS & DEALS AUTO SALES
WHEELS MOTOR SALES
WHEELZ AND DEALZ LLC
WHITEWATER MOTOR COMPANY INC
WHITTEN AUTO CENTER
WHOLESALE DIRECT
WHOLESALE DIRECT AUTO SALES

DEALER NAME

WHOLESALE, INC
WILLETT HONDA SOUTH
WILLIAMSBURG CHRY JEEP
WILLS MOTOR SALES
WILMINGTON AUTO CENTER
WILMINGTON MOTORS INC
WINTER HAVEN CHRYSLER PLYMOUTH
WINTER PARK AUTO MALL CORP
WOODY SANDER FORD, INC.
WORLD CAR CENTER & FINANCING
WORLD CLASS MOTORS LLC
WORLD FORD STONE MOUNTAIN
WORLEY AUTO SALES
WOW CAR COMPANY
WYRICK AUTO SALES
XL1 MOTORSPORTS, INC
XPERT AUTO
X-TREME AUTO CENTER LLC
YADKIN ROAD AUTO MART
YARK AUTOMOTIVE GROUP, INC
YERBY BAUER AUTO SALES
YERTON LEASING & AUTO SALES
YES U CAN USED AUTO SALES INC
YOU SELECT AUTO SALES
YOUR DEAL AUTOMOTIVE
YOUR KAR CO INC
ZEIGLER CHRYSLER DODGE JEEP
ZOOM HOLDING GROUP LLC
 

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13A-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Peter L. Vosotas, certify that:

 

  1. I have reviewed this quarterly report on Form 10-Q of Nicholas Financial, Inc.;

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

 

  a) Designed such disclosure controls and procedures, or caused such controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 9, 2011          

/s/ Peter L Vosotas

      Peter L. Vosotas
     

President and Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13A-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ralph T. Finkenbrink certify that:

 

  1. I have reviewed this quarterly report on Form 10-Q of Nicholas Financial, Inc.;

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a) Designed such disclosure controls and procedures, or caused such controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 9, 2011          

/s/ Ralph T Finkenbrink

      Ralph T. Finkenbrink
     

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

EXHIBIT 32.1

CERTIFICATION of the Chief Executive Officer

Pursuant to 18 U.S.C. § 1350

Solely for the purpose of complying with 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, the undersigned President and Chief Executive Officer of Nicholas Financial, Inc. (the “Company”), hereby certify that the Quarterly Report on Form 10-Q of the Company for the three and nine months ended September 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Peter L Vosotas

Peter L. Vosotas
President and Chief Executive Officer
Dated: November 9, 2011

EXHIBIT 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. § 1350

Solely for the purpose of complying with 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, the undersigned Senior Vice President and Chief Financial Officer of Nicholas Financial, Inc. (the “Company”), hereby certify that the Quarterly Report on Form 10-Q of the Company for the three and nine months ended September 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Ralph T Finkenbrink

Ralph T. Finkenbrink
Senior Vice President and Chief Financial Officer
Dated: November 9, 2011