Nicholas Financial Reports Record 1st Quarter Results

Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that involve risks and uncertainties including competitive factors, the management of growth, and other risks detailed from time to time in the Company’s filings and reports with the Securities and Exchange Commission including the Company’s Annual Report on Form 10-KSB for the year ended March 31, 2004. Such statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to Company management. Actual events or results may differ materially.

NICHOLAS FINANCIAL, INC.
CONSOLIDATED INCOME STATEMENTS
(Unaudited, Dollars in Thousands, Except Per Share Amounts)

	Three Months Ended June 30
	2004	2003
Revenue:
Finance charge income	$ 7,214	$ 5,988
Other Income	63	72
	7,277	6,060
Expenses:
General & administrative expenses	3,157	2,614
Provision for credit losses	581	580
Interest expense	915	987
	4,653	4,181

Income before income taxes	2,624	1,879
Income tax provision	992	713
Net income	$ 1,632 =======	$ 1,166 =======
Earnings per share:
Basic	$ .29 =======	$ .23 =======
Diluted	$ .27 =======	$ .22 =======
Weighted average shares	5,669,552 =======	5,006,926 =======


Weighted average shares and assumed dilution	6,063,622 =======	5,300,458 =======

NICHOLAS FINANCIAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Dollars in Thousands)

	June 30,	March 31,
	2004	2004
Cash	$ 1,781	$ 958
Finance receivables, net	102,031	97,237
Other Assets	4,788	5,028
Total Assets	$ 108,600 =======	$ 103,223 =======
Line of credit	$ 60,060	$ 67,510
Other notes payable	630	682
Other liabilities	7,886	7,585
Total liabilities	68,576	75,777
..
Shareholder's equity	40,024	27,446
Total liabilities & Shareholders' equity	$ 108,600 =======	$ 103,223 =======

Portfolio Summary	Three Months Ended June 30
	2004	2003
Average finance receivables, net of unearned interest (1)	$ 123,025,445 ============	$ 107,212,467 ============
Average indebtedness (2)	63,714,820 ============	62,239,301 ============
Finance revenue (3)	7,214,258	5,988,473
Interest expense	915,320	987,328
Net finance revenue	$ 6,298,938 ============	$ 5,001,145 ============
Weighted average contractual rate (4)	24.29% ============	24.10% ============
Average Cost of Borrowed Funds (2)	5.75% ============	6.35% ============
Gross Portfolio Yield (5)	23.46%	22.34%
Interest expense as a percentage of average finance receivables, net of unearned interest	2.98%	3.68%
Provision for credit losses as a percentage of average finance receivables, net of unearned interest	1.89%	2.16%
Net portfolio yield (5)	18.59%	16.50%
Operating expenses as a percentage of average finance receivables, net of unearned interest (6)	10.04%	9.43%
Operating expenses as a percentage of average finance receivables, net of unearned interest (7)	8.55% ============	7.07% ============
Write-off to liquidation (8)	5.46%	7.76%
Net charge-off percentage (9)	4.65%	6.64%


(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 and notes payable-related party. Average cost of borrowed funds represents interest expense as a percentage of average indebtedness. (3) Finance revenue does not include revenue generated by NDS. (4) Weighted average contractual rate represents the weighted average annual percentage rate (APR) of all Contracts purchased and direct loans originated during the fiscal years ended March 31, 2004 and 2003, respectively. (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) Operating expenses represent total expenses, less interest expense, the provision for credit losses and operating costs associated with NDS. (7) Pre-tax yield represents net portfolio yield minus operating expenses as a percentage of average finance receivables, net of unearned interest. (8) Write-off to liquidation percentage is defined as net charge-offs divided by liquidation. Liquidation is defined as beginning receivable balance plus current period purchases minus voids and refinances minus ending receivable balance. (9) Net charge-off percentage represents net charge-offs divided by average finance receivables, net of unearned interest, outstanding during the period.

The following tables present certain information regarding delinquency rates experienced by the Company with respect to Contracts and under its direct loan program.
	At June 30,
	2004		2003
Contracts
Gross Balance Outstanding	$ 159,959,107		$ 138,823,707

Delinquencies	Dollar Amount	Percent	Dollar Amount	Percent

30 to 59 days	$2,704,294	1.69%	$2,647,022	1.91%
60 to 89 days	539,691	0.34%	736,415	0.53%
90 + days	219,687	0.14%	307,405	0.22%

Total Delinquencies	$3,463,672	2.17%	$3,690,842	2.66%

Direct Loans
Gross Balance Outstanding	$ 4,726,746		$ 4,346,709
..
Delinquencies

30 to 59 days	$26,903	0.57%	$49,582	1.14%
60 to 89 days	20,089	0.43%	12,760	0.29%
90 + days	26,998	0.57%	38,609	0.89%

Total Delinquencies	$73,990	2.17%	$100,951	2.32%

The amounts shown in the table below represent the amount of finance receivables purchased, net of unearned interest
	Three Months Ended June 30
State	2004	2003
FL	$ 11,020,839	$ 10,148,495
GA	2,510,543	2,331,056
NC	2,153,230	1,998,035
SC	1,134,618	760,698
OH	3,251,208	3,125,301
MI	951,131	455,534
VA	1,377,750	17,040
Total	$22,399,319 ============	$18,836,159 ============

The following table represents information on Contracts purchased by the Company, net of unearned interest.
	Three Months Ended June 30
Contracts	2004	2003
Purchases	$ 22,399,319	$ 18,836,159
Weighted APR	24.11%	23.90%
Average Discount	8.76%	8.96%
Average Term (months)	44	44
Average Loan	$ 8,275	$ 8,186
Number of Contracts	2,707	2,301