Nicholas Financial Reports Record 3rd 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 December 31,		Nine Months Ended December 31,
	2004	2003	2004	2003
Revenue:
Finance charge income	$ 8,485	$ 6,335	$ 23,496	$ 18,397
Other income	56	50	155	193
	8,541	6,385	26,651	18,590
Costs and expenses:
Operating expenses	3,506	2,700	9,930	8,090
Provision for losses	566	633	1,806	1,617
Interest expense	909	950	2,720	2,906
	4,981	4,283	14,456	12,613
Income before income taxes	3,560	2,102	9,195	5,977
Income tax provision	1,346	796	3,483	2,256
Net income	$ 2,214 =======	$ 1,306 =======	$ 5,712 =======	$ 3,721 =======
..
Earnings per share:
Basic	$ 0.34 =======	$ 0.26 =======	$ 0.92 =======	$ 0.74 =======
Diluted	$ 0.32 =======	$ 0.24 =======	$ 0.86 =======	$ 0.69 =======
..
Weighted average shares	6,514,634 =======	5,064,623 =======	6,227,129 =======	5,036,730 =======
..
Weighted average shares and assumed dilution	6,929,919 =======	5,438,989 =======	6,629,730 =======	5,395,815 =======

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

	December 31,	March 31,
	2004	2004
Cash	$ 1,494	$ 958
Finance receivables, net	106,989	97,237
Other Assets	5,546	5,028
Total Assets	$ 114,029 =======	$ 103,223 =======
Line of credit	$ 62,208	$ 67,510
Other notes payable	1,552	1,593
Other liabilities	6,460	6,674
Total liabilities	70,220	75,777
..
Shareholder's equity	43,809	27,446
Total liabilities & Shareholders' equity	$ 114,029 =======	$ 103,223 =======

Portfolio Summary	Three Months Ended December 31		Nine Months Ended December 31
	2004	2003	2004	2003
Average finance receivables, net of unearned interest (1)	$ 130,157,442 ============	$ 112,338,303 ============	$ 127,149,953 ============	$ 110,248,781 ============
Average indebtedness (2)	$ 63,908,352 ============	$ 66,328,452 ============	$ 63,564,709 ============	$ 64,243,278 ============
Finance revenue (3)	$ 8,484,354	$ 6,334,652	$ 23,495,609	$ 18,397,452
Interest expense	909,468	950,109	2,719,551	2,905,747
Net finance revenue	$ 7,574,886 ============	$ 5,384,543 ============	$ 20,776,058 ============	$ 15,491,705 ============
Weighted average contractual rate (4)	23.65% ============	23.85% ============	23.90% ============	24.02% ============
Average Cost of Borrowed Funds (2)	5.69% ============	5.73% ============	5.70% ============	6.03% ============
Gross Portfolio Yield (5)	26.07%	22.56%	24.63%	22.25%
Interest expense as a percentage of average finance receivables, net of unearned interest	2.79%	3.38%	2.85%	3.51%
Provision for credit losses as a percentage of average finance receivables, net of unearned interest	1.74%	2.25%	1.89%	1.96%
Net portfolio yield (5)	21.54%	16.93%	19.89%	16.78%
Operating expenses as a percentage of average finance receivables, net of unearned interest (6)	10.60%	9.39%	10.25%	9.51%
Operating expenses as a percentage of average finance receivables, net of unearned interest (7)	10.94% ============	7.54% ============	9.64% ============	7.27% ============
Write-off to liquidation (8)	7.45%	9.64%	6.99%	9.12%
Net charge-off percentage (9)	6.52%	8.11%	6.03%	7.79%


Note: All three and nine 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 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 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) 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 December 31,
	2004		2003
Contracts
Gross Balance Outstanding	$ 165,583,890		$ 143,113,043

Delinquencies	Dollar Amount	Percent	Dollar Amount	Percent

30 to 59 days	$3,056,372	1.85%	$2,836,531	1.98%
60 to 89 days	706,221	0.43%	805,643	0.56%
90 + days	327,077	0.19%	247,261	0.17%

Total Delinquencies	$4,089,670	2.47%	$3,889,435	2.71%

Direct Loans
Gross Balance Outstanding	$ 5,583,074		$ 4,536,172
..
Delinquencies

30 to 59 days	$61,980	1.11%	$37,451	0.83%
60 to 89 days	16,758	0.30%	33,612	0.74%
90 + days	27,475	0.49%	30,354	0.67%

Total Delinquencies	$106,213	1.90%	$101,417	2.24%

The amounts shown in the tables below represent the amount of Contracts purchased, net of unearned interest
	Three Months Ended December 31		Nine Months Ended December 31
State	2004	2003	2004	2003
FL	$ 10,121,741	$ 8,226,294	$ 30,643,243	$ 27,210,545
GA	1,238,711	1,802,773	5,547,869	6,384,776
NC	2,081,482	1,581,909	6,577,416	5,548,857
SC	781,675	664,595	2,847,066	2,144,234
OH	2,064,868	2,267,575	8,635,938	8,453,317
MI	412,137	597,254	2,225,223	1,665,511
VA	1,400,228	438,850	4,270,114	611,901
KY	234,955	-	234,820	-
MD	414,908	-	414,908	-
Total	$18,750,570 ============	$15,579,250 ============	$61,396,597 ============	$52,019,141 ============

	Three Months Ended December 31		Nine Months Ended December 31
Contracts	2004	2003	2004	2003
Purchases	$18,750,570	$15,579,250	$61,396,597	$52,019,141
Weighted APR	23.65%	23.66%	23.90%	23.88%
Avg. Discount	8.73%	8.80%	8.72%	8.91%
Avg.Term (months)	45	43	44	43
Average Loan	$ 8,504	$ 8,110	$ 8,382	$ 8,128
# of Contracts	2,205	1,921	7,325	6,400