Nicholas Financial Announces Change in Operating Structure and Service Agreement with Westlake Portfolio Management – Form 8-K

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Nicholas Financial announces a change in its operating structure and

Service Agreement with Westlake Portfolio Management

November 03, 2022 – Clearwater, Fla. – Nicholas Financial, Inc. (NASDAQ: NICK) today announced a restructuring plan designed to significantly reduce operating expenses and free up capital. As part of this plan, Nicholas will move from a decentralized business model to a regionalized one. Although Nicholas intends to continue its buying and origination activities, its servicing, collection and recovery operations will be outsourced to Westlake Portfolio Management.

CEO Mike Rost said “Nicholas will remain a consumer finance company for automobiles and light trucks. We are taking this step to reduce our operational footprint after careful consideration of our options and believe this plan will reduce overhead. , streamline operations and reduce compliance risk, while maintaining Nicholas’ underwriting standards. We expect the significant annual savings in operating costs to far exceed the initial costs associated with the restructuring. We also expect that this will allow the company to repay the line of credit with Wells Fargo and free up equity.” President Jeffrey Royal added, “Westlake is a perfect fit for the direction the company is taking. They will fully service the portfolio and reduce operating expenses, allowing us to focus on initial operational changes and making some of our equity available for investment. The Company will seek to allocate excess liquidity to our newly restructured financing business as well as explore new business opportunities with the sole objective of generating sufficient returns on equity. Please see our letter to shareholders published on May 25, 2022 for more information. more information on how the board is thinking about capital allocation.”

About Nicholas Financial, Inc.

Nicholas Financial, Inc. (NASDAQ: NICK) is a consumer finance company with branches in the southeastern and midwestern states of the United States. The Company is primarily engaged in acquiring and managing installment automobile finance contracts (“Contracts”) for the purchase of used and new automobiles and light trucks. In addition, Nicholas Financial provides direct consumer lending (“Direct Lending”) and sells consumer credit-related products. For an index of new releases from Nicholas Financial, Inc or to obtain a specific release, please visit our website at www.nicholasfinancial.com.

About Westlake Portfolio Management, LLC

Westlake Portfolio Management, LLC is a wholly owned subsidiary of Westlake Services, LLC. Westlake Portfolio Management provides industry-leading collection services for automotive receivables that help clients reduce costs and improve receivables performance. Clients benefit from Westlake Portfolio Management’s technology platform that results in efficient and compliant collections efforts beyond what most car dealerships, finance companies and lenders can do on their own. , making Westlake Portfolio Management an ideal choice for portfolio management.

Forward-looking information

This release contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on management’s current beliefs and assumptions, as well as information currently available to management. . When used in this document, the words “anticipate”, “estimate”, “expect”, “will”, “may”, “plan”, “believe”, “intend”, “expect” and similar expressions are intended to identify forward-looking statements. These statements, including statements about expected profits, costs and timing of the Company’s restructuring and change in operating strategy, including its service agreement with Westlake and exit and disposal activities, are subject to certain risks, uncertainties and assumptions, including, but not limited to, the risk that the anticipated benefits of the restructuring and change in operating strategy, including the service agreement with Westlake, will not be not

materialize to the extent expected or not at all, and the actual costs of exit and disposal activities exceed the Company’s estimates or such activities are not completed in a timely manner, and include the risk factors discussed at Section “1A – Risk Factors” in our Annual Report on Form 10-K (certain of which, to the extent that they relate to loan servicing, administration and/or collection, apply equally to Westlake), and our other filings with the U.S. Securities and Exchange Commission (“SEC”). Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results could differ materially from those anticipated, estimated or expected. All forward-looking statements included in this report are based on information available to the Company as of the date of filing, and the Company undertakes no obligation to update such forward-looking statements except as required by law.

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