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Clearwater auto lender Nicholas Financial sees shares drop in wake of quarterly loss, risk review

Ralph Finkenbrink, CEO of Clearwater consumer finance company Nicholas Financial. [Company handout]

Ralph Finkenbrink, CEO of Clearwater consumer finance company Nicholas Financial. [Company handout]

Clearwater specialty auto lender Nicholas Financial saw its shares drop Friday morning to their lowest price since 2010 in the wake of a quarterly loss and an announced effort to tighten the company's risk assessment tools when making loans.

"Our net earnings for the three and twelve months ended March 31, 2017 were adversely affected primarily by an increase in the provision for credit losses due to higher charge-offs and past-due accounts along with a reduction in the gross portfolio yield," Nicholas Financial stated in its earnings release earlier this week. Shares fell Thursday on the news.

The company, which provides consumer auto financing, also cited "an extremely competitive market, greater than anticipated losses, and lower auction proceeds" for undermining its loss estimates and leading to actual losses greater than anticipated.

"We remain cautious with respect to near term losses as delinquency percentages remain elevated," the company stated.

On Friday, Nicholas Financial shares were down as much as 14.3 percent to $8.15 before rising to $8.35, up 2.45 percent by noon.

Clearwater auto lender Nicholas Financial sees shares drop in wake of quarterly loss, risk review 05/19/17 [Last modified: Friday, May 19, 2017 12:02pm]
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[Photo by Spencer Platt/Getty Images, 2017]