Coming off of a fiscal year where its net earnings dropped but still surpassed $5 million, Nicholas Financial this week announced the retirement of Ralph Finkenbrink as the subprime auto finance company’s president and chief executive officer for personal reasons.

Nicholas Financial said Finkenbrink’s decision is effective as of Sept. 30 and he will resign as a director and chairman of the board effective as of the date of the company’s 2017 annual general meeting of shareholders, which is expected to be held prior to the end of September.

The company’s board of directors expects to initiate a search for a new president and chief executive officer shortly.

“The board of directors of Nicholas Financial expresses its gratitude to Ralph for 29 years of service to the company, 25 of which have been in senior executive positions,” said Kevin Bates, senior vice president of branch operations and a member of the board of directors.

Finkenbrink’s announcement arrived about a month after the company released results of its latest fiscal year, which closed on March 31.

The company’s fourth-quarter net loss came in at $1.1 million, but net earnings for the year totaled $5.4 million. Nicholas Financial’s revenue softened by 1.3 percent in Q4 to land at $22.9 million. For the year, revenue remained relatively flat at $90.5 million.

While the revenue metric stayed nearly the same year-over-year, Nicholas Financial watched its net earnings tumble from $12.4 million in the 2016 fiscal year.

“Our net earnings … 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,” the company said. “Additionally, several negative factors, including an extremely competitive market, greater than anticipated losses, and lower auction proceeds have undermined our loss estimates and led to actual losses incurred that were greater than anticipated.

“We remain cautious with respect to near term losses as delinquency percentages remain elevated,” the company added.

For the year, Nicholas Financial reported that it purchased 14,619 contracts, 1,884 less than the previous fiscal year. The weighted APR on those contracts stood at 22.37 percent as terms averaged 56 months on opening balances that averaged $11,593.

The company closed its fiscal year with 37,453 active contracts.

As that new paper entered the portfolio, Nicholas Financial also explained the actions it’s taking to mitigate future risk and potential losses. The moves started with new static pools beginning with the fourth quarter collection of contracts purchased, which included 3,677 contracts.

“We have created a centralized funding department whose primary function is to review approved applications prior to funding the contract to the dealer,” the company said. “Stipulations that are embedded in our approvals of applications are verified by the centralized department to eliminate funding acquired contracts to dealers that had inaccurate job information, income proofs or certain other items that would have led us to turn down the application.”

Nicholas Financial also touched on another change it made as of March 1.

“We have also changed our underwriting guidelines to incorporate the results of a retroactive study of our actual contracts measured by a third-party provider of alternative data,” the company said. “The results of this analysis have assisted us in identifying areas where our underwriting guidelines did not price the risk appropriately.

“We continue to evaluate our operating structure and will attempt to make further improvements that can be implemented. The market for contract acquisition remains challenging and we do not expect any material improvements in the near-term,” the company went on to say.