Nicholas Financial acknowledged two elements combined to erode its originations during its most recent quarter that closed on June 30, but the subprime auto finance company is remaining steadfast in its strategy to maintain discipline during challenging market conditions.

The figures Nicholas Financial reported included diluted earnings per share decreasing 73 percent to $0.10 as compared to $0.37 for the three months ended last June 30. The company’s net earnings were $0.8 million and $2.9 million as of that date in 2017 and 2016, respectively.

The company also indicated quarterly revenue dropped 3 percent to $22.2 million.

Nicholas Financial explained 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’s total delinquency rate stood at 12.2 percent at the close of the last quarter, up from 7.66 percent a year earlier. The total outstanding balance associated with those delinquent contracts that range from 31 days past due to more than 90 days rose to $58.18 million, which constitutes a jump from $37.05 million a year ago.

And the company’s net charge-off percentage rose from 7.51 percent to 9.54 percent.

“Additionally, several negative factors continue to put pressure on our net earnings, including an extremely competitive market, higher than expected losses and a continuous decline in auction proceeds,” Nicholas Financial said in its quarterly report. “We remain cautious with respect to near-term losses as delinquency percentages remain elevated.”

Meanwhile, originations tumbled in the most recent quarter, too.

Nicholas Financial purchased 2,349 contracts in the quarter that finished on June 30 worth $27.16 million. During the comparable three-month span last year, the company originated 3,517 contracts representing $40.83 million in outstanding balances.

Many of the other metrics associated with the company’s latest originations remained similar year-over-year, including:

—APR: 22.31 percent as compared to 22.39 percent

—Average discount: 7.56 percent as compared to 7.15 percent

—Average term: 55 months as compared to 57 months

—Average balance: $11,563 as compared to $11,609

Nicholas Financial held a total of 36,174 active contracts as of June 30.

“Throughout this past quarter, we continued to experience intense competition from existing market participants. During this same time period, automobile dealerships, which the company conducts business with, have reported declining sales," Nicholas Financial president and chief executive officer Ralph Finkenbrink said, who announced his retirement would come when the company closes its fiscal year on Sept. 30.

“The combination of robust competition, fewer applications received by the company for potential loan approval and recent changes by the company to its underwriting guidelines has led to a 33-percent reduction in contracts acquired during the three months ended June 30 as compared to the three months ended June 30, 2016,” Finkenbrink continued.

“We will not expand the number of contracts purchased by incurring risk that are not priced appropriately and not conducive to providing long-term sustainable value. These ongoing market conditions require us to gain momentum regarding our ability to adapt to a competitive cycle that, for the foreseeable future, gives no indication of subsiding,” he went on to say.

“For us, that involves further evaluation of our current business structure, as well as, our overall operating strategy,” Finkenbrink added.