The following should be read in conjunction with our consolidated financial statements and notes "and the selected financial data" included in Item 8 Item 6 of this report. See Also instant loans for no credit .
Through our wholly owned subsidiary of the Company, the company QC Financial Service, Inc., QC E-Service Co., QC Financial Services, Inc. QC Auto Service, Inc. and QC loan service, 100% ownership of the main California Operation, Inc who is. QC Financial Services of Texas, Inc. Express Check Advance of QC Financial Services, South Carolina, LLC, QC Advance, Inc. Check out also installment loans in dallas tx ., North Carolina, Inc. Financial services, cash title loan, Inc. QC Properties, LLC and.
We, by providing consumer loans short called payday loans accounted for 70.0 percent of total revenue of the Company for the year ended December 31, 2010, primarily derive our revenues to. Check out also instant debit card loan . We, installment loans, credit services, check cashing service, you can earn a reward for financial services such as money orders and various other title loan, open-end credit, and remittance. See Also instant no hassle payday loans . We are operated 523 branches in 24 states on December 31, 2010. Check out also payday advance. Either all of these conditions, in Texas, we have funded our payday loans directly to customers, you will receive a commission. Fee will be charged to customers, ranging from $ 20 per $ 100 borrowed from $ 15 In general, changes from state to state, in most cases, is limited by state law. In addition, the sale of used cars, financing most of their sales, auto sales, earn money at interest rates car loan.
We are now (which is Idaho, Illinois, Montana, New Mexico, Utah, to Colorado Branch) 89, to provide loans to customers. Loans is the payment (interest plus principal) terms and monthly installments of up to one year from 4 months, all loans are paid in advance at any time without penalty. Installment loan fees will vary based on the amount borrowed and the term of the loan. In general, we can proceed to the maximum amount under the installment loan is $ 1,000. Average principal amount of loans that occurred in 2010 was approximately $ 490.
In Texas, using one of our subsidiaries, we are in accordance with the laws of the State of Texas, operates as a (CSO) on behalf of the consumer credit service organization. And we can make loans to consumers and to place for unrelated third parties, consumer fees CSO in order to provide services related to consumers, including the warranty obligations of consumers to lenders of third-party will be billed to.
Went to pay a segment of the automotive market that is used here in connection with the ongoing effort to evaluate the alternatives in September 2007, to provide our customer base, to buy here. See Also instant decision payday loans . In January 2009, where we pay here in Missouri for approximately $ 4.2 million, were purchased to purchase two here. In May 2009, we have opened a service center to provide services to re-adjust our inventory of vehicles and repair services for customers. Check out also instant payday loans in georgia . As at 31 December 2010, here is a lot of pay, here are operated by the purchase of five are located in Missouri and Kansas. See Also instant guarenteed payday loan . These locations will be able to sell a used car, to acquire the financial cost of vehicle-related financing agreement. Loan payment, the average principal amount of the loan to buy here is the average duration was about $ 9,375 was here 33 months occurred in the year ended December 31, 2010.
We have chosen to organize the two operating segments (financial services, automobiles) as, to report to our business unit. Financial Services segment includes the branch offers payday loans, installment loans, the credit service, please check cash money order services, title loans, and remittances. Automobile segment is configured with our purchase here, pay here operation. We are, among other things, on the basis of return on invested capital and profit Gross profit branch, from continuing operations before income taxes, we evaluated the performance of our segments.
Our cost is related to the operation of our branch network primarily. The most important cost, which includes the cost allowances for tenants of rental real estate interests of the employees salary and branch offices, and our loss. Employees, the cost of compensation and corporate areas, including professional fees and stock awards of charge, is the other major expense of the Company.
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Our branch is opened to consider the length of time, are geographic location, and revenue growth, based on (which is the loss as a percentage of sales) loss rate and contribution to the gross profit to evaluate the branch. See Also instant on line loans . We will evaluate changes in comparable branch metric periodically to evaluate the efficiency of the business. We define a branch as a branch equivalent are open during the full period for which the comparison. For example, a branch for the analysis of the annual equivalent has been open at least 24 months on that day every year as of December 31, 2010. We will monitor the new branch for the Advancement of financing to profitability and growth rate.
With respect to cost structure, salary and benefits is one of our largest cost, will be driven by changes in the number of volumes and financing of the general branch. Check out also instant loans paystubs times square . Is also an important cost of the loss we provide. Uncollected customer's check as if it was returned by the bank, we will make an immediate amortization Provision for loan losses in the amount of fees and accrued interest of customers, including. Check out also installment loans no verification needed . Recovery of any amount of depreciation has been recorded as a reduction of Provision for loss in the period prior to recovery.
We are the fourth quarter of the first, usually during the first quarter like that, as a result of economic factors a wide range such as the refund of income tax holiday and spend the habit of end of each year, which is the period of strongest of us together, they have experienced seasonality in our Financial Services department. Check out also instant loan from direct lender . Is used primarily as a down payment of the vehicle, as a result of the receipt by the customer of its income tax refund, in the first quarter of each year, as the peak of automobile sales, where the season of our automotive experience. Car sales in the last three quarters, and is typically lower than the first quarter. See Also installment loans without credit checks . In addition, the acquisition costs of the vehicle, there is a tendency to increase in the second half of this year to build an inventory of the volume of the first quarter of companies are expected.
In response to changes in the overall market, we slow down the expansion of our branch dramatically in the past five years, closed a significant number of branches. See Also instant cash loans ltd . During this period, we acquired the 65 branches of 82 de novo branches opened, the closure of 156 branches. The following table, since January 1, 2006, and the opening of a branch of our de novo, dictates the closure of the branch and branch acquisition. Check out also installment loans in milwaukee .
2006 2007 2008 2009 2010 Branches closed between (16) and (50)) (year branches have been obtained during the 51 13 one year branch of the de novo has been opened between 46 20 1231 started a branch 532 613 596 585 556 (24) (32) (34) 613 596 585 556 523 end branches
Does not contain a branch of the 21 announced that a closed branch (1) In 2010, we are closing years of the first half of 2011. However, these branches are included as part of discontinued operations in 2010. Check out also instant payday loans manchester .
We will continue to evaluate opportunities for the development of a new branch to supplement existing branches in a given state or market. In addition, we have adopted here pay the business, a disciplined acquisition strategy both here and purchase payday. See Also instant loan application . During the year 2011, we expect to open a branch of about 10 provide the location of the car and three from two short-term loan products.
In the United States in the payday loan industry began to grow rapidly in 1996 when there was a branch of the estimated 2,000 payday loan. According to the (CFSA), industry analysts, industry, the number of estimates that have a branch of payday loans 19,700 about branches of these United States (exclusive of loans Internet Association) financial services community of America middle-class households that experience cash flow shortages between payday extend the $ 290 billion in short-term credit of one million. We are in the 16 large companies to work with (approximately 9,900 branches), we believe our industry is highly fragmented with about half of the branches of the industry as a whole. After several years of growth, the industry is primarily due to the change of the laws governing the salary product, was reduced slightly in the past few years. Changes to regulations and laws do not exist, you can expect to change significantly the number of branches of industry in the near future we should not. Check out also tax refund status instant tax service.
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Continues on the payday loan industry, in various states and then significantly, at the national level, it is affected by laws and regulations of payday loans. We are actively monitoring, and evaluation efforts with each of the state, national legislation and regulations, are involved in the efforts of the CFSA closely. Whether through a cap loan reduction and preclusion, the commission an adverse condition, the extent to enact laws and regulations affecting the financing of payday, our business has been affected in the past adversely, the future may be adversely affected further. Certain state, have enacted interest rate cap to 36 percent annual rate from 28% of payday loans over the past few years. To convert approximately $ 1.38 per $ 100 loan was eliminated us from the ancient capital of 36% per customer per annum interest rate, to provide a payday loan in the state of them effectively.
In 2009, the payday loan laws limit was passed in Kentucky, South Carolina, Washington, Virginia and access to customers to payday loans severe. That these changes in the law affect the Company's revenues and operating income in 2010 to side effects. In 2010, we are results from the state have experienced a change of the law, and the loss rate and higher-than-expected decline in sales for us, we were negative than expected. For the year ended December 31, 2010, revenue from Kentucky, South Carolina, Washington, and Virginia, gross profit, compared to the previous year, respectively, million dollars $ 9.0 and $ 14.1 million decreased. In Arizona, the existing law payday loan has expired on June 30, 2010. We currently provides loans to customers in Arizona title for us. But they were payday loan products, customers in Arizona, does not adopt the product. For the year ended December 31, 2010, revenue from our branches in Arizona, gross profit, year-on-year respectively, a decrease of $ 5,400,000 and $ 6,900,000. In addition, the new law, among other things, customers will be valid in Illinois in March 2011 contains a limit on the number of loans that have at one time the entire state. This type of customer limit, when passed in other states such as Washington, Kentucky, South Carolina and such, depending on the type of alternative products in the state may provide competitors annual sales has resulted in a decrease by 30% to 60%. Other changes change the dramatic economic and market a broader legal and financing of payday does not exist, we as well as the net impact of changes in the law of Illinois, 2010 vs. 2011 first half, as described above Gross branch by 7.0 million from $ ten thousand $ 5.0 during the year ended December 31, 2011 compared to 10.0 million in 2010 from millions of dollars expected to residual effect in Arizona to reduce the revenue at 7.0 dollars a year In order to reduce the profit. Improvement of our automotive sector, the continued diversification efforts of both external to them are expected to offset the decrease from the revised law in the branch and the negative as well as our financial services.
Development of the KEY
Closure of the branch. During the year ended December 31, 2010, we closed 34 branches of the low performance of us in various states, we close the branches of 21 of South Carolina, Arizona State and Washington in 2011 first half I decided to. We have recorded ($ 1,800,000) $ 1.8M pre-tax charge of approximately the year ended December 31, 2010 associated with the closure of these. See Also instant tax refund loan bad credit memphis. Rates are now $ 916,000 representing the loss on disposal of fixed assets, and the end of the lease, which includes $ 33,000 for other expenses $ 155000 $ 671000 and other related moving expenses, retirement benefit costs.
During the year ended December 31, 2009, the 32 branches of the low performance of our (that contained the branch 26 is reported as a branch and 6 discontinued operations have been integrated into the branch near) the various states closed. We, the majority of the recording was included in discontinued operations of $ 1. Check out also instant fast loans .7 million pretax charge in the year ended December 31, 2009 associated with the closure of these. See Also instant tax refund loan bad credit memphis. Fee, which includes $ 14,000 for other expenses and $ 15 000 $ 739,000 cost of moving the other will be a loss of $ 897,000 for the disposal of fixed assets, and the end of the lease, and related benefit expenses and retirement.
During the third quarter of 2008, we primarily as a result of the new law came into force on September 1, 2008 to eliminate payday loans effectively, Branch 32 of us in Ohio during the third quarter of fiscal 2008 13 closed. At 28% per annum is equivalent to $ 1.07 per $ 100 borrowed, interest rate cap on payday loans new law. We recorded a pretax charge of approximately $ 943 thousand the year ended December 31, 2008 associated with the closure of these. See Also instant tax refund loan bad credit memphis. Rates, the loss of $ 554,000 for the disposal of fixed assets, contains $ 342 000 for the end of the lease
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$ 7,000 for occupancy costs and other related expenses, retirement and other benefit costs and $ 40,000. For branches that remain open in Ohio, we offer alternative products to customers under various laws. Check out also instant long term online loans .
In this case growth of purchase, please pay here operation. Check out also instant loan direct lenders . In January 2009, here are paying a lot located in the state of Missouri, I purchased the purchase of two here. We are here to pay the position of the car here had a total of five purchase, at the time of December 31, 2010. In May 2009, we have opened a service center to provide services to re-adjust our inventory of vehicles and repair services for customers. Check out also instant payday loans in georgia . As an operator to buy here, pay a location here, we will try to sell a used car people may not have a relationship with the bank, the credit problems of the past history and credit funds, limited are having. We buy the stock of the car mainly through auctions. The acquired vehicle, in addition to purchase price, are carried in the inventory in the amount of vehicle repair costs. We offer loans to customers who purchase a car in one of the purchase of substantially all of us here, pay here place. Google's finance contract, usually contains a trade in allowance of up to 2000 or from $ 200 to $ down payment. We need payment, weekly, biweekly, or has been done on a monthly basis for half a month according to the date of payment of the customer. Principal amount of the average car loan that occurred in 2010, the average duration of the loan was approximately $ 9,375 was 33 months. For the year ended 31 December 2010, revenue from the purchase of us, were $ 19.9 million to pay here place here.
Here are the different loan products. In April 2008, Virginia will be passed (effective January 1, 2009) a new law to limit our ability to provide payday loans profitable serious. As a result of the new law, we are at the beginning of Virginia, has provided the product of open-end credit to customers in December 2008. See Also text loan money instant no credit. During the second quarter of 2009, we have to reintroduce the product of payday loans in Virginia, an open-ended product was discontinued. It may be difficult to the Company's ability to operate the revenue to provide products payday loans only, we, the laws of payday loans existing, best for long-term success of Virginia I believe that gives you the opportunity. As was given a grace period of 25 days to repay the loan without the customer bear interest, open-end credit products, were similar to those credit card. Check out also instant loans no brokers . In addition, we require the customer to make a monthly payment based on the balance we have, and was responsible for providing our customers using the monthly statement. In addition to the interest in the balance, also the product of open-end credit, which includes the monthly fees.
Discussion of significant accounting policies
The accompanying notes to consolidated financial statements and the Company have been prepared in accordance with accepted accounting principles in the United States that have been applied consistently in general. Preparation of financial statements of these, we, the reported amounts of assets and liabilities contingent on revenues and expenses between the date of financial statements in order to make the number of estimates and assumptions affect the reported amounts of assets and liabilities Reports the period required to be disclosed of. We will evaluate these estimates and assumptions on an ongoing basis. We are to us, based on these estimates into various other assumptions believed to have information available at the moment, we are to be reasonable under the circumstances. Check out also instant loans for emergency bills . Actual results may differ from these estimates under different assumptions or conditions.
We believe the following critical accounting policies is likely to have an influence on the number of significant estimates and assumptions that are used to create the financial statements of the Company.
We will record the revenue from payday loans and title loans at the time of issuance. Of the loan period is 30 days of the loan and title of two to three weeks for payday loans in general. At the end of each month, we will record an estimate of the income-producing accrued income is recognized on the basis of certain fixed-rate yield over a period of each loan.
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We will record the revenue from the loans using the interest method simple. For service of CSO of us in Texas, and we can make loans to consumers and to place for unrelated third parties, related, including the warranties of consumer debt to a third party, to the consumer lenders earn a commission of CSO to provide the service. In addition, the lender provides a loan service. CSO fee is recognized proportionally over the period of the loan.
We, once the vehicle is delivered to the customer, are aware of the (net of sales tax) revenue from the sale of automobile title has passed. We are in the case of loans, for a simple way originated the installment sales contract, to recognize the interest, you are using the interest method the car. See Also direct lenders in massachusetts .
In general, we, these services are rendered to customers generally at the point of sale at a time, contains check the money order cashed, and the remittance, revenue of financial products and services consumer of our other We recognize the.
Open-ended with respect to our products, we are to get the interest of balance, also the product, which contains a monthly membership fee refund. As mentioned above, we have to reintroduce the product in Virginia salary is not provided this product anymore.
Provision for loss, the policy of the item to be returned
We will record the Provision for loan losses associated with the receivables. Payday loans, all accrued fees, interest and principal balance, within 14 days after the date of the loan, in general, we are amortized on the day to receive the check was returned. Therefore, the majority of payday loans are included in the balance of our loan at any time, does not usually older than 30 days. Check out also instant quick payday loans . Amortization of these are recorded as an expense through the Provision for loss. See Also installment loans in . On the recovery of any losses are charged to expense recorded as a reduction of Provision for loss in the period prior to recovery. With respect to financing of the title, and interest additional fee is not charged after an attempt to contact the customer after it has been failure, generally occurs, the loan was in default. Based on state regulations and operating procedures, we will stop the accrual of interest on loans between 60 to 90 days after the final payment. The car loan, we will stop the accrual of interest 60 days after the final payment.
Between 2007 and 2008, our customers credit more difficult, had to overcome the financial and economic environment. See Also installment payday loans no fax . As macro-economic environment has deteriorated in 2008, our Origination and collection procedure was sufficient to maintain a reasonable loss rate throughout the year without resorting to additional underwriting procedures. Pulled back from borrowing customers, as focused on the repayment of the debt, in 2009 and 2010, we have experienced an improvement in loss ratio. See Also installment no credit check loans . In the low volume of loans, person in charge of the branch will focus on limiting the number of checks that were returned, and stressed the recovery of loans.
(Including interest and fees) credit losses of auto loans payday loans at the level of estimation, title loans, and installment loans with respect to loans at the end of each reporting period, we will is sufficient to absorb the estimated cost loss of each outstanding loan portfolio to maintain the allowance aggregation. We do not reserve a particular individual loan.
Methodology for estimating the allowance for doubtful accounts and title payday takes advantage of the approach of stage 4 to reflect the nature of short-term of the loan portfolio at the end of each fiscal year of experience in the collection of historic month, any variation of general economic conditions of each of the following report and recent year-end. First, calculate the volume ratio / loss for the last month of each reporting period. Volume ratio / loss, amortization represents the percentage of the aggregate net payday loan and title loan and title to the volume of total payday of a given period of time. Second, we have to reflect the experience of the collection of the month following the month end immediately report to calculate the adjustment of this percentage. To estimate the experience of the collection, we have (except the current year), and then calculates the average of the changes in the volume ratio / loss from the last month of each reporting period immediately following the end of each of the last three years. This change is then.
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Will be deducted from the volume ratio / loss calculation for the last month of the current reporting period to derive added to, the volume ratio / loss adjustment or experience. Third, the outstanding loans of the title, volume ratio / loss adjustment will be multiplied by the experience in order to determine the initial estimate of the allowance for loan losses and the total year-end pay day. Fourth, we confirm or changes in regulations and laws of the state are known, or changes to the structure and operations of our business, and geographic, etc. In particular, the initial estimate of the calculation of the allowance for loan losses to evaluate population trends might affect the value, and a variety of qualitative factors. Was judged at the time of the year December 31, 2009 and 2010, we are qualitative adjustment to the allowance for loan losses and did not need payday. Check out also instant loan sacramento .
We are at a level considered sufficient to cover the estimated loss of recovery of loans installment we are to maintain the allowance for loan sales. Calculation of the allowance for loans, taking into account economic factors and trends of recent credit losses, and qualitative factors (average of 6 months of the end of the total amount of amortization mainly) historical experience of amortization are based on. See Also instant direct lender loans . Was judged at the time of the year December 31, 2009 and 2010, we have qualitative adjustment to the allowance for doubtful accounts and installment did not need.
Calculation of the allowance for auto loan, has been determined on the basis of the aggregate, taking into account characteristics of the loan, delinquency levels, and other changes in the value of collateral, by Period of loan loss experience and qualitative factors origination, industry general economic conditions are based on our review of the portfolio. This estimate of the expected losses, mainly to adjust for consideration of current economic factors, using the experience of loss estimation, is determined using a static pool analysis prepared for the various segments of the portfolio file. The last few years, the industry's loss ratio, a high proportion was between 20% and 28% of net sales during the most difficult macroeconomic general. In 2008 and 2009, automobile sales in the industry is the increase in delinquencies, as a result, has experienced an increase in the loss. Our level of reserves is higher than the level during the year 2010, for inexperienced relative to our purchase, was higher than expected levels in the future here with respect to auto loans in previous years However, as well as business, where the age of the new payment, negative industry trends and macro-economic environment in general here. In 2010, has been greatly improved management of our experience of loss related to auto loans, and process enhancements. As at 31 December 2010 and December 31, 2009, we are with respect to creditors of the car, consider the factors qualitative variety of adjustment qualitative completely was found that was not necessary.
Using this information, record the adjustment to the allowance for loan losses through a provision for allowance for losses. The overall allowance, which represents the best estimate of the loss of possibilities inherent in the loan portfolio outstanding at year end of each reporting period. See Also instant lending group .
The following table is a summary of the activities of the allowance for loan losses.
For the year ended December 31, 2009 2010 2008 (In thousands) The opening balance of allowance for doubtful accounts, amortization $ 4,442 $ 6,648 $ 10,803 (100,072) (83,577) (77,102) 47249 41879 36127 recovery 55029 45853 37322 loss allowance balance, year-end $ 7,150 $ 6,648 $ 10,803
Provision for loss in the consolidated statements of income, which includes losses due to the CSO, has excluded the activities of the loss related to discontinued operations.
Macroeconomic indicators, as long as it continues to be negative during the years 2011 and later, as described above, with respect to the allowance for loan losses is our estimate, may be subject to more volatile, the balance as There are likely to increase as a percentage of total loans.
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Our financial services business is attributable to changes in seasonal demand for short-term loans during the year. Historically, we have experienced the highest demand for short-term borrowings in the quarter and April 1. As a result, the cash flows that are generated internally, or increased use of debt based on the credit facility we in the month of January and the extent that it is not enough to supply growth capital loan, for the fourth quarter of Most of the time is the duration for. Income tax refund customers for their receipt, the demand for short-term bank loans historically, has declined in the first month of the second quarter and the balance in the first quarter of each calendar year.23432 . .