Payday Loan Times

News About the Ever Changing Payday Advance Industry

Advance America Posts 7.1 Percent Revenue Growth; Net Income Down Slightly From 2004

Filed under: National, South Carolina — Desmond Carlisle at 11:23 am on Thursday, February 23, 2006

Advance America posted strong revenue growth last year while also seeing its net income decline, according to the Spartanburg Herald-Journal.

The Spartanburg, S.C.-based payday loan company reported that it ended 2005 with net revenues of $515 million, up 7.1 percent from 2004. The company earned revenues of $131 million in the fourth quarter, up 0.8 percent from the previous year. Its net income for the year was $63 million, down 3.5 percent from 2004's income of $65.3 million.

Advance America CFO John Hill said revenues were up primarily because of the 361 new stores that opened in 2005. On the flip side, several factors — a forced exit from the North Carolina payday loan market, Hurricanes Katrina and Rita, and new federal banking regulations — had a negative effect on the company's bottom line.

"Without all that stuff, our growth would have been significantly higher," Hill said. "We estimate we lost about $3 million worth of revenue, primarily in Louisiana and Mississippi."

Katrina and Rita caused 128 temporary closings for the company, 13 of which remain closed. Advance America lost revenue during the temporary closures, then lost more because there were no customers to the stores that remained open. Then, in December, the company closed all 117 of its North Carolina stores in compliance with an order from that state's banking commissioner.

The Federal Deposit Insurance Corp. issued new guidance that led Advance America to adopt a different business model in North Carolina, Texas, Michigan, Arkansas and Pennsylvania. In those states, Advance America has switched to offering installment loans, which are easier for borrowers to pay back, and not as profitable as the regular payday advances issued by the agency.



Pingback by Payday Loan Times » Blog Archive » Advance America to Close Payday Loan Offices

Sunday, February 26, 2006 @ 4:03 pm

[...] Advance America and other similar lenders originate short-term, high-interest loans financed by regular banks. The companies also earn fees for collecting payments and dealing with late payers. Because the FDIC insures bank deposits, agency officials have said they think the business is too risky for their banks. « New Mexico Governor Adament About Payday Advance Lending Legislation [...]


Pingback by Payday Loan Times » Blog Archive » Payday Advance Lenders Shut down in NC

Wednesday, March 1, 2006 @ 1:21 pm

[...] The three firms will pay $700,000 to non-profit credit counseling offices as part of the deal. The agreements come after the state banking commissioner ruled in December that Advance America was breaking state lending laws by charging an APR of more than 400 percent. [...]


Pingback by Payday Loan Times » Blog Archive » Missouri Payday Loan Industry is Booming

Sunday, March 5, 2006 @ 11:12 am

[...] “If you look at our customer base, it’s defined as the middle-income working American,” said Jamie Fulmer, spokesman for Advance America. “In order to have an account with us, they have to have an open and active checking account and a regular source of income. These are everyday working people.” [...]

RSS feed for comments on this post. TrackBack URI

Leave a comment

You must be logged in to post a comment.

Warning: fopen(/var/sitecache/ [function.fopen]: failed to open stream: Is a directory in /var/sites/ on line 162