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QC Holdings Inc. Reports Operating Results (10-Q)

November 14, 2012 | About:
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10qk

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QC Holdings Inc. (QCCO) filed Quarterly Report for the period ended 2012-09-30.

Qc Holdings, Inc. has a market cap of $56.1 million; its shares were traded at around $3.16 with a P/E ratio of 4.7 and P/S ratio of 0.3. The dividend yield of Qc Holdings, Inc. stocks is 6.1%. Qc Holdings, Inc. had an annual average earning growth of 9.5% over the past 10 years.

Highlight of Business Operations:

Revenues from our payday loan product represent our largest source of revenues and were approximately 65.9% of total revenues for the three months ended September 30, 2012. With respect to payday loan volume, we originated approximately $218.8 million in loans during third quarter 2012, which was a slight decline from the $219.6 million originated during 2011. Exclusive of Direct Credit, payday loan volume declined by $12.5 million primarily due to the issues discussed above with respect to our branches in Missouri and Illinois. The average payday loan (including fee) totaled $383.87 in third quarter 2012 versus $376.35 during third quarter 2011. Average fees received from customers per loan increased from $56.71 in third quarter 2011 to $57.49 in third quarter 2012. In our Financial Services branches, our average fee rate per $100 for third quarter 2012 was $17.37 compared to $17.74 in 2011.

The provision for losses increased from $11.1 million in third quarter 2011 to $13.0 million during third quarter 2012. Our loss ratio was 23.6% in third quarter 2011 compared to 26.7% in third quarter 2012. The higher loss ratio in third quarter 2012 was primarily due to the inclusion of Direct Credit and a lower collection rate of returned items. As anticipated at the time of the Direct Credit acquisition, losses from online lending are higher as a percentage of revenue than losses from branch-based payday lending. Our charge-offs as a percentage of revenue were 39.9% during third quarter 2012 compared to 41.4% during third quarter 2011. Our collections as a percentage of charge-offs were 39.2% during third quarter 2012 compared to 41.5% during third quarter 2011. In addition, we received cash of approximately $177,000 from the sale of certain payday loan receivables during third quarter 2012 that had previously been written off compared to $101,000 during third quarter 2011.

Revenues from our payday loan product represent our largest source of revenues and were approximately 66.5% of total revenues for the nine months ended September 30, 2012. With respect to payday loan volume, we originated approximately $625.9 million in loans during nine months ended September 30, 2012, which was an increase of 3.9% from the $602.5 million during the same period in 2011. This increase is primarily attributable to the inclusion of volume from Direct Credit. The average payday loan (including fee) totaled $382.85 during first nine months of 2012 versus $375.94 in comparable 2011. Average fees received from customers per loan increased from $56.85 during first nine months of 2011 to $57.58 during first nine months of 2012. In our Financial Services branches, our average fee rate per $100 for the first nine months of 2012 was $17.47 compared to $17.82 in 2011.

The provision for losses increased from $25.8 for the nine months ended September 30, 2011 to $29.0 million for the nine months ended September 30, 2012. Our loss ratio was 19.1% during first nine months of 2011 versus 20.9% during first nine months of 2012. The increase in the loss ratio from 2011 to 2012 was primarily attributable to the inclusion of Direct Credit and a lower collection rate of returned items. Our charge-offs as a percentage of revenue were 37.1% during nine months ended September 30, 2012 compared to 37.3% during the same period in 2011. Our collections as a percentage of charge-offs were 45.4% during first nine months of 2012 compared to 48.3% during first nine months of 2011. In addition, we received cash of approximately $457,000 from the sale of certain payday loan receivables during nine months ended September 30, 2012 that had previously been written off compared to $381,000 during the same period in 2011.

a period of one year, which will likely extend the time period over which the negative effects of the new law will occur. During 2011, our revenues declined by $2.4 million and our gross profit declined by $2.2 million. For the nine months ended September 30, 2012, revenues and gross profit from Illinois declined by $2.5 million and $1.8 million from the same period in the prior year. We anticipate that for full year 2012, our revenues from Illinois will decline by approximately $2.3 million to $2.5 million and gross profit to decline by $1.8 million to $2.0 million, compared to 2011 as a result of this law change. Prior to the change in Illinois payday loan law, branches in Illinois accounted for more than 5% of our revenues and gross profits.

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