QCCO QC Holdings Inc (PK)

N OTES TO C ONSOLIDATED F INANCIAL S TATEMENTS

(Unaudited)

Note 1 – The Company and Significant Accounting Policies

Business. QC Holdings, Inc. and its subsidiaries (hereinafter referred to as the Company) provide various financial services (primarily payday loans and installment loans) through its retail branches and Internet lending operations. The Company also provides other consumer financial products and services, such as credit services, check cashing services, title loans, open-end credit, debit cards, money transfers and money orders. As of March 31, 2014, the Company operated 430 loan branches.

Basis of Presentation. The consolidated financial statements of QC Holdings, Inc. included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to enable a reasonable understanding of the information presented. The Consolidated Balance Sheet as of December 31, 2013 was derived from the audited financial statements of the Company, but does not include all disclosures required by US GAAP. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

The accompanying unaudited consolidated financial statements are prepared consistently with the accounting policies described in Note 2 to the consolidated financial statements included in the Company’s 2013 Form 10-K, which include the following: use of estimates, revenue recognition, cash and cash equivalents, restricted cash and other, loans receivable, provision for losses and allowance for loan losses, operating expenses, property and equipment, software, advertising costs, goodwill and intangible assets, impairment of long-lived assets, earnings per share, stock-based compensation, income taxes, treasury stock, fair value of financial instruments, derivative instruments and foreign currency translations.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the consolidated financial position of the Company and its subsidiaries as of March 31, 2014, and the results of operations, comprehensive income and cash flows for the three months ended March 31, 2013 and 2014.

In December 2013, the Company sold its automotive business to an unaffiliated limited liability company. Also, in December 2013, the Company decided that it would close 35 underperforming branches during first half 2014. During first quarter 2014, the Company closed two of the branches and decided one branch would remain open. The remaining branches are scheduled to be closed or sold during second quarter 2014. The operational results of the automotive business and the 34 loan branches have been reclassified as discontinued operations in our unaudited consolidated financial statements for all periods presented. Unless otherwise stated, footnote references refer to continuing operations.

Note 2 – New Accounting Pronouncements

In July 2013, the FASB issued guidance on the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This update specifies that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements.

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Note 3 – Fair Value Measurements

Accounting guidance on fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. There were no recurring fair value measurements as of December 31, 2013 and March 31, 2014.

The fair value of cash and cash equivalents approximates carrying value. The fair value of restricted cash and other approximates carrying value. The fair value of payday, title, installment loans and open-end credit receivables, borrowings under the credit facility, accounts payable and certain other current liabilities that are short-term in nature approximates carrying value. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy.

Note 4 – Discontinued Operations

In September 2013, the Company approved a plan to discontinue its automotive business. The operating environment for the Company’s automotive business had become increasingly challenging and operating results more volatile over the past several quarters, given the difficult general economic climate. In light of these circumstances, the Company elected to discontinue its automotive business in order to focus on its consumer lending operations in the U.S. and Canada. In December 2013, the Company completed the disposition of certain assets of its automotive business through an agreement (Purchase Agreement) with an unaffiliated limited liability company (Buyer). The Purchase Agreement provided for the sale of certain assets of the automotive business, primarily consisting of loans receivable, inventory, fixed assets and other assets, for an aggregate purchase price of approximately $6.0 million. In addition, under the terms of the Purchase Agreement, the Company assigned the leases of the dealership lots to the Buyer. The Buyer also hired a significant number of employees from the automotive business.

All revenue and expenses reported for each period herein have been adjusted to reflect reclassification of the discontinued automotive business. Discontinued operations include the revenue and expenses which can be specifically identified with the automotive business, and excludes any allocation of general administrative corporate costs, except interest expense.

In 2013, the Company recorded a non-cash loss of $2.8 million in connection with the disposal of its automotive business. Approximately $1.9 million of this charge was a non-cash fair-value adjustment to customer loans receivable. In addition, the Company recorded a non-cash impairment charge related to a write-off of goodwill and intangible assets totaling $679,000. Other fair value adjustments to vehicle inventories, fixed assets and other items accounted for the remaining charge of $256,000.

In December 2013, the Company approved the closure of 35 underperforming branches during first half of 2014. In first quarter 2014, the Company closed two of these branches and decided that one branch would remain open. The remaining branches are scheduled to be closed or sold during second quarter 2014. These branches are reported as discontinued operations in the Consolidated Statements of Income and related disclosures in the accompanying notes for all periods presented.

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Summarized financial information for discontinued operations during the three months ended March 31, 2013 and 2014 is presented below (in thousands):

As of December 31, 2013 and March 31, 2014, non-current loans receivable consists entirely of installment loans.

On occasion, the Company will sell certain payday loan receivables that the Company had previously charged off to third parties for cash. The sales are recorded as a credit to the overall loss provision, which is consistent with the Company’s policy for recording recoveries. During the three months ended March 31, 2013 and 2014, the Company received cash of approximately $126,000 and $199,000, respectively, from the sale of certain payday and installment loan receivables that the Company had previously charged off.

Credit quality information. In order to manage the portfolios of consumer loans effectively, the Company utilizes a variety of proprietary underwriting criteria, monitors the performance of the portfolio and maintains either an allowance or accrual for losses on consumer loans (including fees and interest) at a level estimated to be adequate to absorb credit losses inherent in the portfolio. The portfolio includes balances outstanding from all consumer loans, including short-term payday and title loans and installment loans. The allowance for losses on consumer loans offsets the outstanding loan amounts in the consolidated balance sheets.

The Company had approximately $7.8 million in installment loans receivable that were past due as of December 31, 2013 and approximately 36.8% of this amount was more than 60 days past due. The Company had approximately $7.9 million in installment loans receivable past due as of March 31, 2014 and approximately 49.6% of this amount was more than 60 days past due.

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Allowance for loan losses. The following table summarizes the activity in the allowance for loan losses during the three months ended March 31, 2013 and 2014 (in thousands) :

The provision for losses in the Consolidated Statements of Income includes losses associated with the credit service organization (see note 10 for additional information) and excludes loss activity related to discontinued operations (see note 4 for additional information).

The following tables summarize the activity in the allowance for loan losses by product type during the three months ended March 31, 2013 and 2014 (in thousands) :

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In February 2005, the Company entered into a seven-year lease for a new corporate headquarters in Overland Park, Kansas. In January 2011, the Company amended its lease agreement to extend the lease term and modify the lease payments. The lease was extended with a new landlord through October 31, 2017 and includes a renewal option for an additional five years. As part of the original lease agreement and the amendment to the lease agreement, the Company received tenant allowances from the landlord for leasehold improvements totaling $1.4 million. The tenant allowances are recorded by the Company as a deferred liability and are being amortized as a reduction of rent expense over the life of the lease. As of December 31, 2013, the balance of the deferred liability was approximately $214,000, of which $158,000 was classified as a non-current liability. As of March 31, 2014, the balance of the deferred liability was approximately $200,000 of which $144,000 is classified as a non-current liability.

Note 7 – Goodwill and Intangible Assets

Goodwill. As of March 31, 2014, the Company did not have any goodwill. The Company performed its annual impairment test as of December 31, 2013 and determined that the fair values of both the Branch Lending and E-Lending reporting units did not exceed their respective carrying amounts. The amount of impairment for each reporting unit was calculated by comparing the reporting unit’s implied fair value of goodwill to its carrying amount, which requires an allocation of the fair value determined in the step one analysis to the individual assets and liabilities of each reporting unit. Any remaining fair value would represent the implied fair value of goodwill on the testing date. The test results showed that the implied fair value of the goodwill for each reporting unit was a negative amount after the allocation of the fair value to the individual assets and liabilities of each reporting unit and thus, a full impairment of goodwill was recorded for each reporting unit.

The following table summarizes by reportable segment the changes in the carrying amount of goodwill for the year ended December 31, 2013 (in thousands) :

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Intangible Assets. The following table summarizes intangible assets (in thousands) :

The Company tests trade names with indefinite lives for impairment annually by comparing the book value to a fair value calculated using a discounted cash flow approach on a presumed royalty rate derived from the revenues related to the trade name. Based on testing results for 2013, the Company concluded that the indefinite lived intangible assets associated with the acquisition of Direct Credit were impaired and recorded an impairment charge of $669,000 to reduce the value of the indefinite lived intangible assets.

Amortization of intangible assets for the three months ended March 31, 2013 and March 31, 2014 was approximately $307,000 and $294,000, respectively. Annual amortization for intangible assets recorded as of December 31, 2013 is estimated to be $863,000 for 2014 and $5,000 for 2015.

On September 30, 2011, the Company entered into an amended and restated credit agreement with a syndicate of banks to replace its prior credit agreement, which was previously amended on December 7, 2007. The credit agreement contained various financial covenants related to, among others, fixed charge coverage, leverage, total indebtedness, liquidity and maximum loss ratio. In fourth quarter 2013, the Company amended the credit facility as it relates to the maximum loss ratio allowed under the agreement. As of January 31, 2014, the Company was not in compliance with this revised maximum loss ratio covenant and entered into a fourth amendment with the bank syndicate. As of March 31, 2014, the Company again was not in compliance with the financial covenant related to maximum loss ratio. On April 24, 2014, the Company entered into a fifth amendment to the credit agreement to provide for a trailing 12-month maximum loss ratio of 30% for the monthly periods ending March 31, 2014 to September 30, 2014. In addition, the amendment also reduced the maximum available under the revolving credit facility from $18 million to $16 million.

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Note 9 – Income taxes

Effective Tax Rate. The Company’s effective tax rate was 40.9% for the three months ended March 31, 2014 compared to 40.3% for the three months ended March 31, 2013.

Uncertain Tax Positions. The Company had unrecognized tax benefits of approximately $190,000 and $186,000 as of December 31, 2013 and March 31, 2014, respectively.

The Company records accruals for interest and penalties related to unrecognized tax benefits in interest expense and operating expense, respectively. Interest and penalties and associated accruals were not material as of March 31, 2014.

The Company does not anticipate any material changes in the amount of unrecognized tax benefits in the next twelve months.

Note 10 – Credit Services Organization

For the Company’s locations in Texas, the Company acts as a credit services organization on behalf of consumers in accordance with Texas laws. The Company charges the consumer a fee for arranging for an unrelated third-party to make a loan to the consumer and for providing related services to the consumer, including a guarantee of the consumer’s obligation to the third-party lender. The Company also services the loan for the lender. The CSO fee is recognized ratably over the term of the loan. The Company is not involved in the loan approval process or in determining the loan approval procedures or criteria. As a result, loans made by the lender are not included in the Company’s loans receivable balance and are not reflected in the Consolidated Balance Sheets. As noted above, however, the Company absorbs all risk of loss through its guarantee of the consumer’s loan from the lender. As of December 31, 2013 and March 31, 2014, the consumers had total loans outstanding with the lender of approximately $2.8 million and $1.2 million, respectively. Because of the economic exposure for potential losses related to the guarantee of these loans, the Company records a liability at fair value to reflect the anticipated losses related to uncollected loans. In 2013, the products offered to consumers in Texas (through the CSO model discussed above) were expanded to include an installment loan product and a new online loan product. Consistent with the Company’s historical experience, losses associated with new product offerings are significantly higher during the initial launch of the product compared to long-term expectations. As a result of this experience and the Company’s guarantee of losses under the CSO model, the liability for estimated losses was significantly increased during 2013.

The following table summarizes the activity in the CSO liability (in thousands) :

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For the three months ended March 31, 2013 and March 31, 2014, options to purchase 2.5 million shares were excluded from the diluted earnings per share calculation for each period because they were anti-dilutive.

Stock Repurchases. The board of directors has authorized the Company to repurchase up to $60 million of its common stock in the open market and through private purchases. The acquired shares may be used for corporate purposes, including shares issued to employees in stock-based compensation programs. As of March 31, 2014, the Company had approximately $3.9 million that may yet be utilized to repurchase shares under the current program. As a result of the amendment to its credit agreement in fourth quarter 2013 (see Note 8), the Company may not repurchase its common stock through the maturity of the facility on September 30, 2014, except for the repurchase of up to $175,000 of stock in connection with vesting of restricted stock held by employees. In February 2014, the Company repurchased 70,000 shares at a total cost of $174,000, in connection with the funding of employee income tax withholding obligations arising from the vesting of restricted shares.

Dividends. In November 2008, the Company’s board of directors established a regular quarterly cash dividend of $0.05 per share of the Company’s common stock. In addition to regular quarterly dividends, the Company’s board of directors has also approved special cash dividends on the Company’s common stock from time to time. As a result of the amendment to its credit agreement in fourth quarter 2013 (see Note 8), the Company may not pay dividends on its common stock through the maturity of the facility on September 30, 2014.

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Stock Option Grants. The Company did not grant stock options during the three months ended March 31, 2014. As of March 31, 2014, the Company had 2.5 million stock options outstanding and exercisable with a weighted average exercise price of $9.84.

Restricted Stock. A summary of all restricted stock activity under the equity compensation plans for the three months ended March 31, 2014 is as follows:

As of March 31, 2014, there was $399,000 of total unrecognized compensation costs related to the nonvested restricted stock grants. The Company estimates that these costs will be amortized over a weighted average period of 9 months.

Other Long-Term Incentive Compensation. In 2012, the Company adopted a new Long-Term Incentive Plan (LTIP), which covers all executive officers, other than its Chairman of the Board and its Vice Chairman of the Board. The annual long-term incentive awards are made at targeted dollar levels and consist of Performance Units comprising 75% of the target value and cash-based Restricted Stock Units (RSUs) comprising 25% of the target value. The ultimate value of the Performance Units and RSUs can only be settled in cash.

Since 2012, the Company has granted Performance Units and RSUs to various officers under the LTIP effective as of January of each calendar year. The value of the Performance Units is based upon a performance measure established by our compensation committee. If the performance measure is met, the Performance Units will be paid in cash at the end of the performance period subject to continued employment by the covered officer throughout the performance period and vest upon the occurrence of certain change in control events. The RSUs vest at the end of the performance period subject to continued employment by the covered officer throughout the performance period (i.e., 3-year cliff vesting as of close of business on December 31 of the third year of the performance period) and vest upon the occurrence of certain change in control events. The payout of the RSUs will be made in cash at the end of the performance period based on number of RSUs times the average weighted trailing 3-month stock price of the Company as of December 31 of the third year of the performance period.

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The following table summarizes expense reported in net income from Performance Units and RSU’s ( in thousands) :

The following table summarizes the non-current liability associated with Performance Units and RSU’s (in thousands) :

The liability for Performance Units is evaluated each quarter for the likelihood of obtaining the required performance measure and any adjustment, if necessary, is recorded as of quarter-end. As of March 31, 2014, the total unrecognized compensation costs related to the Performance Units and RSUs was approximately $605,000 and $296,000, respectively. The Company expects that these costs will be amortized to compensation expense over a weighted average period of 2.1 years.

Note 13 – Commitments and Contingencies

Litigation . The Company is subject to various asserted and unasserted claims during the course of business. Due to the uncertainty surrounding the litigation process, except for those matters for which an accrual is described below, the Company is unable to reasonably estimate the range of loss, if any, in connection with the asserted and unasserted legal actions against it. Although the outcome of many of these matters is currently not determinable, the Company believes that it has meritorious defenses and that the ultimate cost to resolve these matters will not have a material adverse effect on the Company’s consolidated financial statements. In addition to the legal proceedings discussed below, the Company is subject to various legal proceedings arising from normal business operations.

The Company assesses the materiality of litigation by reviewing a range of qualitative and quantitative factors. These factors include the size of the potential claims, the merits of the Company’s defenses and the likelihood of plaintiffs’ success on the merits, the regulatory environment that could impact such claims and the potential impact of the litigation on its business. The Company evaluates the likelihood of an unfavorable outcome of the legal or regulatory proceedings to which it is a party in accordance with accounting guidance. This assessment is subjective based on the status of the legal proceedings and is based on consultation with in-house and external legal counsel. The actual outcomes of these proceedings may differ from the Company’s assessments.

North Carolina. On February 8, 2005, the Company, two of its subsidiaries, including its subsidiary doing business in North Carolina, and Mr. Don Early, the Company’s Chairman of the Board, were sued in Superior Court of New Hanover County, North Carolina in a putative class action lawsuit filed by James B. Torrence, Sr. and Ben Hubert Cline, who were customers of a Delaware state-chartered bank for whom the Company provided certain services in connection with the bank’s origination of payday loans in North Carolina, prior to the closing of

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the Company’s North Carolina branches in fourth quarter 2005. The lawsuit alleges that the Company violated various North Carolina laws, including the North Carolina Consumer Finance Act, the North Carolina Check Cashers Act, the North Carolina Loan Brokers Act, the state unfair trade practices statute and the state usury statute, in connection with payday loans made by the bank to the two plaintiffs through the Company’s retail locations in North Carolina. The lawsuit alleges that the Company made the payday loans to the plaintiffs in violation of various state statutes, and that if the Company is not viewed as the “actual lenders or makers” of the payday loans, its services to the bank that made the loans violated various North Carolina statutes. Plaintiffs are seeking certification as a class, unspecified monetary damages, and treble damages and attorney fees under specified North Carolina statutes. Plaintiffs have not sued the bank in this matter and have specifically stated in the complaint that plaintiffs do not challenge the right of out-of-state banks to enter into loans with North Carolina residents at such rates as the bank’s home state may permit, all as authorized by North Carolina and federal law.

In July 2011, the parties completed a weeklong hearing on the Company’s motion to enforce its class action waiver provision and its arbitration provision. In January 2012, the trial court denied the Company’s motion to enforce its class action and arbitration provisions. The Company has appealed that ruling to the North Carolina Court of Appeals. On February 4, 2014, the Court of Appeals ruled that the trial court erred, and ordered the trial court to dismiss the lawsuit and that the parties proceed to arbitration. It is now expected that plaintiffs will seek review of this decision by the North Carolina Supreme Court. That review is discretionary, however, so there is a possibility that the Supreme Court will refuse review. It is expected that the Company will know if the Supreme Court will review the case by mid-2014. If the Supreme Court accepts review, the parties will file briefs and argue the matter before the Supreme Court. That would likely result in an issued decision from the Supreme Court no earlier than mid-2015.

There were three similar purported class action lawsuits filed in North Carolina against three other companies unrelated to the Company. The plaintiffs in those three cases were represented by the same law firms as the plaintiffs in the case filed against the Company. Settlements in each of the three companion cases were reached by the end of 2010; however, the settlements do not provide reasonable guidance on settlements in the Company’s case, especially in light of the favorable decision by North Carolina Court of Appeals on the Company arbitration clause.

Canada. On September 30, 2011, the Company acquired all the outstanding shares of Direct Credit, a British Columbia company engaged in short-term, consumer Internet lending in certain Canadian provinces. On October 18, 2011, Matthew Lee, an alleged Alberta, Canada resident sued Direct Credit, all of its subsidiaries and three former directors of those subsidiaries in the Supreme Court of British Columbia in a purported class action. The plaintiff alleges that Direct Credit and its subsidiaries violated Canada’s criminal usury laws by charging interest on its loans at rates higher than 60%. The plaintiff purports to represent all Canadian borrowers of the subsidiary who resided outside of British Columbia.

Plaintiff sought (i) class certification for the class described above, (ii) a declaration that loan fees collected in excess of the 60% limit in the cited usury statute are held by the defendants in constructive trust for the benefit of the class members, (iii) an accounting and restitution to plaintiff and class members of all loan fees received by the defendants, (iv) a declaration that the collection of the loan fees in excess of 60% per annum constitutes an unconscionable trade act or practice under the Canadian Business Practices Consumer Protection Act, (v) an order to restore to the class members the loan fees collected by defendants in excess of 60% per annum, and (vi) interest thereon.

On March 19, 2014, the Supreme Court of British Columbia entered a judgment regarding certain procedural matters relating to the class action, including (i) a formal rule certifying the class (which Direct Credit had not opposed), (ii) setting a 10-year statute of limitation period for the covered claims from the date the complaint was filed on October 18, 2011, (iii) setting end dates for the class period, which varies from province and territory, (iv) providing that all class members that entered into loan agreements on or after June 20, 2009 will be class members unless they opt out of the class, (v) proving that all other class members must opt into the class within three months after the notice of class certification is issued, and (vi) certain related matters.

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The parties have reached an oral settlement of this matter, subject to negotiation and execution of a written settlement agreement and receipt of required court approval of the settlement terms. The Company’s share of the proposed settlement amount and ancillary expenses, net of indemnification from the prior owners of Direct Credit, is expected to be approximately $500,000. The Company has reserved in the accompanying financial statements the estimated gross liability for settling this litigation or the agreed upon terms and recorded an indemnification asset due from the prior owners.

California. On August 13, 2012, the Company was sued in the United States District Court for the South District of California in a putative class action lawsuit filed by Paul Stemple. Mr. Stemple alleges that the Company used an automatic telephone dialing system with an “artificial or prerecorded voice” in violation of the Telephone Consumer Protection Act, 47 U.S.C. 227, et seq. The complaint does not identify any other members of the proposed class, nor how many members may be in the proposed class. This matter is in the early stages of litigation. The Company has filed an answer denying all claims. It is expected that class briefing will occur in the second quarter of 2014.

Other Matters. The Company is also currently involved in ordinary, routine litigation and administrative proceedings incidental to its business, including customer bankruptcies and employment-related matters from time to time. The Company believes the likely outcome of any other pending cases and proceedings will not be material to its business or its financial condition.

Note 14 – Certain Concentrations of Risk

The Company is subject to regulation by federal and state governments in the United States that affect the products and services provided by the Company, particularly payday loans. The Company currently operates in 23 states throughout the United States and is engaged in consumer Internet lending in three states in the United States and certain Canadian provinces. The level and type of regulation of payday loans varies greatly from state to state, ranging from states with no regulations or legislation to other states with very strict guidelines and requirements. The Company is also subject to foreign regulation in Canada where certain provinces have proposed substantive regulation of the payday loan industry.

Company short-term lending branches located in the states of Missouri and California represented approximately 23% and 16%, respectively, of total revenues for the three months ended March 31, 2014. Company short-term lending branches located in the states of Missouri and California represented approximately 30% and 15%, respectively, of total gross profit for the three months ended March 31, 2014. To the extent that laws and regulations are passed that affect the Company’s ability to offer loans or the manner in which the Company offers its loans in either of these states, the Company’s financial position, results of operations and cash flows could be adversely affected.

There was an effort in Missouri to place a voter initiative on the statewide ballot in November 2012, which was intended to preclude any lending in the state with an annual rate over 36%. The supporters of the voter initiative did not submit a sufficient number of valid signatures to place the initiative on the ballot in November 2012. However, a similar initiative was submitted to the Missouri Secretary of State in December 2012 for inclusion on the November 2014 ballot subject to the proponents submitting the required number of valid signatures in support of the initiative. The deadline for the submission of valid signatures passed on May 4, 2014, and the proponents did not submit the required signatures for the initiative to be placed on the ballot.

Note 15 – Segment Information

The Company’s operating business units offer various financial services. During the fourth quarter of 2013, the Company evaluated its operating segments and implemented changes to align the Company’s operating segments with how the Company manages the business and views the markets the Company serves. The Company has elected to organize and report on its business units as three reportable segments (Branch Lending, Centralized Lending and E-Lending). The Branch Lending segment includes branches that offer payday loans, installment loans, credit services, check cashing services, title loans, open-end credit, debit cards, money transfers and money orders. The Centralized Lending segment includes long-term installment loans (Signature Loans and

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Auto Equity Loans) that are centrally underwritten. The E-Lending segment includes the Internet lending operations in the United States and Canada. The Company evaluates the performance of its segments based on, among other things, gross profit, income from continuing operations before income taxes and return on invested capital.

The following tables present summarized financial information for the Company’s segments (in thousands) :

Information concerning total assets by reporting segment is as follows (in thousands) :

The operations of the Branch Lending and Centralized Lending segments are all located in the United States. The operations of the E-Lending segment are located in the United States and Canada.

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Note 16 – Restructuring and Other Exit Costs

Restructuring. In January 2013, the Company announced a restructuring plan for the organization primarily due to a decline in loan volumes over the past few years as a result of shifting customer demand, the poor economy, regulatory changes and increasing competition in the short-term credit industry. The restructuring plan included a 10% workforce reduction in field and corporate employees primarily due to the decision in 2012 to close 38 underperforming branches during the first half of 2013. In first quarter 2013, the Company recorded $1.1 million in pre-tax charges associated with the restructuring plan. The charges included approximately $380,000 for lease terminations and other related occupancy costs and approximately $691,000 in severance and benefit costs for the workforce reduction.

Closure of Branches. In December 2013, the Company approved the closure of 35 underperforming branches during first half of 2014. In first quarter 2014, the Company closed two of these branches and decided that one branch would remain open. The remaining branches are scheduled to be closed or sold during second quarter 2014. See additional information in Note 4.

The following table summarizes the accrued exit costs associated with the closure of branches discussed above, and the activity related to those charges as of March 31, 2014 (in thousands) :

As of March 31, 2014, the balance of $46,000 for accrued costs associated with the closure of branches is included as a current liability on the Consolidated Balance Sheets as the Company expects that the liabilities for these costs will be settled within one year.