Advance America announces results of second quarter

July 26, 2006 - Spartanburg, South Carolina

Advance America, Cash Advance Centers, Inc. today reported the results of its operations for the second quarter and six months ended June 30, 2006.

For the six months ended June 30, 2006, total revenues increased 6.7% to $308.1 million, compared to $288.7 million for same period in 2005. Total revenues for the quarter ended June 30, 2006 increased 3.7% to $155.9 million compared to $150.3 million for the quarter ending June 30, 2005. For the quarter ended June 30, 2006, total revenues for the centers opened prior to April 1, 2005 and still open as of June 30, 2006 increased 4.6% compared to the same period in 2005. Excluding centers in Arkansas, Illinois, Indiana, and Pennsylvania where legislative and regulatory changes have negatively affected revenues during the period, total revenues for the quarter ended June 30, 2006 for centers opened prior to April 1, 2005 and still open as of June 30, 2006 increased 17.4% compared to the same period in 2005.

Center gross profit increased 10.6%, from $80.1 million in the first six months of 2005 to $88.6 million in the first six months of 2006. For the quarter ended June 30, 2006, center gross profit was $38.5 million compared to $34.2 million for the quarter ended June 30, 2005.

Net income for the first six months of 2006 was $33.3 million, compared to net income of $30.5 million for the same period in 2005. Net income for the quarter ended June 30, 2006 was $12.9 million compared to $10.7 million for the quarter ended June 30, 2005.

Diluted earnings per share were $0.16 for the quarter ended June 30, 2006 compared to diluted earnings per share of $0.13 for the same period in 2005. For the six months ended June 30, 2006, diluted earnings per share were $0.41 compared to diluted earnings per share of $0.36 for the same period in 2005.

Commenting on the second quarter 2006 results, Advance America's President and Chief Executive Officer Ken Compton said, "This was a challenging quarter, but one that also underscored the overall strength of our business model. We experienced new regulatory changes, which caused us to alter our business model in Pennsylvania and Arkansas and reduced revenues for the second quarter. In addition, the Company continues to experience the effects of previous legislative and regulatory changes in Illinois and Indiana, which we believe improve the regulatory landscape, but have impaired our results for the second quarter. We remain encouraged by continued consumer demand for the payday cash advance product and strong growth rates in the other 32 states in which we operate."

The Company previously announced that in both Pennsylvania and Arkansas it had ceased operations as marketing, processing, and servicing agent for Federal Deposit Insurance Corporation (FDIC) supervised banks that offered payday cash advances and installment loans. In Pennsylvania, the bank discontinued offering both advances and loans in March 2006. In Arkansas the bank discontinued offering installment loans in April and payday cash advances in June 2006. These changes resulted in an estimated reduction in revenue of approximately $9.6 million for the quarter ended June 30, 2006 compared to the same period in 2005.

On June 20, 2006, the Company announced that its subsidiary in Pennsylvania began offering consumers in that state a new financial service called the Advance America Choice-Line of Credit. This service allows customers access up to $500 in credit for a monthly participation fee plus interest on outstanding loan balances. Since the introduction of the Choice-Line of Credit, representatives from the Pennsylvania Department of Banking have asserted, in both public comments and informal discussions with the Company, that this product violates the Pennsylvania Consumer Discount Company Act. The Company, however, remains confident that it is in compliance with all applicable laws.

On June 26, 2006, the Company's subsidiary in Arkansas began operating under existing state based legislation, directly providing consumers with check-cashing services. Depending on consumer acceptance of these products, and other management and regulatory issues, the Company expects operating results in both Pennsylvania and Arkansas will be similar to those historically generated prior to the implementation of the Revised FDIC Guidance in July 2005.

In Illinois and Indiana, modifications to state-based legislation, which the Company supported, resulted in a $4.3 million reduction in revenue for the quarter ended June 30, 2006 compared to the same period of 2005.

The Company opened 46 and 88 new centers during the second quarter and six months ended June 30, 2006, respectively, compared to 104 and 126 during the same periods in 2005. As of June 30, 2006, the Company had expanded its national operating network to a total of 2,670 centers in 36 states.

The provision for doubtful accounts and agency bank losses as a percent of total revenues for the quarter ended June 30, 2006 was 17.6% compared to 20.3% for the same period in 2005. Proceeds from the sale of previously written-off customer receivables during the second quarter of 2006 totaled approximately $1.2 million.

On July 26, 2006, the Company's Board of Directors declared a regular quarterly dividend of $0.11 per share. The dividend will be payable on September 8, 2006, to stockholders of record as of August 28, 2006.

The Company will discuss these results during a conference call on Thursday, July 27, at 9:00 a.m. (EDT). To listen to this call, please dial the conference telephone number (800) 810-0924. This call will also be webcast live and can be accessed at Advance America's website www.advanceamericacash.com. An audio replay of the call will be available online or by telephone (888) 203-1112 (replay passcode: 9046150) until the close of business on August 2, 2006.

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Yahoo! Finance, Advance America Press Release

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Advance America announces results of second quarter

July 26, 2006 - Spartanburg, South Carolina

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