Duckwall-ALCO Credit

Duckwall-ALCO Stores, Inc. entered into a $120 million, five-year revolving credit agreement with Wells Fargo Capital Finance, part of Wells Fargo & Company. The new credit facility replaces an existing $120 million credit agreement with Bank of America, N.A. and Wells Fargo Retail Finance, LLC executed in February 2010. The new facility offers a 150 basis point reduction in interest rates, access to more availability through an increase of advance rates on the collateral, a streamlined treasury management process, and an extended term. In conjunction with the closing of the transaction, the Company will record a one-time non-cash after-tax charge of approximately $300,000, or $0.08 per share, in the second quarter ended July 31, 2011. This one-time charge is related to accelerated amortization of certain transaction fees from the February 2010 loan agreement with Bank of America.