First Acceptance Corp.
3.8.2021 22:06:47 CEST | ACCESS Newswire | Press release
NASHVILLE, TN / ACCESSWIRE / August 3, 2021 / First Acceptance Corporation (OTCQX:FACO) today reported its financial results for the three and six months ended June 30, 2021. A quarterly report can be found at www.otcmarkets.com/stock/FACO/disclosure.
Income before income taxes, for the three months ended June 30, 2021 was $3.6 million, compared with $8.2 million for the three months ended June 30, 2020. Net income for the three months ended June 30, 2021 was $2.8 million, compared with $6.4 million for the three months ended June 30, 2020. Diluted net income per share was $0.07 for the three months ended June 30, 2021, compared with $0.17 for the same period in the prior year.
Income before income taxes, for the six months ended June 30, 2021 was $6.3 million, compared with $5.9 million for the six months ended June 30, 2020. Net income for the six months ended June 30, 2021 was $4.9 million, compared with $4.6 million for the six months ended June 30, 2020. Diluted net income per share was $0.13 for the six months ended June 30, 2021, compared with $0.12 for the same period in the prior year.
For the three months ended June 30, 2021 and 2020, we recognized favorable prior period loss and LAE development of $2.4 million and $1.9 million, respectively. For the six months ended June 30, 2021 and 2020, we recognized $3.8 million and $1.1 million of favorable prior period loss and LAE development, respectively.
Net income for the three months ended June 30, 2021 included $0.5 million in net gains on investments, compared with $1.3 million for the same period in the prior year. Net income for the six months ended June 30, 2021 included $0.9 million in net gains on investments, compared with $2.0 million in net losses for the same period in the prior year.
President and Chief Operations Officer, Larry Willeford, commented "Despite an atypical economy that presented us with the challenges of a normalizing claims frequency and a competition for talent , I am pleased to report another profitable quarter for Acceptance. And although our year-to-date new business production continues to exceed the prior year, looking forward in this uncertain economy, we continue to be proactive with business development initiatives."
Mr. Willeford further added, "With this news release, we are also announcing that in July we recognized a $5.7 million gain from an investment made by one of our insurance companies. In addition, since quarter end, we have also acquired the renewal rights to the non-standard business of a Florida insurance agency which will provide us with two additional retail locations. Thus far this year, we have now added four new locations and several experienced employee-agents through our small agency acquisition program. I believe that this activity offers an excellent opportunity for Acceptance to grow in a strategic and cost-effective manner."
About First Acceptance Corporation
We own and operate "Acceptance Insurance," an insurance agency headquartered in Nashville, Tennessee that sells insurance and related products underwritten and serviced by our own insurance companies (known as the First Acceptance Insurance Group) and through third-party carriers for which we receive a commission. We operate under an "Agency Model" in 15 states where we sell both our own underwritten insurance policies and those issued by third-party insurers for which we earn commissions.
Acceptance Insurance primarily sells non-standard personal automobile insurance through our own insurance companies and third-party carriers. Non-standard personal automobile insurance is sought after by individuals because of their inability or unwillingness to obtain standard insurance coverage due to various factors including their payment preference, failure to have maintained continuous insurance coverage, or their driving record. We also offer a variety of other commissionable third-party products such as roadside assistance and in most states, we also sell an insurance product for renters that we underwrite. We believe that our agency-focused operations provide us with a variety of insurance alternatives for our core customers as well as the ability to provide products that suit other potential customers.
Acceptance Insurance currently leases and operates 336 retail locations staffed with employee-agents. In addition to our retail locations, we are able to complete sales over the phone through employee-agents in our call center or through our consumer-based website and mobile platform. On a limited basis, we also sell our products through selected retail locations operated by independent agents.
Additional information about First Acceptance Corporation can be found online at www.acceptance.com.
Forward-Looking Statements
This press release contains forward-looking statements. All statements made other than statements of historical fact are forward-looking statements. You can identify these statements from our use of the words "believe," "expect," or the negative of these objective terms and similar expressions. These statements, which have been included in reliance on the "safe harbor" provisions of the federal securities laws, involve risks and uncertainties. Investors are hereby cautioned that these statements may be affected by important factors, including, among others, the factors set forth under the caption "Risk Factors" in our Annual Report for the year ended December 31, 2020 filed by the Company with the OTCQX. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
First Acceptance Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(amounts in thousands, except per share data)
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||
Revenues | $ | 73,741 | $ | 68,845 | $ | 142,435 | $ | 132,426 | |||||||||
Income before income taxes | $ | 3,614 | $ | 8,206 | $ | 6,315 | $ | 5,906 | |||||||||
Net income | $ | 2,845 | $ | 6,399 | $ | 4,934 | $ | 4,566 | |||||||||
Net income per diluted share | $ | 0.07 | $ | 0.17 | $ | 0.13 | $ | 0.12 | |||||||||
Average diluted shares outstanding | 38,557 | 37,943 | 38,515 | 39,700 | |||||||||||||
Statutory Combined Ratio: | |||||||||||||||||
Loss | 68.0 | % | 59.0 | % | 66.2 | % | 64.2 | % | |||||||||
Expense | 27.4 | % | 29.9 | % | 28.6 | % | 29.4 | % | |||||||||
Combined | 95.4 | % | 88.9 | % | 94.8 | % | 93.6 | % | |||||||||
INVESTOR RELATIONS CONTACT:
Michael J. Bodayle
615.844.2885
SOURCE: First Acceptance Corporation
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