NASHVILLE, TN / ACCESSWIRE / November 6, 2019 / First Acceptance Corporation (OTCQX:FACO) today reported its financial results for the three and nine months ended September 30, 2019. A quarterly report can be found at www.otcmarkets.com/stock/FACO/disclosure.
Income before income taxes, for the three months ended September 30, 2019 was $6.2 million, compared with $6.5 million for the three months ended September 30, 2018. Net income for the three months ended September 30, 2019 was $4.8 million, compared with $5.2 million for the three months ended September 30, 2018. Diluted net income per share was $0.12 for both the three months ended September 30, 2019 and 2018.
Income before income taxes, for the nine months ended September 30, 2019 was $22.3 million, compared with $20.0 million for the nine months ended September 30, 2018. Net income for the nine months ended September 30, 2019 was $17.4 million, compared with $15.4 million for the nine months ended September 30, 2018. Diluted net income per share was $0.42 for the nine months ended September 30, 2019, compared with $0.37 for the same period in the prior year.
For the three months ended September 30, 2019 and 2018, we recognized favorable prior period loss and LAE development of $9.8 million and $4.2 million, respectively.
For the nine months ended September 30, 2019 and 2018, we recognized $24.0 million and $9.4 million of favorable prior period loss and LAE development, respectively. Net income for the nine months ended September 30, 2019 included $931 thousand in unrealized gains on equity securities, compared with $376 thousand in unrealized losses on equity securities for the same period in the prior year.
Chief Executive Officer, Ken Russell, commented, 'As expected, we again realized favorable loss reserve development which contributed to another profitable quarter for Acceptance. This development is a continuing testament to the loss-reducing impact on our 2017 through 2019 accident periods and is primarily attributable to better claims-handling and product management.
While we are starting to see positive sales trends in certain segments of our business, our primary focus still remains on reversing the revenue decline we have experienced thus far in 2019. In this regard, I am pleased to announce that we have added Ken Hampton to our executive team where he leads our sales and marketing efforts. Ken has extensive experience in non-standard automobile insurance, and under his direction, new sales training modules are being developed for our employee-agents that include a greater emphasis on the sale of ancillary products and sales leadership is being equipped with better methods for maintaining a high-performing team.'
Mr. Russell further added, 'The first of October marked Larry Willeford's transition to overseeing our day-to-day operations as President and Chief Operating Officer. Larry and his team are currently in the process of developing our 2020 strategic operating plan, and together we have a shared vision of establishing the initiatives that will create a path and establish a foundation for sustainable profitable growth in the future. Additionally, in the fourth quarter, we received regulatory approval for a $25.0 million capital and surplus distribution from our lead insurance company from which our Board of Directors has approved a $25.0 million prepayment of our term loan to our principal stockholder that will reduce future interest expense.'
About First Acceptance Corporation
We are principally a retailer, servicer and underwriter of non-standard personal automobile insurance based in Nashville, Tennessee. Our insurance operations generate revenue from selling non-standard personal automobile insurance products and related products in 17 states. We currently conduct our insurance servicing and underwriting operations in 15 states and operate only as an insurance agency in two states. We are also licensed as an insurance company in 11 states where we do not conduct any business. 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 payment history, payment preference, failure in the past to maintain continuous insurance coverage or driving record and/or vehicle type.
We currently lease and operate 346 retail locations and a call center staffed with employee-agents. Our employee-agents primarily sell non-standard personal automobile insurance products underwritten by us and through third-party carriers for which we receive a commission. We also offer a variety of additional commissionable products, and, in most states, our employee-agents also sell an insurance product providing personal property and liability coverage for renters that is underwritten by us. In addition to our retail locations, we are able to complete the entire sales process over the phone via our call center or through the internet via our consumer-based website or 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.
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, 2018 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
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INVESTOR RELATIONS CONTACT:
Michael J. Bodayle
SOURCE: First Acceptance Corporation
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