NASHVILLE, TN / ACCESSWIRE / May 4, 2021 / First Acceptance Corporation (OTCQX: FACO) today reported its financial results for the quarter ended March 31, 2021. A quarterly report can be found at www.otcmarkets.com/stock/FACO/disclosure.
Income before income taxes, for the three months ended March 31, 2021 was $2.7 million, compared with loss before income taxes of $2.3 million for the three months ended March 31, 2020. Net income for the three months ended March 31, 2021 was $2.1 million, compared with net loss of $1.8 million for the three months ended March 31, 2020. Diluted net income per share was $0.05 for the three months ended March 31, 2021 compared with diluted net loss per share of $0.04 for the for the three months ended March 31, 2020.
For the three months ended March 31, 2021 and 2020, we recognized favorable prior period loss and LAE development of $2.3 million and $0.2 million, respectively.
Revenues and net income for the three months ended March 31, 2021 included $0.4 million in net gains on investments (unrealized gain of $0.8 million offset by a realized loss of $0.4 million) and revenues and net loss for the three months ended March 31, 2020 included $3.3 million in unrealized loss.
President and Chief Operations Officer, Larry Willeford, commented, 'Historically, Acceptance's first quarter has set the tone for the remainder of the year. Given the behavior of our customers during 'income tax season,' it is a time for us to increase our advertising investment to generate quotes to foster new business production. During the recent quarter, in addition to the benefits from improving the technology and training for our employee-agents, we also believe that our customers' financial resources were bolstered by both their tax refund checks and the continued government stimulus. Despite a delay in tax refunds that slid our usual February peak into March, I am pleased to report that new business polices in the first quarter increased 9% over the prior year and policies in force grew 16% from the beginning of the year.'
Mr. Willeford further added, 'In addition to the increased production which we believe will also contribute favorably to revenues in the coming quarters, the continuing positive trends in claims frequency and severity helped produce pre-tax income of $2.7 million in the current quarter. As we move ahead into 2021, our team will be focused on adapting to the coming post-Pandemic economy and profitably growing our business.'
The Company also announced that its Board of Directors declared a special cash dividend of $0.27 per common share, payable on June 4, 2021, to all common stockholders of record as of the close of business on May 20, 2021. The determination to pay dividends in the future will be evaluated by the Board of Directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements and contractual restrictions.
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.
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 word 'believe' or the negative of this term 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 Operations
amounts in thousands, except per share data)
INVESTOR RELATIONS CONTACT:
Michael J. Bodayle
SOURCE: First Acceptance Corp.
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