First Acceptance Corporation Reports Operating Results for the Quarter and Year Ended December 31, 2024
Rhea-AI Summary
First Acceptance (OTCQX:FACO) reported its Q4 and full-year 2024 financial results. Q4 2024 income before taxes was $9.5M with net income of $8.2M, compared to $84.0M and $62.4M respectively in Q4 2023 (which included a $73.0M gain from insurance agency sale).
For full-year 2024, income before taxes reached $33.4M with net income of $26.3M. The company achieved record gross premiums written of $542.7M in 2024, a 101% increase from 2022. Investment income grew significantly from $3.9M in 2022 to $18.4M in 2024, while cash and invested assets increased to $407.8M.
Notable developments include a new reinsurance agreement effective July 1, 2024, resulting in $47.4M in ceded premiums earned. The company's tangible book value per share rose from $0.85 in 2022 to $4.41 in 2024, with diluted earnings per share of $0.67 for 2024.
Positive
- Record gross premiums written of $542.7M in 2024 (+101% vs 2022)
- Investment income grew 372% to $18.4M in 2024
- Tangible book value per share increased to $4.41 from $0.85 in 2022
- Eight consecutive quarters of profitable operations
- Income before taxes increased to $33.4M in 2024 from $26.0M in 2023
Negative
- Q4 2024 net income declined to $8.2M vs $62.4M in Q4 2023
- $13.3M unfavorable prior period loss development in 2024
- $47.4M reduction in revenues from ceded premiums due to new reinsurance agreement
- Loss of commission and fee income from sold insurance agency
News Market Reaction 1 Alert
On the day this news was published, FACO gained 9.03%, reflecting a notable positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
NASHVILLE, TN / ACCESS Newswire / March 4, 2025 / First Acceptance Corporation (OTCQX:FACO) today reported its financial results for the quarter and year ended December 31, 2024. A quarterly report can be found at www.otcmarkets.com/stock/FACO/disclosure.
Income before income taxes, for the three months ended December 31, 2024 was
Income before income taxes, for the year ended December 31, 2024 was
For the three months ended December 31, 2024, we recognized favorable prior period loss and LAE development of
Revenues for the year ended December 31, 2024 were reduced by ceded premiums earned of
The Company's President and Chief Executive Officer, Ken Russell commented "After rebounding from negative insurance industry conditions following the COVID pandemic, First Acceptance management is proud of our financial accomplishments over the past two fiscal years.
In 2022, our financial results were negatively impacted by a nationwide increase in used car prices and vehicle repair costs resulting from post-pandemic market reactions and supply chain disruptions. However, since the end of 2022, the Company has experienced eight consecutive quarters of profitable operations. This turnaround was achieved primarily through growth in premiums written along with necessary regulatory rate increases and the continuous monitoring and adjusting of underwriting standards. Additionally, our investment management team was able to take advantage of favorable market and interest rate changes in concert with our continually increasing investable assets.
The sale of our insurance agency operations in December 2023 provided the Company with sufficient statutory capital to generate gross premiums written in 2024 in excess of
Income before income taxes were
$26.0 million in 2023 (after excluding the$73.0 million gain on the sale of the insurance agency) and increased to$33.4 million in 2024.Gross premiums written (before reinsurance) were
$542.7 million in 2024 reflecting an increase of101% from$269.6 million in 2022.Investment income increased from
$3.9 million in 2022 to$18.4 million in 2024 driven by favorable market conditions and the increase in cash and invested assets from$176.8 at December 31, 2022 to$407.8 million at December 31, 2024.Tangible book value per share increased from
$0.85 at December 31, 2022 to$4.41 at December 31, 2024, primarily the result of diluted earnings per share of$1.92 in 2023 (or$0.51 excluding the after-tax gain on the sale of the insurance agency) and$0.69 in 2024.
These positive accomplishments should provide our stockholders with confidence in the resilience of First Acceptance and its leadership to weather through challenging conditions and protect the value of their investment."
About First Acceptance Corporation
First Acceptance Corporation is an insurance holding company headquartered in Nashville that underwrites non-standard personal automobile insurance through insurance companies known as the First Acceptance Insurance Group. Subsequent to December 1, 2023, we solely offer our own underwritten insurance policies through independent agents.
Additional information about First Acceptance Corporation can be found online at www.firstacceptance.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," "look," 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, 2024, 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 |
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| Year Ended |
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| December 31, |
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| December 31, |
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| 2024 |
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| 2023 |
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| 2024 |
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| 2023 |
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Revenues |
| $ | 127,231 |
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| $ | 216,395 |
|
| $ | 559,427 |
|
| $ | 560,576 |
|
Income before income taxes |
| $ | 9,548 |
|
| $ | 84,021 |
|
| $ | 33,418 |
|
| $ | 99,033 |
|
Net income |
| $ | 8,173 |
|
| $ | 62,395 |
|
| $ | 26,291 |
|
| $ | 73,912 |
|
Net income per diluted share |
| $ | 0.21 |
|
| $ | 1.62 |
|
| $ | 0.67 |
|
| $ | 1.92 |
|
Average diluted shares outstanding |
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| 39,138 |
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| 38,553 |
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| 39,095 |
|
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| 38,409 |
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Combined Ratio for Insurance Companies: |
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Loss |
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| 76.7 | % |
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| 67.3 | % |
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| 73.6 | % |
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| 69.6 | % |
Expense |
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| 16.9 | % |
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| 29.5 | % |
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| 22.1 | % |
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| 27.6 | % |
Combined |
|
| 93.6 | % |
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| 96.8 | % |
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| 95.7 | % |
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| 97.2 | % |
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Book Value per Common Share |
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| $ | 4.44 |
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| $ | 3.71 |
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INVESTOR RELATIONS CONTACT:
Michael J. Bodayle
mbodayle@firstacceptance.com
SOURCE: First Acceptance Corporation
View the original press release on ACCESS Newswire
FAQ
What was FACO's gross premium written growth from 2022 to 2024?
How much did FACO's investment income increase in 2024?
What impact did the 2023 insurance agency sale have on FACO's earnings?
How did FACO's tangible book value per share change from 2022 to 2024?
What was the impact of FACO's new reinsurance agreement in 2024?
