First Acceptance Corporation Reports Operating Results for the Quarter and Year Ended December 31, 2022
First Acceptance Corporation (OTCQX:FACO) reported its financial results for the quarter and year ending December 31, 2022. For Q4, the company posted a net loss of $2.1 million, a significant reduction from $5.6 million in Q4 2021. The 2022 total net loss was $17.5 million, compared to $1.2 million in the previous year. The average diluted loss per share was $0.06 for Q4 2022, down from $0.15, while the annual figure was $0.46 compared to $0.03. Despite a 4.8 million unfavorable prior period loss development, management cited positive trends in cost reductions and premium rate increases. Ken Russell announced the promotion of Doug Jensen to a new executive role overseeing insurance operations.
- Reduction in Q4 net loss from $5.6 million to $2.1 million.
- Improvement in diluted net loss per share from $0.15 to $0.06 in Q4.
- Management reported positive trends in auto repair costs and premium rates, potentially favorably impacting loss ratios in 2023.
- Continued cost containment efforts at the corporate level, including closure of underperforming locations, to improve expense ratios.
- Promotion of Doug Jensen to a new role aligns insurance operations under a single leader, enhancing operational efficiency.
- 2022 total net loss significantly increased to $17.5 million from $1.2 million in 2021.
- Average diluted net loss per share increased from $0.03 to $0.46 over the year.
- Recognized unfavorable prior period loss and loss adjustment expense development of $4.8 million for the year.
NASHVILLE, TN / ACCESSWIRE / March 7, 2023 / First Acceptance Corporation (OTCQX:FACO) today reported its financial results for the quarter and year ended December 31, 2022. Our 2022 Annual Report can be found at www.otcmarkets.com/stock/FACO/disclosure.
Loss before income taxes, for the three months ended December 31, 2022, was
Loss before income taxes, for the year ended December 31, 2022, was
For the three months ended December 31, 2022, we recognized favorable prior period loss and loss adjustment expense development of
For the three months ended December 31, 2022, and 2021, revenues and net loss before income taxes included net gains on investments of
Interim President and Chief Executive Officer, Ken Russell, commented, "As a follow-up to my message from last quarter, I am pleased to report that we have seen evidence of positive trends relating to the reduction in the elevated cost for auto repairs and the replacement of used cars that has impacted loss severity over the most recent and past several quarters. Additionally, Acceptance has continued and expects to maintain its efforts to strengthen premium rates across all states where our products are sold. We believe that together, reduced severity on incurred losses and higher premium rates are favorably impacting our loss ratio as we move into 2023. Management has continued to enact its cost containment efforts at the corporate level and we have closed identified underperforming retail locations, which together are expected to favorably impact our expense ratio. Furthermore, we are continuing to diversify our product distribution with anticipated additional growth coming from our independent agency channel.
Mr. Russell further commented, "I am also pleased to report that we have promoted our Chief Claims Officer, Doug Jensen to Executive Vice President, Chief Insurance Operations Officer, effective March 1, 2023. Doug's promotion into this new position aligns all functions and departments within our carrier operations under a single leader."
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 325 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. 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," "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, 2022, 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) | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
Revenues | $ | 87,858 | $ | 66,445 | $ | 302,296 | $ | 285,247 | |||||||||
Loss before income taxes | $ | (2,434 | ) | $ | (7,476 | ) | $ | (22,033 | ) | $ | (2,581 | ) | |||||
Net loss | $ | (2,146 | ) | $ | (5,630 | ) | $ | (17,488 | ) | $ | (1,228 | ) | |||||
Net loss per diluted share | $ | (0.06 | ) | $ | (0.15 | ) | $ | (0.46 | ) | $ | (0.03 | ) | |||||
Average diluted shares outstanding | 37,799 | 37,971 | 37,795 | 38,151 | |||||||||||||
Loss Ratio | 80.0 | % | 79.1 | % | 78.7 | % | 74.2 | ||||||||||
Expense Ratio | 30.0 | % | 32.3 | % | 30.6 | % | 29.3 | ||||||||||
Combined Ratio | 110.0 | % | 111.4 | % | 109.3 | % | 103.5 | ||||||||||
INVESTOR RELATIONS CONTACT:
Michael J. Bodayle
mbodayle@acceptance.com
SOURCE: First Acceptance Corporation
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https://www.accesswire.com/742499/First-Acceptance-Corporation-Reports-Operating-Results-for-the-Quarter-and-Year-Ended-December-31-2022
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