First Acceptance Corporation Reports Operating Results for the Quarter Ended March 31, 2023

NASHVILLE, TN / ACCESSWIRE / May 2, 2023 / First Acceptance Corporation (OTCQX:FACO) today reported its financial results for the quarter ended March 31, 2023. A quarterly report can be found at www.otcmarkets.com/stock/FACO/disclosure.

Income before income taxes for the three months ended March 31, 2023 was $1.4 million, compared with loss before income taxes of $3.9 million for the three months ended March 31, 2022. Net income for the three months ended March 31, 2023 was $1.2 million, compared with net loss of $3.1 million for the three months ended March 31, 2022. Diluted net income per share was $0.03 for the three months ended March 31, 2023, compared with diluted net loss per share of $0.08 for the for the three months ended March 31, 2022.

For the three months ended March 31, 2023, we recognized unfavorable prior period loss and LAE development of $1.0 million compared with $2.8 million for the same period in the prior year.

Revenues and net income for the three months ended March 31, 2023 included $0.5 million in net gains on investments, and revenues and net loss for the three months ended March 31, 2022 included $0.7 million in net gains on investments.

Interim President and Chief Executive Officer, Ken Russell, commented "The financial results for the recent quarter are an indication that we are beginning to realize the benefits of the recent actions taken by the Company to return to profitability. Premium rate increases and production growth across all distribution channels, notably our diversification with independent agents, have contributed to higher revenues. And as we anticipated, the rate increases, along with the added benefit of normalizing severity trends, have favorably impacted the loss ratio for the current accident period. Likewise, our late 2022 cost containment efforts and closures of underperforming stores have reduced our overall insurance operating expense ratio. I look forward with optimism that the Company can continue in this positive direction."

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. 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 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, 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
	March 31,
	2023				2022
Revenues	$	97,909			$	67,644
Income (loss) before income taxes	$	1,418			$	(3,907	)
Net income (loss)	$	1,158			$	(3,134	)
Net income (loss) per diluted share	$	0.03			$	(0.08	)
Average diluted shares outstanding		37,978				37,939
Combined Ratio for Insurance Companies:
Loss		75.2	%			79.2	%
Expense		27.2	%			27.9	%
Combined		102.4	%			107.1	%

INVESTOR RELATIONS CONTACT:

Michael J. Bodayle
615.844.2885

SOURCE: First Acceptance Corporation

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