First Acceptance Corporation Reports Operating Results for the Three and Nine Months Ended September 30, 2022
First Acceptance Corporation (OTCQX:FACO) reported significant financial losses for Q3 and the first nine months of 2022. The company reported a net loss of $8.6 million for the three months ending September 30, 2022, compared to a $0.5 million loss in 2021. For the nine-month period, net loss totaled $15.3 million, a stark contrast to a $4.4 million income in the previous year. Underwriting losses were influenced by inflation and rising auto repair costs. The company is planning to implement premium rate increases to mitigate these challenges.
- The company plans to increase premium rates to counteract underwriting losses.
- Recent expansion of variable cost independent agency channel could diversify income sources.
- Net loss increased significantly to $8.6 million in Q3 2022 from $0.5 million in Q3 2021.
- Total net loss for the nine months of 2022 reached $15.3 million, down from a net income of $4.4 million in 2021.
- Unfavorable prior period loss development amounted to $5.4 million for Q3 2022.
NASHVILLE, TN / ACCESSWIRE / November 1, 2022 / First Acceptance Corporation (OTCQX:FACO) today reported its financial results for the three and nine months ended September 30, 2022. A quarterly report can be found at www.otcmarkets.com/stock/FACO/disclosure.
Loss before income taxes, for the three months ended September 30, 2022 was
Loss before income taxes, for the nine months ended September 30, 2022 was
For the three months ended September 30, 2022, we recognized unfavorable prior period loss and LAE development of
Revenues and net loss for the three months ended September 30, 2022 included
Interim President and Chief Executive Officer, Ken Russell, commented, "For the recent quarter, underwriting losses continued for Acceptance and other auto insurers. These losses were driven by the prolonged increase in inflation and the elevated cost for auto repairs and the replacement of used cars that has exceeded the impact of recent premium rate increases. The American Property Casualty Insurance Association reported that the private passenger automobile loss ratio for the second quarter of 2022 was the highest in more than 20 years. While we expect this inflationary challenge to continue into 2023, Acceptance will seek additional premium rate increases while working to reduce its expense ratio through cost containment efforts and by diversifying its business mix through the recent expansion of its variable cost independent agency channel."
Our management team and employees are saddened by the recent, untimely death of its President and Chief Operating Officer, Larry Willeford. Mr. Russell further commented: "The Acceptance team is united in honoring Larry's legacy and the lasting impact of his leadership."
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 338 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 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, 2021 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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenues | $ | 76,771 | $ | 76,366 | $ | 214,438 | $ | 218,802 | ||||||||
(Loss) income before income taxes | $ | (10,801 | ) | $ | (1,421 | ) | $ | (19,598 | ) | $ | 4,895 | |||||
Net (loss) income | $ | (8,648 | ) | $ | (532 | ) | $ | (15,342 | ) | $ | 4,402 | |||||
Net (loss) income per diluted share | $ | (0.23 | ) | $ | (0.01 | ) | $ | (0.41 | ) | $ | 0.11 | |||||
Average diluted shares outstanding | 37,744 | 38,242 | 37,794 | 38,478 | ||||||||||||
Statutory Combined Ratio: | ||||||||||||||||
Loss | 85.5 | % | 85.6 | % | 80.0 | % | 72.6 | % | ||||||||
Expense | 32.0 | % | 28.1 | % | 30.0 | % | 28.4 | % | ||||||||
Combined | 117.5 | % | 113.7 | % | 110.0 | % | 101.0 | % | ||||||||
INVESTOR RELATIONS CONTACT:
Michael J. Bodayle
615.844.2885
SOURCE: First Acceptance Corporation
View source version on accesswire.com:
https://www.accesswire.com/723295/First-Acceptance-Corporation-Reports-Operating-Results-for-the-Three-and-Nine-Months-Ended-September-30-2022
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