First Acceptance Corporation Reports Operating Results for the Three and Six Months Ended June 30, 2021

Rhea-AI Summary

First Acceptance Corporation (OTCQX:FACO) reported its financial results for Q2 and the first half of 2021. Income before taxes for Q2 2021 was $3.6 million, down from $8.2 million in Q2 2020. Net income for Q2 2021 was $2.8 million compared to $6.4 million in the prior year. Year-to-date, net income increased to $4.9 million from $4.6 million in 2020. The company recognized favorable prior period loss development totaling $3.8 million for the first half. Additionally, in July, it gained $5.7 million from an investment and acquired renewal rights to a Florida insurance agency.

Positive

• Year-to-date net income increased to $4.9 million, up from $4.6 million in 2020.
• Successful acquisition of renewal rights to a Florida insurance agency, expanding retail locations.
• Recognized a $5.7 million gain from an investment in July 2021.

Negative

• Q2 2021 net income decreased to $2.8 million from $6.4 million in Q2 2020.
• Income before taxes for Q2 2021 dropped to $3.6 million, down from $8.2 million in Q2 2020.

NASHVILLE, TN / ACCESSWIRE / August 3, 2021 / First Acceptance Corporation (OTCQX:FACO) today reported its financial results for the three and six months ended June 30, 2021. A quarterly report can be found at www.otcmarkets.com/stock/FACO/disclosure.

Income before income taxes, for the three months ended June 30, 2021 was $3.6 million, compared with $8.2 million for the three months ended June 30, 2020. Net income for the three months ended June 30, 2021 was $2.8 million, compared with $6.4 million for the three months ended June 30, 2020. Diluted net income per share was $0.07 for the three months ended June 30, 2021, compared with $0.17 for the same period in the prior year.

Income before income taxes, for the six months ended June 30, 2021 was $6.3 million, compared with $5.9 million for the six months ended June 30, 2020. Net income for the six months ended June 30, 2021 was $4.9 million, compared with $4.6 million for the six months ended June 30, 2020. Diluted net income per share was $0.13 for the six months ended June 30, 2021, compared with $0.12 for the same period in the prior year.

For the three months ended June 30, 2021 and 2020, we recognized favorable prior period loss and LAE development of $2.4 million and $1.9 million, respectively. For the six months ended June 30, 2021 and 2020, we recognized $3.8 million and $1.1 million of favorable prior period loss and LAE development, respectively.

Net income for the three months ended June 30, 2021 included $0.5 million in net gains on investments, compared with $1.3 million for the same period in the prior year. Net income for the six months ended June 30, 2021 included $0.9 million in net gains on investments, compared with $2.0 million in net losses for the same period in the prior year.

President and Chief Operations Officer, Larry Willeford, commented "Despite an atypical economy that presented us with the challenges of a normalizing claims frequency and a competition for talent , I am pleased to report another profitable quarter for Acceptance. And although our year-to-date new business production continues to exceed the prior year, looking forward in this uncertain economy, we continue to be proactive with business development initiatives."

Mr. Willeford further added, "With this news release, we are also announcing that in July we recognized a $5.7 million gain from an investment made by one of our insurance companies. In addition, since quarter end, we have also acquired the renewal rights to the non-standard business of a Florida insurance agency which will provide us with two additional retail locations. Thus far this year, we have now added four new locations and several experienced employee-agents through our small agency acquisition program. I believe that this activity offers an excellent opportunity for Acceptance to grow in a strategic and cost-effective manner."

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.

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, 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 Income
(amounts in thousands, except per share data)

		Three Months Ended									Six Months Ended
		June 30,									June 30,
		2021				2020					2021				2020
Revenues		$	73,741			$	68,845				$	142,435			$	132,426
Income before income taxes		$	3,614			$	8,206				$	6,315			$	5,906
Net income		$	2,845			$	6,399				$	4,934			$	4,566
Net income per diluted share		$	0.07			$	0.17				$	0.13			$	0.12
Average diluted shares outstanding			38,557				37,943					38,515				39,700
Statutory Combined Ratio:
Loss			68.0	%			59.0	%				66.2	%			64.2	%
Expense			27.4	%			29.9	%				28.6	%			29.4	%
Combined			95.4	%			88.9	%				94.8	%			93.6	%

INVESTOR RELATIONS CONTACT:

Michael J. Bodayle
615.844.2885

SOURCE: First Acceptance Corporation

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https://www.accesswire.com/657766/First-Acceptance-Corporation-Reports-Operating-Results-for-the-Three-and-Six-Months-Ended-June-30-2021

FAQ

What were the net income results for First Acceptance Corporation for Q2 2021?

First Acceptance Corporation reported a net income of $2.8 million for Q2 2021, a decline from $6.4 million in Q2 2020.

How did First Acceptance Corporation's income before taxes change in Q2 2021?

Income before taxes for Q2 2021 was $3.6 million, compared to $8.2 million for the same period in 2020.

What is the total net income for First Acceptance Corporation in the first half of 2021?

For the first half of 2021, First Acceptance Corporation reported a net income of $4.9 million, up from $4.6 million in the same period of 2020.

What significant acquisition did First Acceptance Corporation make recently?

In July 2021, First Acceptance Corporation acquired renewal rights to a Florida insurance agency, enhancing its retail presence.

What gain did First Acceptance Corporation recognize in July 2021?

First Acceptance Corporation recognized a $5.7 million gain from an investment made by one of its insurance companies in July 2021.