First Acceptance Corporation Reports Operating Results for the Three and Six Months Ended June 30, 2020
First Acceptance Corporation (OTCQX:FACO) announced financial results for the three and six months ended June 30, 2020. For Q2 2020, income before taxes rose to $8.2 million, up from $7.8 million in Q2 2019. Net income increased to $6.4 million from $6.1 million. Diluted earnings per share reached $0.17, compared to $0.14 year-over-year. However, for the first half of 2020, net income dropped to $4.6 million from $12.6 million in 2019. The company reported enhanced business activity as retail locations reopened, along with a decrease in claims frequency due to reduced driving during the pandemic.
- Q2 2020 income before taxes increased to $8.2 million, up from $7.8 million in Q2 2019.
- Net income for Q2 2020 rose to $6.4 million compared to $6.1 million in Q2 2019.
- Diluted earnings per share improved to $0.17 from $0.14 year-over-year.
- Sales team performance improved with new business policies exceeding prior year levels post-reopening.
- Net income for the first half of 2020 decreased to $4.6 million from $12.6 million in 2019.
- Income before taxes for the first half of 2020 fell to $5.9 million, down from $16.1 million the previous year.
- Losses on investments totaled $2 million for the first half of 2020 compared to gains of $0.9 million in 2019.
NASHVILLE, TN / ACCESSWIRE / August 11, 2020 / First Acceptance Corporation (OTCQX:FACO) today reported its financial results for the three and six months ended June 30, 2020. A quarterly report can be found at www.otcmarkets.com/stock/FACO/disclosure.
Income before income taxes, for the three months ended June 30, 2020 was
Income before income taxes, for the six months ended June 30, 2020 was
For the three months ended June 30, 2020 and 2019, we recognized favorable prior period loss and LAE development of
Net income for the three months ended June 30, 2020 included
President and Chief Operations Officer, Larry Willeford, commented, "In early June, Acceptance reopened the doors to all of its retail locations for "face-to-face" sales while maintaining its commitment to safe practices for all customers and Team Members. The robust efforts of our sales team were boosted by the "return-to-work" reopening of the economy and the government stimulus to individuals, and our previously depressed daily counts of new business policies sold are now exceeding prior year levels. At the same time, claims frequency has subsided as we believe that our insureds are driving less during the current pandemic."
Mr. Willeford further added, "While I will be the first to acknowledge that uncertainty still lies ahead, I am so proud of how our team has maneuvered through the challenges posed by the current crisis. They have modified our sales processes as necessary to safely accommodate our insureds and our retail staff, and we have continued to effectively utilize "work-at-home" practices to ensure the safety of our corporate employees. Considering what we faced back in March, I am pleased to report that Acceptance has met the challenges of keeping its customers insured and attaining profitability for the first half of the year."
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. Currently, our operations generate revenue from sales in 17 states and from underwriting our own insurance company products in 15 of these states.
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 347 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, 2019 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, | ||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
Revenues | $ | 68,845 | $ | 77,112 | $ | 132,426 | $ | 153,681 | |||||||||||
Income before income taxes | $ | 8,206 | $ | 7,801 | $ | 5,906 | $ | 16,095 | |||||||||||
Net income | $ | 6,399 | $ | 6,079 | $ | 4,566 | $ | 12,593 | |||||||||||
Net income per diluted share | $ | 0.17 | $ | 0.14 | $ | 0.12 | $ | 0.30 | |||||||||||
Average diluted shares outstanding | 37,943 | 42,002 | 39,700 | 41,934 | |||||||||||||||
Statutory Combined Ratio: | |||||||||||||||||||
Loss | 59.0 | % | 64.7 | % | 64.2 | % | 63.3 | % | |||||||||||
Expense | 29.9 | % | 25.9 | % | 29.4 | % | 25.8 | % | |||||||||||
Combined | 88.9 | % | 90.6 | % | 93.6 | % | 89.1 | % | |||||||||||
INVESTOR RELATIONS CONTACT:
Michael J. Bodayle
615.844.2885
SOURCE: First Acceptance Corporation
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FAQ
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