NASHVILLE, TN / ACCESSWIRE / March 3, 2020 / First Acceptance Corporation (OTCQX:FACO) today reported its financial results for the quarter and year ended December 31, 2019. Our 2019 Annual Report can be found at www.otcmarkets.com/stock/FACO/disclosure.
Loss before income taxes, for the three months ended December 31, 2019 was $2.6 million, compared with net income of $2.6 million for the three months ended December 31, 2018. Net loss for the three months ended December 31, 2019 was $2.1 million, compared with net income of $2.4 million for the three months ended December 31, 2018. Diluted net loss per share was $0.05 for the three months ended December 31, 2019, compared with diluted net income per share of $0.06 for the same period in the prior year.
Income before income taxes, for the year ended December 31, 2019 was $19.7 million, compared with $22.6 million for the year ended December 31, 2018. Net income for the year ended December 31, 2019 was $15.4 million, compared with $17.8 million for the year ended December 31, 2018. Diluted net income per share was $0.37 for the year ended December 31, 2019, compared with $0.43 for the same period in the prior year.
For the three months ended December 31, 2019 and 2018, we recognized favorable prior period loss and loss adjustment expense development of $3.0 million and $9.7 million, respectively. For the years ended December 31, 2019 and 2018, we recognized favorable prior period loss and loss adjustment expense development of $25.4 million and $16.2 million, respectively.
Net income for the year ended December 31, 2019 included $1.3 million in net unrealized gains on equity securities compared with $1.7 million in net unrealized losses on equity securities for the same period in the prior year.
President and Chief Operations Officer, Larry Willeford, commented, "When I assumed my new position at the beginning of the fourth quarter, I placed my primary focus on reversing the Company's recent decline in revenues. In this regard, our new head of sales and marketing, Ken Hampton, has filled out his sales and marketing team with experienced leaders to help him move forward with this goal. During this past quarter, we also made a significant investment towards restoring our brand through extensive digital advertising with our new "We Live Where You Do" message. In this same time period, we have added new intuitive tools to our agency management system that are designed to increase both new and renewal business. These long-term growth expenditures factored into the loss we incurred during the quarter."
Mr. Willeford further added, "As we had anticipated and our financial results have revealed, the magnitude of our prior period loss development has begun to normalize. I am also pleased with our accident year 2019 loss ratio. This result of strong efforts by our product and claims teams, has made me optimistic that profitable underwriting, along with increased revenues, will enable the Company to sustain future profitability. Likewise, I still am confident that adding third party insurance carriers within our new agency model, best optimizes our retail footprint."
About First Acceptance Corporation
We are principally a retailer, servicer and underwriter of non-standard personal automobile insurance based in Nashville, Tennessee. Our insurance operations generate revenue from selling non-standard personal automobile insurance products and related products in 17 states. We currently conduct our insurance servicing and underwriting operations in 15 states and operate only as an insurance agency in two states. 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 payment history, payment preference, failure in the past to maintain continuous insurance coverage or driving record and/or vehicle type.
We currently lease and operate 344 retail locations and a call center staffed with employee-agents. Our employee-agents primarily sell non-standard personal automobile insurance products underwritten by us and through third-party carriers for which we receive a commission. We also offer a variety of additional commissionable products, and, in most states, our employee-agents also sell an insurance product providing personal property and liability coverage for renters that is underwritten by us. In addition to our retail locations, we are able to complete the entire sales process over the phone via our call center or through the internet via our consumer-based website or 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 Operations
(amounts in thousands, except per share data)
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Three Months Ended | Year Ended | ||||||||||||||
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December 31, | December 31, | ||||||||||||||
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2019 | 2018 | 2019 | 2018 | ||||||||||||
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Revenues
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$ | 68,060 | $ | 73,729 | $ | 292,691 | $ | 323,813 | ||||||||
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Income before income taxes
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$ | (2,560 | ) | $ | 2,643 | $ | 19,715 | $ | 22,606 | |||||||
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Net income (loss)
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$ | (2,057 | ) | $ | 2,363 | $ | 15,356 | $ | 17,718 | |||||||
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Net income (loss) per diluted share
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$ | (0.05 | ) | $ | 0.06 | $ | 0.37 | $ | 0.43 | |||||||
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Average diluted shares outstanding
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41,534 | 41,693 | 41,914 | 41,616 | ||||||||||||
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Loss Ratio
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71.2 | % | 67.3 | % | 64.3 | % | 69.4 | % | ||||||||
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Expense Ratio
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34.6 | % | 26.9 | % | 29.3 | % | 24.4 | % | ||||||||
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Combined Ratio
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105.8 | % | 94.2 | % | 93.6 | % | 93.8 | % | ||||||||
INVESTOR RELATIONS CONTACT:
Michael J. Bodayle
615.844.2885
SOURCE: First Acceptance Corporation
View source version on accesswire.com:
https://www.accesswire.com/578448/First-Acceptance-Corporation-Reports-Operating-Results-for-the-Quarter-and-Year-Ended-December-31-2019
