NASHVILLE, TN / ACCESSWIRE / November 6, 2024 / First Acceptance Corporation (OTCQX:FACO) today reported its financial results for the three and nine months ended September 30, 2024. A quarterly report can be found at www.otcmarkets.com/stock/FACO/disclosure.
Income before income taxes, for the three months ended September 30, 2024 was $6.9 million, compared with $9.4 million for the three months ended September 30, 2023. Net income for the three months ended September 30, 2024 was $5.4 million, compared $7.2 million for the three months ended September 30, 2023. Diluted net income per share was $0.14 for the three months ended September 30, 2024, compared with $0.19 for the same period in the prior year.
Income before income taxes, for the nine months ended September 30, 2024 was $23.9 million, compared with $15.0 million for the nine months ended September 30, 2023. Net income for the nine months ended September 30, 2024 was $18.1 million, compared with $11.5 million for the nine months ended September 30, 2023. Diluted net income per share was $0.46 for the nine months ended September 30, 2024, compared with $0.30 for the same period in the prior year.
For the three months ended September 30, 2024, we recognized unfavorable prior period loss and LAE development of $3.3 million, compared with $1.6 million for the same period in the prior year. For the nine months ended September 30, 2024, we recognized $13.5 million of unfavorable prior period loss and LAE development compared with $1.3 million for the same period in the prior year.
As a result of this unfavorable prior period loss and LAE development, we recognized reductions in commission expense from a contingent commission adjustment to an independent agent of $1.0 million and $11.0 million, for the three and nine months ended September 30, 2024, respectively.
Revenues for both the three and nine months ended September 30, 2024 were reduced by ceded premiums earned of $24.4 million from a new reinsurance agreement that was effective July 1, 2024.
The Company's President and Chief Executive Officer, Ken Russell, commented "Our revenues for the quarter continued to be strong, approaching record levels for the Company. Despite the recent storm activity in several of our market states, claim losses incurred from Hurricane Helena were not significant, and we do not anticipate that the fourth quarter will reflect a significant loss from Hurricane Milton. The Company continues to enjoy revenue growth and incurred claim losses within expected guidelines, resulting in our seventh consecutive quarter of profitable operating financial results. As we approach the end of our first fiscal year under a complete independent agent model of distribution, our written premium and policies in force continue to achieve record levels. I believe that we are well-situated to sustain this positive momentum."
About First Acceptance Corporation
First Acceptance Corporation is an insurance holding company headquartered in Nashville that underwrites non-standard personal automobile insurance through insurance companies known as the First Acceptance Insurance Group.
Additional information about First Acceptance Corporation can be found online at www.firstacceptance.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," "look," 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, 2023, 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 | |||||||||||||||
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Three Months Ended |
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| Nine Months Ended |
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September 30, |
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| September 30, |
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2024 |
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| 2023 |
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| 2024 |
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| 2023 |
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Revenues | $ | 129,257 |
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| $ | 133,626 |
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| $ | 432,195 |
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| $ | 344,181 |
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Income before income taxes | $ | 6,854 |
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| $ | 9,396 |
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| $ | 23,870 |
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| $ | 15,012 |
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Net income | $ | 5,402 |
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| $ | 7,204 |
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| $ | 18,118 |
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| $ | 11,517 |
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Net income per diluted share | $ | 0.14 |
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| $ | 0.19 |
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| $ | 0.46 |
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| $ | 0.30 |
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Average diluted shares outstanding |
| 39,120 |
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| 38,379 |
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| 39,021 |
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| 38,233 |
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Combined Ratio for Insurance Companies: |
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Loss |
| 76.0 | % |
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| 69.1 | % |
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| 72.7 | % |
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| 70.6 | % |
Expense |
| 19.2 | % |
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| 23.8 | % |
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| 24.6 | % |
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| 26.8 | % |
Combined |
| 95.2 | % |
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| 92.9 | % |
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| 97.3 | % |
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| 97.4 | % |
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Book Value per Common Share |
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| $ | 4.33 |
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| $ | 1.98 |
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INVESTOR RELATIONS CONTACT:
Michael J. Bodayle
mbodayle@firstacceptance.com
SOURCE: First Acceptance Corporation
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