First Acceptance Corporation Reports Operating Results for the Three and Nine Months Ended September 30, 2024
Rhea-AI Summary
First Acceptance (OTCQX:FACO) reported its Q3 2024 financial results. Net income for Q3 2024 was $5.4 million ($0.14 per diluted share), down from $7.2 million ($0.19 per share) in Q3 2023. For the nine months ended September 30, 2024, net income increased to $18.1 million ($0.46 per share) from $11.5 million ($0.30 per share) year-over-year. The company recognized $3.3 million in unfavorable prior period loss development for Q3 2024. Revenues were impacted by $24.4 million in ceded premiums from a new reinsurance agreement effective July 1, 2024. The company reported strong revenue growth and its seventh consecutive profitable quarter.
Positive
- Nine-month net income increased 57% to $18.1 million from $11.5 million YoY
- Seventh consecutive quarter of profitable operations
- Record levels of written premium and policies in force
- $11.0 million reduction in commission expense for nine months due to contingent commission adjustment
Negative
- Q3 2024 net income decreased 25% to $5.4 million from $7.2 million YoY
- $24.4 million revenue reduction from ceded premiums due to new reinsurance agreement
- $13.5 million unfavorable prior period loss development for nine months of 2024
- Q3 2024 diluted EPS decreased to $0.14 from $0.19 YoY
News Market Reaction
On the day this news was published, FACO declined 2.00%, reflecting a moderate negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
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
Income before income taxes, for the nine months ended September 30, 2024 was
For the three months ended September 30, 2024, we recognized unfavorable prior period loss and LAE development of
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
Revenues for both the three and nine months ended September 30, 2024 were reduced by ceded premiums earned of
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 | |||||||||||||||
(amounts in thousands, except per share data) | |||||||||||||||
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
View the original press release on accesswire.com
FAQ
What was First Acceptance 's (FACO) net income for Q3 2024?
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What was FACO's nine-month net income for 2024?
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