First Acceptance Corporation Reports Operating Results for the Quarter and Year Ended December 31, 2022

NASHVILLE, TN / ACCESSWIRE / March 7, 2023 / First Acceptance Corporation (OTCQX:FACO) today reported its financial results for the quarter and year ended December 31, 2022. Our 2022 Annual Report can be found at www.otcmarkets.com/stock/FACO/disclosure.

Loss before income taxes, for the three months ended December 31, 2022, was $2.4 million, compared with $7.5 million for the three months ended December 31, 2021. Net loss for the three months ended December 31, 2022, was $2.1 million, compared with $5.6 million for the three months ended December 31, 2021. Diluted net loss per share was $0.06 for the three months ended December 31, 2022, compared with $0.15 for the same period in the prior year.

Loss before income taxes, for the year ended December 31, 2022, was $22.0 million, compared with $2.6 million for the year ended December 31, 2021. Net loss for the year ended December 31, 2022, was $17.5 million, compared with $1.2 million for the year ended December 31, 2021. Diluted net loss per share was $0.46 for the year ended December 31, 2022, compared with $0.03 for the same period in the prior year.

For the three months ended December 31, 2022, we recognized favorable prior period loss and loss adjustment expense development of $0.6 million compared to unfavorable prior period loss and loss adjustment expense development of $0.5 million, in the same period last year. For the year ended December 31, 2022, we recognized unfavorable prior period loss and loss adjustment expense development of $4.8 million, compared to favorable prior period loss and loss adjustment expense development of $1.6 million in the prior year.

For the three months ended December 31, 2022, and 2021, revenues and net loss before income taxes included net gains on investments of $0.1 million and $0.5 million, respectively. For the year ended December 31, 2022, revenues and net loss before income taxes included a net loss on investments of $1.1 million compared with a net gain on investments and foreclosed real estate held for sale of $7.5 million in the prior year.

Interim President and Chief Executive Officer, Ken Russell, commented, "As a follow-up to my message from last quarter, I am pleased to report that we have seen evidence of positive trends relating to the reduction in the elevated cost for auto repairs and the replacement of used cars that has impacted loss severity over the most recent and past several quarters. Additionally, Acceptance has continued and expects to maintain its efforts to strengthen premium rates across all states where our products are sold. We believe that together, reduced severity on incurred losses and higher premium rates are favorably impacting our loss ratio as we move into 2023. Management has continued to enact its cost containment efforts at the corporate level and we have closed identified underperforming retail locations, which together are expected to favorably impact our expense ratio. Furthermore, we are continuing to diversify our product distribution with anticipated additional growth coming from our independent agency channel.

Mr. Russell further commented, "I am also pleased to report that we have promoted our Chief Claims Officer, Doug Jensen to Executive Vice President, Chief Insurance Operations Officer, effective March 1, 2023. Doug's promotion into this new position aligns all functions and departments within our carrier operations under a single leader."

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 325 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. 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," "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, 2022, 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.

INVESTOR RELATIONS CONTACT:

Michael J. Bodayle
mbodayle@acceptance.com

SOURCE: First Acceptance Corporation