First Acceptance Corporation Reports Operating Results for the Three and Nine Months Ended September 30, 2018

NASHVILLE, TN / ACCESSWIRE / November 7, 2018 / First Acceptance Corporation (OTCQX: FACO) today reported its financial results for the three and nine months ended September 30, 2018. A quarterly report can be found at www.otcmarkets.com/stock/FACO/disclosure.

Income before income taxes, for the three months ended September 30, 2018 was $6.5 million, compared with $3.4 million for the three months ended September 30, 2017. Net income for the three months ended September 30, 2018 was $5.2 million, compared with $2.0 million for the three months ended September 30, 2017. Basic and diluted net income per share were $0.12 for the three months ended September 30, 2018, compared with $0.05 for the same period in the prior year.

Income before income taxes, for the nine months ended September 30, 2018 was $20.0 million, compared with $3.4 million for the nine months ended September 30, 2017. Net income for the nine months ended September 30, 2018 was $15.4 million, compared with $1.8 million for the nine months ended September 30, 2017. Basic and diluted net income per share were $0.37 for the nine months ended September 30, 2018, compared with $0.04 for the same period in the prior year.

For the three months ended September 30, 2018 and 2017, we recognized favorable prior period loss and LAE development of $4.2 million and $3.6 million, respectively. For the nine months ended September 30, 2018 and 2017, we recognized $9.4 million and $0.7 million of favorable prior period loss and LAE development, respectively.

For the three and nine months ended September 30, 2018, the Company recognized $77 thousand in unrealized gains on equity securities, and $376 thousand in unrealized losses on equity securities, respectively. These are now a component of net income in accordance with newly-adopted accounting standards.

President and Chief Executive Officer, Ken Russell, commented, "I am pleased to report that our Company continues to achieve consistent profitability by maintaining more disciplined underwriting and appropriate pricing of premiums. We have now recovered sufficient statutory capital to bring our underwriting leverage below the 3-to-1 regulatory guideline. Additionally, our continued risk management, as well as strong consistent claims handling, have resulted in a solid 74.8% loss ratio for the current accident year."

Mr. Russell further added "It is satisfying that our Company has been able to maintain solid profitable operations while migrating all of our sales distribution units to a full agency model. We plan on completing this initiative with all sales units offering both Acceptance and third-party non-standard automobile insurance products, as well as other-than-auto insurance products, before the end of the year. The challenges of installing a new agency management system, establishing and enhancing our third-party carrier relationships and retraining our employee-agents has been a monumental effort. I believe that we are now better positioned to serve our customers by providing a broader range of products for their needs. With change it often takes time to achieve new objectives and efficiencies. Based on the results we have seen from the agency model migration thus far, management believes that we will see a continued favorable impact from this effort as we move into 2019."

About First Acceptance Corporation

First Acceptance Corporation is principally a retailer, servicer and underwriter of non-standard personal automobile insurance based in Nashville, Tennessee. Its insurance operations generate revenue from selling non-standard personal automobile insurance products and related products in 16 states. The company currently conducts its insurance servicing and underwriting operations in 13 states and operates only as an insurance agency in three states. The company is also licensed as an insurance company in 13 states where it does not conduct any business. 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.

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 word "believe" or the negative of this term 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 possibility that there may not be an active trading market for our securities, the possibility that delisting and deregistration could adversely affect the price and liquidity of our securities, and the factors set forth under the caption "Risk Factors" in Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2017 and in our other filings with the SEC. 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

615.844.2885

SOURCE: First Acceptance Corporation