First Acceptance Corp. (FACO) research, news, and more from GeoInvesting

Company description

Wed, 09 May 2018 15:13:03 GMT

First Acceptance Corporation is a retailer, servicer and underwriter of non-standard personal automobile insurance based in Nashville, Tennessee. The Company operates in two segments: Insurance, and Real estate and corporate. Its insurance operations are engaged in selling non-standard personal automobile insurance products and related products in over 20 states. The real estate and corporate segment consists of the activities related to the disposition of foreclosed real estate held for sale, interest expense associated with all debt and other general corporate overhead expenses. The Company conducts its servicing and underwriting operations in approximately 10 states and is licensed as an insurer in over 10 additional states. It leases and operates approximately 440 retail locations and a call center staffed by employee-agents who primarily sell non-standard personal automobile insurance products underwritten by the Company, as well as certain commissionable ancillary products.

Research

Wed, 04 Mar 2026 18:31:41 GMT

First Acceptance Corp. (OTC:FACO) ($4.14; $151.7M market cap) announced Q4 and full-year 2025 results:

Q4 sales of $99.9 million vs. $127.2 million in the prior year
Q4 2025 EPS: $0.24 vs. $0.21 in the prior year
FY sales of $506.3 million vs. $559.4 million in the prior year
FY 2025 EPS: $0.80 vs. $0.67 in the prior year

Management Commentary:

"The year ended December 31, 2025 marked the Company's third consecutive year of increased net income from our insurance operations. Despite a year beginning with uncertainty around tariffs, a marked increase in loss severity and a broadly challenged consumer economy, we managed to sustain and grow our profitability through our transition to an independent agency model with a predominantly variable cost structure. We look forward to continued profitability along with the continuation of our efforts to diversify our product distribution. The 15% increase in net income year-over-year and a tangible book value over $5.40 a share are a testament to the strength of our Company and how we are positioned to continue to capitalize on our growing independent agency distribution platform, disciplined underwriting execution, and scalable, variable-cost operating model.”

Our Quick Take:

Q4 2025 revenues declined YoY, partly driven by a $17M accounting reclassification. Adjusting for this item, Q4 2025 revenue would have been approximately $116.9M, which still represents a decline versus Q4 2024.

Despite this, profitability improved. EPS increased YoY, and the combined ratio was 95%, indicating continued underwriting profitability. Book value per share also increased meaningfully.

Given the challenging environment in 2025 (tariffs, higher loss severity, and a broadly pressured consumer environment), the results are decent.

We’re looking into why the stock is not trading at a typical insurance company valuation of 1.5x to 2.5x book.

First Acceptance Corporation provides non-standard auto insurance and related products, underwriting policies for high-risk drivers and offering additional insurance and telemedicine services through retail locations, call centers, and online channels.

Research

Wed, 05 Nov 2025 05:00:00 GMT

First Acceptance Corporation (OTC:FACO) ($3.33; $122.0M market cap) announced Q3 2025 results:

Q3 sales of $140.7 million vs. $129.3 million in the prior year
Q3 EPS of $0.27 vs. $0.14 in the prior year

“The Company continued its profitable results for the nine months ended September 30, 2025, strengthened by improvements from claims handling, leveling claims costs and strong underwriting and pricing actions. Although since the first quarter of 2025 the industry has experienced an increase in physical damage loss severities relating to increased costs for autos and parts, over the last two quarters there has been a partial stabilization of these costs. Additionally, enhancements and efficiencies in our claim handling operations have been implemented throughout 2025. Claim costs, lower than our first quarter expectations, recognized in the current quarter were also favorably influenced by a reduction in claims frequency. In addition to the favorable reduction in claim costs realized through September 30, 2025, management believes that revenues, investment returns and our fixed operating expenses continue to meet our expectations."

Key Takeaway

The company put up a strong EPS number after a few quarters of average results. Hopefully, we’re starting to see the benefits of their partnership with a large real estate brokerage firm that acquired FACO’s brokerage business in late 2023. You can read more about that in our research piece here.

FACO trades at a tangible book value of $5.05, compared with insurance companies that often trade between 1.5x and 2x book value. This implies a price target range of $7.57 to $10.10. FACO currently resides in our Open Forum Focus Portfolio, and hopefully these results will give the stock a little lift.

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.

Research

Wed, 06 Aug 2025 04:00:00 GMT

First Acceptance Corporation (OTC:FACO) ($3.18; $120.1M market cap) announced Q2 2025 results:

Q2 2025 sales of $140.7 million vs. $157.7 million in the prior year
Q2 2025 EPS: $0.21 vs. $0.15 in the prior year
Favorable prior period loss and LAE development of $7.8 million in Q2 2025 (vs. unfavorable $4.8 million in Q2 2024)
Revenues were reduced by ceded premiums earned of $24.9 million in Q2 and $48.2 million in H1 due to a new reinsurance agreement effective July 1, 2024
Contingent commission adjustment of $1.8 million increased commission expense in Q2 due to 2024 accident year

"The three months ended June 30, 2025 marked our Company's tenth consecutive profitable quarter. During the current quarter, the Company's claims cost for imported auto parts was consistent with the first quarter, and as a result, physical damage loss severity levels appeared to be stabilizing. Additionally, bodily injury loss frequency declined favorably. Our positive year-to date financial results have increased our June 30, 2025, book value per common share to a record $4.85." – Ken Russell, President and CEO

Research

Wed, 07 May 2025 13:57:17 GMT

First Acceptance Corporation (OTC:FACO) ($3.63; $138.6M market cap) announced Q1 2025 results:

Q1 sales of $125.1 million vs. $145.3 million in the prior year
Q1 EPS of $0.08 vs. $0.18 in the prior year

Noteworthy Disclosures:

Revenues were reduced by $23.3 million due to ceded premiums earned under a new reinsurance agreement effective July 1, 2024.
Prior period loss and LAE development was unfavorable at $0.2 million, compared to $3.9 million in the prior year.

Management Commentary:

“Our first quarter financial results were impacted by increased physical damage loss severity. We believe this was largely attributable to marketplace price increases in anticipation of tariffs on imported vehicles, auto parts and vehicle components. While uncertainty about the future of these tariffs still lingers, we, along with the automobile insurance industry, will focus on monitoring these trends and will respond accordingly by modifying our underwriting standards and seeking regulatory approval to increase our pricing where appropriate,” said Ken Russell, President and Chief Executive Officer

Research

Wed, 05 Mar 2025 20:42:50 GMT

First Acceptance Corp. (OTC:FACO) ($3.10; $118.2M market cap) - reported fourth quarter 2024 results:

Sales of $127.2 million vs $216.4 million in the prior year
EPS of $0.21 vs $0.21. in the prior year

“In 2022, our financial results were negatively impacted by a nationwide increase in used car prices and vehicle repair costs resulting from post-pandemic market reactions and supply chain disruptions. However, since the end of 2022, the Company has experienced eight consecutive quarters of profitable operations. This turnaround was achieved primarily through growth in premiums written along with necessary regulatory rate increases and the continuous monitoring and adjusting of underwriting standards. Additionally, our investment management team was able to take advantage of favorable market and interest rate changes in concert with our continually increasing investable assets…

..Tangible book value per share increased from $0.85 at December 31, 2022 to $4.41 at December 31, 2024, primarily the result of diluted earnings per share of $1.92 in 2023 (or $0.51 excluding the after-tax gain on the sale of the insurance agency) and $0.69 in 2024.”

Research

Thu, 07 Nov 2024 20:26:51 GMT

First Acceptance Corp. (OTC:FACO) ($3.50; $133.5M market cap) - reported third quarter 2024 results:

Sales of $129.2 million vs $133.6 million in the prior year
EPS of $0.14 vs $0.19 in the prior year

"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."

We had hoped for a better Q3 outing, given that the company now has a leading brokerage firm selling their policies. We would like to understand how long it might take for this relationship to gain momentum. However, it’s possible that severe weather conditions in some of the markets that the company services slowed down sales activities during the quarter.

Overall, we sill like the story and believe the stock is still undervalued, given long term growth opportunities and the ability for the company to materially increase the amount of insurance policies it can write, given the large increase in its cash balance as a result of the sale of its retail brokerage business at the end of 2023.

First Acceptance Corporation, together with its subsidiaries, operates as a retailer, servicer, and underwriter of non-standard personal automobile insurance and related products in the United States.

Research

Wed, 14 Aug 2024 15:53:08 GMT

First Acceptance Corp. (OTC:FACO) ($3.69; $139.5M market cap) - reported second quarter 2024 results:

Sales of $157.6 million vs $112.6 million in the prior year
EPS of $0.15 vs $0.08 in the prior year

"The quarter ended June 30, 2024 marks the Company's sixth consecutive profitable quarter reflecting a steady continuation of the favorable market trends we have experienced since the fourth quarter of 2022. Since then, premium growth has sustained across all our distribution channels through a combination of rate increases and increased production. Throughout, our loss ratio has remained within our expectations, as has our expense ratio, which was favorably impacted by the sale of our insurance agency operations in December 2023. Investment income has also grown to become a more significant component of our net income. Going forward, I remain confident that our Company is well positioned to continue this profitable success ".

Research

Mon, 13 May 2024 15:21:06 GMT

**Call To Action

We are adding FACO to our Model Portfolio. Please see our new article for full details.

Note that yesterday's Weekly GeoWire title wrote that the stock is selling below book value. We have revised that to near book value.