First Acceptance Corporation (FAC) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $3.55 million, or $ 0.09 a share in the quarter, against a net profit of $0.29 million, or $0.01 a share in the last year period. Revenue during the quarter went down marginally by 0.82 percent to $87.81 million from $88.54 million in the previous year period. Net premium earned for the quarter was almost stable at $69.33 million, when compared with the previous year period.
Total expenses move up
Benefits, losses and expenses for the quarter were at $93.63 million, or 135.05 percent of premium earned from $88.08 million or 126.61 percent of premium earned in the last year period. Operating loss for the quarter was $5.82 million, compared with an operating income of $0.46 million in the previous year period. Net premium earned from property and casualty insurance for the quarter was almost stable at $69.33 million, when compared with the previous year period.
Net investment income was at $0.85 million for the quarter, down 35.74 percent or $0.48 million from year-ago period. Meanwhile, income from fees and commission for the quarter moved down marginally by 0.56 percent or $0.10 million to $17.54 million.
President and Chief Executive Officer, Ken Russell, commented “While the loss ratio for the recent quarter was negatively impacted by additional loss development, we believe that there are indications that the cloud of uncertainty from prior period losses is coming to an end. Remaining committed to our goal of returning the Company to profitability, management has made significant efforts to improve our risk management through rate increases, risk segmentation and key additions to the senior staff of our claims handling and product teams. Numerous initiatives have been implemented as part of our strategic plan to curtail unprofitable production, and positive trends are anticipated regarding both claims severity and frequency.”
Assets fall, liabilities growTotal assets decreased 0.51 percent or $2.05 million to $400.07 million on Dec. 31, 2016. On the other hand, total liabilities were at $327.59 million as on Dec. 31, 2016, up 9.76 percent or $29.13 million from year-ago. Return on assets was negative at 0.61 percent in the quarter against a positive 0.33 percent in the last year period. Return on equity was negative at 4.89 percent in the quarter against a positive 0.28 percent in the last year period.
Investments come down
Investments stood at $127.21 million as on Dec. 31, 2016, down 10.94 percent or $15.63 million from year-ago. Meanwhile, yield on investments went down 26 basis points to 0.67 percent in the quarter. Net premiums and other receivables decreased 4.99 percent or $3.49 million over the year to $66.39 million on Dec. 31, 2016.
Total debt was almost stable over the past one year at $70.08 million on Dec. 31, 2016. Shareholders equity stood at $72.49 million as on Dec. 31, 2016, down 30.08 percent or $31.18 million from year-ago. As a result, debt to equity ratio went up 29 basis points to 0.97 percent in the quarter from 0.68 percent in the last year period.
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