First Acceptance wants options-for-shares swap
Posted on October 6, 2009 at 7:21 amAuto insurer First Acceptance wants its shareholders to approve a new incentive compensation plan that would replace more than 600,000 options that have been underwater for more than two years with restricted shares. The options’ average exercise price is $6.64; the stock (Ticker: FAC) hasn’t been above $5 since September 2007. That’s not good for executive talent retention.
Because of the continued challenging economic environment, we believe the Exchange Options are no longer effective as incentives to motivate and retain the members of our senior management. Furthermore, although the Exchange Options are not likely to be exercised as long as our stock price is lower than the applicable exercise price, the Exchange Options continue to impact our financial statements and have the potential to dilute our stockholders’ interests for up to the full remaining term of the Exchange Options, while delivering little or no retentive or incentive value and no opportunity to recapture value from the associated compensation expense, unless they are surrendered or cancelled.
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First Acceptance jumps
Posted on August 21, 2009 at 12:41 pmThere doesn’t appear to be a real solid reason — auto insurance stocks aren’t that closely correlated to housing sales, are they? — but shares of First Acceptance (Ticker: FAC) are up almost 20 percent on light volume.
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First Acceptance motors on
Posted on May 11, 2009 at 10:47 pmAuto insurer First Acceptance (Ticker: FAC) continues to tiptoe its way through the recession. Premium volume is way off, but so are costs. In addition, selected price hikes are lifting profits.
We attribute this improvement to the impact of the rate increases taken in early calendar 2008 in Florida, Illinois, Indiana, Texas and South Carolina and the continued improvement in our underwriting and claim handling practices, as well as favorable severity trends most notably in our property damage and physical damage coverages.
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Leaner First Acceptance trims Q2 loss
Posted on February 9, 2009 at 10:12 pmThe Nashville-based auto insurer lost $1.0 million last quarter versus more than $11 million the year before. Revenue fell by a fifth to $65.1 million, but fewer policy losses have helped lift profitability. Now investors are hoping their shares (Ticker: FAC) will follow.
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First Acceptance ratings affirmed
Posted on January 30, 2009 at 7:21 pmInsurance ratings group A.M. Best hasn’t changed its opinion on the Nashville-based company (Ticker: FAC), but does note its leaders are doing some good things that have “positively impacted underwriting leverage and overall risk-adjusted capitalization.” Translation: They’re not sticking their neck way out there anymore.
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Tallying the local damage
Posted on January 20, 2009 at 4:04 pmOn a day when the stock market “started with a quick burst of selling pressure and the situation only deteriorated from there,” nine Middle Tennessee companies lost 9 percent or more.
And things aren’t looking much better. Historically, Bob O’Brien at Barron’s points out that equity markets’ bad inauguration days lead to bad first years. Fundamentally, the news is just as sour.
The session proved discouraging because it revealed the ferocity with which investors are inclined to greet eanings disappointments and accompanying commentary. With the earnings-reporting campaign just getting underway, there’s a lot more bad news ahead for this market.
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