exv99

Exhibit 99


Press Release		Source: First Acceptance Corporation Contact: Steve Harrison (615) 844-2885

First Acceptance Corporation Reports Fourth Quarter and Fiscal Year 2006 Financial Results

NASHVILLE, TN, September 13, 2006 /Businesswire-FirstCall/ — First Acceptance Corporation (NYSE: FAC) today reported its financial results for the fourth quarter and fiscal year ended June 30, 2006.

Net income for the three months ended June 30, 2006 was $14.7 million, or $0.30 per share on a fully-diluted basis, compared with net income of $13.2 million, or $0.27 per share on a fully-diluted basis, for the same period of fiscal 2005. The 2006 and 2005 periods include income tax benefits of $10.5 million and $10.6 million ($0.21 per share on a fully-diluted basis for both periods), respectively, from decreases in the valuation allowance for the Company’s deferred tax asset. Such decreases were the result of taxable income for both years exceeding the estimates used by management in establishing the valuation allowances, in addition to revisions in management’s estimates of future taxable income based on the results for the most recent fiscal years. Total revenues for the three months ended June 30, 2006 increased 51% to $75.2 million, from $49.8 million in the same period last year. Income before taxes for the three months ended June 30, 2006 was $6.9 million versus $4.0 million for the same period of fiscal 2005.

Net income for the year ended June 30, 2006 was $28.1 million, or $0.57 per share on a fully-diluted basis, compared with $26.2 million, or $0.53 per share on a fully-diluted basis, for the same period of fiscal 2005. The 2006 and 2005 periods include income tax benefits of $10.5 million and $10.6 million ($0.21 and $0.22 per share on a fully-diluted basis), respectively, from decreases in the valuation allowance for the Company’s deferred tax asset. Total revenues for the year ended June 30, 2006 increased 49% to $249.0 million, from $166.8 million in the same period last year. Income before income taxes for the year ended June 30, 2006 was $27.0 million versus $24.0 million for the same period of fiscal 2005.

Net income for the year ended June 30, 2006 included pre-tax gains on sales of foreclosed real estate held for sale of $3.6 million as compared with $0.08 million for the year ended June 30, 2005. There were no sales of foreclosed real estate held for sale during the three months ended June 30, 2006 or 2005. Remaining real estate held for sale consists of two tracts of land in San Antonio, Texas with a book value of $87,000.

Insurance Operations

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Key ratios — The Company’s loss ratio for the three months ended June 30, 2006 was 68.0%, compared with 68.8% for the same period last year and 69.6% for the quarter ended March 31, 2006. The Company’s expense ratio for the three months ended June 30, 2006 was 21.1%, compared with 22.0% for the same period last year and 19.3% for the quarter ended March 31, 2006. As a result, the Company’s combined ratio for the three months ended June 30, 2006 was 89.1%, compared with 90.8% for the same period last year and 88.9% for the quarter ended March 31, 2006.

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Office Expansion — During the three months ended June 30, 2006, the Company opened 17 additional offices, compared with 25 offices added to operations during the three months ended June 30, 2005 and 28 offices added to operations during the three months ended March 31, 2006. The Company also closed four offices during the three months ended June 30, 2006. The total number of stores in operation increased from 248 as of June 30, 2005 and 447 as of March 31, 2006 to 460 as of June 30, 2006.

•

Premium growth — Total gross premiums earned increased 53% to $64.0 million for the three months ended June 30, 2006 from $41.9 million for the same period last year. The number of insured policies in force serviced by the Company at June 30, 2006 increased 68% over the number of policies in force at June 30, 2005.

Appointment of Edward Pierce As Executive Vice President

The Company also announced that Edward Pierce has been named Executive Vice President. The Company anticipates that Mr. Pierce will be named as the Chief Financial Officer of the Company in the future. In connection with Mr. Pierce’s employment, the Company has agreed to sell Mr. Pierce 50,000 shares of the Company’s common stock at a purchase price equal to the closing price on September 13, 2006.

From May 2001 through February 2006, Mr. Pierce, 49, served as Executive Vice President and Chief Financial Officer and as a director of BindView Development Corporation, a network security software development company. BindView was acquired by Symantec Corp. in January 2006. From November 1994 through January 2001, Mr. Pierce held various financial management positions, including Executive Vice President and Chief Financial Officer, with Metamor Worldwide Corporation, a global information technology services company. Metamor was acquired by PSINet Inc. in June 2000.

2006 Annual Meeting of Stockholders

The 2006 annual meeting of stockholders of First Acceptance Corporation will be held on Thursday, November 9, 2006 in Dallas, Texas. Further details will be provided in our forthcoming Proxy Statement.

About First Acceptance Corporation

First Acceptance Corporation provides non-standard private passenger automobile insurance, primarily through employee-agents. As of September 1, 2006, the Company leased and operated 458 retail offices in 12 states. The Company’s insurance company subsidiaries are licensed to do business in 25 states.

This press release contains forward-looking statements. 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 in the Company’s Annual Report on Form 10-K and its other filings with the Securities and Exchange Commission. Actual operations and results may differ materially from the results discussed in the forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
($000s EXCEPT PER SHARE DATA)
(Unaudited)


	Three Months Ended						Year Ended
	June 30,						June 30,
	2006			2005			2006			2005
Revenues:
Premiums earned	$	64,037		$	41,613		$	206,754		$	132,347
Commissions and fees		8,434			7,868			28,774			27,151
Transaction service fee		1,050			—			4,150			—
Ceding commissions from reinsurer(1)		—			(628	)		—			2,975
Gains on sales of foreclosed real estate		—			—			3,638			755
Investment income		1,801			898			5,762			3,353
Other gains (losses)		(127	)		22			(76	)		214

Total revenues		75,195			49,773			249,002			166,795

Expenses:
Losses and loss adjustment expenses		43,542			28,616			140,845			87,493
Insurance operating expenses		22,999			15,806			75,773			49,921
Other operating expenses		530			792			2,494			2,775
Stock-based compensation		82			95			500			332
Depreciation and amortization		684			322			1,463			1,920
Interest expense		441			144			898			351

Total expenses		68,278			45,775			221,973			142,792

Income before income taxes		6,917			3,998			27,029			24,003
Income tax benefit(2)		(7,774	)		(9,203	)		(1,039	)		(2,153	)

Net income	$	14,691		$	13,201		$	28,068		$	26,156

Basic net income per share	$	0.31		$	0.28		$	0.59		$	0.56
Diluted net income per share	$	0.30		$	0.27		$	0.57		$	0.53
Weighted average basic shares		47,525			47,444			47,487			47,055
Weighted average diluted shares		49,605			49,378			49,576			48,989

(1)

The reduction in ceding commissions from reinsurer for the three months ended June 30, 2005 was the result of a re-estimation based upon loss experience.

(2)

The three month periods and years ended June 30, 2006 and 2005 include decreases in the valuation allowance for the deferred tax asset of $10,540 and $10,594, respectively.

FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations — By Business Segment
($000s EXCEPT PER SHARE DATA)
(Unaudited)


	Three Months Ended						Year Ended
	June 30,						June 30,
INSURANCE OPERATIONS	2006			2005			2006			2005
Revenues:
Premiums earned	$	64,037		$	41,613		$	206,754		$	132,347
Commissions and fees		8,434			7,868			28,774			27,151
Transaction service fee		1,050			—			4,150			—
Ceding commissions from reinsurer(2)		—			(628	)		—			2,975
Investment income		1,693			756			4,955			2,287
Other gains (losses)		(127	)		22			(76	)		214

Total revenues		75,087			49,631			244,557			164,974

Expenses:
Losses and loss adjustment expenses		43,542			28,616			140,845			87,493
Operating expenses		22,999			15,806			75,773			49,921
Depreciation and amortization		684			322			1,463			1,920

Total expenses		67,225			44,744			218,081			139,334

Income before income taxes	$	7,862		$	4,887		$	26,746		$	25,640


	Three Months Ended						Year Ended
	June 30,						June 30,
REAL ESTATE AND CORPORATE(1)	2006			2005			2006		2005
Revenues:
Gains on sales of foreclosed real estate	$	—		$	—		$	3,638	$	755
Investment income		108			142			807		1,066

Total revenues		108			142			4,445		1,821

Expenses:
Operating expenses		530			792			2,494		2,775
Stock-based compensation		82			95			500		332
Interest expense		441			144			898		351

Total expenses		1,053			1,031			3,892		3,458

(Loss) income before income taxes	$	(945	)	$	(889	)	$	553	$	(1,637	)

(1)

Includes activities related to disposing of foreclosed real estate held for sale, interest expense associated with debt, and general corporate overhead.

(2)

The reduction in ceding commissions from reinsurer for the three months ended June 30, 2005 was the result of a re-estimation based upon loss experience.

FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
($000s EXCEPT PER SHARE DATA)
(Unaudited)


	June 30,
	2006		2005

ASSETS
Fixed maturities, available-for-sale, at market value	$	127,828	$	74,840
Investment in mutual fund, at market value		—		10,920
Cash and cash equivalents		31,534		24,762
Premiums and fees receivable		64,074		42,908
Reinsurance recoverables		1,344		4,490
Deferred tax asset		48,068		48,106
Other assets		17,501		11,031
Foreclosed real estate held for sale		87		961
Goodwill and identifiable intangible assets		143,870		112,704

TOTAL	$	434,306	$	330,722

LIABILITIES AND SHAREHOLDERS’ EQUITY
Total policy liabilities		138,939		90,649
Notes payable and capitalized lease obligation		24,026		—
Other liabilities		17,918		11,744

Total liabilities		180,883		102,393
Total stockholders’ equity		253,423		228,329

TOTAL	$	434,306	$	330,722

Book value per share	$	5.33	$	4.81

FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES
Supplemental Data
($000s EXCEPT PER SHARE DATA)
(Unaudited)

GROSS PREMIUMS EARNED BY STATE


	Three Months Ended						Year Ended
	June 30,						June 30,
	2006			2005			2006			2005

Gross premiums earned:
Georgia	$	17,467		$	17,829		$	68,948		$	69,806
Florida		11,086			994			26,327			1,181
Alabama		7,595			7,126			28,952			26,610
Texas		6,252			2,408			16,579			4,569
Tennessee		6,094			6,710			24,387			26,205
Illinois		5,106			65			7,680			112
Ohio		3,862			3,339			14,046			10,703
Indiana		1,946			941			6,163			2,032
Missouri		1,466			1,239			5,332			4,193
Mississippi		1,354			1,247			5,187			4,431
Pennsylvania		941			24			1,996			24
South Carolina		873			—			1,238			—

Total gross premiums earned		64,042			41,922			206,835			149,866
Premiums ceded		(5	)		(309	)		(81	)		(8,732	)
Premiums not assumed		—			—			—			(8,787	)

Total net premiums earned	$	64,037		$	41,613		$	206,754		$	132,347

GAAP COMBINED RATIOS (INSURANCE COMPANIES)


	Three Months Ended						Year Ended
	June 30,						June 30,
	2006			2005			2006			2005
Loss and loss adjustment expense		68.0	%		68.8	%		68.1	%		66.1	%
Expense (1)		21.1	%		22.0	%		20.7	%		17.7	%

Combined ratio		89.1	%		90.8	%		88.8	%		83.8	%

(1)

Insurance operating expenses are reduced by fee income from insureds, ceding commissions received from our quota-share reinsurer and the transaction service fee received from the Chicago agencies whose business we acquired.

POLICIES IN FORCE


	Three Months Ended					Year Ended
	June 30,					June 30,
	2006		2005			2006		2005

Policies in force — beginning of period		187,048		122,363			119,422		91,385
Acquired		—		6,473			—		6,473
Net increase during period		13,353		(9,414	)		80,979		21,564

Policies in force — end of period		200,401		119,422			200,401		119,422

FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES
Supplemental Data (continued)
(Unaudited)

NUMBER OF RETAIL LOCATIONS

Retail location counts are based upon the date that a location commenced writing business. Through December 31, 2005, we had previously reported this information based upon the date that a location was leased and first incurred operating expenses. Count information for all prior periods presented has been restated to conform to the current period’s method of presentation. Under the prior basis of presentation, we would have reported a total of 468 locations leased at June 30, 2006.


	Three Months Ended					Years Ended
	June 30,					June 30,
	2006			2005		2006			2005

Retail locations — beginning of period		447			208		248			133
Opened		17			25		149			101
Acquired		—			15		72			15
Closed		(4	)		—		(9	)		(1	)

Retail locations — end of period		460			248		460			248

RETAIL LOCATIONS BY STATE


									Change in Locations
									During the Three Months
	Retail Locations as of				Retail Locations as of				Ended
	June 30,				March 31,				June 30,
	2006		2005		2006		2005		2006			2005

Alabama		25		25		25		24		—			1
Florida		39		20		40		14		(1	)		6
Georgia		63		62		63		62		—			—
Illinois		86		5		86		3		—			2
Indiana		26		21		25		21		1			—
Mississippi		8		8		8		8		—			—
Missouri		18		14		20		14		(2	)		—
Ohio		30		29		30		28		—			1
Pennsylvania		25		7		20		—		5			7
South Carolina		21		—		12		—		9			—
Tennessee		20		20		20		20		—			—
Texas		99		37		98		14		1			23

Total		460		248		447		208		13			40


									Change in Locations
	Retail Locations as of				Retail Locations as of				During the Years Ended
	June 30,				June 30,				June 30,
	2006		2005		2005		2004		2006		2005

Alabama		25		25		25		21		—		4
Florida		39		20		20		—		19		20
Georgia		63		62		62		54		1		8
Illinois		86		5		5		—		81		5
Indiana		26		21		21		4		5		17
Mississippi		8		8		8		5		—		3
Missouri		18		14		14		10		4		4
Ohio		30		29		29		23		1		6
Pennsylvania		25		7		7		—		18		7
South Carolina		21		—		—		—		21		—
Tennessee		20		20		20		16		—		4
Texas		99		37		37		—		62		37

Total		460		248		248		133		212		115