EXHIBIT 99
HALLMARK FINANCIAL SERVICES, INC.
ANNOUNCES JUNE 27, 2003 RECORD DATE FOR RIGHTS OFFERING
FORT WORTH, Texas, (June 16, 2003) - Hallmark Financial Services, Inc.
(Amex:HAF.EC), announced today that the record date for its previously
announced rights offering has been set for the close of business on June 27,
2003. Upon the effectiveness of the registration statement, the Company
will distribute to its shareholders of record as of the record date a fixed
amount of non-transferable rights to subscribe for shares of its common
stock. It is anticipated that each right will entitle the holder to purchase
one share of the Company's common stock at a subscription price to be
determined.
Hallmark anticipates that the rights offering will begin promptly following
the effectiveness of the registration statement filed with the Securities
and Exchange Commission. The proceeds of the rights offering will be used
to repay an $8.6 million loan, plus accrued interest on the loan, made to
Hallmark in 2002 by Newcastle Partners, L.P., with any additional proceeds
used for working capital purposes. The proceeds of the loan from Newcastle
Partners, L.P., were utilized to finance the purchase of a note receivable
from a major bank and the acquisition of the Commercial Lines Group from
Millers Insurance Company. A portion of the note receivable purchased from
the bank was later exchanged for one-hundred percent of the capital stock
of Phoenix Indemnity Insurance Company. Newcastle Partners, L.P. is an
affiliate of Mark E. Schwarz, the Chairman and CEO of Hallmark.
Neither Hallmark, its board of directors, nor any committee of the board of
directors is making any recommendation to shareholders as to whether to
exercise their subscription rights. Further information regarding the rights
offering including pricing, record date, and process will be communicated
over the next several weeks. When available, a written prospectus may be
obtained by contacting Hallmark Financial Services, Inc., 777 Main Street,
Suite 1000, Fort Worth, Texas 76102, Attention: Investor Relations.
A registration statement relating to these securities has been filed with
the Securities and Exchange Commission but has not yet become effective.
These securities may not be sold and offers may not be accepted prior to the
time the registration statement becomes effective. The rights offering will
only be made by means of prospectus. This press release shall not constitute
an offer to sell or the solicitation of an offer to buy these securities,
and there shall not be any sale of these securities in any state in which
such offer, solicitation, or sale would be unlawful prior to registration or
qualification under securities laws of any such state.
Hallmark Financial Services, Inc. engages primarily in the sale of property
and casualty insurance products. The Company's business involves marketing,
underwriting and premium financing of non-standard personal automobile
insurance primarily in Texas, Arizona and New Mexico, commercial insurance
in Texas, New Mexico, Idaho, Oregon and Washington, third party claims
administration, and other insurance related services. The Company is
headquartered in Fort Worth, Texas and its common stock is listed on the
American Stock Exchange under the symbol "HAF.EC".
Forward-looking statements in this Release are made pursuant to the "safe
harbor" provisions of the Private Securities Litigation Act of 1995.
Investors are cautioned that actual results may differ substantially from
such forward-looking statements. Forward-looking statements involve risks
and uncertainties including, but not limited to, continued acceptance of the
Company's products and services in the marketplace, competitive factors,
interest rate trends, the availability of financing, underwriting loss
experience and other risks detailed from time to time in the Company's
periodic report filings with the Securities and Exchange Commission.
For further information, please contact:
Timothy A. Bienek, President and COO at 817.348.1600
www.hallmarkgrp.com