EXHIBIT 99.1
FOR IMMEDIATE RELEASE
HALLMARK FINANCIAL SERVICES, INC.
FOURTH QUARTER AND YEAR 2003 EARNINGS RESULTS
FORT WORTH, Texas, (March 30, 2004) - Hallmark Financial Services, Inc.,
("The Company") today reported operating results for the fourth quarter and
year ended December 31, 2003. Net loss for the quarter ended December 31,
2003 was $0.4 million or $0.01 per diluted share, as compared to a net loss
of $0.4 million or $0.04 per diluted share for the same period in 2002. For
the year ended December 31, 2003, the Company reported net income of $8.7
million, or $0.46 per diluted share, as compared to a net loss of $1.7
million, or $0.15 per diluted share, for the year ended December 31, 2002.
Income before the extraordinary gain related to the Phoenix Indemnity
Insurance Company ("Phoenix") acquisition in the first quarter of 2003 and
the cumulative effect of a change in accounting principle recorded in 2002,
for the year ended December 31, 2003 was $0.7 million, as compared to
breakeven results for the same period in 2002.
Total revenues were $16.4 million and $69.6 million for the fourth quarter
and year ended December 31, 2003, respectively, as compared to $8.7 million
and $25.8 million for the corresponding 2002 periods.
The net loss reported for the fourth quarter 2003 includes an accrual for a
settlement of a bad faith claim in Phoenix in the amount of $2.1 million
before tax and after considering reinsurance.
"The bad faith claim against Phoenix was a big disappointment in what would
have otherwise been the most profitable quarter ever reported by Hallmark on
an operating basis. We are, nonetheless, pleased to have the matter behind
us. We are now focused intently on realizing the benefits in 2004 of the
many positive improvements achieved this past year. We more than doubled
the size of the Company in both revenue and surplus, added a new line of
business, expanded into new states and strengthened our management team, all
of which significantly enhance Hallmark's future prospects," stated Mark E.
Schwarz, Chief Executive Officer.
Hallmark Financial Services, Inc. engages primarily in 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, marketing commercial
insurance primarily 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:
Mark E. Schwarz, Chief Executive Officer at 817.348.1600
www.hallmarkgrp.com
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HALLMARK FINANCIAL SERVICES, INC.
AND CONSOLIDATED SUBSIDIARIES
(In thousands, except earnings per share)
Selected Operating Results
Three Months Ended December 31
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2003 2002
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Gross Premiums Written $ 6,934 $ 14,101
Total Revenues $ 16,428 $ 8,690
Pretax Income (Loss) $ (870) $ (587)
Income Tax Expense $ (473) $ (199)
Income before Extraordinary Gain (Loss) $ (397) $ (388)
Extraordinary Gain (Loss) $ (32) $ -
Net Income $ (429) $ (388)
Basic Earnings Per Share $ (0.01) $ (0.04)
Diluted Earnings Per Share $ (0.01) $ (0.04)
Twelve Months Ended December 31
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2003 2002
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Gross Premiums Written $ 43,338 $ 51,643
Total Revenues $ 69,559 $ 25,797
Pretax Income $ 686 $ 36
Income Tax Expense $ 25 $ 13
Income before Cumulative Effect of
Change in Accounting Principle and
Extraordinary Gain $ 661 $ 23
Cumulative Effect of Change in Accounting
Principle $ - $ (1,694)
Extraordinary Gain $ 8,084 $ -
Net Income (Loss) $ 8,745 $ (1,671)
Basic Earnings (Loss) Per Share $ 0.47 $ (0.15)
Diluted Earnings (Loss) Per Share $ 0.46 $ (0.15)