EXHIBIT 99.5


                      HALLMARK FINANCIAL SERVICES, INC.


                      50,000,000 Shares of Common Stock
          Offered Pursuant to Rights Distributed to Security Holders

                                                          _____________, 2005

 To Our Clients:

      Enclosed for your consideration are a Prospectus, dated _________, 2005
 (the "Prospectus"), and the "Instructions as to Use of Rights  Certificates"
 relating to  the  offering (the  "Rights  Offering") by  Hallmark  Financial
 Services, Inc. (the  "Company") of shares  of its Common  Stock (as  defined
 below) pursuant  to  non-transferable  subscription  rights  (the  "Rights")
 distributed to all  holders of  record of shares  of its  common stock,  par
 value  $0.03  per  share  (the  "Common Stock"), at  the close  of  business
 on April 20, 2005 (the  "Record Date").  The  Rights  are  described  in the
 Prospectus.

      In the  Rights  Offering,  the Company  is  offering  an  aggregate  of
 50,000,000 shares of Common Stock (the "Underlying Shares"), as described in
 the Prospectus.

      The Rights will expire, if not  exercised, at 5:00 p.m., Dallas,  Texas
 time,  on ________, 2005,  unless extended  in the  sole discretion  of  the
 Company (as it may be extended, the "Expiration Date").

      As described in  the Prospectus, you  will receive one  Right for  each
 share of Common Stock carried by us in your account as of the Record Date.

      Each Right allows you to subscribe for 1.37 shares of Common Stock (the
 "Basic Subscription Privilege") at the cash price  of $0.90  per  share (the
 "Subscription Price").

      In  addition,  each  holder  of   Rights  who  exercises  their   Basic
 Subscription Privilege in  full will be  eligible to  subscribe (the  "Over-
 Subscription Privilege")  at the  Subscription Price  for shares  of  Common
 Stock that are not otherwise purchased pursuant to the exercise of Rights by
 other holders of Rights under the Basic Subscription Privilege (the  "Excess
 Shares"), subject to availability and proration as described below.   Shares
 of Common  Stock  will be  available  for  purchase pursuant  to  the  Over-
 Subscription Privilege only to the extent that any Underlying Shares are not
 subscribed for pursuant to the Basic  Subscription Privilege.  If there  are
 not enough Excess Shares to satisfy  all subscriptions made under the  Over-
 Subscription Privilege,  the  Company  will allocate  the  remaining  Excess
 Shares pro-rata  (subject to  the elimination  of fractional  shares)  among
 those Rights holders  who exercised their  Over-Subscription Privileges,  in
 proportion to  the  number  of  Underlying  Shares  each  beneficial  holder
 exercising the  Over-Subscription Privilege  has purchased  pursuant to  the
 Basic Subscription  Privilege;  provided,  however, that  if  such  pro-rata
 allocation results in any Rights holder being allocated a greater number  of
 Excess Shares than such  holder subscribed for pursuant  to the exercise  of
 such  holder's  Over-Subscription  Privilege,  then  such  holder  will   be
 allocated only such number  of Excess Shares as  such holder subscribed  for
 and the remaining Excess  Shares will be allocated  among all other  holders
 exercising the  Over-Subscription  Privilege  on  the  same  pro-rata  basis
 outlined above.   Such proration will  be repeated until  all Excess  Shares
 have been allocated to the full  extent of the Over-Subscription  Privilege.
 See "The  Offering - Subscription Rights - Over-Subscription  Privilege"  in
 the Prospectus.

      The Rights will  be evidenced by  non-transferable Rights  certificates
 and will cease to have any value at the close of business on the  Expiration
 Date.

      The materials enclosed  are being forwarded  to you  as the  beneficial
 owner of Common Stock carried  by us in your  account but not registered  in
 your name.  Exercises of rights may be made  only by us as the record  owner
 and pursuant to your instructions.  Accordingly, we request instructions  as
 to whether you wish us to elect to subscribe for any shares of Common  Stock
 to which  you  are  entitled  pursuant  to the  terms  and  subject  to  the
 conditions set forth  in the enclosed  Prospectus. However, we  urge you  to
 read  the  Prospectus   and  other  enclosed   materials  carefully   before
 instructing us to exercise your Rights.

      Your instructions to us should be forwarded as promptly as possible  in
 order to permit us to exercise Rights on your behalf in accordance with  the
 provisions of the Rights Offering. The  Rights Offering will expire at  5:00
 p.m., Dallas, Texas time,  on the Expiration Date.  Once you have  exercised
 your Basic Subscription Privilege and your Over-Subscription Privilege, such
 exercise may not be revoked.

      If you wish to  have us, on  your behalf, exercise  the Rights for  any
 shares of Common Stock to which you  are entitled, please so instruct us  by
 completing, executing and  returning to  us the  "Beneficial Owner  Election
 Form" included herewith.

      Any questions or requests for assistance concerning the Rights Offering
 should be  directed  to  Securities Transfer  Corporation,  the  Information
 Agent, at (469) 633-0101.