Exhibit 99.1
FOR IMMEDIATE RELEASE
HALLMARK FINANCIAL SERVICES, INC.
FIRST QUARTER 2005 EARNINGS RESULTS
FORT WORTH, Texas, (May 13, 2005) - Hallmark Financial Services, Inc. today
reported operating results for the first quarter ended March 31, 2005.
During the first quarter of fiscal 2005, total revenues of the Company were
$17.4 million, representing a 10.6% increase over the $15.8 million in total
revenues for the comparable period of fiscal 2004. For the three months
ended March 31, 2005, the Company reported net income of $1.8 million,
representing a 28.5% increase over the $1.4 million reported in the first
quarter of 2004. On a diluted per share basis, net income was $0.05 for the
three months ended March 31, 2005 as compared to $0.04 for the same period
in the prior year.
"Earnings for the first quarter of 2005 reflect the continuation of
successes reported in fiscal 2004," stated Mark E. Schwarz, Chief Executive
Officer. "Future operations should further be enhanced by the recently
commenced rights offering which will strengthen the financial condition and
underwriting capacity of the Company, as well as the planned restructure of
our insurance subsidiaries under each of our operating units," Mr. Schwarz
continued.
"The increase in total revenues for the quarter ended March 31, 2005 as
compared to the first quarter of fiscal 2004 was primarily attributable to
increased premium assumption by the Personal Lines Group as a result of
changes in Hallmark's reinsurance arrangements and the combined impact of
increased premium volume and improved commission terms in the Commercial
Lines Group," stated Mark J. Morrison, Chief Operating Officer & Chief
Financial Officer. "The increase in net income for the first quarter of
2005 versus the same period in 2004 reflects ongoing initiatives to improve
underwriting performance in both operating units, increased premium
assumption by the Personal Lines Group and additional commission revenue in
the Commercial Lines Group," Mr. Morrison concluded.
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 J. Morrison, Chief Operating Officer at 817.348.1600
www.hallmarkgrp.com
HALLMARK FINANCIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands)
Three Months Ended
March 31
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2005 2004
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Gross premiums written $ 10,634 $ 8,753
Ceded premiums written - 24
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Net premiums written 10,634 8,777
Change in unearned premiums (594) (513)
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Net premiums earned 10,040 8,264
Investment income, net of expenses 411 279
Finance charges 540 547
Commission and fees 4,812 5,195
Processing and service fees 1,634 1,480
Other income 8 8
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Total revenues 17,445 15,773
Losses and loss adjustment expenses 6,026 5,227
Other operating costs and expenses 8,705 8,439
Interest expense 3 24
Amortization of intangible asset 7 7
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Total expenses 14,741 13,697
Income before tax 2,704 2,076
Income tax expense 889 664
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Net income $ 1,815 $ 1,412
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Net income per share:
Basic $ 0.05 $ 0.04
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Diluted $ 0.05 $ 0.04
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