EXHIBIT 99.1


                            FOR IMMEDIATE RELEASE

                      HALLMARK FINANCIAL SERVICES, INC.
                    COMPLETES SHAREHOLDER RIGHTS OFFERING

 FORT WORTH, TEXAS (June 7, 2005)  -  Hallmark Financial Services, Inc. today
 announced  the completion  of its shareholder rights offering.  Shareholders
 exercised subscription rights to purchase all 50.0 million shares offered at
 the subscription  price  of  $0.90 per  share,  resulting in  gross offering
 proceeds to  the Company  of $45.0  million.  Shareholders  exercised  basic
 subscriptions for approximately 36.8 million shares  and  over-subscriptions
 for the remaining  approximately 13.2  million  shares.  Approximately  $3.8
 million in additional funds  attributable to excess  over-subscriptions will
 be returned to the subscribing shareholders  by the subscription agent.  The
 Company's transfer agent  is  in the process of preparing  and  transmitting
 stock certificates representing the shares issued in the rights offering.

 "The successful  completion  of  this  aspect  of  our  strategic  plan  has
 significantly increased the capitalization and underwriting capacity of  our
 Company," stated  Mark E. Schwarz,  Hallmark's President and Chief Executive
 Officer.  "Hallmark is continuing to pursue the regulatory process necessary
 to consolidate  the  underwriting  of all  of  its  non-standard  automobile
 insurance into one insurance  subsidiary and to  convert its other  personal
 lines insurance subsidiary  to a  commercial lines  insurance carrier,"  Mr.
 Schwarz continued.

 Mark J. Morrison,  Hallmark's Chief  Operating Officer  and Chief  Financial
 Officer, stated, "The  $45.0 million  in new  equity capital  raised in  the
 rights offering,  together with  $30.0 million  in  proceeds from  new  debt
 presently  being negotiated,  will  be  used  as  working  capital  for  the
 Company's business  and  general corporate  purposes.  The Company  believes
 that the infusion of this additional working capital and realignment of  its
 insurance operations will allow it to  write and retain additional  personal
 lines business,  permit  it  to directly  write  commercial  lines  business
 presently being sold  as agent for  a third party  insurer, and enable  both
 insurance subsidiaries to achieve more favorable financial strength  ratings
 from our rating agencies."

 Hallmark Financial Services, Inc. engages primarily in the sale of  property
 and casualty insurance products.  The Company's business involves  marketing
 and underwriting  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
 registration statement and periodic reports filed  with  the Securities  and
 Exchange Commission.

                   For further information, please contact:
                               Mark J. Morrison
              Chief Operating Officer & Chief Financial Officer
                                 817.348.1600
                             www.hallmarkgrp.com