EXHIBIT 99.1


                            FOR IMMEDIATE RELEASE

                      HALLMARK FINANCIAL SERVICES, INC.
              COMPLETES PLACEMENT OF TRUST PREFERRED SECURITIES

 FORT WORTH, TEXAS (June 21, 2005) - Hallmark Financial Services, Inc.  today
 announced the completion of  the private placement of  $30 million in  trust
 preferred  securities  by a newly formed  and wholly owned trust subsidiary.
 The proceeds of this placement, together  with $45 million in proceeds  from
 the  Company's  recently completed  shareholder rights  offering, have  been
 contributed  to the Company's two insurance subsidiaries, American  Hallmark
 Insurance Company of Texas and Phoenix Indemnity Insurance Company, in order
 to strengthen their financial condition and underwriting capacity.

 The $30 million  in trust  preferred securities  bears interest  at a  fixed
 annual rate of 7.725% for the first ten years and at a floating annual  rate
 of LIBOR plus 3.250% thereafter  until  maturity or redemption.  Interest on
 the trust preferred securities is payable  quarterly in arrears, but may  be
 deferred from time  to time  at the election  of the  Company for  up to  20
 consecutive quarters.  The trust preferred  securities have a  30-year term,
 but are redeemable by the Company at par commencing in June 2010.

 In a related development, the Company also announced that  A.M. Best Co. has
 raised the financial strength  ratings  of both  insurance subsidiaries.  In
 light of the improved operating performance and enhanced  capital surplus of
 each insurer,  A.M.  Best has  upgraded  the financial  strength  rating  of
 American  Hallmark  Insurance Company  of  Texas  from  "B  (Fair)"  to  "A-
 (Excellent)"  and  has upgraded  the financial  strength rating  of  Phoenix
 Indemnity Insurance Company from "B- (Fair)" to "B+ (Very Good)".

 "The  issuance of these trust preferred securities represents a  significant
 additional step in implementing our strategic plan to enhance the  structure
 and  broaden the scope of our insurance operations," stated Mark E. Schwarz,
 Hallmark's President  and  Chief Executive Officer.  "We continue to  pursue
 the regulatory process necessary to consolidate our non-standard  automobile
 insurance business into one  insurance subsidiary and  to convert our  other
 personal lines insurance subsidiary to a commercial lines insurance carrier.
 We expect  to  begin underwriting commercial  lines insurance  in Texas  and
 Oregon early in the third quarter," Mr. Schwarz continued.

 Mark J. Morrison,  Hallmark's  Chief Operating Officer  and  Chief Financial
 Officer, stated,  "We are gratified that A.M. Best has recognized the strong
 operating performance  and  enhanced  financial strength  of  our  insurance
 subsidiaries.  With the infusion of  this $75 million in additional  working
 capital and the significant improvement in our A.M. Best ratings, we believe
 that we are well  positioned to write and  retain additional personal  lines
 business and to directly write commercial lines business upon completing the
 realignment of our insurance operations."


 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