Mark J. Morrison
Chief Operating Officer & Chief Financial Officer
817-348-1600
http://www.hallmarkgrp.com
FORT WORTH,
Texas -- June 7, 2005 -- Hallmark Financial Services, Inc. (Amex: HAF.EC)
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
http://www.hallmarkgrp.com
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