Mark J. Morrison
Chief Operating Officer
817-348-1600
http://www.hallmarkgrp.com
FORT WORTH, Texas -- May 13, 2005 -- Hallmark Financial Services, Inc. (Amex: HAF.EC)
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
http://www.hallmarkgrp.com
HALLMARK FINANCIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands)
Three Months Ended
March 31
2005 2004
Gross premiums written $ 10,634 $ 8,753
Ceded premiums written --- 24
Net premiums written 10,634 8,777
Change in unearned premiums (594) (513)
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
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
Total expenses 14,741 13,697
Income before tax 2,704 2,076
Income tax expense 889 664
Net income $ 1,815 $ 1,412
Net income per share:
Basic $ 0.05 $ 0.04
Diluted $ 0.05 $ 0.04
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