CONTACT:
Timothy A. Bienek
President and COO
(817) 348-1600
www.hallmarkgrp.com
FORT WORTH, Texas -- September 5, 2003 --
Hallmark Financial Services, Inc. (Amex: HAF.EC),
announced today the completion of its rights
offering. Stockholders exercised subscription
rights to purchase the entire 25 million shares
offered at a subscription price of $0.40 per
share, raising gross proceeds of $10.0 million.
There were 18.0 million shares purchased through
the exercise of basic subscription rights and
an additional 7.0 million shares purchased through
the over subscription privilege. The proceeds
from the rights offering will be used to repay
the bridge loan to Newcastle Partners, L.P.
and for general corporate purposes.
In
aggregate, Hallmark received cash commitments
for $13.5 million totaling 33.7 million shares.
Hallmark has accepted all validly exercised
subscription rights limited to the $10 million
offering size. Hallmark's transfer agent is
in the process of distributing stock certificates
to stockholders exercising their subscription
rights.
Commenting
on the rights offering, Mark E. Schwarz, Chairman
and CEO, stated, "We are pleased by the
wide spread participation in the rights offering
by our stockholders. The rights offering proved
to be a stockholder friendly and efficient mechanism
to raise capital. Proceeds to the Company were
maximized because no underwriter or sales agent
was necessary in the process. Having completed
the offering, Hallmark's capital structure is
now primarily equity and better positioned to
support the future growth of the company."
Hallmark
Financial Services, Inc. engages primarily in
the 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 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.
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