CONTACT:
Linda H. Sleeper
President and CEO
(972) 404-1637
DALLAS, Texas -- December 3, 2002 -- Hallmark Financial Services, Inc.
(Amex: HAF.EC) (Hallmark) today announced the closing of its acquisition of
certain subsidiaries and other assets from Millers American Group, Inc. (Millers).
Hallmark acquired the outstanding stock of Millers General Agency, Inc., a Texas
managing general agency, as well as certain contracts and fixed assets, from
Millers Insurance Company, an indirect subsidiary of Millers. Hallmark simultaneously
acquired directly from Millers all of the outstanding stock of two inactive
subsidiaries, Financial and Actuarial Resources, Inc. and Effective Litigation
Management, Inc.
The acquisition of Millers General Agency expands Hallmark's product offerings
to include commercial lines insurance in addition to non-standard automobile
insurance. As a result of the transaction, Hallmark will expand its presence
beyond Texas to the states of Idaho, New Mexico, Oregon and Washington. Additionally,
the newly acquired Hallmark subsidiaries have employed all Millers Insurance
Company personnel and entered into agreements to provide fee-based claims and
financial administrative services to Millers Insurance Company.
These acquisitions follow Hallmark's recent purchase of a note in default by
Millers which is secured by the capital stock of Millers Insurance Company,
a Texas-based commercial lines insurance carrier, and Phoenix Indemnity Insurance
Company (Phoenix), an Arizona-based non-standard automobile insurance carrier.
Hallmark previously announced that, in lieu of immediate foreclosure, it has
negotiated with Millers to accept the stock of Phoenix in partial satisfaction
of the outstanding balance of the Millers note. This proposed exchange is contingent
on execution of a mutually acceptable definitive agreement and regulatory approval.
If consummated, the proposed transaction would result in Phoenix becoming a
wholly-owned subsidiary of Hallmark. The stock of Millers Insurance Company
would continue to be held by Hallmark as collateral for the remaining balance
of the Millers note while the parties evaluate the recapitalization or reorganization
of Millers Insurance Company.
Hallmark Financial Services, Inc. now engages primarily in underwriting, marketing
and financing non-standard automobile insurance in the State of Texas and in
marketing commercial lines insurance in Texas, New Mexico, Idaho, Oregon and
Washington. Other activities include fee-based claims handling as well as administrative
and financial services for unrelated parties. The Company is headquartered in
Dallas, 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, consummation of contemplated transactions, 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:
Linda H. Sleeper, President and CEO at (972) 404-1637
www.hallmarkgrp.com
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