ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2010 EARNINGS RESULTS
FORT WORTH, Texas, (March 14, 2011) - Hallmark Financial Services, Inc. (NASDAQ: HALL) (“Hallmark”) today reported fourth quarter 2010 net earnings of $0.4 million compared to $9.3 million reported for the fourth quarter of 2009. Hallmark reported net earnings of $7.3 million for fiscal year 2010, compared to $24.6 million reported for fiscal year 2009. On a fully diluted basis, net earnings were $0.02 per share and $0.36 per share, respectively, for the fourth quarter and fiscal year 2010, as compared to net earnings of $0.46 per share and $1.19 per share, respectively, for the fourth quarter and fiscal year 2009. Total revenues were $79.3 million and $307.1 million for the fourth quarter and fiscal year 2010, up 8% and 7%, respectively, from the $73.5 million and
$287.0 million reported for the fourth quarter and fiscal year 2009.
Mark J. Morrison, President and Chief Executive Officer, said, “Fiscal 2010 proved to be a year of challenges and opportunities for Hallmark. We missed our combined ratio target for the year due to a combination of factors affecting incurred losses in each of our three largest business units. Increased volatility of large losses and weather related claims negatively affected the results of our Standard Commercial and E&S Commercial business units. We also experienced uncharacteristically poor results in our Personal Lines business unit, as higher than expected growth from geographic and product expansion drove a greater proportion of less seasoned business into the total mix of policies in force. Compounding this situation was an extraordinary level of fraudulent claims
from business written in the recent expansion state of Florida. In order to bring Personal Lines results back to acceptable levels, we are actively managing our exposure in less seasoned states through rate increases and aggressive agency plant management. We expect these efforts to bring our Personal Lines results back in line with our expectations by the end of 2011.”
Mr. Morrison continued, “During the first week of February this year, most of the country was impacted by severe winter storms. We presently estimate our losses from these storms to be approximately $3 million, net of approximately $1 million in reinsurance. These events will be reflected in our first quarter 2011 results. Despite these challenges, Hallmark is continuing to build opportunities for the future. With the close of our acquisition of Hallmark National Insurance Company at the end of 2010 and the renewal rights to its non-standard personal automobile business, we have a pipeline of seasoned business to fuel growth in our Personal Lines business unit for 2011 and beyond. Additionally in 2010, our E&S Commercial business unit launched a nationwide non-standard medical malpractice insurance
program with the hiring of an experienced Chicago-based underwriting team. This program produced $1.6 million of written premium during 2010.”
Mark E. Schwarz, Executive Chairman of Hallmark, stated, “Book value per share grew 4% during fiscal 2010 to $11.72. Total cash, cash equivalents and investments grew $53 million, or 12%, during fiscal 2010 to $498 million, or approximately $25 per share. Total investment securities increased 32% during the year to $432 million, contributing to growth in investment income and helping to offset the effect of lower market yields. Fourth quarter 2010 investment income increased 16% to $4 million compared to the prior year quarter. Cash flow from operations was $36 million for the year. As of year-end, Hallmark continued to have significant cash and cash equivalents of $66 million.”
The following information was filed by Hallmark Financial Services Inc (HALL) on Tuesday, March 15, 2011 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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Form Type: 10-K Annual Report Accession Number: 0001144204-11-014687 Submitted to the SEC: Mon Mar 14 2011 7:39:37 PM EST Accepted by the SEC: Tue Mar 15 2011 Period: Friday, December 31, 2010 Industry: Insurance Carriers