Hallmark Files for Public Offering; Elects New CEO

Hallmark Financial Services Inc., an insurance holding company based in Fort Worth, Texas, announced that it has filed a registration statement on Form S-1 with the Securities and Exchange Commission relating to a proposed public offering of up to $80.5 million in shares of its common stock, including shares subject to the underwriters’ over-allotment option.

The shares will be sold by Hallmark and its largest stockholder, Newcastle Partners L.P. The number of shares to be offered and offering price will be determined by market conditions at the time of pricing in consultation with the underwriters of the offering.

Hallmark also announced that Mark E. Schwarz, formerly CEO, will serve in the newly created position of executive chairman. Mark J. Morrison was elected as the new chief executive officer.

Schwarz will continue to serve as an executive of Hallmark as well as chairman of its Board of Directors. Morrison will also remain president, but will relinquish his positions as chief operating officer and chief financial officer.

Hallmark’s current senior vice president and chief accounting officer, Jeffrey R. Passmore, has assumed the duties of the principal financial officer of the company.

Schwarz, age 45, has served as a director of Hallmark since 2001. He was elected CEO in January 2003 and also served as president from November 2003 through March 2006. Since 1993, Mr. Schwarz has served, directly or indirectly through entities he controls, as the sole general partner of Newcastle Partners L.P., a private investment firm. Since 2000, he has also served as the president and sole managing member of Newcastle Capital Group L.L.C., the general partner of Newcastle Capital Management L.P., a private investment management firm.

Morrison, age 46, became executive vice president and chief financial officer upon joining Hallmark in March 2004, was given the additional responsibilities of chief operating officer in April 2005 and was named president in March, 2006. He has been employed in the property and casualty insurance industry since 1993.

Prior to joining Hallmark, he had since 2001 served as president of Associates Insurance Group, a subsidiary of the St. Paul Travelers Group.

Passmore, age 39, has served as senior vice president and chief accounting Officer of Hallmark since June 2003, and previously served as vice president of Business Development. Prior to joining the company in November 2002 served as vice president and Controller of Benfield Blanch Inc. and its predecessor E.W. Blanch Holdings Inc., a reinsurance intermediary.

Hallmark intends to use its portion of the net proceeds from the public offering to repay certain indebtedness and for general working capital purposes. Hallmark will not receive any proceeds from the sale of shares by Newcastle Partners.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective.

Through its subsidiaries, Hallmark engages in the sale of property and casualty insurance products to businesses and individuals. The company’s business involves marketing, distributing, underwriting and servicing commercial insurance in Texas, New Mexico, Idaho, Oregon, Montana, Louisiana, Oklahoma and Washington; marketing, distributing, underwriting and servicing non- standard personal automobile insurance in Texas, New Mexico, Arizona, Oklahoma and Idaho; marketing, distributing, underwriting and servicing general aviation insurance in 48 states; and providing other insurance related services.

Topics Texas