Hallmark Announces Final Arbitration Award

Rhea-AI Summary

Hallmark Financial Services, Inc. received a final determination in an arbitration proceeding, resulting in a total aggregate write-off of $36.9 million. This includes a write-off of $4.0 million during Q2 2023 and $32.9 million recognized during Q1 2023. Hallmark had previously included the $4.0 million amount as an account receivable in its balance sheet.

Positive

• Hallmark Financial Services, Inc. received a final determination in an arbitration proceeding, resulting in a write-off of $36.9 million. This could impact the company's financial position and stock price negatively.

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• None.

DALLAS, June 05, 2023 (GLOBE NEWSWIRE) -- Hallmark Financial Services, Inc. (“Hallmark”) (NASDAQ: HALL) received the final determination in an arbitration proceeding relating to a Loss Portfolio Transfer Reinsurance Contract with DARAG Bermuda Ltd. and DARAG Insurance Limited and certain of Hallmark’s subsidiaries. On June 2, 2023, a final definitive binding award was declared by the arbitration panel which will result in a write-off to Hallmark of $4.0 million during the second quarter of 2023 in addition to a write-off of $32.9 million recognized during the first quarter of 2023 as a result of the interim binding arbitration award, yielding a total aggregate write-off of $36.9 million. Hallmark had previously included this $4.0 million amount as an account receivable in its consolidated balance sheet as of March 31, 2023 and had estimated a write-off in the range of $25 to $35 million.

About Hallmark

Hallmark is a property and casualty insurance holding company with a diversified portfolio of insurance products written on a national platform. With six insurance subsidiaries, Hallmark markets, underwrites and services commercial and personal insurance in select markets. Hallmark is headquartered in Dallas, Texas, and its common stock is listed on NASDAQ under the symbol "HALL."

Forward-looking statements in this release are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that actual results may differ materially 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, general economic conditions, the availability of financing, underwriting loss experience and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission.

For further information, please contact:

Chris Kenney
Chief Executive Officer
817.348.1600
www.hallmarkgrp.com

A photo accompanying this release is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/4fb87372-b7a9-47e0-969b-94291b3c6287

 

FAQ

What is the final determination in the arbitration proceeding?

The final determination in the arbitration proceeding resulted in a write-off of $36.9 million for Hallmark Financial Services, Inc.

How much is the total aggregate write-off?

The total aggregate write-off is $36.9 million.

What were the previous write-off amounts recognized by Hallmark?

Hallmark recognized a write-off of $32.9 million during Q1 2023 and an additional $4.0 million during Q2 2023.

How did the arbitration proceeding impact Hallmark's balance sheet?

The $4.0 million amount that was included as an account receivable in Hallmark's balance sheet will now be written off.

What was Hallmark's estimated write-off range?

Hallmark had estimated a write-off in the range of $25 to $35 million.