UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                                   FORM 8-K

                           CURRENT REPORT PURSUANT
                        TO SECTION 13 OR 15(D) OF THE
                       SECURITIES EXCHANGE ACT OF 1934


   Date of report (Date of earliest event reported): July 31, 2006

                      HALLMARK FINANCIAL SERVICES, INC.
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            (Exact Name of Registrant as Specified in Its Charter)

                                    Nevada
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                (State or Other Jurisdiction of Incorporation)

             0-16090                                  87-0447375
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     (Commission File Number)             (IRS Employer Identification No.)

  777 Main Street, Suite 1000, Fort Worth, Texas             76102
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 (Address of Principal Executive Offices)                  (Zip Code)

                                 817-348-1600
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             (Registrant's Telephone Number, Including Area Code)

                                Not Applicable
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        (Former Name or Former Address, if Changed Since Last Report)

   Check the  appropriate box below  if the Form  8-K filing  is intended  to
 simultaneously satisfy the filing obligation of the registrant under any  of
 the following provisions (see General Instruction A.2. below):

   [ ]     Written communications pursuant to Rule 425 under the Securities
           Act (17 CFR 230.425)

   [ ]     Soliciting material pursuant to Rule 14a-12 under the Exchange
           Act (17 CFR 240.14a-12)

   [ ]     Pre-commencement communications pursuant to Rule 14d-2(b) under
           the Exchange Act (17 CFR 240.14d-2(b))

   [ ]     Pre-commencement communications pursuant to Rule 13e-4(c) under
           the Exchange Act (17 CFR 240.13e-4(c))



 Item 3.03   Material Modification to Rights of Security Holders.

      Effective July 31, 2006, the Registrant effected a one-for-six  reverse
 split of all issued and unissued authorized shares of its common stock and a
 corresponding increase in the par value of its authorized common stock  from
 $0.03 per  share to  $0.18 per  share.   After effecting  the reverse  stock
 split,  the  Registrant's  total   authorized  capital  stock  consists   of
 33,333,333 shares of common stock, of which 17,759,770 shares are issued and
 outstanding.  The  reverse stock split  did not otherwise  alter any of  the
 voting  powers,  designations,  preferences,  limitations,  restrictions  or
 relative rights of the capital stock of the Registrant.


                                  SIGNATURES

      Pursuant to the requirements  of the Securities  Exchange Act of  1934,
 the Registrant has duly caused this report to be signed on its behalf by the
 undersigned duly authorized.

                               HALLMARK FINANCIAL SERVICES, INC.


 Date:  August 3, 2006         By:  /s/ Mark J. Morrison
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                                    Mark J. Morrison,
                                    President and
                                    Chief Financial Officer