8-K

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 1, 2011

HALLMARK FINANCIAL SERVICES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada

(State or Other Jurisdiction of Incorporation)

001-11252	87-0447375
(Commission File Number)	(IRS Employer Identification No.)

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

817-348-1600

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(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 7.01             Regulation FD Disclosure

On July 1, 2011, the Registrant issued a press release announcing the completion of the acquisition of TBIC Holding Corporation, Inc.  A copy of the Registrant’s press release is attached as Exhibit 99.1 to this Current Report.

Item 8.01             Other Events

On July 1, 2011, American Hallmark Insurance Company of Texas (the “Buyer”), a wholly-owned subsidiary of Hallmark Financial Services, Inc. (the “Registrant”), completed the acquisition of 100% of the issued and outstanding capital stock of TBIC Holding Corporation, Inc. (“TBIC Holding”) from Robert C. Siddons, Stephen W. Gurasich, Andrew J. Reynolds, Paul W. Keller, Kerry A. Keller and Austin Engineering Co., Inc. (collectively, the “Sellers”).  TBIC Holding has two wholly-owned subsidiaries, Texas Builders Insurance Company (“TBIC”) and TBIC Risk Management, Inc. (“TBICRM”).  TBIC is a Texas domiciled workers’ compensation insurance carrier.  TBICRM provides risk management services to customers of TBIC.  Prior to the transaction, there was no material relationship between any of the Sellers, TBIC Holding, TBIC, TBICRM or any of their affiliates, on the one hand, and the Buyer, the Registrant or any of their affiliates, on the other hand.

The Buyer acquired TBIC Holding for initial consideration of $1.6 million paid in cash on July 1, 2011, from working capital of the Buyer.  The base purchase price is subject to certain post-closing adjustments.  In addition, a holdback purchase price of up to $350,000 may become payable following four full calendar quarters after closing and a contingent purchase price of up to $3.0 million may become payable following 16 full calendar quarters after closing, in each case based upon a formula contained in the acquisition agreement.

Item 9.01             Financial Statements and Exhibits

(c)          Exhibits.

99.1       Press release dated July 1, 2011.

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:     July 1, 2011	By:	/s/ Jeffrey R. Passmore
		Jeffrey R. Passmore, Chief Accounting Officer

 

EX-99.1

FOR IMMEDIATE RELEASE

Hallmark Financial Services, Inc.

Completes Acquisition of Texas Builders Insurance Company

FORT WORTH, Texas, (July 1, 2011) - Hallmark Financial Services, Inc. (NASDAQ: HALL) today announced the completion of its previously disclosed acquisition of TBIC Holding Corporation, including its wholly owned subsidiaries Texas Builders Insurance Company and TBIC Risk Management, Inc. (collectively referred to as “TBIC”).  TBIC is an Austin, Texas based insurance company writing small and middle market workers compensation business within the State of Texas.  Hallmark funded the $1.6 million required to close the acquisition from available working capital.

Mark J. Morrison, President and Chief Executive Officer, said, “We are pleased to add TBIC as an extension of our standard commercial segment product line offering. TBIC brings a veteran management team that has a proven underwriting track record. We are confident the addition of this product line to our standard commercial business segment will produce synergies enhancing the competitiveness of both businesses. ”

Hallmark Financial Services, Inc. is an insurance holding company which, through its subsidiaries, engages in the sale of property/casualty insurance products to businesses and individuals. Hallmark’s business involves marketing, distributing, underwriting and servicing commercial insurance, personal insurance and general aviation insurance, as well as providing other insurance related services.  The Company is headquartered in Fort Worth, 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 substantially 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:

Mark J. Morrison, President and Chief Executive Officer at 817.348.1600