Earnings Per Share

12 Months Ended

Dec. 31, 2011

Earnings Per Share

11. Earnings Per Share:

We have adopted the provisions of ASC 260, “Earnings Per Share,” requiring presentation of both basic and diluted earnings per share. A reconciliation of the numerators and denominators of the basic and diluted per share calculations is presented below (in thousands, except per share amounts):

	2011			2010		2009
Numerator for both basic and diluted earnings per share:
Net (loss) income attributable to Hallmark Financial Services,  Inc.	$	(10,821	)	$	7,334	$	24,575
Denominator, basic shares		19,673			20,123		20,620
Effect of dilutive securities:
Stock options		14			52		13
Denominator, diluted shares		19,687			20,175		20,633
Basic earnings per share:	$	(0.55	)	$	0.36	$	1.19
Diluted earnings per share:	$	(0.55	)	$	0.36	$	1.19

We had 809,999 shares, 899,166 shares and 899,166 shares of common stock potentially issuable upon exercise of employee stock options for years ended 2011, 2010 and 2009, respectively, that were excluded from the weighted average number of shares outstanding on a diluted basis because the effect of such options would be anti-dilutive. These instruments expire at varying times from 2016 to 2021.