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Hallmark Financial (HALL) Incurs Q4 Loss, Revenues Rise Y/Y


Hallmark Financial Services, Inc. HALL reported fourth-quarter 2017 operating loss of 52 cents per share, lagging the Zacks Consensus Estimate of earnings of 17 cents. Moreover, the figure is wider than the loss of 20 cents incurred a year ago.

Quarter in Detail

Operating revenues totaled $97 million, missing the Zacks Consensus Estimate by 0.60%. However, the top line increased 2.1% year over year.

Net premiums written decreased 3% year over year to about $81.1 million in the quarter. Net premiums earned improved 2% to $92.3 million.

Net investment income was $4.5 million, up 3% from the year-ago quarter’s tally.

Total expenses nudged up nearly 1% to $113.3 million.

Catastrophe loss, net of reinsurance, was $1.4 million. Net combined ratio of 118.7% deteriorated 770 basis points in the quarter under review.

Full-Year Highlights

Hallmark Financial reported operating loss per share of 63 cents against 34 cents earned in 2016.

Total revenues of $385.5 million rose 3% from the prior-year’s level. This improvement stemmed from higher net earned premiums in the Specialty Commercial Segment, partially offset by lower net earned premiums at the Standard Commercial and the Personal Segments.

Net combined ratio was 107.9%, deteriorating 810 basis points.

Segment Update

Specialty Commercial: Net premiums earned $67.8 million increased from $62.5 million in the year-ago quarter. Combined ratio deteriorated 1480 bps to 123%.

Standard Commercial: Net premiums earned $17.2 million grew from $16.6 million in the year-earlier quarter. Combined ratio improved 370 bps to 94.7%.

Personal: Net premiums earned $7.3 million decreased from $11.4 million in the comparable period last year. Combined ratio improved 1750 bps to 114.3%.

Financial Update

Cash and cash equivalents of nearly $65 million as of Dec 31 2017 were down from $79.6 million at the end of 2016. Total shareholders’ equity declined about 6% to $251.1 million as of Dec 31, 2017.

Book value per share was $13.82 as of Dec 31, 2017, down nearly 3% from year-end 2016.

Operating cash outflow was $27.1 million in 2017 compared with cash inflow of $5.3 million in 2016.

Zacks Rank

Hallmark Financial carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1Rank (Strong Buy) stocks here.

Performance of Other Insurers

Among other players from the insurance industry having reported fourth-quarter earnings so far, the bottom line of Brown & Brown, Inc. BRO, Chubb Limited CB and The Progressive Corporation PGR surpassed the respective Zacks Consensus Estimate.

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