HAF Hallmark

FORT WORTH, Texas, Dec. 13 /PRNewswire-FirstCall/ -- Hallmark Financial Services, Inc. (AMEX:HAF) today announced that it has executed a definitive agreement to acquire Aerospace Holdings, LLC. Aerospace, through various wholly-owned subsidiaries, including Aerospace Insurance Managers, Inc., markets and services general aviation property and casualty insurance products, with a particular emphasis on private and small commercial aircraft. The transaction is expected to be effective as of January 1, 2006. "We are very pleased to announce the acquisition of Aerospace Holdings, LLC, one of the premier aviation insurance operations in the U. S. today," stated Mark E. Schwarz, Hallmark's President and Chief Executive Officer. "Hallmark's entry into the general aviation market is part of a continuing strategy to further expand into specialty lines businesses. Aerospace is a comprehensive insurance organization that annually produces approximately $30 million of premium in 44 states through an established network of specialized aviation agents. Aerospace focuses on small aircraft and airports where competition is relatively stable and adequate pricing generally prevails. Aerospace is led by its founder and CEO, Curtis Donnell, who will remain with the company and continue to manage the operations of Aerospace. Mr. Donnell has over 35 years experience in the general aviation market and leads a seasoned team of underwriters and claim adjusters, most of whom have over 20 years experience and are themselves experienced pilots," Mr. Schwarz continued. Hallmark has filed with the Securities and Exchange Commission a Current Report on Form 8-K containing additional information regarding the Aerospace purchase agreement. Hallmark Financial Services, Inc. engages primarily in the sale of property and casualty insurance products. The Company's business involves marketing and underwriting of non-standard personal automobile insurance primarily in Texas, Arizona and New Mexico; marketing and underwriting commercial insurance primarily in Texas, New Mexico, Idaho, Oregon, Montana and Washington; third party claims administration; and other insurance related services. The Company is headquartered in Fort Worth, Texas and its common stock is listed on the American Stock Exchange under the symbol "HAF". Forward-looking statements in this Release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation 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, the availability of financing, underwriting loss experience and other risks detailed from time to time in the Company's periodic report filings with the Securities and Exchange Commission. For further information, please contact: Mark J. Morrison, Chief Operating Officer at 817.348.1600 http://www.hallmarkgrp.com/ DATASOURCE: Hallmark Financial Services, Inc. CONTACT: Mark J. Morrison, Chief Operating Officer of Hallmark Financial Services, Inc., +1-817-348-1600 Web site: http://www.hallmarkgrp.com/

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