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Hallmark Financial (HALL) Q1 Earnings, Revenues Top Estimates

·3 min read

Hallmark Financial Services HALL delivered operating earnings of 27 cents per share against the Zacks Consensus Estimate of a loss of 7 cents per share. The bottom line increased 8% year over year.

Hallmark Financial continued to achieve substantial rate increases, particularly in the Specialty Commercial segment.

Hallmark Financial Services, Inc. Price, Consensus and EPS Surprise

Hallmark Financial Services, Inc. Price, Consensus and EPS Surprise
Hallmark Financial Services, Inc. Price, Consensus and EPS Surprise

Hallmark Financial Services, Inc. price-consensus-eps-surprise-chart | Hallmark Financial Services, Inc. Quote

Quarterly Operational Update

Total revenues declined 16.3% year over year to $108 million in the quarter under review. However, the top line beat the Zacks Consensus Estimate by 0.5%.

Gross premiums written decreased 19% year over year to $163 million.

Net premiums written dropped 26% year over year to $93.1 million, attributable to lower premium in Specialty Commercial and Personal segments.

Net investment income was $3 million, down 32% year over year owing to lower interest rates.

Net combined ratio improved 150 basis points (bps) to 96.1

Expense ratio of 28.1 deteriorated 590 bps year over year.

Total expenses decreased 39.8% year over year to $102.7 million due to lower losses, loss adjustment costs and interest expenses.

Net catastrophe losses were $5.9 million in the quarter.

Segmental Update

Specialty Commercial: Net premiums written dropped 36.3% year over year to $54.4 million. Combined ratio deteriorated 10 bps to 87.7

Standard Commercial: Net premiums written were up 3% year over year to $19.5 million. Combined ratio improved 230 bps to 102.4

Personal: Net premiums decreased 12.9% year over year to $19.2 million. Combined ratio improved 1660 bps to 112.4

Corporate: Total revenues were $5.8 million against ($31 million) in the year-ago quarter. Pretax income of $1.1 million rebounded from the year-ago loss of $80.9 million.

Financial Position

As of first-quarter 2021 end, cash and cash equivalents were $281.8 million, up nearly three-fold from 2020 end level.

Shareholders equity increased 5.2% from 2020 end to $179.8 million at first-quarter 2021 end.

Book value per share dropped 5% from 2020 end to $9.89 at first-quarter 2021 end.

Zacks Rank

Hallmark Financial currently carries a Zacks Rank #4 (Sell).

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

Performance of Other Insurers

First-quarter earnings per share of The Travelers Companies TRV, W.R. Berkley Corporation WRB and RLI Corporation’s RLI beat their respective Zacks Consensus Estimate.

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