U.S. Markets close in 5 hrs 28 mins

Hallmark Financial's (HALL) Shares Gain on Q2 Earnings Beat

Zacks Equity Research

Hallmark Financial Services, Inc.’s HALL second-quarter 2019 operating earnings of 42 cents per share beat the Zacks Consensus Estimate by 20%. Moreover, the bottom line improved 61.5% year over year, primarily backed by the company’s solid revenues and premiums. Results were also boosted by its Specialty Commercial Segment and Personal Segment.

Shares of the company inched up 2.3% in the last couple of trading sessions to reflect this outperformance.

Total revenues improved 16.7%year over year in the quarter under review. Also, the top line surpassed the Zacks Consensus Estimate by 4.7%.

Quarterly Operational Update

In the second quarter of 2019, gross premiums of the company increased 26% year over year to $218.2 million.

Net premiums written also surged 38% year over year to $123.8 million on the back pf premium growth in Specialty Commercial and Personal Segments and net retention of business in the Personal Segment.

Net premiums earned by the company rose 17% year over year to $106.5 million.

Net combined ratio of the company improved 250 basis points to 94.5%.

Expense ratio of 25.7% for the second quarter was down 130 bps from the year-ago figure of 27%.

Total expenses of the company were up 13.8% year over year due to higher losses and loss adjustment costs plus operating expenses.

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

Segmental Update

Specialty Commercial Segment: Gross premiums written rose 26.5% from the year-earlier number. Total revenues also inched up 2.1%.

Standard Commercial Segment: Gross premiums written were up 1.2% year over year. However, revenues decreased 10% year over year.

Personal Segment: Gross premiums surged nearly 51% from the prior-year quarter. Also, revenues soared 192% year over year.

Corporate Segment: Total revenues written for this unit came in at $6.9 million against the year-ago quarter's reported loss of $1.2 million.

Financial Position

As of Jun 30, 2019, cash and cash equivalents of the company rose 90% from the level at 2018 end.

Total assets of the company jumped 11.2% from 2018 end.

Zacks Rank

Hallmark Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Of the insurance industry players that have already reported second-quarter results, the bottom-line figures of The Progressive Corporation PGR and RLI Corp. RLI beat the respective Zacks Consensus Estimate. However, The Travelers Companies, Inc.’s TRV earnings missed the mark.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Hallmark Financial Services, Inc. (HALL) : Free Stock Analysis Report
 
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
 
RLI Corp. (RLI) : Free Stock Analysis Report
 
The Progressive Corporation (PGR) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research