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Hallmark Financial (HALL) Q2 Earnings and Revenues Beat
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Hallmark Financial (HALL - Free Report) reported second-quarter 2020 operating income of 28 cents per share, beating the Zacks Consensus Estimate of 10 cents per share. The bottom line dropped 33.3% year over year.
The quarter witnessed lower premiums and adverse impact of the COVID-19 pandemic.
Total revenues improved 15.2% year over year to $129 million in the quarter under review. The top line beat the Zacks Consensus Estimate by 1.4%.
Hallmark Financial Services, Inc. Price, Consensus and EPS Surprise
Gross premiums decreased 16% year over year to $183.6 million.
Net premiums written declined 12% year over year to $109 million.
Investment income dropped 41% year over year to $3.2 billion in the quarter, attributable to lower interest rates and an increase in the proportion of short-term investments held relative to longer maturity investments.
Net catastrophe losses of $6.6 million includes $3.7 million net losses for COVID-19 claims, which deteriorated net combined ratio by 520 basis points (bps).
Net combined ratio deteriorated 390 bps to 98.4%. The exit of the Binding Primary Auto business had a 260 bps negative impact on net combined ratio.
Expense ratio of 22.9% improved 280 bps year over year.
Total expenses increased 21.7% year over year to $127.1 million due to higher losses and loss adjustment costs, operating expenses and interest expense.
Segmental Update
Specialty Commercial Segment: Net premiums written declined 17.4% year over year to $74 million. Combined ratio deteriorated 510 bps to 96.9%.
Standard Commercial Segment: Net premiums written were up 14.6% year over year to $16.8 million. Combined ratio deteriorated 590 bps to 100.1%.
Personal Segment: Net premiums decreased 7.2% year over year to $20.9 million. Combined ratio deteriorated 60 bps to 92.1%.
Corporate Segment: Total revenues was $2 million, down from $6.9 million in the year-ago quarter. Pretax loss was $3 million against year-ago income $1.6 million.
Financial Position
As on Jun 30, 2020 end, cash and cash equivalents were $126.6 million, up 137.4% from 2019 end level.
Total assets decreased 4.1% year over year to $1.4 billion at Jun 30, 2020.
Book value per share dropped 30% year over year to $11.14 as on Jun 30, 2020.
Zacks Rank
Hallmark Financial currently carries a Zacks Rank #4 (Sell).
Of the insurance industry players that have reported second-quarter results so far, The Progressive Corporation (PGR - Free Report) , Cincinnati Financial (CINF - Free Report) , and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings.
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Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Hallmark Financial (HALL) Q2 Earnings and Revenues Beat
Hallmark Financial (HALL - Free Report) reported second-quarter 2020 operating income of 28 cents per share, beating the Zacks Consensus Estimate of 10 cents per share. The bottom line dropped 33.3% year over year.
The quarter witnessed lower premiums and adverse impact of the COVID-19 pandemic.
Total revenues improved 15.2% year over year to $129 million in the quarter under review. The top line beat the Zacks Consensus Estimate by 1.4%.
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
Gross premiums decreased 16% year over year to $183.6 million.
Net premiums written declined 12% year over year to $109 million.
Investment income dropped 41% year over year to $3.2 billion in the quarter, attributable to lower interest rates and an increase in the proportion of short-term investments held relative to longer maturity investments.
Net catastrophe losses of $6.6 million includes $3.7 million net losses for COVID-19 claims, which deteriorated net combined ratio by 520 basis points (bps).
Net combined ratio deteriorated 390 bps to 98.4%. The exit of the Binding Primary Auto business had a 260 bps negative impact on net combined ratio.
Expense ratio of 22.9% improved 280 bps year over year.
Total expenses increased 21.7% year over year to $127.1 million due to higher losses and loss adjustment costs, operating expenses and interest expense.
Segmental Update
Specialty Commercial Segment: Net premiums written declined 17.4% year over year to $74 million. Combined ratio deteriorated 510 bps to 96.9%.
Standard Commercial Segment: Net premiums written were up 14.6% year over year to $16.8 million. Combined ratio deteriorated 590 bps to 100.1%.
Personal Segment: Net premiums decreased 7.2% year over year to $20.9 million. Combined ratio deteriorated 60 bps to 92.1%.
Corporate Segment: Total revenues was $2 million, down from $6.9 million in the year-ago quarter. Pretax loss was $3 million against year-ago income $1.6 million.
Financial Position
As on Jun 30, 2020 end, cash and cash equivalents were $126.6 million, up 137.4% from 2019 end level.
Total assets decreased 4.1% year over year to $1.4 billion at Jun 30, 2020.
Book value per share dropped 30% year over year to $11.14 as on Jun 30, 2020.
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.
Of the insurance industry players that have reported second-quarter results so far, The Progressive Corporation (PGR - Free Report) , Cincinnati Financial (CINF - Free Report) , and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>