FORT WORTH, Texas, March 28, 2011 (GLOBE NEWSWIRE) -- Hallmark Financial Services, Inc. (Nasdaq:HALL) announced today that its subsidiary, American Hallmark Insurance Company of Texas, has executed a purchase agreement to acquire all of the outstanding capital stock of TBIC Holding Corporation, including its wholly owned subsidiaries Texas Builders Insurance Company and TBIC Risk Management, Inc. (collectively referred to as "TBIC") for an estimated initial base purchase price of $1.7 million, net of approximately $0.4 million holdback payable four calendar quarters following closing, and up to $3.0 million contingent consideration payable four years after closing. The transaction will be funded from existing working capital.
TBIC is an Austin, Texas based insurance company writing small and middle market workers compensation business within the State of Texas. Formed in 1987, TBIC organized as a stock property casualty insurance company providing workers' compensation insurance to segments of the highway construction industry that could not obtain coverage in the standard market. In 1996, TBIC expanded its business plan and began to provide workers' compensation insurance to a broad range of risks competing with standard companies. Today TBIC writes annual premiums of approximately $5.0 million of low hazard business produced through independent agents throughout the state.
Mark J. Morrison, Chief Executive Officer and President of Hallmark, said, "We are pleased to add TBIC as an extension of our standard commercial segment product line offering. Hallmark has spent the past several years actively looking for the right vehicle to enter the workers' compensation market. TBIC brings a veteran management team that has a proven underwriting track record. We are confident the addition of this product line to our standard commercial business segment will produce synergies enhancing the competitiveness of both businesses. Over time, we expect to expand this product line into our other existing standard commercial lines markets outside of Texas."
Kevin T. Kasitz, Executive Vice President of Commercial Operations of Hallmark added, "TBIC provides its agents and insureds the superior level of personal service and support to which Hallmark agents are accustomed. TBIC's claims department earned the designation of "High Performer" by the Texas Department of Insurance in its annual Performances Board Oversight assessment in 2008 and 2009. They have built a culture committed to providing excellent service which fits perfectly with our standard commercial business strategy."
Robert C. Siddons, President of TBIC, said, "We are pleased with the agreement we have reached with Hallmark. The financial strength Hallmark brings to this relationship greatly enhances TBIC's ability to effectively compete in the market. We are confident TBIC will provide significant future returns for Hallmark shareholders."
Hallmark Financial Services, Inc. is an insurance holding company which, through its subsidiaries, engages in the sale of property/casualty insurance products to businesses and individuals. Hallmark's business involves marketing, distributing, underwriting and servicing commercial insurance, personal insurance, medical malpractice insurance and general aviation insurance, as well as providing other insurance related services. The Company is headquartered in Fort Worth, Texas and its common stock is listed on NASDAQ under the symbol "HALL."
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