Hallmark Financial Services Inc (HALL) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $3.66 million, or $ 0.20 a share in the quarter, against a net profit of $3.45 million, or $0.18 a share in the last year period. Revenue during the quarter grew 7.97 percent to $97.25 million from $90.07 million in the previous year period. Net premium earned for the quarter increased 5.90 percent or $5.05 million to $90.55 million. During the quarter, the company has written premium worth $83.28 million on net basis, up 1.13 percent or $0.93 million.
Total expenses move up
Benefits, losses and expenses for the quarter were at $103.43 million, or 114.22 percent of premium earned from $84.98 million or 99.39 percent of premium earned in the last year period. Operating loss for the quarter was $6.17 million, compared with an operating income of $5.09 million in the previous year period. Net investment income was at $4.40 million for the quarter, up 12.28 percent or $0.48 million from year-ago period. Meanwhile, income from fees and commission for the quarter plunged 41.34 percent or $0.11 million to $0.15 million. The company has recorded a gain on investments of $0.93 million in the quarter compared with a loss of $1.18 million for the previous year period.
“The 4th Quarter results were disappointing and the conclusion of a challenging year for Hallmark in 2016. Deteriorated results in the automobile line of business, both commercial and personal, as well as higher than expected property catastrophe losses were the primary drivers of our results in 2016. For the year, excluding the 3.1% impact of catastrophe losses and the 2.2% impact from adverse prior accident year reserve development, driven by deteriorating auto results from those prior years, the combined ratio for the group would have been 94.5%,” said Naveen Anand, president and chief executive officer.
Liabilities outpace assets growth
Total assets increased 7.98 percent or $85.86 million to $1,162.46 million on Dec. 31, 2016. On the other hand, total liabilities were at $896.72 million as on Dec. 31, 2016, up 10.09 percent or $82.15 million from year-ago. Return on assets was negative at 0.22 percent in the quarter against a positive 0.40 percent in the last year period. Return on equity was negative at 1.38 percent in the quarter against a positive 1.32 percent in the last year period.
Investments move up
Investments stood at $659.07 million as on Dec. 31, 2016, up 13.77 percent or $79.79 million from year-ago. Meanwhile, yield on investments went down 1 basis points to 0.67 percent in the quarter. Meanwhile, reinsurance recoverables moved up 29.34 percent or $33.53 million over the year to $147.82 million on Dec. 31, 2016.
Total debt was almost stable over the past one year at $85.70 million on Dec. 31, 2016. Shareholders equity stood at $265.74 million as on Dec. 31, 2016, up 1.42 percent or $3.71 million from year-ago. As a result, debt to equity ratio was almost stable at 0.32 percent in the quarter, when compared with the last year period.
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