Form 4 HALLMARK FINANCIAL SERVI For: Jun 10 Filed by: SCHWARZ MARK E (10K)

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

NEWCASTLE PARTNERS L P

(Last)

(First)

(Middle)

200 CRESCENT COURT, STE 1400

(Street)

DALLAS

75201

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
HALLMARK FINANCIAL SERVICES INC [HALL]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	X	10% Owner
	Officer (give title below)	X	Other (specify below)
See Explanation

3. Date of Earliest Transaction (Month/Day/Year)
06/10/2009

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

	Form filed by One Reporting Person
X	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock	06/10/2009		P		3,082	A	$ 6.7	11,077,312 ⁽¹⁾ ⁽²⁾ ⁽³⁾	I ⁽¹⁾ ⁽²⁾ ⁽³⁾	See Explanation

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security
(Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code
(Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date
(Month/Day/Year)

7. Title and Amount of Underlying Securities
(Instr. 3 and 4)

8. Price of Derivative Security
(Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)

11. Nature of Indirect Beneficial Ownership
(Instr. 4)

Code

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

1. Name and Address of Reporting Person^*

NEWCASTLE PARTNERS L P

(Last)

(First)

(Middle)

200 CRESCENT COURT, STE 1400

(Street)

DALLAS

75201

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

NEWCASTLE CAPITAL MANAGEMENT LP

(Last)

(First)

(Middle)

200 CRESCENT COURT, STE 1400

(Street)

DALLAS

75201

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

NEWCASTLE CAPITAL GROUP LLC

(Last)

(First)

(Middle)

200 CRESCENT COURT, STE 1400

(Street)

DALLAS

75201

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

SCHWARZ MARK E

(Last)

(First)

(Middle)

200 CRESCENT COURT, STE 1400

(Street)

DALLAS

75201

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

NEWCASTLE SPECIAL OPPORTUNITY FUND I, L.P.

(Last)

(First)

(Middle)

200 CRESCENT COURT, SUITE 1400

(Street)

DALLAS

75201

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

NEWCASTLE SPECIAL OPPORTUNITY FUND II, L.P.

(Last)

(First)

(Middle)

200 CRESCENT COURT, SUITE 1400

(Street)

DALLAS

75201

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

Newcastle Focus Fund II LP

(Last)

(First)

(Middle)

200 CRESCENT COURT, SUITE 1400

(Street)

DALLAS

75201

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

DSC Services, Inc.

(Last)

(First)

(Middle)

200 CRESCENT COURT, SUITE 1400

(Street)

DALLAS

75201

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

DETROIT STOKER Co

(Last)

(First)

(Middle)

1510 E. FIRST ST.

(Street)

MONROE

48161

(City)

(State)

(Zip)

Explanation of Responses:

1. The Reporting Persons are members of a "group" for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended and accordingly may be deemed to beneficially own Shares of the Issuer's Common Stock owned in the aggregate by the other members of the Section 13(d) group. The Section 13(d) group consists of Newcastle Partners, L.P. ("NP"), Newcastle Capital Management, L.P. ("NCM"), Newcastle Capital Group, L.L.C. ("NCG"), Newcastle Special Opportunity Fund I, L.P. ("NSOF I"), Newcastle Special Opportunity Fund II, L.P. ("NSOF II"), Newcastle Focus Fund II, L.P. ("NFF"), DSC Services Inc. ("DSC"), the Detroit Stoker Company ("Detroit Stoker") and Mark E. Schwarz ("Schwarz"). Each Reporting Person disclaims beneficial ownership of the shares of the Issuer's Common Stock owned by the other members of the Section 13(d) group except to the extent of its pecuniary interest therein.

2. NCM is the general partner of each of NP, NSOFI, NSOFII and NFF. NCG is the general partner of NCM, and Schwarz is the managing member of NCG. Accordingly, each of NCM, NCG and Schwarz may be deemed to beneficially own the shares directly owned by any of NP, NSOFI, NSOFII and NFF. In addition, NCG and Schwarz may be deemed to beneficially own shares controlled by NCM pursuant to an account management agreement under which NCM holds the power to vote and dispose of the shares. Also, DSC is the parent company of Detroit Stoker, and Schwarz and NCG together own all of the outstanding shares of DSC. Accordingly, each of Schwarz and DSC may be deemed to beneficially own the shares directly owned by Detroit Stoker.

3. Includes, as of 6/10/09, (1) (a) 51,526 shares of Common Stock and (b) 19,167 options exercisable into shares of Common Stock within 60 days of the date hereof, held in each case by Schwarz directly, (2) 5,901,615 shares of Common Stock held by NP, (2) a total of 3,274,830 shares of Common Stock held by NSOFI and NSOFII, (3) 2,400 shares of Common Stock held by NFF (4) 1,515,151 shares of Common Stock controlled by NCM pursuant to an account management agreement under which NCM holds the power to vote and dispose of such shares and (5) 312,623 shares of Common Stock held by Detroit Stoker. In the aggregate, as of 6/10/09, the members of the Section 13(d) group beneficially own 11,077,312 shares of the Issuer's Common Stock.

	Newcastle Partners, L.P., By: Newcastle Capital Management, L.P., its general partner, By: Newcastle Capital Group, L.L.C. its general partner, By: /s/ Mark E. Schwarz, its managing member	06/12/2009
	Newcastle Capital Management, L.P., By: Newcastle Capital Group, L.L.C. its general partner, By: /s/ Mark E. Schwarz, its managing member	06/12/2009
	Newcastle Capital Group, L.L.C., By: /s/ Mark E. Schwarz, its managing member	06/12/2009
	/s/ Mark E. Schwarz, its managing member	06/12/2009
	Newcastle Special Opportunity Fund I, L.P., By: Newcastle Capital Management, L.P., its general partner, By: Newcastle Capital Group, L.L.C. its general partner, By: /s/ Mark E. Schwarz, its managing member	06/12/2009
	Newcastle Special Opportunity Fund II, L.P., By: Newcastle Capital Management, L.P., its general partner, By: Newcastle Capital Group, L.L.C. its general partner, By: /s/ Mark E. Schwarz, its managing member	06/12/2009
	Newcastle Focus Fund II, L.P., By: Newcastle Capital Management, L.P., its general partner, By: Newcastle Capital Group, L.L.C. its general partner, By: /s/ Mark E. Schwarz, its managing member	06/12/2009
	/s/ DSC Services, Inc.	06/12/2009
	/s/ Detroit Stoker Co.	06/12/2009
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.

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