Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

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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(Print or Type Responses)
1. Name and Address of Reporting Person *
MORRISON MARK J
  2. Issuer Name and Ticker or Trading Symbol
HALLMARK FINANCIAL SERVICES INC [HAF]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
President; COO; CFO
(Last)
(First)
(Middle)
777 MAIN STREET, SUITE 1000
3. Date of Earliest Transaction (Month/Day/Year)
05/25/2006
(Street)

FORT WORTH, TX 76102
4. If Amendment, Date Original Filed(Month/Day/Year)
6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
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               102,220 D  

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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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 V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
EMPLOYEE STOCK OPTION (RIGHT TO BUY) $ 1.89 05/25/2006   A   125,000     (1) 05/24/2016 COMMON STOCK 125,000 (1) 125,000 D  
EMPLOYEE STOCK OPTION (RIGHT TO BUY) $ 1.19               (2) 05/26/2010 COMMON STOCK 100,000   100,000 D  
EMPLOYEE STOCK OPTION (RIGHT TO BUY) $ 0.65               (3) 03/24/2009 COMMON STOCK 90,000   90,000 D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
MORRISON MARK J
777 MAIN STREET
SUITE 1000
FORT WORTH, TX 76102
      President; COO; CFO  

Signatures

 STEVEN D. DAVIDSON AS ATTORNEY-IN-FACT FOR MARK J. MORRISON   06/29/2006
**Signature of Reporting Person Date

Explanation of Responses:

* 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).
(1) Represents grant of employee stock options exercisable as to 12,500, 25,000, 37,500 and 50,000 shares on May 25, 2007, 2008, 2009 and 2010, respectively.
(2) Represents grant of employee stock options exercisable as to 10,000, 20,000, 30,000 and 40,000 shares on May 27, 2006, 2007, 2008 and 2009, respectively.
(3) Represents grant of employee stock options exercisable as to 20,000, 30,000 and 40,000 shares on March 25, 2006, 2007 and 2008, respectively.

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