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
                                                                                  
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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(f) of the Investment Company Act of 1940
                      

1. Name and Address of Reporting Person *

NEWCASTLE PARTNERS L P 		2. Issuer Name and Ticker or Trading Symbol

HALLMARK FINANCIAL SERVICES INC [ HALL ] 		5. Relationship of Reporting Person(s) to Issuer (Check all applicable)

_____ Director                      _____ 10% Owner
_____ Officer (give title below)      __ X __ Other (specify below)
see attached explanation
(Last)          (First)          (Middle)

200 CRESCENT COURT, STE 1400 		3. Date of Earliest Transaction (MM/DD/YYYY)

7/9/2010
(Street)

DALLAS, TX 75201
(City)        (State)        (Zip)
4. If Amendment, Date Original Filed (MM/DD/YYYY)

 
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. Trans. Date 2A. Deemed Execution Date, if any 3. Trans. 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   7/9/2010     J (1)    204048   D $0   4064851   D   (2) (3)  

Table II - Derivative Securities Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities)
1. Title of Derivate Security
(Instr. 3) 		2. Conversion or Exercise Price of Derivative Security 3. Trans. Date 3A. Deemed Execution Date, if any 4. Trans. 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 7. Title and Amount of Securities Underlying Derivative Security
(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

Explanation of Responses:
(1)  Constitutes a distribution of shares to withdrawing partners of NP as of June 30, 2010.
(2)  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"), 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.
(3)  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, 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.

Reporting Owners
Reporting Owner Name / Address
Relationships
Director 10% Owner Officer Other
NEWCASTLE PARTNERS L P
200 CRESCENT COURT
STE 1400
DALLAS, TX 75201


see attached explanation
NEWCASTLE CAPITAL MANAGEMENT LP
200 CRESCENT COURT
STE 1400
DALLAS, TX 75201


see attached explanation
NEWCASTLE CAPITAL GROUP LLC
200 CRESCENT COURT
STE 1400
DALLAS, TX 75201


see attached explanation
SCHWARZ MARK E
200 CRESCENT COURT
STE 1400
DALLAS, TX 75201 		X X Chairman see attached explanation
NEWCASTLE SPECIAL OPPORTUNITY FUND I, L.P.
200 CRESCENT COURT
SUITE 1400
DALLAS, TX 75201


see attached explanation
NEWCASTLE SPECIAL OPPORTUNITY FUND II, L.P.
200 CRESCENT COURT
SUITE 1400
DALLAS, TX 75201


see attached explanation
Newcastle Focus Fund II LP
200 CRESCENT COURT
SUITE 1400
DALLAS, TX 75201


see attached explanation
DETROIT STOKER Co
1510 E. FIRST ST.
MONROE, MI 48161


see attached explanation
DSC Services, Inc.
200 CRESCENT COURT
SUITE 1400
DALLAS, TX 75201


see attached explanation

Signatures
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 7/12/2010
** Signature of Reporting Person Date

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 7/12/2010
** Signature of Reporting Person Date

Newcastle Capital Group, L.L.C. its general partner, By: /s/ Mark E. Schwarz, its managing member 7/12/2010
** Signature of Reporting Person Date

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 7/12/2010
** Signature of Reporting Person Date

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 7/12/2010
** Signature of Reporting Person Date

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 7/12/2010
** Signature of Reporting Person Date

DSC Services, Inc. 7/12/2010
** Signature of Reporting Person Date

Detroit Stoker Co. 7/12/2010
** Signature of Reporting Person Date

/s/ Mark E. Schwarz 7/12/2010
** 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.
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