Hallmark Financial Services, Inc. announced on Thursday that will no longer actively pursue a previously announced separation of its specialty commercial business segment and will not proceed with an initial public offering of the specialty segment.

It was in late January when Hallmark first announced that it would explore the separation of its specialty commercial business to unlock its value and improve access to capital. And in April, the company announced the intention to pursue and IPO for the business.

In a Dec. 23 statement, the property/casualty company, which operates in three business segments—specialty commercial, standard commercial and personal—pointed to improved operating results and market conditions for the specialty commercial segment as factors leading to the decision not to IPO.

The statement said that evaluations by Hallmark’s board of directors also considered the successful completion of a loss portfolio transfer transaction (third-quarter 2020), and A.M. Best’s recent (November 2021) affirmation of Hallmark’s financial strength rating of A- (Excellent).

“Hallmark and its subsidiaries are well positioned to benefit from current conditions in the insurance market, including a continuing favorable pricing environment. Exacting focus on underwriting discipline and the long-term growth and profitability of each of our business segments represents the greatest opportunity to enhance and realize the significant inherent value in each of them,” said Mark Schwarz, Hallmark’s Executive Chairman, President and Chief Executive Officer.

Hallmark’s board appointed Executive Chair Schwarz to take on the roles of president and chief executive officer in January 2021, filling a role vacated by Naveen Anand. Anand submitted his resignation on Jan. 11, 2021, citing family and personal reasons. Schwarz previously served as CEO from January 2003 through August 2006, and as president from November 2003 through March 2006 became executive chairman in August 2006.

(Editor’s Note: Anand moved on to assume the role of President of Insurance for Player’s Health, a data-driven insurance and risk management platform that serves the sport and fitness markets, in late June)

In its latest earnings report, Hallmark attributed an improvement in its pre-tax results for the nine months ended Sept. 30, 2021 (as compared to the same period the prior year) primarily to the absence of $46.0 million of impairment charges taken during the first quarter of 2020, and to a $98.6 million decrease in loss and loss adjustment expenses. “The impairment charges during the first quarter of 2020 resulted from our determination that a significant decline in market capitalization below stockholders’ equity indicated the impairment of the goodwill and indefinite-lived intangible assets included in our balance sheet,” the company said.

2020 was a difficult year for the company. After announcing its exit from binding primary commercial auto business in March 2020, Hallmark received several delinquent filing notices from NASDAQ in subsequent. After filing the 2019 annual financial results, which were unfavorably impacted by prior-year development in late June, NASDAQ’s rule compliance matter was closed in July.

In September 2020, Hallmark Financial announced that the chief financial officer, Jeff Passmore, had submitted his resignation.

A day after reporting improved results for the nine-months ended 2021 on Nov. 15, AM Best announced that it was removing its long-term credit and financial strength ratings from under review with developing implications, affirming the A- FSR but assigning a negative outlook to the ratings.

The negative outlooks reflect the volatility in the group’s operating performance, AM Best said, noting that Hallmark’s five-year operating metrics compare unfavorably with the commercial casualty composite.

AM Best said it expects improvement in Hallmark’s operating performance as the group transitions from a commercial auto writer to a specialty lines writer.

The ratings were placed under review with developing implications on April 20, 2021, following Hallmark’s announcement about the IPO, AM Best said, adding that the decision to remove the under-review status reflected Best’s determination that the IPO would have no immediate rating implications.

The A- FSR and credit ratings reflect Hallmark Group’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management, the rating agency announcement said.