NU Online News Service, May 5, 4:20 p.m. EDT–U.S.I. Holdings Corporation reported a lower first-quarter profit for 2005, hampered by higher expenses that included its acquisition of Summit Global.
The Briarcliff Manor, N.Y.-based insurance broker reported net income for the quarter was $975,000, down from slightly more than $5 million for the same period a year ago.
The firm's commissions-and-fees revenues rose to more than $122 million, up from $91.5 million, while investment income improved to $664,000 from $361,000. The higher revenues were attributable to U.S.I.'s continuing acquisition of agency businesses, the firm said.
But U.S.I. recorded much-higher expenses for the quarter–$120.5 million, up from $83 million.
Some of the expenses were related to the firm's latest acquisitions, Summit Global Partners. U.S.I. said it recorded $10.6 million of expenses related to the integration of Summit, which it completed in the first quarter.
Commenting on its acquisition strategy, Chief Executive Officer David Eslick said: "We achieved historic results in our acquisition strategy for the quarter, closing deals that will contribute approximately $80 million in annualized revenues. All of these results provide strong momentum toward achieving our target of 15 percent annual earnings growth."
U.S.I. also reported that it received $18 million in contingent commissions in the 2005 first quarter, up from about $13 million in 2004. The broker has not abandoned its contingent-fee arrangements, and said the increase in contingent fees is attributable to acquired agency businesses.
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