Rockwater Capital Corp. today reported a net loss for the third quarter ended September 30.

The financial services holding company said the net loss for the quarter was $ 27.1 million, or $1.31 a share, compared with a profit of $2.5 million, or 11¢ a share in the third quarter of 2005.

The quarterly loss includes a one-time, non-cash impairment charge of $29.5 million, or $1.18 a share, for goodwill and intangible assets related to the acquisition of KBSH.

Excluding the impairment charge, net loss for the period was $2.7 million, or 13¢ a share.

Total revenue during the quarter was $46.6 million, compared with $56.9 million in Q3 2005

The company said assets under administration increased 15.5% over the prior year to $8.2 billion.

“While we are disappointed with the financial results for the quarter, we continued to make good progress executing our strategies to grow the business, including adding talented professionals across the company,” said Robert Schultz, chairman of Rockwater.

“It was a particularly tough quarter for certain businesses, as our investment banking revenue and transaction-based revenue in Wealth Management were affected by the general decline in commodity prices, which had an impact on equity underwriting and trading. Our reported earnings were also significantly affected by the non-cash impairment charge related to KBSH. However, we are encouraged by the strong investment performance at KBSH and are focused on translating this into new mandates. This business offers growth opportunities and remains a key part of our long-term strategy.”


Wealth Management revenue was $30 million during the quarter compared with $35.2 million in the third quarter of 2005, due mainly to lower commission revenue resulting from a decrease in client trading and new equity issue activity.

Capital markets revenue slipped to $9.2 million, from $10.8 million in the third quarter of 2005, due principally to a decline in the number and total value of investment banking transactions.

Total assets under management were $4.8 billion, compared with $6.5 billion at Sept. 30, 2005.

Management fee revenue was $6.3 million, compared with $9.7 million in the third quarter of 2005.

Rockwater’s asset management business is comprised of KBSH Capital Management Inc., which offers investment counseling and portfolio management, and Lakeview Asset Management Inc., a retail investment management platform. Rockwater’s wealth management and capital markets businesses operate under Blackmont Capital Inc., a full service investment dealer.