Rockwater Capital Corp. is reporting a profit for the third-quarter ended September 30.

The financial services holding company says third quarter earnings were $104,000, or 0¢ a share, on revenue of $30.3 million. That compares with a loss of $1.8 million, or 1¢ a share, on revenue of $24.2 million in the second quarter of 2003.

“We are very pleased that, for the first time since changing our strategic direction in 2002, we are reporting positive quarterly earnings,” said Robert Schultz, chairman of Rockwater. “Our revenues increased 25% over the second quarter and are now annualizing at over $120 million — surpassing our goal of $100 million in annualized revenues a full three months ahead of schedule.”

The company says compensation as a percentage of revenue was 62.7% in the third quarter, down from 63.6% in the second quarter due to the favourable effect of investment income. Non-compensation expenses in the third quarter increased by $485,000 due to investment in the firm’s asset management platform, but declined as a percentage of revenue to 29.3% from 34.7% in the second quarter.

Rockwater says its capital markets business increased revenues by 68% over the second quarter to almost $4.1 million, while its wealth management revenues increased by 13% over the second quarter to $22.2 million. Asset Management revenues increased to $2.9 million, a 42% increase over the second quarter.

Rockwater serves individual, corporate and institutional clients through its operating subsidiaries First Associates Investments Inc. and Rockwater Asset Management Inc.