Hub International announces Q4 results, strategic alliance

Hub International Limited (NYSE:HBG)(TSX:HBG) is reporting a fourth-quarter revenue of US$114.1 million up 12% from US$101.5 million in the same period of 2004.
For the year, net earnings from continuing operations were flat on a 25% increase in revenue. Results for both the quarter and the year include the impact of a compensation charge related to the 2004 Talbot acquisition and other items. On an adjusted basis, net earnings increased 6% for the quarter and 28% for the year.
U.S. revenue rose 16%, to US$81.5 million, and Canadian revenue increased 4% to US$32.6 million. Hub’s organic growth of 2% in the fourth quarter reflected the impact of 1% growth in the United States and 4% organic growth in Canada.
Adjusted for foreign exchange effects, organic growth was 1%, while organic growth of core commissions was flat.
“2005 was a great year,” Hub chairman and CEO Martin P. Hughes said in a press release.
“Our investment in Hub’s sales culture and the commitment of our people enabled us to post organic growth in the face of declining insurance rates. Our acquisition team continued to excel in identifying and closing attractive opportunities. In addition, we achieved our goal of increasing operating margins, recording a 1% improvement for the quarter and the year.”
Hub also announced it has entered into a strategic alliance with Citizens Financial Group, Inc. (“CFG”), the eighth-largest commercial bank holding company in the United States (US$155 billion in assets as of Dec. 31, 2005).
Hub and CFG have entered into an agreement pursuant to which Hub will purchase three large insurance brokerages from subsidiaries of CFG: Citizens Clair Insurance Group (Clair), based in Norristown (Philadelphia), Pennsylvania; Brewer & Lord, based in Norwell (Boston), Massachusetts; and Feitelberg Insurance, based in Fall River, Massachusetts.
The purchase price for the acquisition of the three brokerages is $80 million (inclusive of tangible net worth) payable in cash on closing, as well as an earn-out based on future performance.
On a combined basis, the three brokerages had revenue of approximately $45 million in 2005, and operate from 19 offices in Pennsylvania, Massachusetts, and Rhode Island.
“We believe banking customers are best served when they have access to a full array of financial services, including insurance, and we have provided those services through three strong agencies within Citizens,” Robert M. Mahoney, vice chairman of Citizens Financial Group. “Our strategic alliance with Hub International will expand our access to product offerings, locations and expertise, enhancing our competitive position.”