Question-and-Answer Session
Operator
(Operator instructions) We'll have our first question from Beth Malone with Wunderlich.
Beth Malone – Wunderlich
Thank you, good morning. Congratulations on the quarter.
Michael Lee
Thank you.
Beth Malone – Wunderlich
Just talking about the guidance and the outlook, how much of the adjustment from your previous guidance to the guidance you provided in this release, is due to the Hermitage and CastlePoint delay of closing? How much were they expected to contribute to the 2009 estimate?
Michael Lee
This is Michael. Good morning, Beth. We don't have the exact breakdown, but obviously our previously – previous guidance anticipates closing as of January 1. So the revised guidance reflects the – the later closing. We don't have the exact breakdown. But I – I think if you go four quarters ahead, I think our – our projections are probably going to be similar to the projections that we have provided previously. The first quarter is somewhat complex because of the two acquisitions, and also due to the fact that we held so much cash in anticipation of these two transactions. So I would say that we probably are – our guidance is – that we previously provided is going to be right on point, if we include the first quarter of 2009, along with the three quarters in 2008.
Beth Malone – Wunderlich
Okay. And then if we look out on – when you talk about the weakness you saw in the Northeast, which was early on in your development that was a core market for you. Are you not seeing that same kind of weakness in these other markets that you're entering now?
Michael Lee
Well, for – first of all, I think we're – first of all, we're still growing in the Northeast. But we have decided that our capital is better – better allocated to other small, premium-sized segments in other parts of the country. So our strategy was really to rotate our capital out of middle market and large accounts, where we're seeing some significant competition in the north – Northeast, and then allocate our capital to small, premium-sized segments. And in other territories, we're finding the same type of pricing integrity for that segment of the market, as we're seeing in the Northeast. So, I think as we enter into different states, especially Florida, Texas, and California, we're focusing on small premium-sized segments. And we're either writing that on an excess and surplus basis, or on an admitted basis, but competing in that E&S market segment where there is price, still pricing integrity.
Beth Malone – Wunderlich
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