Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of outstanding shares of the registrant’s Class A common stock, par value $0.01 per share, and Class B common stock, par value $0.01 per share, as of ~~November 1, 2021~~May 2, 2022 was ~~9,653,214~~9,871,990 and ~~4,815,460,~~4,590,798, respectively.

Except where the context requires otherwise and as otherwise set forth herein, in this report, references to the “Company”, “we”, “us” or “our” refer to Silvercrest Asset Management Group Inc. (“Silvercrest”) and its consolidated subsidiary, Silvercrest L.P., the managing member of our operating subsidiary (“Silvercrest L.P.” or “SLP”). SLP is a limited partnership whose existing limited partners are referred to in this report as “principals”.

This report contains, and from time to time our management may make, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks, uncertainties and assumptions. These statements are only predictions based on our current expectations and projections about future events. Important factors that could cause actual results, level of activity, performance or achievements to differ materially from those indicated by such forward-looking statements include but are not limited to: incurrence of net losses, fluctuations in quarterly and annual results, adverse economic or market conditions, our expectations with respect to future levels of assets under management, inflows and outflows, our ability to retain clients from whom we derive a substantial portion of our assets under management, our ability to maintain our fee structure, our particular choices with regard to investment strategies employed, our ability to hire and retain qualified investment professionals, the cost of complying with current and future regulation coupled with the cost of defending ourselves from related investigations or litigation, failure of our operational safeguards against breaches in data security, privacy, conflicts of interest or employee misconduct, our expected tax rate, and our expectations with respect to deferred tax assets, adverse economic or market conditions, including the continued adverse effects of the coronavirus pandemic, incurrence of net losses, adverse effects of management focusing on implementation of a growth strategy, failure to develop and maintain the Silvercrest brand and other factors disclosed under “Risk Factors” in our annual report on Form 10-K for the year ended December 31, ~~2020~~2021 which is accessible on the SEC’s website at www.sec.gov. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Class A
Common
Stock
Shares

Class A
Common
Stock
Amount

Class B
Common
Stock
Shares

Class B
Common
Stock
Amount

Additional
Paid-In
Capital

Retained
Earnings

Total
Silvercrest
Asset
Management
Group Inc.’s
Equity

Non-
controlling
Interest

Total
Equity

January 1, 2020

9,330

$
93

5,031

$
49

$
49,246

$
15,648

$
65,036

$
32,771

$
97,807

Distributions to partners

—

—

—

—

—

—

—

(2,226
)

(2,226
)
Repayment of notes receivable from partners

—

—

—

—

—

—

—

300

300

Equity-based compensation

—

—

—

—

9

—

9

100

109

Net Income

—

—

—

—

—

5,532

5,532

4,158

9,690

Deferred tax, net of amounts payable under tax receivable agreement

—

—

—

—

(364
)

—

(364
)

—

(364
)
Accrued interest on notes receivable from partners

—

—

—

—

—

—

—

(2
)

(2
)
Share conversion

176

2

(176
)

(2
)

1,149

—

1,149

(1,149
)

—

Dividends paid on Class A common stock - $0.15 per share

—

—

—

—

—

(1,520
)

(1,520
)

—

(1,520
)
March 31, 2020

9,506

$
95

4,855

$
47

$
50,040

$
19,660

$
69,842

$
33,952

$
103,794

Distributions to partners

—

—

—

—

—

—

—

(2,798
)

(2,798
)
Repayment of notes receivable from partners

—

—

—

—

—

—

—

—

—

Equity-based compensation

2

—

9

—

10

—

10

147

157

Net Income

—

—

—

—

—

490

490

292

782

Deferred tax, net of amounts payable under tax receivable agreement

—

—

—

—

8

—

8

—

8

Accrued interest on notes receivable from partners

—

—

—

—

—

—

—

(2
)

(2
)
Share conversion

12

—

(12
)

—

88

—

88

(88
)

—

Dividends paid on Class A common stock - $0.16 per share

—

—

—

—

—

(1,523
)

(1,523
)

—

(1,523
)
June 30, 2020

9,520

$
95

4,852

$
47

$
50,146

$
18,627

$
68,915

$
31,503

$
100,418

Distributions to partners

—

—

—

—

—

—

—

(1,497
)

(1,497
)
Repayment of notes receivable from partners

—

—

—

—

—

—

—

—

—

Equity-based compensation

1

—

—

—

52

—

52

169

221

Net Income

—

—

—

—

—

2,059

2,059

1,421

3,480

Deferred tax, net of amounts payable under tax receivable agreement

—

—

—

—

(176
)

—

(176
)

—

(176
)
Accrued interest on notes receivable from partners

—

—

—

—

—

—

—

(2
)

(2
)
Share conversion

24

—

(24
)

—

163

—

163

(163
)

—

Dividends paid on Class A common stock - $0.16 per share

—

—

—

—

—

(1,531
)

(1,531
)

—

(1,531
)
September 30, 2020

9,545

$
95

4,828

$
47

$
50,185

$
19,155

$
69,482

$
31,431

$
100,913

Class A
Common
Stock
Shares

Class A
Common
Stock
Amount

Class B
Common
Stock
Shares

Class B
Common
Stock
Amount

Additional
Paid-In
Capital

Treasury
Stock
Shares

Treasury
Shares
Amount

Retained
Earnings

Total
Silvercrest
Asset
Management
Group Inc.’s
Equity

Non-
controlling
Interest

Total
Equity

January 1, 2021

9,651

$
96

4,722

$
46

$
51,039

—

$
—

$
19,498

$
70,679

$
32,720

$
103,399

Distributions to partners

—

—

—

—

—

—

—

—

—

(1,758
)

(1,758
)
Issuance of notes receivable from partners

—

—

—

—

—

—

—

—

—

(475
)

(475
)
Issuance of Class B shares

—

—

56

1

—

—

—

—

1

475

476

Repayment of notes receivable from partners

—

—

—

—

—

—

—

—

—

228

228

Equity-based compensation

—

—

—

—

—

—

—

—

—

469

469

Net Income

—

—

—

—

—

—

—

2,552

2,552

1,783

4,335

Deferred tax, net of amounts payable under tax receivable agreement

—

—

—

—

7

—

—

—

7

—

7

Accrued interest on notes receivable from partners

—

—

—

—

—

—

—

—

—

(2
)

(2
)
Share conversion

8

—

(8
)

—

56

—

—

—

56

(56
)

—

Dividends paid on Class A common stock - $0.16 per share

—

—

—

—

—

—

—

(1,545
)

(1,545
)

—

(1,545
)
March 31, 2021

9,658

$
96

4,770

$
47

$
51,102

—

$
—

$
20,505

$
71,750

$
33,384

$
105,134

Distributions to partners

—

—

—

—

—

—

—

—

—

(3,592
)

(3,592
)
Issuance of notes receivable from partners

—

—

—

—

—

—

—

—

—

—

—

Issuance of Class B shares

—

—

2

—

—

—

—

—

25

25

Repayment of notes receivable from partners

—

—

—

—

—

—

—

—

—

—

—

Equity-based compensation

1

1

21

—

55

—

—

—

56

237

293

Net Income

—

—

—

—

—

—

—

3,335

3,335

2,326

5,661

Deferred tax, net of amounts payable under tax receivable agreement

—

—

—

—

7

—

—

—

7

—

7

Accrued interest on notes receivable from partners

—

—

—

—

—

—

—

—

—

(1
)

(1
)
Share conversion

11

—

(11
)

—

76

—

—

—

76

(76
)

—

Dividends paid on Class A common stock - $0.16 per share

—

—

—

—

—

—

—

(1,549
)

(1,549
)

—

(1,549
)
June 30, 2021

9,670

$
97

4,782

$
47

$
51,240

—

$
—

$
22,291

$
73,675

$
32,303

$
105,978

Distributions to partners

—

—

—

—

—

—

—

—

—

(1,471
)

(1,471
)
Issuance of notes receivable from partners

—

—

—

—

—

—

—

—

—

—

—

Issuance of Class B shares

—

—

44

—

—

—

—

—

—

674

674

Repayment of notes receivable from partners

—

—

—

—

—

—

—

—

—

—

—

Equity-based compensation

—

75

—

—

—

75

269

344

Net Income

—

—

—

—

—

—

—

3,723

3,723

2,631

6,354

Deferred tax, net of amounts payable under tax receivable agreement

—

—

—

—

16

—

—

—

16

—

16

Accrued interest on notes receivable from partners

—

—

—

—

—

—

—

—

—

(1
)

(1
)
Share conversion

11

—

(11
)

—

77

—

—

—

77

(77
)

—

Purchase of shares of Class A common stock of Silvercrest Asset Management Group Inc.

(27
)

—

—

—

—

27

(418
)

—

(418
)

—

(418
)
Dividends paid on Class A common stock - $0.17 per share

—

—

—

—

—

—

(1,651
)

(1,651
)

—

(1,651
)
September 30, 2021

9,653

$
97

4,815

$
47

$
51,408

27

$
(418
)

$
24,363

$
75,497

$
34,328

$
109,825

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 and for the Three ~~and Nine~~ Months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~

(Dollars in thousands, except per share and par value data and as otherwise indicated)

Goodwill consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired. Goodwill is not amortized but is evaluated for impairment at least annually, on October 1st of each year, or whenever events or circumstances indicate that impairment may have occurred.

The Company accounts for Goodwill under Accounting Standard Codification (“ASC”) No. 350, “Intangibles - Goodwill and Other,” which provides an entity the option to first perform a qualitative assessment of whether a reporting unit’s fair value is more likely than not less than its carrying value, including goodwill. In performing its qualitative assessment, an entity considers the extent to which adverse events or circumstances identified, such as changes in economic conditions, industry and market conditions or entity specific events, could affect the comparison of the reporting unit’s fair value with its carrying amount. If an entity concludes that the fair value of a reporting unit is more likely than not less than its carrying amount, the entity is required to perform the currently prescribed two-step goodwill impairment test to identify potential goodwill impairment and, accordingly, measure the amount, if any, of goodwill impairment loss to be recognized for that reporting unit. The Company utilized this option when performing its annual impairment assessment in 2020 and 2019 and concluded that its single reporting unit’s fair value was more likely than not greater than its carrying value, including goodwill.

The Company has 1 reporting unit at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~ 2021. NaN goodwill impairment charges were recorded during the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021.

Intangible assets of the Company are reviewed for impairment whenever events or changes in circumstances indicate that the net carrying amount of the asset may not be recoverable. In connection with such review, the Company also re-evaluates the periods of amortization for these assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed their fair value.

Identifiable finite-lived intangible assets are amortized over their estimated useful lives ranging from 3 to 20 ~~years.~~years. The method of amortization is based on the pattern over which the economic benefits and generally expected undiscounted cash flows of the intangible asset are consumed. Intangible assets for which no pattern can be reliably determined are amortized using the straight-line method. Intangible assets consist primarily of the contractual right to future management and advisory fees and performance fees and allocations from customer contracts or relationships.

In June 2016, the FASB issued ASU 2016-13, “Accounting for Credit Losses” which amends the Board’s guidance on the impairment of financial instruments. The ASU adds to U.S. GAAP an impairment model, known as the current expected credit loss (“CECL”) model, that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. This amendment became effective for the Company on January 1, 2020. The adoption of this ASU did not have a material effect on the Company’s Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” The ASU provides guidance for entities to evaluate the accounting for fees paid by a customer in a cloud computing arrangement which includes a software license. ASU 2018-15 became effective for the Company on January 1, 2020. ~~The adoption of this ASU did not have a material effect on the Company’s Condensed Consolidated Financial Statements~~.

In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This ASU is effective for all public entities beginning March 12, 2020 through December 31, 2022. The Company expects the adoption of this guidance will not have a material effect on the Company’s Condensed Consolidated Financial Statements.

4. INVESTMENTS AND FAIR VALUE MEASUREMENTS

Investments

Investments include ~~$53 and $914~~$1,588 as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020, respectively,~~2021, representing the Company’s interests in the Silvercrest Funds which have been established and managed by the Company and its affiliates. The Company’s financial interest in these funds can range in amounts up to 2%2% of the net assets of the funds. The Company applies the equity method to account for its interests in affiliated investment funds, despite the Company’s insignificant financial interest therein, because the Company exercises significant influence over and typically serves as the general partner, managing member, or equivalent of these funds. During 2007, the Silvercrest Funds granted the unaffiliated investors in each respective fund the right, by a simple majority of the fund’s unaffiliated investors, without cause, to remove the general partner or equivalent of that fund or to accelerate the liquidation date of that fund in accordance with certain procedures. At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company determined that none of the Silvercrest Funds were required to be consolidated. The Company’s involvement with these entities began on the dates that they were formed, which range from July 2003 to July 2014.

Fair Value Measurements

GAAP establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is affected by a number of factors, including the type of investment, the characteristics specific to the investment and the state of the marketplace including the existence and transparency of transactions between market participants. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices in an orderly market generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

•

Level I: Quoted prices are available in active markets for identical investments as of the reporting date. The type of investments in Level I include listed equities and listed derivatives.

•

Level II: Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Investments which are generally included in Level II include corporate bonds and loans, less liquid and restricted equity securities, certain over-the counter derivatives, and certain fund of hedge funds investments in which the Company has the ability to redeem its investment at net asset value at, or within three months of, the reporting date.

•

Level III: Pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation. Investments that are included in Level III generally include general and limited partnership interests in private equity and real estate funds, credit-oriented funds, certain over-the-counter derivatives, funds of hedge funds which use net asset value per share to determine fair value in which the Company may not have the ability to redeem its investment at net asset value at, or within three months of, the reporting date, distressed debt and non-investment grade residual interests in securitizations and collateralized debt obligations. Liabilities that are included in Level III generally include contingent consideration related to the acquisition earnouts.

~~Level I: Quoted prices are available in active markets for identical investments as of the reporting date. The type of investments in Level I include listed equities and listed derivatives.~~

•

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment.

At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company did 0t0t have any financial assets or liabilities that are recorded at fair value on a recurring basis, with the exception of the contingent consideration related to the acquisition earnouts.

Contingent Consideration

For business acquisitions, the Company recognizes the fair value of goodwill and other acquired intangible assets, and estimated contingent consideration at the acquisition date as part of purchase price. This fair value measurement is based on unobservable (Level 3) inputs.

The following table represents changes in the fair value of estimated contingent consideration for the year ended December 31, ~~2020~~2021 and the three ~~and nine~~ months ended ~~September 30, 2021:~~March 31, 2022:

Balance at January 1, 2020

$
15,921

Additions to estimated contingent consideration

—

Payments of contingent consideration

(741
)
Non-cash changes in fair value of estimated contingent consideration

1,222

Balance at December 31, 2020

16,402

Additions to estimated contingent consideration

—

Payments of contingent consideration

(114
)
Non-cash changes in fair value of estimated contingent consideration

2,300

Balance at March 31, 2021

18,588

Additions to estimated contingent consideration

—

Payments of contingent consideration

(260
)
Non-cash changes in fair value of estimated contingent consideration

1,600

Balance at June 30, 2021

$
19,928

Additions to estimated contingent consideration

—

Payments of contingent consideration

(3,370
)
Non-cash changes in fair value of estimated contingent consideration

670

Balance at September 30, 2021

$
17,228


Balance at January 1, 2021	$	16,402
Additions to estimated contingent consideration		—
Payments of contingent consideration		(3,744	)
Non-cash changes in fair value of estimated contingent consideration		5,305
Balance at December 31, 2021		17,963
Additions to estimated contingent consideration		—
Payments of contingent consideration		—
Non-cash changes in fair value of estimated contingent consideration		(6,500	)
Balance at March 31, 2022		11,463

Estimated contingent consideration is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition. Payments of contingent consideration are included in earn-outs paid related to acquisitions in financing activities in the Condensed Consolidated Statements of Cash Flows.

In determining fair value of the estimated contingent consideration, the acquired business’ future performance is estimated using financial projections for the acquired business. These financial projections, as well as alternative scenarios of financial performance, are measured against the performance targets specified in each respective acquisition agreement. In addition, discount rates are established based on the cost of debt and the cost of equity. The Company uses the Monte Carlo Simulation Model to determine the fair value of the Company’s estimated contingent consideration.

The significant unobservable inputs used in the fair value measurement of the Company’s estimated contingent consideration are the forecasted growth rates over the measurement period and discount rates. Significant increases or decreases in the Company’s forecasted growth rates over the measurement period or discount rates would result in a higher or lower fair value measurement.

Inputs used in the fair value measurement of estimated contingent consideration at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are summarized below:


Monte Carlo Simulation Model	September 30, 2021			December 31, 2020			Fair Value Hierarchy		March 31, 2022			December 31, 2021				Fair Value Hierarchy
Fair Value	$	17,228		$	16,402			Level 3	$	11,463		$	17,963			Level 3
Forecasted growth rate		16.6	%		16.4	%				10.00	%		16.70	%
Discount rate		10.1	%		11.7	%				12.30	%		10.74	%	��

Please refer to Note 3. Acquisitions for more details on contingent consideration related to acquisition earnouts.

At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, financial instruments that are not held at fair value are categorized in the table below:


	March 31, 2022				December 31, 2021
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Hierarchy
Financial Assets:
Cash and cash equivalents	$	57,020	$	57,020	$	85,744	$	85,744	Level 1	(1)
Investments	$	1,588	$	1,588	$	1,588	$	1,588	N/A	(2)

Financial liabilities:
Borrowings under credit facility	$	8,100	$	8,100	$	9,000	$	9,000	Level 2	(3)

September 30, 2021


December 31, 2020




Carrying
Amount


Fair
Value


Carrying
Amount


Fair
Value


Fair Value
Hierarchy

Financial Assets:










Cash and cash equivalents

$
65,930

$
65,930


$
62,498


$
62,498



Level 1
(1)
Investments

$
53

$
53

$
914

$
914

N/A
(2)

Financial liabilities:

Borrowings under credit facility

$
9,900

$
9,900

$
12,600

$
12,600

Level 2
(3)
(1)

Includes $1,399 and $1,398 of cash equivalents at March 31, 2022 and December 31, 2021, respectively, that fall under Level 1 in the fair value hierarchy.

(2)

Investments consist of the Company’s equity method investments in affiliated investment funds which have been established and managed by the Company and its affiliates. Fair value of investments is based on the net asset value of the affiliated investment funds which is a practical expedient for fair value, which is not included in the fair value hierarchy under GAAP.

(3)

The carrying value of borrowings under the revolving credit agreement approximates fair value, which is determined based on interest rates currently available to the Company for similar debt and the weighted average cost of capital of the Company.

~~(1)~~

~~Includes $1,398 and $1,398 of cash equivalents at September 30, 2021 and December 31, 2020, respectively, that fall under Level 1 in the fair value hierarchy.~~

~~(2)~~

~~(3)~~

5. RECEIVABLES, NET

The following is a summary of receivables as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


	September 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
Management and advisory fees receivable	$	3,644		$	3,780		$	4,899		$	3,379
Unbilled receivables		6,188			5,107			4,991			5,917
Other receivables		2			2			2			2
Receivables		9,834			8,889			9,892			9,298
Allowance for doubtful receivables		(448	)		(548	)		(448	)		(448	)
Receivables, net	$	9,386		$	8,341		$	9,444		$	8,850

6. FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

The following is a summary of furniture, equipment and leasehold improvements, net as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


	September 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
Leasehold improvements	$	7,859		$	7,936		$	7,859		$	7,859
Furniture and equipment		7,979			7,275			8,291			8,258
Artwork		505			502			505			505
Total cost		16,343			15,713			16,655			16,622
Accumulated depreciation and amortization		(11,071	)		(10,190	)		(11,648	)		(11,365	)
Furniture, equipment and leasehold improvements, net	$	5,272		$	5,523		$	5,007		$	5,257

Depreciation expense for the three months ended ~~September 30,~~March 31, 2022 and 2021 was $284and ~~2020 was $294 and $279,~~$281, respectively. ~~Depreciation expense for the nine months ended September 30, 2021 and 2020 was $881 and $838, respectively.~~

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021, the Company wrote off leased assets of ~~$38 and $120,~~$82 with accumulated depreciation of ~~$31 and $95, respectively. During the nine months ended September 30, 2020, the Company wrote off leased assets of $209, with accumulated depreciation of $180.~~$64.

7. GOODWILL

The following is a summary of the changes to the carrying amount of goodwill for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and the year ended December 31, ~~2020:~~2021:


	September 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
Beginning
Gross balance	$	81,090		$	81,090		$	81,090		$	81,090
Accumulated impairment losses		(17,415	)		(17,415	)		(17,415	)		(17,415	)
Net balance		63,675			63,675			63,675			63,675
Ending
Gross balance		81,090			81,090			81,090			81,090
Accumulated impairment losses		(17,415	)		(17,415	)		(17,415	)		(17,415	)
Net balance	$	63,675		$	63,675		$	63,675		$	63,675

On June 24, 2013, the subsidiaries of Silvercrest L.P. entered into a ~~$15.0~~$15.0 million credit facility with City National Bank. The subsidiaries of Silvercrest L.P. are the borrowers under such facility and Silvercrest L.P. guarantees the obligations of its subsidiaries under the credit facility. The credit facility is secured by certain assets of Silvercrest L.P. and its subsidiaries. The credit facility consisted of a ~~$7.5~~$7.5 million delayed draw term loan that was scheduled to mature on June 24, 2025 and a ~~$7.5~~$7.5 million revolving credit facility that was scheduled to mature on June 21, ~~2019.~~2019. On July 1, 2019, the credit facility was amended to increase the term loan by ~~$18.0~~$18.0 million to ~~$25.5~~$25.5 million, extend the draw date on the term loan facility to July 1, 2024, extend the maturity date of the term loan to July 1, 2026 and increase the revolving credit facility by ~~$2.5~~$2.5 million to ~~$10.0~~$10.0 million. On June 17, 2021, the revolving credit facility was further amended to extend the maturity date to June 18, ~~2022.~~2022. The loan bears interest at either (a) the higher of the prime rate plus a margin of 0.25 percentage points and ~~2.5%~~2.5% or (b) the LIBOR rate plus 2.75 percentage points, at the borrowers’ ~~option.~~option. Borrowings under the term loan on or prior to June 30, 2021 are payable in 20 equal quarterly installments. Borrowings under the term loan after June 30, 2021 will be payable in equal quarterly installments through the maturity date. On February 15, 2022, the credit facility was amended and restated to reflect changes to various definitions and related clauses with respect to the Company’s subsidiaries. The credit facility contains restrictions on, among other things, (i) incurrence of additional debt, (ii) creating liens on certain assets, (iii) making certain investments, (iv) consolidating, merging or otherwise disposing of substantially all of our assets, (v) the sale of certain assets, and (vi) entering into transactions with affiliates. In addition, the credit facility contains certain financial covenants including a test on discretionary assets under management, maximum debt to EBITDA and a fixed charge coverage ratio. The credit facility contains customary events of default, including the occurrence of a change in control which includes a person or group of persons acting together acquiring more than ~~30%~~30% of the total voting securities of Silvercrest. The Company was in compliance with the covenants under the credit facility as of ~~September 30, 2021.~~March 31, 2022.

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company did 0t0t have any outstanding borrowings under the revolving credit facility. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company had ~~$9,900~~$8,100 and ~~$12,600,~~$9,000, respectively, outstanding under the term loan. Accrued but unpaid interest was ~~$27~~$25 and $0$25 as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

Interest expense, which also includes amortization of deferred financing fees, incurred on the revolving credit facility and term loan for the three months ended ~~September 30,~~March 31, 2022 and 2021 was $76and ~~2020 was $90 and $117,~~$102, respectively. Interest expense, which also includes amortization of deferred financing fees, incurred on the revolving credit facility and term loan for the nine months ended September 30, 2021 and 2020 was $286 and $437, respectively.

The Company has finance leases for the following office equipment: (i) a three-year lease agreement for one copier totaling ~~$11~~$11 with monthly minimum payments of ~~$0.3,~~$0.3, which began on March 1, 2018 and continued through January 31, 2021, (ii) a three-year lease

agreement for one copier totaling ~~$13~~$13 with monthly minimum payments of ~~$0.4,~~$0.4, which began on March 1, 2019 and ~~continue~~continued through February 28, 2022, (iii) a ~~39-month~~39-month lease agreement for one copier totaling ~~$12~~$12 with monthly minimum lease payments of ~~$0.4,~~$0.4, which began on March 1, 2019 and ~~continue~~continues through May 31, 2022, (iv) a lease agreement for one copier that was assumed as part of the Cortina Acquisition with monthly minimum lease payments of ~~$1,~~$1, which began on July 1, 2019 and ~~continue~~continued through November 30, 2021, (v) a three year lease agreement for two copiers totaling ~~$51~~$51 with monthly minimum lease payments of ~~$1,~~$1, which began on August 1, 2019 and ~~continue~~continues through July 31, 2022, (vi) a five year lease agreement for a copier totaling ~~$82~~$82 with monthly minimum lease payments of ~~$1,~~$1, which began on May 1, 2020 and ~~continue~~continues through April 30, 2025, (vii) a three year lease agreement for a copier totaling ~~$59~~$59 with minimum monthly lease payments of ~~$2,~~$2, which began on June 1, 2020 and ~~continue~~continues through May 31, 2023, (viii) a three year lease agreement for two copiers totaling ~~$43~~$43 with minimum monthly lease payments of ~~$1,~~$1, which began on August 20, 2020 and ~~continue~~continues through August 19, 2023, (ix) a three year lease agreement for two copiers totaling ~~$39~~$39 with minimum monthly lease payments of ~~$1,~~$1, which began on August 20, 2020 and ~~continue~~continues through August 19, 2023, (x) a five year lease agreement for four copiers totaling ~~$94~~$94 with minimum monthly lease payments of ~~$2,~~$2, which began on February 1, 2021 and ~~continue~~continues through January 31, 2026 and (xi) a three year lease agreement for two copiers totaling ~~$52~~$52 with minimum monthly lease payments of ~~$1,~~$1, which begin on July 1, 2021 and ~~continue~~continues through June 30, ~~2024.~~2024. The aggregate principal balance of finance leases was ~~$283~~$223 and ~~$259~~$253 as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

Depreciation expense relating to finance lease assets was ~~$30~~$29 and ~~$26~~$30 for the three months ended ~~September~~ 30,March 31, 2022 and 2021, ~~and 2020,~~ respectively. ~~Depreciation expense relating to finance lease assets was $90 and $88 for the nine months ended September~~ 30~~, 2021 and 2020, respectively.~~

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021, the Company wrote off leased assets of ~~$38 and $120, respectively,~~$82 with accumulated depreciation of ~~$31 and $95, respectively. During the nine months ended September 30, 2020, the Company wrote off leased assets of $209, with accumulated depreciation of $180.~~ $64.

SLP has historically made, and will continue to make, distributions of its net income to the holders of its partnership units for income tax purposes as required under the terms of its Second Amended and Restated Limited Partnership Agreement and also made, and will continue to make, additional distributions of net income under the terms of its Second Amended and Restated Limited Partnership Agreement. Partnership distributions totaled ~~$1,471~~$2,685 and ~~$1,497,~~$1,758, for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. ~~Partnership distributions totaled $6,821 and $6,521, for the nine months ended September 30, 2021 and 2020, respectively.~~

Pursuant to SLP’s Second Amended and Restated Limited Partnership Agreement, partner incentive allocations are treated as distributions of net income. The remaining net income or loss after partner incentive allocations was generally allocated to the partners based on their pro rata ownership. Net income allocation is subject to the recovery of the allocated losses of prior periods. Distributions of partner incentive allocations of net income for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ amounted to ~~$27,819~~$34,429 and ~~$27,236,~~$27,619, respectively. The distributions are included in non-controlling interests in the Condensed Consolidated Statements of Financial Condition and Condensed Consolidated Statement of Changes in Equity for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021. The Company treats SLP’s partner incentive allocations as compensation expense and accrues such amounts when earned.

During the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ SLP accrued partner incentive allocations of ~~$9,196~~$8,627 and ~~$7,121,~~$8,004, respectively. ~~During the nine months ended September 30, 2021 and 2020, SLP accrued partner incentive allocations of $26,210 and $20,055, respectively.~~

Silvercrest is dependent on cash generated by SLP to fund any dividends. Generally, SLP will distribute its profits to all of its partners, including Silvercrest, based on the proportionate ownership each holds in SLP. Silvercrest will fund dividends to its stockholders from its proportionate share of those distributions after provision for its income taxes and other obligations.

Full recourse notes receivable from partners as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are ~~$604~~$450 and ~~$353,~~$606, respectively. There were 0 limited recourse notes receivable from partners as of ~~September 30, 2021~~March 31, 2022 or December 31, ~~2020.~~2021. There is 0 allowance for credit losses on notes receivable from partners as of ~~September 30, 2021~~March 31, 2022 or December 31, ~~2020.~~2021.

For the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company recorded compensation expense related to such RSUs and NQOs of ~~$344~~$228 and $192, respectively, as part of total compensation expense in the Condensed Consolidated Statements of Operations for the period then ended. For the nine months ended September 30, 2021 and 2020, the Company recorded compensation expense related to such RSUs and NQOs of $1,107 and $456,$469, respectively, as part of total compensation expense in the Condensed Consolidated Statements of Operations for the period then ended. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, there was ~~$2,356~~$1,819 and ~~$1,342,~~$2,047, respectively, of unrecognized compensation expense related to unvested awards. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the unrecognized compensation expense related to unvested awards is expected to be recognized over a period of ~~1.82~~1.16 and ~~1.44~~1.22 years, respectively.

~~A summary of the RSU grants by the Company as of September 30, 2021 and 2020 is presented below:~~

~~A summary of the NQO grants by the Company as of September 30, 2021 and 2020 is presented below:~~

SAMG LLC has a defined contribution401(k) savings plan (the “Plan”) for all eligible employees who meet the minimum age and service requirements as defined in the Plan. The Plan is designed to be a qualified plan under sections 401(a) and 401(k) of the Internal Revenue Code. For employees who qualify under the terms of the Plan, on an annual basis Silvercrest matches dollar for dollar an employee’s contributions up to the first 4%4% of compensation. For the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ Silvercrest made matching contributions of ~~$22~~$27 and ~~$22,~~$22, respectively, for the benefit of employees. ~~For the nine months ended September 30, 2021 and 2020, Silvercrest made matching contributions of $65 and $66, respectively, for the benefit of employees.~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This report contains forward-looking statements relating to present or future trends or factors that are subject to risks and uncertainties. These risks include, but are not limited to: specific and overall impacts of the coronavirus (COVID-19) pandemic on our financial condition and results of operations; our ability to achieve our business objectives; our ability to successfully achieve the anticipated results of strategic transactions, including the integration of the operations of acquired assets and businesses; the retention and development of clients and other business relationships; disruptions or delays in our business operations, including without limitation disruptions or delays arising from political unrest, war, labor strikes, natural disasters, public health crises such as the coronavirus pandemic, and other events and circumstances beyond our control; our ability to control costs; general economic conditions; fluctuation in operating results; changes in the securities markets; our ability to maintain compliance with the terms of our credit facility; the availability, integration and effective operation of information systems and other technology, and the potential interruption of such systems or technology; risks related to data security of privacy breaches; and other risks detailed from time to time in our filings with the SEC. Our future financial performance could differ materially from the expectations of management contained herein. Additionally, many of these risks and uncertainties are currently elevated by and may or will continue to be elevated by the COVID-19 pandemic. It is not possible to predict or identify all such risks, but may become material in the future. We undertake no obligation to release revisions to these forward-looking statements after the date of this report.

We are a full-service wealth management firm focused on providing financial advisory and related family office services to ultra-high net worth individuals and institutional investors. In addition to a wide range of investment capabilities, we offer a full suite of complementary and customized family office services for families seeking a comprehensive oversight of their financial affairs. During the three months ended ~~September 30, 2021,~~March 31, 2022, our assets under management ~~remained flat at $31.0 billion. During the nine months ended September 30, 2021, our assets under management increased~~decreased by ~~11.5%~~3.4% from ~~$27.8~~$32.3 billion to ~~$31.0~~$31.2 billion.

The business includes the management of funds of funds, and other investment funds, collectively referred to as the “Silvercrest Funds.” As of ~~September 30, 2021,~~March 31, 2022, Silvercrest L.P. has issued Restricted Stock Units exercisable for 170,854, Class B units which entitle the holders thereof to receive distributions from Silvercrest L.P. to the same extent as if the underlying Class B units were outstanding. Net profits and net losses of Silvercrest L.P. will be allocated, and distributions from Silvercrest L.P. will be made, to its current partners pro rata in accordance with their respective partnership units (and assuming the Class B units underlying all restricted stock units are outstanding).

The historical results of operations discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations include those of Silvercrest L.P. and its subsidiaries. As the general partner of Silvercrest L.P., we control its business and affairs and, therefore, consolidate its financial results with ours. The interests of the limited partners’ collective ~~33.2%~~31.8% partnership interest in Silvercrest L.P. as of ~~September 30, 2021~~March 31, 2022 are reflected in non-controlling interests in our Condensed Consolidated Financial Statements.

The emergence of the coronavirus (COVID-19) around the world, and particularly in the United States, presents significant risks to us, not all of which we are able to fully evaluate or foresee at the current time. While the COVID-19 pandemic ~~did~~has not materially ~~affect our financial results and business operations in the first fiscal quarter ended March 31, 2020,~~affected us to date, economic and health conditions in the United States and across ~~most of~~ the globe have changed rapidly since the end of ~~the first quarter and into the second fiscal quarter ended June 30,~~ 2020. ~~Demand~~Although demand for our services ~~continues~~has continued despite the current capital markets and overall economic ~~environment. Such~~environment, such current demand may not continue and/or demand may decrease from historical levels depending on the duration and severity of the COVID-19 pandemic, the length of time it takes for normal economic and operating conditions to resume, additional governmental actions that may be taken and/or extensions of time for restrictions that have been imposed to date, and numerous other uncertainties.

The COVID-19 pandemic affected our operations in the each of the ~~five~~eight quarters during the period April 1, 2020 through ~~September 30, 2021~~March 31, 2022 and may continue to do so indefinitely thereafter. All of these factors may have far reaching impacts on our business, operations, and financial results and conditions, directly and indirectly, including without limitation impacts on the health of our management and employees, client behavior, and on the overall economy. The scope and nature of these impacts, most of which are beyond our control, continue to evolve, and the outcomes of these impacts are uncertain.

Our revenue is highly correlated to securities markets. As a result, we expect that our assets under management and revenue levels will be negatively impacted, on an incremental basis, by the effect of the COVID-19 pandemic on securities markets. The decrease in assets under management for the three months ended March 31, 2020 had an impact on our revenue for the second quarter ended June 30, 2020 because most of our revenue is billed in advance based on the value of assets under management on the last day of the preceding calendar quarter. We continue to fully operate with our management and employees working remotely and we have had business continuity plans in place which we were able to seamlessly activate upon actions taken by various governmental authorities suggesting that businesses recommend that their employees work from home as a result of the pandemic.

Due to the above circumstances and as described generally in this Form 10-Q, management cannot predict the full impact of the COVID-19 pandemic on the Company’s earnings and operations nor to economic conditions generally. The ultimate extent of the effects of the COVID-19 pandemic on the Company is highly uncertain and will depend on future developments, and such effects could exist for an extended period of time even after the pandemic might end.

We generate revenue from management and advisory fees, performance fees and allocations, and family office services fees. Our management and advisory fees are generated by managing assets on behalf of separate accounts and acting as investment adviser for various investment funds. Our performance fees and allocations relate to assets managed in external investment strategies in which we have a revenue sharing arrangement and in funds in which we have no partnership interest. Our management and advisory fees and family office services fees income is recognized through the course of the period in which these services are provided. Income from performance fees and allocations is recorded at the conclusion of the contractual performance period when all contingencies are resolved. In certain arrangements, we are only entitled to receive performance fees and allocations when the return on assets under management exceeds certain benchmark returns or other performance targets.

The discretionary investment management agreements for our separately managed accounts do not have a specified term. Rather, each agreement may be terminated by either party at any time, unless otherwise agreed with the client, upon written notice of termination to the other party. The investment management agreements for our private funds are generally in effect from year to year, and may be terminated at the end of any year (or, in certain cases, on the anniversary of execution of the agreement) (i) by us upon 30 or 90 days’ prior written notice and (ii) after receiving the affirmative vote of a specified percentage of the investors in the private fund that are not affiliated with us, by the private fund on 60 or 90 days’ prior written notice. The investment management agreements for our private funds may also generally be terminated effective immediately by either party where the non-terminating party (i) commits a material breach of the terms subject, in certain cases, to a cure period, (ii) is found to have committed fraud, gross negligence or willful misconduct or (iii) terminates, becomes bankrupt, becomes insolvent or dissolves. Each of our investment management agreements contains customary indemnification obligations from us to our clients. The tables below set forth the amount of assets under management, the percentage of management and advisory fees revenues, the amount of revenue recognized, and the average assets under management for discretionary managed accounts and for private funds for each period presented.

Our management and advisory fees are primarily driven by the level of our assets under management. Our assets under management increase or decrease based on the net inflows or outflows of funds into our various investment strategies and the investment performance of our clients’ accounts. In order to increase our assets under management and expand our business, we must develop and market investment strategies that suit the investment needs of our target clients and provide attractive returns over the long term. Our ability to continue to attract clients will depend on a variety of factors including, among others:

The majority of management and advisory fees that we earn on separately managed accounts are based on the value of assets under management on the last day of each calendar quarter. Most of our management and advisory fees are billed quarterly in advance on the first day of each calendar quarter. Our basic annual fee schedule for management of clients’ assets in separately managed accounts is: (i) for managed equity or balanced portfolios, 1% of the first $10 million and 0.60% on the balance, (ii) for managed fixed income only portfolios, 0.40% on the first $10 million and 0.30% on the balance, (iii) for the municipal value strategy, 0.65%, (iv) for Cortina’s equity portfolios, 1% on the first $25 million, 0.90% on the next $50 million and 0.80% on the balance and (v) for outsourced chief investment officer portfolios, 0.40% on the first $50 million, 0.32% on the next $50 million and 0.24% on the balance. Our fee for monitoring non-discretionary assets can range from 0.05% to 0.01%, but can also be incorporated into an agreed-upon fixed family office service fee. The majority of our client relationships pay a blended fee rate since they are invested in multiple strategies.

Management fees earned on investment funds that we advise are calculated primarily based on the net assets of the funds. Some funds calculate investment fees based on the net assets of the funds as of the last business day of each calendar quarter, whereas other funds calculate investment fees based on the value of net assets on the first business day of the month. Depending on the investment fund, fees are paid either quarterly in advance or quarterly in arrears. For our private funds, the fees range from 0.25% to 1.5% annually. Certain management fees earned on investment funds for which we perform risk management and due diligence services are based on flat fee agreements customized for each engagement.

Average annual management fee is calculated by dividing our actual annualized revenue earned over a period by our average assets under management during the same period (which is calculated by averaging quarter-end assets under management for the applicable period). Our average annual management fee was ~~0.43%~~0.42% and ~~0.45%~~0.44% for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively. Our average annual management fee was 0.44% and 0.43% for the nine months ended September 30, 2021 and 2020,~~ respectively. Changes in our total average management fee rates are typically the result of changes in the mix of our assets under management and the concentration in our equities strategies whose fee rates are higher than those of other investment strategies. Management and advisory fees are also adjusted for any cash flows into or out of a portfolio, where the cash flow represents greater than 10% of the previous quarter-end market value of the portfolio. These cash flow-related adjustments were insignificant for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021. Silvercrest L.P. has authority to take fees directly from external custodian accounts of its separately managed accounts.

Our management and advisory fees may fluctuate based on a number of factors, including the following:

Our family office services capabilities enable us to provide comprehensive and integrated services to our clients. Our dedicated group of tax and financial planning professionals provide financial planning, tax planning and preparation, partnership accounting and fund administration and consolidated wealth reporting among other services. Family office services income fluctuates based on both the number of clients for whom we perform these services and the level of agreed-upon fees, most of which are flat fees. Therefore, non-discretionary assets under management, which are associated with family office services, do not typically serve as the basis for the amount of family office services revenue that is recognized.

Our expenses consist primarily of compensation and benefits expenses, as well as general and administrative expense including rent, professional services fees, data-related costs and sub-advisory fees. These expenses may fluctuate due to a number of factors, including the following:

Our largest expense is compensation and benefits, which includes the salaries, bonuses, equity-based compensation and related benefits and payroll costs attributable to our principals and employees. Our compensation methodology is intended to meet the following objectives: (i) support our overall business strategy; (ii) attract, retain and motivate top-tier professionals within the investment management industry; and (iii) align our employees’ interests with those of our equity owners. We have experienced, and expect to continue to experience, a general rise in compensation and benefits expense commensurate with growth in headcount and with the need to maintain competitive compensation levels.

The components of our compensation expense for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ are as follows:

During the three months ended March 31, 2021 ~~and 2020,~~, Silvercrest L.P. granted restricted stock units (“RSU”) to existing Class B unit holders. During the three months ended March 31, 2021, ~~and 2020,~~ Silvercrest L.P. granted non-qualified options (“NQO”) to an existing Class B unit holder. Information regarding restricted stock units and stock options can be found in Note 16. “Equity Based Compensation” in the “Notes to Condensed Consolidated Financial Statements” in “Item 1. Financial Statements” of this filing.

General and administrative expenses include occupancy-related costs, professional and outside services fees, office expenses, depreciation and amortization, sub-advisory fees and the costs associated with operating and maintaining our research, trading and portfolio accounting systems. Our costs associated with operating and maintaining our research, trading and portfolio accounting systems and professional services expenses generally increase or decrease in relative proportion to the number of employees retained by us and the overall size and scale of our business operations. Sub-advisory fees will fluctuate based on the level of management fees from funds that utilize sub-advisors.

Other income is derived primarily from investment income arising from our investments in various private investment funds that were established as part of our investment strategies. We expect the investment components of other income, in the aggregate, to fluctuate based on market conditions and the success of our investment strategies. Performance fees and allocations earned from those investment funds in which we have a partnership interest have been earned over the past few years as a result of the achievement of various high-water marks depending on the investment fund. These performance fees and allocations are recorded based on the equity method of accounting. The majority of our performance fees and allocations over the past few years have been earned from our fixed income-related funds.

We are the general partner of Silvercrest L.P. and control its business and affairs and, therefore, consolidate its financial results with ours. In light of the limited partners’ interest in Silvercrest L.P., we reflect their partnership interests as non-controlling interests in our Condensed Consolidated Financial Statements.

We are subject to taxes applicable to C-corporations. Our effective tax rate, and the absolute dollar amount of our tax expense will be offset by the benefits of the tax receivable agreement entered into with our Class B stockholders.

On April 12, 2019, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Cortina Asset Management, LLC, a Wisconsin limited liability company (“Cortina”), and certain interest holders of Cortina (the “Principals of Cortina”) to acquire, directly or through a designated affiliate, substantially all of the assets of Cortina relating to Cortina’s business of providing investment management, investment advisory, and related services.

Subject to the terms and conditions set forth in the Purchase Agreement, we agreed to pay to Cortina an aggregate maximum amount of $44.9 million, 80% of which was agreed to be paid in cash at closing by us, and 20% of which was agreed to be paid by us in the form of issuance and delivery to certain Principals of Cortina at closing of Class B Units in Silvercrest L.P., in each case subject to certain adjustments as described in the Purchase Agreement. In addition, the Purchase Agreement provides for up to an additional ~~$26.2~~

$26.2 million to be paid 80% in cash with certain Principals of Cortina receiving the remaining 20% in the form of Class B Units of Silvercrest L.P. in potential earn-out payments over the next four years.

On July 1, 2019, the acquisition was completed pursuant to the Purchase Agreement. At closing, the Company paid to Cortina an aggregate principal amount of $33.6 million in cash, and Silvercrest L.P. paid an additional $9.0 million in the form of issuance and delivery to certain Principals of Cortina of 662,713 Class B Units in Silvercrest L.P. Of the $33.6 million paid in cash, $35.1 million represented consideration, partially offset by net closing credits due to the Company for reimbursable expenses from Cortina.

In addition, the Purchase Agreement provides for up to an additional $26.2 million to be paid 80% in cash with certain Principals of Cortina receiving the remaining 20% in the form of Class B Units of Silvercrest L.P. in potential earn-out payments over the next four years.

The foregoing description of the Purchase Agreement is only a summary, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is attached as Exhibit 2.1 to the Form 8-K filed by Silvercrest on April 15, 2019.

On December 13, 2018, we executed an Asset Purchase Agreement (the “Neosho Asset Purchase Agreement”) by and among the Company, Silvercrest L.P. (“SLP”), Silvercrest Asset Management Group LLC (“SAMG LLC”) and Neosho Capital LLC (“Neosho” or the “Seller”), and Christopher K. Richey, Alphonse I. Chan, Robert K. Choi and Vincent G. Pandes, each such individual a principal of Neosho, to acquire certain assets of Neosho. The transaction contemplated by the Neosho Asset Purchase Agreement closed on January 15, 2019 and is referred to herein as the “Neosho Acquisition”.

Information regarding the Cortina and Neosho Acquisitions can be found in Note 3. “Acquisitions” in the “Notes to Condensed Consolidated Financial Statements” in “Item 1. Financial Statements” of this filing.

Our revenues for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ are set forth below:

The growth in our assets under management during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ is described below:

Assets Under Management

Non-

(in billions)

Discretionary

Discretionary

Total

As of June 30, 2020

$
17.3

$
6.5

$
23.8

Gross client inflows

0.8

0.1

0.9

Gross client outflows

(0.9
)

(0.1
)

(1.0
)
Net client flows

(0.1
)

—

(0.1
)

Market appreciation

0.7

—

0.7

As of September 30, 2020

$
17.9

$
6.5

$
24.4
(1)

As of June 30, 2021

$
22.9

$
8.1

$
31.0

Gross client inflows

1.1

0.1

1.2

Gross client outflows

(1.3
)

(0.1
)

(1.4
)
Net client flows

(0.2
)

—

(0.2
)

Market (depreciation)/appreciation

(0.2
)

0.4

0.2

As of September 30, 2021

$
22.5

$
8.5

$
31.0
(1)

As of January 1, 2020

$
18.8

$
6.3

$
25.1

Gross client inflows

2.6

0.3

2.9

Gross client outflows

(2.4
)

(0.2
)

(2.6
)
Net client flows

0.2

0.1

0.3

Market (depreciation)/appreciation

(1.1
)

0.1

(1.0
)
As of September 30, 2020

$
17.9

$
6.5

$
24.4
(1)

As of January 1, 2021

$
20.6

$
7.2

$
27.8

Gross client inflows

3.6

0.4

4.0

Gross client outflows

(4.2
)

(0.4
)

(4.6
)
Net client flows

(0.6
)

—

(0.6
)

Market appreciation

2.5

1.3

3.8

As of September 30, 2021

$
22.5

$
8.5

$
31.0
(1)
(1)

Less than 5% of assets under management generate performance fees or allocations.

~~(1)~~

~~Less than 5% of assets under management generate performance fees or allocations.~~

The following chart summarizes the performance ^{1, 2} of each of our principal equity strategies relative to their appropriate benchmarks since inception:

PROPRIETARY EQUITY PERFORMANCE


as of March 31, 2022	ANNUALIZED PERFORMANCE
	INCEPTION	1-YEAR	3-YEAR	5-YEAR	7-YEAR	INCEPTION
Large Cap Value Composite	4/1/02	15.8	16.5	14.7	13.2	10.0
Russell 1000 Value Index		11.7	13.0	10.3	9.7	8.1
Small Cap Value Composite	4/1/02	2.9	12.7	8.6	9.1	10.8
Russell 2000 Value Index		3.3	12.7	8.6	8.8	8.5
Smid Cap Value Composite	10/1/05	7.9	12.6	10.1	10.9	10.4
Russell 2500 Value Index		7.7	13.0	9.2	8.9	8.3
Multi Cap Value Composite	7/1/02	11.9	14.4	12.2	11.7	10.4
Russell 3000 Value Index		11.1	13.0	10.2	9.7	8.7
Equity Income Composite	12/1/03	12.4	11.2	11.3	11.5	11.8
Russell 3000 Value Index		11.1	13.0	10.2	9.7	8.9
Focused Value Composite	9/1/04	8.6	10.0	9.6	10.2	10.7
Russell 3000 Value Index		11.1	13.0	10.2	9.7	8.7
Small Cap Opportunity Composite	7/1/04	- 0.2	13.5	11.8	11.5	11.5
Russell 2000 Index		- 5.8	11.7	9.7	8.9	8.7
Small Cap Growth Composite	7/1/04	- 7.1	20.3	18.3	16.0	12.1
Russell 2000 Growth Index		-14.3	9.9	10.3	8.5	9.0
Smid Cap Growth Composite	1/1/06	- 7.4	25.3	21.3	16.5	12.7
Russell 2500 Growth Index		-10.1	13.0	13.2	10.5	10.3

1 Returns are based upon a time weighted rate of return of various fully discretionary equity portfolios with similar investment objectives, strategies and policies and other relevant criteria managed by SAMG LLC, a subsidiary of Silvercrest. Performance results are gross of fees and net of commission charges. An investor’s actual return will be reduced by the management and advisory fees and any other expenses it may incur in the management of the investment advisory account. SAMG LLC’s standard management and advisory fees are described in Part 2 of its Form ADV. Actual fees and expenses will vary depending on a variety of factors, including the size of a particular account. Returns greater than one year are shown as annualized compounded returns and include gains and accrued income and reinvestment of ~~September 30, 2021~~distributions. Past performance is no guarantee of future results. This report contains no recommendations to buy or sell securities or a solicitation of an offer to buy or sell securities or investment services or adopt any investment position. This report is not intended to constitute investment advice and is based upon conditions in place during the period noted. Market and economic views are subject to change without notice and may be untimely when presented here. Readers are advised not to infer or assume that any securities, sectors or markets described were or will be profitable. SAMG LLC is an independent investment advisory and financial services firm created to meet the investment and administrative needs of individuals with substantial assets and select institutional investors. SAMG LLC claims compliance with the Global Investment Performance Standards (GIPS®).

2 The market indices used to compare to the performance of our strategies are as follows:

ANNUALIZED PERFORMANCE

INCEPTION

1-YEAR

3-YEAR

5-YEAR

7-YEAR

INCEPTION

Large Cap Value Composite

4/1/02

31.5

12.7

14.9

13.2

  9.9

Russell 1000 Value Index

35.0

10.1

10.9

  9.3

  7.9

Small Cap Value Composite

4/1/02

51.1

  8.6

10.7

11.1

11.0

Russell 2000 Value Index

63.9

  8.6

11.0

10.2

  8.7

Smid Cap Value Composite

10/1/05

49.3

  9.0

12.1

12.1

10.5

Russell 2500 Value Index

54.4

  8.9

10.5

  9.5

  8.3

Multi Cap Value Composite

7/1/02

36.6

11.6

13.5

12.3

10.4

Russell 3000 Value Index

36.6

  9.9

10.9

  9.4

  8.6

Equity Income Composite

12/1/03

31.6

  8.4

11.5

11.3

11.7

Russell 3000 Value Index

36.6

  9.9

10.9

  9.4

  8.7

Focused Value Composite

9/1/04

28.8

  7.8

10.7

10.7

10.8

Russell 3000 Value Index

36.6

  9.9

10.9

  9.4

  8.5

Small Cap Opportunity Composite

7/1/04

48.1

12.4

16.4

14.9

12.3

Russell 2000 Index

47.7

10.5

13.5

11.9

  9.4

Small Cap Growth Composite

7/1/04

60.8

21.7

24.1

19.4

13.3

Russell 2000 Growth Index

33.3

11.7

15.3

13.2

10.2

Smid Cap Growth Composite

1/1/06

50.3

28.6

27.5

20.5

14.1

Russell 2500 Growth Index

32.0

16.0

18.2

14.9

11.5

Returns are based upon a time weighted rate of return of various fully discretionary equity portfolios with similar investment objectives, strategies and policies and other relevant criteria managed by SAMG LLC, a subsidiary of Silvercrest. Performance results are gross of fees and net of commission charges. An investor’s actual return will be reduced by the management and advisory fees and any other expenses it may incur in the management of the investment advisory account. SAMG LLC’s standard management and advisory fees are described in Part 2 of its Form ADV. Actual fees and expenses will vary depending on a variety of factors, including the size of a particular account. Returns greater than one year are shown as annualized compounded returns and include gains and accrued income and reinvestment of distributions. Past performance is no guarantee of future results. This report contains no recommendations to buy or sell securities or a solicitation of an offer to buy or sell securities or investment services or adopt any investment position. This report is not intended to constitute investment advice and is based upon conditions in place during the period noted. Market and economic views are subject to change without notice and may be untimely when presented here. Readers are advised not to infer or assume that any securities, sectors or markets described were or will be profitable. SAMG LLC is an independent investment advisory and financial services firm created to meet the investment and administrative needs of individuals with substantial assets and select institutional investors. SAMG LLC claims compliance with the Global Investment Performance Standards (GIPS^®).

2	~~The market indices used to compare to the performance of our strategies are as follows:~~

The Russell 1000 Index is a capitalization-weighted, unmanaged index that measures the 1000 largest companies in the Russell 3000. The Russell 1000 Value Index is a capitalization-weighted, unmanaged index that includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.

The Russell 2000 Index is a capitalization-weighted, unmanaged index that measures the 2000 smallest companies in the Russell 3000. The Russell 2000 Value Index is a capitalization-weighted, unmanaged index that includes those Russell 2000 Index companies with lower price-to-book ratios and lower expected growth values. The Russell 2000 Growth Index is a capitalization-weighted, unmanaged index that includes those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth.

The Russell 2500 Index is a capitalization-weighted, unmanaged index that measures the 2500 smallest companies in the Russell 3000. The Russell 2500 Value Index is a capitalization-weighted, unmanaged index that includes those Russell 2000 Index companies with lower price-to-book ratios and lower expected growth values. The Russell 2500 Growth Index is a capitalization-weighted, unmanaged index that includes those Russell 2500 Index companies with higher price-to-book ratios and higher forecasted growth.

The Russell 3000 Value Index is a capitalization-weighted, unmanaged index that measures those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth.

Three Months Ended ~~September 30, 2021~~March 31, 2022 versus Three Months Ended ~~September 30, 2020~~March 31, 2021

Our total revenue increased by ~~$6.3~~$2.3 million, or ~~23.1%~~7.3%, to $33.5 million for the three months ended ~~September 30, 2021,~~March 31, 2022, from ~~$27.2~~$31.2 million for the three months ended ~~September 30, 2020.~~March 31, 2021. This increase was driven by market appreciation in discretionary assets under management, partially offset by net client outflows.

Total assets under management ~~increased~~decreased by ~~$6.6~~$1.1 billion, or ~~27.0%~~3.4%, to ~~$31.0~~$31.2 billion at ~~September 30, 2021~~March 31, 2022 from ~~$24.4~~$32.3 billion at ~~September 30, 2020.~~December 31, 2021. Compared to the three months ended ~~September 30, 2020,~~March 31, 2021, there was ~~an increase of $0.3 billion in client inflows, partially offset by~~ a decrease in market appreciation of ~~$0.5~~$2.5 billion ~~and~~partially offset by an increase of ~~$0.4~~$0.1 billion in client inflows and a decrease of $0.1 billion in client outflows. During the three

months ended ~~September 30, 2021,~~March 31, 2022, from ~~June 30,~~December 31, 2021, there was a decrease of ~~$0.4~~$1.3 billion in discretionary assets under management and an increase of ~~$0.4~~$0.2 billion in non-discretionary assets under management. The ~~increase~~decrease in assets under management as of ~~September 30, 2021~~March 31, 2022 as compared to ~~June 30,~~December 31, 2021 was primarily due to market ~~appreciation~~depreciation during the quarter ended ~~September 30, 2021, partially offset by net client outflows.~~March 31, 2022. Sub-advised fund management revenue ~~decreased by $0.2~~remained flat at $0.3 million for the three months ended ~~September 30, 2021 as compared to the same period in the prior year.~~March 31, 2022 and March 31, 2021. Proprietary fund management revenue ~~increased by $0.1~~remained flat at $0.9 million for the three months ended ~~September 30, 2021 as compared to the same period in the prior year.~~March 31, 2022 and March 31, 2021. With respect to our discretionary assets under management, equity assets experienced a decrease of ~~2.6%~~3.4% during the three months ended ~~September 30, 2021~~March 31, 2022 and fixed income assets ~~increased~~decreased by ~~0.5%~~5.2% during the same period. For the three months ended ~~September 30, 2021,~~March 31, 2022, most of the decrease in equity assets came from our SMID growth, small cap ~~concentrated, international small cap value~~growth and ~~emerging markets ADR~~focused opportunity strategies with composite returns of ~~(3.30%)~~-13.3%, ~~(2.79%)~~-11.7% and ~~(2.75%)~~-11.0%, respectively. As of ~~September 30, 2021,~~March 31, 2022, the composition of our assets under management was ~~73%~~76% in discretionary assets, which includes both separately managed accounts and proprietary and sub-advised funds, and ~~27% in non-discretionary assets which represent assets on which we provide portfolio reporting but do not have investment discretion.~~

~~The following table represents a further breakdown of our assets under management as of the three months ended September 30, 2021 and 2020:~~

Three Months Ended
September 30,

2021

2020

Total AUM as of June 30,

$
31.0

$
23.8

Discretionary AUM:

Total Discretionary AUM as of June 30,

22.9

17.3

New client accounts/assets (1)

0.1

0.1

Closed accounts (2)

(0.1
)

─

Net cash inflow/(outflow) (3)

(0.2
)

(0.2
)
Non-discretionary to Discretionary AUM (4)

─

─

Market (depreciation)/appreciation

(0.2
)

0.7

Change to Discretionary AUM

(0.4
)

0.6

Total Discretionary AUM at September 30,

22.5

17.9

Change to Non-Discretionary AUM (5)

0.4

─

Total AUM as of September 30,

$
31.0

$
24.4

~~(1)~~

~~Represents new account flows from both new and existing client relationships.~~

~~(2)~~

~~Represents closed accounts of existing client relationships and those that terminated.~~

~~(3)~~

~~Represents periodic cash flows related to existing accounts.~~

~~(4)~~

~~Represents client assets that converted to Discretionary AUM from Non-Discretionary AUM.~~

~~(5)~~

~~Represents the net change to Non-Discretionary AUM.~~

~~Nine Months Ended September 30, 2021 versus Nine Months Ended September 30, 2020~~

Our total revenue increased by $18.2 million, or 22.9%, to $97.8 million for the nine months ended September 30, 2021, from $79.6 million for the nine months ended September 30, 2020. This increase was driven by market appreciation in assets under management, partially offset by net client outflows.

Total assets under management increased by $6.6 billion, or 27.0%, to $31.0 billion at September 30, 2021 from $24.4 billion at September 30, 2020. Compared to the nine months ended September 30, 2020, there was an increase in market appreciation of $4.8 billion and an increase of $1.1 billion in client inflows, partially offset by an increase of $2.0 billion in client outflows. During the nine months ended September 30, 2021, from December 31, 2020, there was an increase of $1.9 billion in discretionary assets under management and an increase of $1.3 billion in non-discretionary assets under management. The increase in assets under management

as of September 30, 2021 as compared to December 31, 2020 was primarily due to market appreciation during the period. Sub-advised fund management revenue decreased by $0.1 million for the nine months ended September 30, 2021 as compared to the same period in the prior year. Proprietary fund management revenue increased by $0.1 million for the nine months ended September 30, 2021 as compared to the same period in the prior year. With respect to our discretionary assets under management, equity assets experienced an increase of 10.0% during the nine months ended September 30, 2021 and fixed income assets increased by 8.7% during the same period. For the nine months ended September 30, 2021, most of the increase in equity assets came from our energy infrastructure, REIT and small cap growth strategies with composite returns of 33.80%, 22.50% and 20.73%, respectively. As of September 30, 2021, the composition of our assets under management was 73% in discretionary assets, which includes both separately managed accounts and proprietary and sub-advised funds, and 27%24% in non-discretionary assets which represent assets on which we provide portfolio reporting but do not have investment discretion.

The following table represents a further breakdown of our assets under management as of the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020:~~2021:


	Three Months Ended March 31,
	2022			2021
Total AUM as of January 1,	$	32.3		$	27.8
Discretionary AUM:
Total Discretionary AUM as of January 1,		25.1			20.6
New client accounts/assets (1)		0.1			0.2
Closed accounts (2)		—			(0.3	)
Net cash inflow/(outflow) (3)		(0.2	)		(0.2	)
Non-discretionary to Discretionary AUM (4)		—			—
Market (depreciation)/appreciation		(1.2	)		1.6
Change to Discretionary AUM		(1.3	)		1.3
Total Discretionary AUM at March 31,		23.8			21.9
Change to Non-Discretionary AUM (5)		0.2			(0.1	)
Total AUM as of March 31,	$	31.2			29.0

Nine Months Ended
September 30,

2021

2020

Total AUM as of January 1,

$
27.8

$
25.1

Discretionary AUM:

Total Discretionary AUM as of January 1,

20.6

18.8

New client accounts/assets (1)

0.3

0.5

Closed accounts (2)

(0.4
)

(0.2
)
Net cash inflow/(outflow) (3)

(0.5
)

0.1

Non-discretionary to Discretionary AUM (4)

─

─

Market appreciation/(depreciation)

2.5

(1.1
)
Change to Discretionary AUM

1.9

(0.9
)
Total Discretionary AUM at September 30,

22.5

17.9

Change to Non-Discretionary AUM (5)

1.3

0.2

Total AUM as of September 30,

$
31.0

$
24.4

(1)

Represents new account flows from both new and existing client relationships.

(2)

Represents closed accounts of existing client relationships and those that terminated.

(3)

Represents periodic cash flows related to existing accounts.

(4)

Represents client assets that converted to Discretionary AUM from Non-Discretionary AUM.

(5)

Represents the net change to Non-Discretionary AUM.

Expenses

~~(2)~~

~~Represents new account flows from both new and existing client relationships.~~

~~(2)~~

~~Represents closed accounts of existing client relationships and those that terminated.~~

~~(3)~~

~~Represents periodic cash flows related to existing accounts.~~

~~(4)~~

~~Represents client assets that converted to Discretionary AUM from Non-Discretionary AUM.~~

~~(5)~~

~~Represents the net change to Non-Discretionary AUM.~~

~~Expenses~~

Our expenses for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ are set forth below:


	For the Three Months Ended March 31,
(in thousands)	2022			2021		2022 vs. 2021 ($)			2022 vs. 2021 (%)
Compensation and benefits (1)	$	18,659		$	17,649	$	1,010			5.7	%
General, administrative and other		(588	)		7,900		(8,488	)		(107.4	)%
Total expenses	$	18,071		$	25,549	$	(7,478	)		(29.3	)%

For the Three Months Ended September 30,

(in thousands)

2021

2020

2021 vs. 2020
($)

2021 vs. 2020
(%)

Compensation and benefits (1)

$
18,758


$
15,142


$
3,616


23.9
%
General, administrative and other

6,522

7,091

(569
)

(8.0
)%
Total expenses

$
25,280


$
22,233


$
3,047


13.7
%
(1)

For the three months ended March 31, 2022 and 2021, $8,627 and $8,004, respectively, of partner incentive payments were included in cash compensation and benefits expense in the Condensed Consolidated Statements of Operations.

For the Nine Months Ended September 30,

(in thousands)

2021

2020

2021 vs. 2020
($)

2021 vs. 2020
(%)

Compensation and benefits (1)

$
54,882


$
44,217


$
10,665


24.1
%
General, administrative and other

21,706

16,431

5,275

32.1
%
Total expenses

$
76,588


$
60,648


$
15,940


26.3
%

~~(1)~~

For the three months ended September 30, 2021 and 2020, $9,196 and $7,121, respectively, of partner incentive payments were included in cash compensation and benefits expense in the Condensed Consolidated Statements of Operations. For the nine months ended September 30, 2021 and 2020, $26,210 and $20,055, respectively, of partner incentive payments were included in cash compensation and benefits expense in the Condensed Consolidated Statements of Operations.

Our expenses are driven primarily by our compensation costs. The table included in “—Expenses—Compensation and Benefits Expense” describes the components of our compensation expense for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~.2021. Other expenses, such as rent, professional service fees, data-related costs, and sub-advisory fees incurred are included in our general and administrative expenses in the Condensed Consolidated Statements of Operations.

Three Months Ended ~~September 30, 2021~~March 31, 2022 versus Three Months Ended ~~September 30, 2020~~March 31, 2021

Total expenses ~~increased~~decreased by ~~$3.0~~$7.5 million, or ~~13.7%~~29.3%, to ~~$25.3~~$18.1 million for the three months ended ~~September 30, 2021~~March 31, 2022 from ~~$22.2~~$25.6 million for the three months ended ~~September 30, 2020.~~March 31, 2021. This ~~increase~~decrease was attributable to ~~an increase in compensation and benefits expense of $3.6 million, partially offset by~~ a decrease in general, administrative and other expenses of ~~$0.6~~$8.5 million, partially offset by an increase in compensation and benefits expense of $1.0 million.

Compensation and benefits expense increased by ~~$3.6~~$1.0 million, or ~~23.9%~~5.7%, to ~~$18.8~~$18.7 million for the three months ended ~~September 30, 2021~~March 31, 2022 from ~~$15.2~~$17.7 million for the three months ended ~~September 30, 2020.~~March 31, 2021. The increase was primarily attributable to an increase in the accrual for bonuses of ~~$3.0~~$0.7 million, an increase in salaries and benefits of ~~$0.4~~$0.5 million primarily as a result of merit-based increases and newly hired staff, ~~and an increase~~partially offset by a decrease in equity-based compensation expense of $0.2 million due to ~~an increase~~a decrease in the number of vested and unvested restricted stock units and unvested non-qualified stock options outstanding.

General and administrative expenses decreased by ~~$0.6~~$8.5 million, or ~~8.0%~~107.4%, to ~~$6.5~~($0.6) million for the three months ended ~~September 30, 2021~~March 31, 2022 from ~~$7.1~~$7.9 million for the three months ended ~~September 30, 2020.~~March 31, 2021. This was primarily attributable to a decrease in the adjustment to the fair value of contingent consideration related to the Cortina Acquisition of ~~$1.0~~$8.8 million and a decrease in occupancy and related costs of $0.1 million primarily due to a decrease in cleaning and maintenance costs, partially offset by an increase in ~~professional fees~~travel and entertainment expenses of $0.1 million due to the easing of restrictions related to the coronavirus pandemic, an increase in portfolio and systems expense of $0.2 ~~and an increase depreciation and amortization expense of $0.1 million.~~

~~Nine Months Ended September 30, 2021 versus Nine Months Ended September 30, 2020~~

Total expenses increased by $16.0 million, or 26.3%, to $76.6 million for the nine months ended September 30, 2021 from $60.6 million for the nine months ended September 30, 2020. This increase was attributable to increases in compensation and benefits expense and general, administrative and other expenses of $10.7 million and ~~$5.3 million, respectively.~~

Compensation and benefits expense increased by $10.7 million, or 24.1%, to $54.9 million for the nine months ended September 30, 2021 from $44.2 million for the nine months ended September 30, 2020. The increase was primarily attributable to an increase in the accrual for bonuses of $8.8 million, an increase in salaries and benefits of $1.1 million primarily as a result of merit-based increases and newly hired staff and an increase in equity-based compensation expense of $0.7 million due to an increase in the number of vested and unvested restricted stock units and unvested non-qualified stock options outstanding.

General and administrative expenses increased by $5.3 million, or 32.1%, to $21.7 million for the nine months ended September 30, 2021 from $16.4 million for the nine months ended September 30, 2020. This was primarily attributable to an increase in the adjustment to the fair value of contingent consideration related to the Cortina Acquisition of $5.1 million, an increase in trade errors of $0.3 million, an increase in professional fees of $0.1 million, an increase in sub-advisory and referral ~~fees of $0.1 million and an increase in insurance~~fee expense of $0.1 million partially offset by a decrease in travel and entertainment expenses of $0.2 million as a result of the coronavirus pandemic, a decrease in portfolio and systems expense of $0.1 million and a decrease in depreciation and amortization of $0.1 million.

Other Income (Expense), Net


	For the Three Months Ended September 30,												For the Three Months Ended March 31,
(in thousands)	2021			2020			2021 vs. 2020 ($)			2021 vs. 2020 (%)			2022			2021			2022 vs. 2021 ($)			2022 vs. 2021 (%)
Other income (expense), net	$	43		$	8		$	35			NM		$	8		$	7		$	1			14.3	%
Interest income		1			2			(1	)		(50.0	)%		1			2			(1	)		-50.0	%
Interest expense		(92	)		(120	)		28			23.3	%		(78	)		(105	)		27			-25.7	%
Total other income (expense), net	$	(48	)	$	(110	)	$	62			56.4	%	$	(69	)	$	(96	)	$	27			-28.1	%

For the Nine Months Ended September 30,

(in thousands)

2021


2020

2021 vs. 2020
($)

2021 vs. 2020
(%)

Other income (expense), net

$
58

$
23

$
35

NM

Interest income


5

12

(7
)

(58.3
)%
Interest expense


(294
)

(445
)

151

33.9
%
Total other income (expense), net

$
(231
)

$
(410
)

$
179

43.7
%

~~NM – Not Meaningful~~

Three Months Ended ~~September 30, 2021~~March 31, 2022 versus Three Months Ended ~~September 30, 2020~~March 31, 2021

Total other income (expense) net ~~increased~~decreased by ~~$62~~$27 thousand to other expense of ~~$48~~$69 thousand for the three months ended ~~September 30, 2021~~March 31, 2022 from other expense of ~~$110~~$96 thousand for the three months ended ~~September 30, 2020~~March 31, 2021 due to a decrease in interest expense as a result of the level of borrowings under our credit facility and an increase in other income.

~~Nine Months Ended September 30, 2021 versus Nine Months Ended September 30, 2020~~

Total other income (expense) net increased by $179 thousand to other expense of $231 thousand for the nine months ended September 30, 2021 from other expense of $410 thousand for the nine months ended September 30, 2020 due to a decrease in interest expense as a result of the level of borrowings under our credit facility and an increase in other income.

Provision for Income Taxes

Three Months Ended ~~September 30, 2021~~March 31, 2022 versus Three Months Ended ~~September 30, 2020~~ March 31, 2021

The provision for income taxes was ~~$1.8~~$3.0 million and ~~$1.4~~$1.3 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. The change was primarily related to the tax effect of the change in the fair value of the contingent consideration related to the Cortina Acquisition and by increased profitability during the current period as compared to the prior year. Our provision for income taxes as a percentage of income before provision for income taxes for the three months ended ~~September 30,~~March 31, 2022 and 2021 was 19.3% and ~~2020 was 21.9% and 28.1%~~22.5%, respectively.

~~Nine Months Ended September 30, 2021 versus Nine Months Ended September 30, 2020~~

The provision for income taxes was $4.6 million and $4.6 million for the nine months ended September 30, 2021 and 2020, respectively. Our provision for income taxes as a percentage of income before provision for income taxes for the nine months ended September 30, 2021 and 2020 was 22.1% and 24.6%, respectively. 36

Supplemental Non-GAAP Financial Information

To provide investors with additional insight, promote transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making, we supplement our Condensed Consolidated Financial Statements presented on a basis consistent with U.S. generally accepted accounting principles, or GAAP, with Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Earnings Per Share which are non-GAAP financial measures of earnings.

•

EBITDA represents net income before provision for income taxes, interest income, interest expense, depreciation and amortization.

•

We define Adjusted EBITDA as EBITDA without giving effect to the Delaware franchise tax, professional fees associated with acquisitions or financing transactions, gains on extinguishment of debt or other obligations related to acquisitions, impairment charges and losses on disposals or abandonment of assets and leaseholds, client reimbursements and fund redemption costs, severance and other similar expenses, but including partner incentive allocations, prior to our initial public offering, as an expense. We feel that it is important to management and investors to supplement our Condensed Consolidated Financial Statements presented on a GAAP basis with Adjusted EBITDA, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring earnings of the Company, taking into account earnings attributable to both Class A and Class B shareholders.

•

Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenue. We feel that it is important to management and investors to supplement our Condensed Consolidated Financial Statements presented on a GAAP basis with Adjusted EBITDA Margin, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring profitability of the Company, taking into account profitability attributable to both Class A and Class B shareholders.

•

Adjusted Net Income represents recurring net income without giving effect to professional fees associated with acquisitions or financing transactions, losses on forgiveness of notes receivable from our principals, gains on extinguishment of debt or other obligations related to acquisitions, impairment charges and losses on disposals or abandonment of assets and leaseholds, client reimbursements and fund redemption costs, severance and other similar expenses, but including partner incentive allocations, prior to our initial public offering, as an expense. Furthermore, Adjusted Net Income includes income tax expense assuming a blended corporate rate of 26%. We feel that it is important to management and investors to supplement our Condensed Consolidated Financial Statements presented on a GAAP basis with Adjusted Net Income, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring income of the Company, taking into account income attributable to both Class A and Class B shareholders.

•

Adjusted Earnings Per Share represents Adjusted Net Income divided by the actual Class A and Class B shares outstanding as of the end of the reporting period for basic Adjusted Earnings Per Share, and to the extent dilutive, we add unvested restricted stock units and non-qualified stock options to the total shares outstanding to compute diluted Adjusted Earnings Per Share. As a result of our structure, which includes a non-controlling interest, we feel that it is important to management and investors to supplement our Condensed Consolidated Financial Statements presented on a GAAP basis with Adjusted Earnings Per Share, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring earnings per share of the Company as a whole as opposed to being limited to our Class A common stock.

•

~~EBITDA represents net income before provision for income taxes, interest income, interest expense, depreciation and amortization.~~

•

basis with Adjusted Net Income, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring income of the Company, taking into account income attributable to both Class A and Class B shareholders.

•

These adjustments, and the non-GAAP financial measures that are derived from them, provide supplemental information to analyze our operations between periods and over time. Investors should consider our non-GAAP financial measure in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

The following tables contain reconciliations of net income to Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings Per Share (amounts in thousands except per share amounts).


	Three Months Ended March 31,
	2022			2021
Reconciliation of non-GAAP financial measure:
Net income	$	12,396		$	4,335
GAAP Provision for income taxes		2,974			1,257
Delaware Franchise Tax		50			50
Interest expense		78			105
Interest income		(1	)		(2	)
Depreciation and amortization		957			968
Equity-based compensation		228			169
Other adjustments (A)		(6,432	)		2,774
Adjusted EBITDA	$	10,250		$	9,656
Adjusted EBITDA Margin		30.6	%		30.9	%

Adjusted Net Income and Adjusted Earnings Per Share
Reconciliation of non-GAAP financial measure:
Net income	$	12,396		$	4,335
GAAP Provision for income taxes		2,974			1,257
Delaware Franchise Tax		50			50
Other adjustments (A)		(6,432	)		2,774
Adjusted earnings before provision for income taxes		8,988			8,416
Adjusted provision for income taxes:
Adjusted provision for income taxes (26% assumed tax rate)		(2,337	)		(2,188	)

Adjusted net income	$	6,651		$	6,228

GAAP net income per share (B):
Basic and diluted	$	0.77		$	0.26

Adjusted earnings per share/unit (B):
Basic	$	0.46		$	0.43
Diluted	$	0.45		$	0.42

Shares/units outstanding:
Basic Class A shares outstanding		9,872			9,658
Basic Class B shares/units outstanding		4,591			4,770
Total basic shares/units outstanding		14,463			14,428

Diluted Class A shares outstanding (C)		9,894			9,666
Diluted Class B shares/units outstanding (D)		5,014			5,037
Total diluted shares/units outstanding		14,908			14,703

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Reconciliation of non-GAAP financial measure:

Net income

$
6,354

$
3,480

$
16,350

$
13,952

GAAP Provision for income taxes

1,779

1,359

4,630

4,558

Delaware Franchise Tax

50

50

150

150

Interest expense

92

120

294

445

Interest income

(1
)

(2
)

(5
)

(12
)
Depreciation and amortization

981

968

2,942

2,995

Equity-based compensation

345

193

807

456

Other adjustments (A)

745

1,951

5,262

455

Adjusted EBITDA

$
10,345

$
8,119

$
30,430

$
22,999

Adjusted EBITDA Margin

30.9
%

29.9
%

31.1
%

28.9
%

Adjusted Net Income and Adjusted Earnings Per Share

Reconciliation of non-GAAP financial measure:

Net income

$
6,354

$
3,480

$
16,350

$
13,952

GAAP Provision for income taxes

1,779

1,359

4,630

4,558

Delaware Franchise Tax

50

50

150

150

Other adjustments (A)

745

1,951

5,262

455

Adjusted earnings before provision for income taxes

8,928

6,840

26,392

19,115

Adjusted provision for income taxes:

Adjusted provision for income taxes (26% assumed tax rate)

(2,321
)

(1,778
)

(6,862
)

(4,970
)

Adjusted net income

$
6,607

$
5,062

$
19,530

$
14,145

GAAP net income per share (B):

Basic and diluted

$
0.38

$
0.22

$
0.99

$
0.85

Adjusted earnings per share/unit (B):

Basic

$
0.46

$
0.35

$
1.35

$
0.98

Diluted

$
0.44

$
0.35

$
1.31

$
0.97

Shares/units outstanding:

Basic Class A shares outstanding

9,653

9,545

9,653

9,545

Basic Class B shares/units outstanding

4,815

4,828

4,815

4,828

Total basic shares/units outstanding

14,468

14,373

14,468

14,373

Diluted Class A shares outstanding (C)

9,675

9,553

9,675

9,553

Diluted Class B shares/units outstanding (D)

5,239

4,989

5,239

4,989

Total diluted shares/units outstanding

14,914

14,542

14,914

14,542

(A)

Other adjustments consist of the following:


	Three Months Ended March 31,
	2022			2021
Acquisition costs (a)	$	16		$	311
Other (b)		(6,448	)		2,463
Total other adjustments	$	(6,432	)	$	2,774

(a)

For the three months ended March 31, 2022, represents insurance costs of $11 and professional fees of $5 related to the acquisition of Cortina. For the three months ended March 31, 2021, represents equity-based compensation expense of $300 related to restricted stock units grants issued to two associates hired as part of the Cortina Acquisition in conjunction with their admission to Silvercrest L.P., and insurance costs of $11 related to the acquisition of Cortina.

(b)

For the three months ended March 31, 2022, represents a fair value adjustment to the Cortina contingent purchase price consideration of ($6,500), an ASC 842 rent adjustment of $48 related to the amortization of property lease incentives and expenses related to the Coronavirus pandemic of $4. For the three months ended March 31, 2021, represents a fair value adjustment to the Cortina contingent purchase price consideration of $2,300, an ASC 842 rent adjustment of $48 related to the amortization of property lease incentives and expenses related to the Coronavirus pandemic of $115.

(b)

GAAP net income per share is strictly attributable to Class A shareholders. Adjusted earnings per share takes into account earnings attributable to both Class A and Class B shareholders.

(c)

Includes 21,704 and 8,242 unvested restricted stock units at March 31, 2022 and 2021, respectively.

(d)

Includes 170,854 and 74,907 unvested restricted stock units and 252,904 and 192,162 unvested non-qualified options at March 31, 2022 and 2021, respectively.

~~(A)~~

~~Other adjustments consist of the following:~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Acquisition costs (a)

$
16

$
38

$
347

$
318

Severance

10

─

10

─

Other (b)

719

1,913

4,905

137

Total other adjustments

$
745

$
1,951

$
5,262

$
455

~~(a)~~

For the three months ended September 30, 2021, represents insurance costs of $11 and professional fees of $5 related to the acquisition of Cortina. For the nine months ended September 30, 2021, represents equity-based compensation expense of $300 related to restricted stock unit grants issued to two associates hired as part of the Cortina Acquisition in conjunction with their admission to Silvercrest L.P., insurance costs of $34 and professional fees of $14 related to the acquisition of Cortina. For the three months ended September 30, 2020, represents legal and other professional fees of $27 and insurance costs of $11 related to the acquisition of Cortina. For the nine months ended September 30, 2020, represents legal and other professional fees of $111, insurance costs of $34 related to the acquisition of Cortina, and costs related to the integration of Cortina’s operations of $173.

~~(b)~~

For the three months ended September 30, 2021, represents a fair value adjustment to the Cortina contingent purchase price consideration of $670, an ASC 842 rent adjustment of $48 related to the amortization of property lease incentives and expenses related to the Coronavirus pandemic of $1. For the nine months ended September 30, 2021, represents a fair value adjustment to the Cortina contingent purchase price consideration of $4,570, an ASC 842 rent adjustment of $144 related to the amortization of property lease incentives and expenses related to the Coronavirus pandemic of $191. For the three months ended September 30, 2020, represents an ASC 842 rent adjustment of $48 related to the amortization of property lease incentives, a fair value adjustment to the Cortina contingent purchase price consideration of $1,700 and expenses related to the Coronavirus pandemic of $165. For the nine months ended September 30, 2020, represents expenses of $18 related to office renovations, an ASC 842 rent adjustment of $144 related to the amortization of property lease incentives, professional fees related to a new audit requirement of $13, a fair value adjustment to the Cappiccille contingent purchase price consideration of $83, a fair value adjustment to the Cortina contingent purchase price consideration of $(500), a fair value adjustment to the Jamison contingent purchase price consideration of $70, and expenses related to the Coronavirus pandemic of $309.

~~(B)~~

~~GAAP net income per share is strictly attributable to Class A shareholders. Adjusted earnings per share takes into account earnings attributable to both Class A and Class B shareholders.~~

~~(C)~~

~~Includes 21,704 and 8,242 unvested restricted stock units at September 30, 2021 and 2020, respectively.~~

~~(D)~~

~~Includes 170,854 and 74,907 unvested restricted stock units and 252,904 and 86,764 unvested non-qualified options at September 30, 2021 and 2020, respectively.~~

Liquidity and Capital Resources

Historically, the working capital needs of our business have primarily been met through cash generated by our operations. We expect that our cash and liquidity requirements in the next twelve months will be met primarily through cash generated by our operations. The challenges posed by the COVID-19 pandemic and the impact on our business and cash flows are evolving rapidly and cannot be predicted at this time. Consequently, we will continue to evaluate our liquidity and financial position on an ongoing basis.

On June 24, 2013, the subsidiaries of Silvercrest L.P. entered into a $15.0 million credit facility with City National Bank. The subsidiaries of Silvercrest L.P. are the borrowers under such facility and Silvercrest L.P. guarantees the obligations of its subsidiaries under the credit facility. The credit facility is secured by certain assets of Silvercrest L.P. and its subsidiaries. The credit facility consists of a $7.5 million delayed draw term loan that matures on June 24, 2025 and a $7.5 million revolving credit facility that was scheduled to mature on June 21, 2019. On July 1, 2019, the credit facility was amended to increase the term loan by $18.0 million to $25.5 million, extend the draw date on the term loan facility to July 1, 2024, extend the maturity date of the term loan to July 1, 2026 and increase the revolving credit facility by $2.5 million to $10.0 million. On June 17, 2021, the revolving credit facility was further amended to extend the maturity date to June 18, 2022. The loan bears interest at either (a) the higher of the prime rate plus a margin of 0.25 percentage points and 2.5% or (b) the LIBOR rate plus 2.75 percentage points, at the borrowers’ option. Borrowings under the term loan on or prior to June 30, 2021 are payable in 20 equal quarterly installments. Borrowings under the term loan after June 30, 2021 will be payable in equal quarterly installments through the maturity date. On February 15, 2022, the credit facility was amended and restated to reflect changes to various definitions and related clauses with respect to our subsidiaries. The credit facility contains restrictions on, among other things, (i) incurrence of additional debt, (ii) creating liens on certain assets, (iii) making certain investments, (iv) consolidating, merging or otherwise disposing of substantially all of our assets, (v) the sale of certain assets, and (vi) entering into transactions with affiliates. In addition, the credit facility contains certain financial covenants including a test on discretionary assets under management, maximum debt to EBITDA and a fixed charge coverage ratio. The credit facility contains customary events of default, including the occurrence of a change in control which includes a person or group of persons acting together acquiring more than 30% of the total voting securities of Silvercrest. Any undrawn amounts under this facility would be available to fund future acquisitions or for working capital purposes, if needed. As of ~~September 30, 2021,~~March 31, 2022, we had ~~$9.9~~$8.1 million outstanding under the term loan. As of ~~September 30, 2021,~~March 31, 2022, there were no borrowings outstanding on the revolving credit facility. We were in compliance with the covenants under the credit facility as of ~~September 30, 2021.~~ March 31, 2022.

Our ongoing sources of cash will primarily consist of management fees and family office services fees, which are principally collected quarterly. We will primarily use cash flow from operations to pay compensation and related expenses, general and administrative expenses, income taxes, debt service, capital expenditures, distributions to Class B unit holders and dividends on shares of our Class A common stock.

Seasonality typically affects cash flow since the first quarter of each year includes, as a source of cash, payment of the prior year’s annual performance fees and allocations, if any, from our various funds and external investment strategies and, as a use of cash, the prior fiscal year’s incentive compensation. We believe that we have sufficient cash from our operations to fund our operations and commitments for the next twelve months.

The following table sets forth certain key financial data relating to our liquidity and capital resources as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.


	As of				As of
(in thousands)	September 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Cash and cash equivalents	$	65,930	$	62,498	$	57,020	$	85,744
Accounts receivable	$	9,386	$	8,341	$	9,444	$	8,850
Due from Silvercrest Funds	$	2,188	$	1,018	$	1,286	$	428

We anticipate that distributions to the limited partners of Silvercrest L.P. will continue to be a material use of our cash resources and will vary in amount and timing based on our operating results and dividend policy. We pay and intend to continue paying quarterly cash dividends to holders of our Class A common stock. We are a holding company and have no material assets other than our ownership of interests in Silvercrest L.P. As a result, we will depend upon distributions from Silvercrest L.P. to pay any dividends to our Class A stockholders. We expect to cause Silvercrest L.P. to make distributions to us in an amount sufficient to cover dividends, if any, declared by us. Our dividend policy has certain risks and limitations, particularly with respect to liquidity. Although we expect to pay dividends according to our dividend policy, we may not pay dividends according to our policy, or at all, if, among other things, we do not have the cash necessary to pay our intended dividends or our subsidiaries are prevented from making a distribution to us under the terms of our current credit facility or any future financing. To the extent we do not have cash on hand sufficient to pay dividends, we may decide not to pay dividends. By paying cash dividends rather than investing that cash in our future growth, we risk slowing the pace of our growth, or not having a sufficient amount of cash to fund our operations or unanticipated capital expenditures, should the need arise.

Our purchase of Class B units in Silvercrest L.P. that occurred concurrently with the consummation of our initial public offering, and the future exchanges of Class B units of Silvercrest L.P., are expected to result in increases in our share of the tax basis of the tangible and intangible assets of Silvercrest L.P. at the time of our acquisition and these future exchanges, which will increase the tax depreciation and amortization deductions that otherwise would not have been available to us. These increases in tax basis and tax depreciation and amortization deductions are expected to reduce the amount of tax that we would otherwise be required to pay in the future. We entered into a tax receivable agreement with the current principals of Silvercrest L.P. and any future employee-holders of Class B units pursuant to which we agreed to pay them 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that we actually realize as a result of these increases in tax basis and certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments thereunder. The timing of these payments is currently unknown. The payments to be made pursuant to the tax receivable agreement will be a liability of Silvercrest and not Silvercrest L.P., and thus this liability has been recorded as an “other liability” on our Condensed Consolidated Statement of Financial Condition. For purposes of the tax receivable agreement, cash savings in income tax will be computed by comparing our actual income tax liability to the amount of such taxes that we would have been required to pay had there been no increase in our share of the tax basis of the tangible and intangible assets of Silvercrest L.P.

The actual increase in tax basis, as well as the amount and timing of any payments under the tax receivable agreement, will vary depending upon a number of factors, including the timing of exchanges, the price of shares of our Class A common stock at the time of the exchange, the extent to which such exchanges are taxable, the amount and timing of our income and the tax rates then applicable. Nevertheless, we expect that as a result of the size of the increases in the tax basis of our tangible and intangible assets, the payments that we may make under the tax receivable agreement likely will be substantial. Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize the full tax benefit of the increased depreciation and amortization of our assets, we expect that future payments to the selling principals of Silvercrest L.P. in respect of our purchase of Class B units from them will aggregate approximately ~~$9.5~~$9.2 million. Future payments to current principals of Silvercrest L.P. and future holders of Class B units in respect of subsequent exchanges would be in addition to these amounts and are expected to be substantial. We intend to fund required payments pursuant to the tax receivable agreement from the distributions received from Silvercrest L.P.

Cash Flows

The following table sets forth our cash flows for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021. Operating activities consist of net income subject to adjustments for changes in operating assets and liabilities, depreciation, and equity-based compensation expense. Investing activities consist primarily of acquiring and selling property and equipment, and cash paid as part of business acquisitions. Financing activities consist primarily of contributions from partners, distributions to partners, dividends paid on Class A common stock, the issuance and payments on partner notes, other financings, and earnout payments related to business acquisitions.


	Nine Months Ended September 30,						Three Months Ended March 31,
(in thousands)	2021			2020			2022			2021
Net cash provided operating activities	$	21,643		$	10,105
Net cash used in operating activities							$	(23,555	)	$	(15,594	)
Net cash used in investing activities		(630	)		(453	)		(33	)		(142	)
Net cash used in financing activities		(17,581	)		(14,313	)		(5,136	)		(4,118	)
Net change in cash	$	3,432		$	(4,661	)	$	(28,724	)	$	(19,854	)

Operating Activities

~~Nine~~Three Months Ended ~~September 30, 2021~~March 31, 2022 versus ~~Nine~~Three Months Ended ~~September 30, 2020~~March 31, 2021

For the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ operating activities ~~provided $21.6~~used $23.6 million and ~~provided $10.1~~$15.6 million, respectively. This difference is primarily the result of a decrease in accrued compensation of $6.9 million, a decrease in distributions received from investment funds of $0.9 million, an increase in ~~net income~~accounts receivable of ~~$2.4~~$1.0 million due to timing of payments received from clients, increased ~~non-cash~~operating lease liabilities of $0.3 million, a decrease in equity-based compensation expense of ~~$1.1~~$0.2 million ~~an increase~~and a decrease in accounts payable and accrued expense of ~~$6.0~~$9.0 million primarily due to a change in the fair value of contingent consideration related to the Cortina Acquisition, partially offset by an increase in ~~equity-based compensation~~net income of $8.1 million, increased deferred tax expense of $0.7 million and an increase in accrued compensation of $7.4 million. This was partially offset by a decrease in distributions received from investment funds of $0.9 million, an increase in accounts receivable of $2.4 million due to timing of payments received from clients, increased operating lease liabilities of $0.6 million, decreased deferred income taxes of $1.3$1.8 million, a decrease in ~~depreciation~~prepaid and ~~amortization~~other expenses of ~~$0.1~~$0.2 million and ~~an increase in prepaid expenses and other assets~~increased non-cash lease expense of ~~$0.7~~$0.3 million.

Investing Activities

~~Nine~~Three Months Ended ~~September 30, 2021~~March 31, 2022 versus ~~Nine~~Three Months Ended ~~September 30, 2020~~March 31, 2021

For the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ investing activities used ~~$0.6 million~~$33 thousand and ~~$0.5 million,~~$100 thousand, respectively. The primary use of cash during the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021 was for the acquisition of furniture, equipment and leasehold improvements. ~~The primary use of cash during~~

Financing Activities

Three Months Ended March 31, 2022 versus Three Months Ended March 31, 2021

For the ~~nine~~three months ended ~~September 30, 2020 was for the acquisition of furniture, equipment~~March 31, 2022 and ~~leasehold improvements mostly related to the renovation of our office space in New York City.~~

~~Financing Activities~~

~~Nine Months Ended September 30,~~ 2021, ~~versus Nine Months Ended September 30, 2020~~

~~For the nine months ended September 30, 2021 and 2020,~~ financing activities used ~~$17.6~~$5.1 million and ~~used $14.3~~$4.1 million, respectively. During the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company repaid ~~$2.7~~$0.9 million and ~~$2.7~~$0.9 million, respectively, of principal on the term loan with City National Bank. Distributions to partners during the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ were ~~$6.8~~$2.7 million and ~~$6.5~~$1.8 million, respectively. During the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company paid dividends of ~~$4.7~~$1.7 million and ~~$4.6~~$1.5 million, respectively, to Class A shareholders. During the ~~nine~~three months ended ~~September 30,~~March 31, 2021, ~~and 2020,~~ we made earnout payments of ~~$3.0 million and $0.7 million, respectively.~~$0.1 million. During the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ we received payments from partners on notes receivable of $0.2 million and ~~$0.3~~$0.2 million, respectively. ~~During the nine months ended September 30, 2021, we purchased approximately 27 thousand shares of Class A common stock of Silvercrest Asset Management Group Inc. at a cost of $0.4 million.~~

We anticipate that distributions to principals of Silvercrest L.P. will continue to be a material use of our cash resources, and will vary in amount and timing based on our operating results and dividend policy.

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020, $9.9~~2021, $8.1 million and ~~$12.6,~~$9.0 million, respectively, was outstanding under the term loan with City National Bank. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, accrued but unpaid interest on the term loan with City National Bank was ~~$27~~$25 thousand and ~~$0,~~$25 thousand, respectively.

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, nothing was outstanding on our revolving credit facility with City National Bank.

Critical Accounting Policies and Estimates

There have been no changes to our critical accounting policies during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 filed with the Securities and Exchange Commission on March ~~4, 2021.~~2, 2022.

Revenue Recognition

Investment advisory fees are typically billed quarterly in advance at the beginning of the quarter or in arrears after the end of the quarter, based on a contractual percentage of the assets managed. Family office services fees are also typically billed quarterly in advance at the beginning of the quarter or in arrears after the end of the quarter based on a contractual percentage of the assets managed or upon a contractually agreed-upon flat fee arrangement. Revenue is recognized on a ratable basis over the period in which services are performed.

We account for performance-based revenue in accordance with ASC 606-10-32, Accounting for Management Fees Based on a Formula, by recognizing performance fees and allocations as revenue only when it is certain that the fee income is earned and payable pursuant to the relevant agreements. In certain arrangements, we are only entitled to receive performance fees and allocations when the return on assets under management exceeds certain benchmark returns or other performance targets. We record performance fees and allocations as a component of ~~revenue.~~revenue once the performance fee has crystallized. As a result, there is no estimate or variability in the consideration when revenue is recorded.

Because the majority of our revenues are earned based on assets under management that have been determined using fair value methods and since market appreciation/depreciation has a significant impact on our revenue, we have presented our assets under management using the GAAP framework for measuring fair value. That framework provides a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs based on company assumptions (Level 3). A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. The three levels within the fair value hierarchy are described as follows:

•

Level 1—includes quoted prices (unadjusted) in active markets for identical instruments at the measurement date. The types of financial instruments included in Level 1 include unrestricted securities, including equities listed in active markets.

•

Level 2—includes inputs other than quoted prices that are observable for the instruments, including quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or inputs other than quoted prices that are observable for the instruments. The type of financial instruments in this category include less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and managed funds whose net asset value is based on observable inputs.

•

Level 3—includes one or more significant unobservable inputs. Financial instruments that are included in this category include assets under management primarily comprised of investments in privately held entities, limited partnerships, and other instruments where the fair value is based on unobservable inputs.

•

The table below summarizes the approximate amount of assets under management for the periods indicated for which fair value is measured based on Level 1, Level 2 and Level 3 inputs.

Level 1


Level 2


Level 3


Total


(in billions)

September 30, 2021 AUM

$
22.6


$
6.7


$
1.7


$
31.0

December 31, 2020 AUM

$
20.5


$
4.7


$
2.6


$
27.8


	Level 1		Level 2		Level 3		Total
	(in billions)
March 31, 2022 AUM	$	24.3	$	4.9	$	2.0	$	31.2
December 31, 2021 AUM	$	25.3	$	5.4	$	1.6	$	32.3

As substantially all our assets under management are valued by independent pricing services based upon observable market prices or inputs, we believe market risk is the most significant risk underlying valuation of our assets under management, as discussed under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, ~~2020~~2021 and Item 3. “– Qualitative and Quantitative Disclosures Regarding Market Risk.”

The average value of our assets under management for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 was approximately $31.0 billion and $29.4 billion, respectively. Assuming a 10% increase or decrease in our average assets under management and the change being proportionately distributed over all our products, the value would increase or decrease by approximately $3.1 billion and $2.9 billion for the three and nine months ended September 30, 2021, respectively, which would cause an annualized increase or decrease in revenues of approximately $13.4 million and $13.0 million for the three and nine months ended September 30, 2021, respectively, at a weighted average fee rate for the three and nine months ended September 30, 2021 of 0.43% and 0.44%, respectively.

~~The average value of our assets under management for the year ended December 31, 2020 was approximately $26.5~~$31.8 billion. Assuming a 10% increase or decrease in our average assets under management and the change being proportionately distributed over all our products, the value would increase or decrease by approximately ~~$2.7~~$3.2 billion for the ~~year~~three months ended ~~December~~March 31, ~~2020,~~2022, which would cause an annualized increase or decrease in revenues of approximately ~~$10.8~~$13.4 million for the three months ended March 31, 2022, at a weighted average fee rate for the three months ended March 31, 2022 of 0.42%.

The average value of our assets under management for the year ended December 31, 2021 was approximately $30.1 billion. Assuming a 10% increase or decrease in our average assets under management and the change being proportionately distributed over all our products, the value would increase or decrease by approximately $3.0 billion for the year ended December 31, 2021, which would cause an annualized increase or decrease in revenues of approximately $13.2 million for the year ended December 31, ~~2020,~~2021, at a weighted average fee rate for the year ended December 31, ~~2020~~2021 of ~~0.41%~~0.44%.

Recently Issued Accounting Pronouncements

Information regarding recent accounting developments and their impact on the Company can be found in Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in this filing.

Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk

Our exposure to market risk is directly related to our role as investment adviser for the separate accounts we manage and the funds for which we act as sub-investment adviser. Most of our revenue for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ was derived from advisory fees, which are typically based on the market value of assets under management. Accordingly, a decline in the prices of securities would cause our revenue and income to decline due to a decrease in the value of the assets we manage. In addition, such a decline could cause our clients to withdraw their funds in favor of investments offering higher returns or lower risk, which would cause our revenue and income to decline further. Due to the nature of our business, we believe that we do not face any material risk from inflation. Please see our discussion of market risks in “—Critical Accounting Policies and Estimates—Revenue Recognition” which is part of Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended) at ~~September 30, 2021.~~March 31, 2022. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at ~~September 30, 2021.~~March 31, 2022.

Internal Control over Financial Reporting

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended ~~September 30, 2021~~March 31, 2022 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that most of our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 pandemic situation on our internal controls to minimize the impact on their design and operating effectiveness.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness, as of ~~September 30, 2021,~~March 31, 2022, of the design and operation of our disclosure controls and procedures, as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

PART II - Other Information

Item 6. Exhibits


Exhibit Number		Description

31.1* 4.1**		Tenth Amendment to Credit Agreement, dated as of February 15, 2022, among Silvercrest Asset Management Group LLC, Silvercrest Investors LLC, Silvercrest Investors II LLC and Silvercrest Financial Services, Inc., as borrowers, City National Bank, a national banking association, and acknowledged by Silvercrest L.P., as guarantor.

31.1**		Certification of the Company’s Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2**		Certification of the Company’s Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1***		Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2***		Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS**		Inline XBRL Instance Document – The instance document does not appear in the Interactive Data File because iXBRL tags are embedded within the Inline XBRL document.

101.SCH**		Inline XBRL Taxonomy Extension Schema Document

101.CAL**		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB**		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE**		Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF**		Inline XBRL Taxonomy Extension Definition Linkbase Document

104**		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

** Filed herewith

*** Furnished herewith

SIGNATURES

~~Filed herewith~~

~~***~~

~~Furnished herewith~~

~~SIGNATURES~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on ~~November 4, 2021.~~May 5, 2022.

Silvercrest Asset Management Group Inc.


		By:	~~/s/~~ /s/ Richard R. Hough III
Date:	~~November 4, 2021~~May 5, 2022		Richard R. Hough III
			Chairman, Chief Executive Officer and President
			(Principal Executive Officer)

			~~/s/~~ /s/ Scott A. Gerard
Date:	~~November 4, 2021~~May 5, 2022		Scott A. Gerard
			Chief Financial Officer
			(Principal Financial and Accounting Officer)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.01 par value per share	SAMG	The Nasdaq Global Market


	September 30, 2021			December 31, 2020		March 31, 2022			December 31, 2021
Assets
Cash and cash equivalents	$	65,930		$	62,498	$	57,020		$	85,744
Investments		53			914		1,588			1,588
Receivables, net		9,386			8,341		9,444			8,850
Due from Silvercrest Funds		2,188			1,018		1,286			428
Furniture, equipment and leasehold improvements, net		5,272			5,523		5,007			5,257
Goodwill		63,675			63,675		63,675			63,675
Operating lease assets		26,580			30,068		25,032			26,130
Finance lease assets		276			254		217			247
Intangible assets, net		24,582			26,553		23,280			23,924
Deferred tax asset—tax receivable agreement		11,100			11,397		9,085			10,797
Prepaid expenses and other assets		3,870			3,563		2,269			2,678
Total assets	$	212,912		$	213,804	$	197,903		$	229,318
Liabilities and Equity
Accounts payable and accrued expenses	$	18,763		$	18,040	$	13,031		$	19,820
Accrued compensation		31,567			33,849		10,704			41,707
Borrowings under credit facility		9,927			12,600		8,125			9,025
Operating lease liabilities		32,896			36,127		31,174			32,371
Finance lease liabilities		283			259		223			253
Deferred tax and other liabilities		9,651			9,530		9,423			9,334
Total liabilities		103,087			110,405		72,680			112,510
Commitments and Contingencies (Note 10)
Equity
Preferred Stock, par value $0.01, 10,000,000 shares authorized; NaN issued and outstanding, as of September 30, 2021 and December 31, 2020		—			—
Class A common stock, par value $0.01, 50,000,000 shares authorized; 9,680,411 and 9,653,214 shares issued and outstanding as of September 30, 2021, respectively; 9,650,692 shares issued and outstanding as of December 31, 2020		97			96
Class B common stock, par value $0.01, 25,000,000 shares authorized; 4,815,460 and 4,721,646 issued and outstanding, as of September 30, 2021 and December 31, 2020, respectively		47			46
Preferred Stock, par value $0.01, 10,000,000 shares authorized; NaN issued and outstanding, as of March 31, 2022 and December 31, 2021							—			—
Class A common stock, par value $0.01, 50,000,000 shares authorized; 9,905,073 and 9,871,990 shares issued and outstanding as of March 31, 2022, respectively; 9,902,184 and 9,869,101 shares issued and outstanding as of and December 31, 2021, respectively							99			99
Class B common stock, par value $0.01, 25,000,000 shares authorized; 4,590,798 and 4,593,687 issued and outstanding, as of March 31, 2022 and December 31, 2021, respectively							45			45
Additional Paid-In Capital		51,408			51,039		52,961			52,936
Treasury stock, at cost, 27,197 and 0 shares as of September 30, 2021 and December 31, 2020, respectively		(418	)		—
Treasury stock, at cost, 33,083 shares as of March 31, 2022 and December 31, 2021							(512	)		(512	)
Retained earnings		24,363			19,498		33,669			27,782
Total Silvercrest Asset Management Group Inc.’s equity		75,497			70,679		86,262			80,350
Non-controlling interests		34,328			32,720		38,961			36,458
Total equity		109,825			103,399		125,223			116,808
Total liabilities and equity	$	212,912		$	213,804	$	197,903		$	229,318


	Three Months Ended March 31,
	2022			2021
Cash Flows From Operating Activities
Net income	$	12,396		$	4,335
Adjustments to reconcile net income to net cash used in operating activities:
Equity-based compensation		228			469
Depreciation and amortization		957			968
Deferred income taxes		1,801			(12	)
Non-cash interest on notes receivable from partners		(1	)		(2	)
Interest on notes payable		(1	)		32
Non-cash lease expense		1,098			814
Distributions received from investment funds		—			861
Cash flows due to changes in operating assets and liabilities:
Receivables and Due from Silvercrest Funds		(1,452	)		(458	)
Prepaid expenses and other assets		(417	)		(652	)
Accounts payable and accrued expenses		(5,965	)		3,045
Accrued compensation		(31,003	)		(24,096	)
Operating lease liabilities		(1,197	)		(896	)
Deferred and other liabilities		1			(2	)
Net cash used in operating activities		(23,555	)		(15,594	)
Cash Flows From Investing Activities
Acquisition of furniture, equipment and leasehold improvements	$	(33	)	$	(142	)
Net cash used in investing activities		(33	)		(142	)
Cash Flows From Financing Activities
Earn-outs paid related to acquisitions	$	—		$	(114	)
Repayments of notes payable		(900	)		(900	)
Principal payments on financing leases		(30	)		(30	)
Distributions to partners		(2,685	)		(1,758	)
Dividends paid on Class A common stock		(1,678	)		(1,544	)
Payments from partners on notes receivable		157			228
Net cash used in financing activities		(5,136	)		(4,118	)
Net increase (decrease) in cash and cash equivalents		(28,724	)		(19,854	)
Cash and cash equivalents, beginning of period		85,744			62,498
Cash and cash equivalents, end of period	$	57,020		$	42,644

	Nine months ended September 30,
	2021			2020
Cash Flows From Operating Activities
Net income	$	16,350		$	13,952
Adjustments to reconcile net income to net cash provided by operating activities:
Equity-based compensation		1,107			456
Depreciation and amortization		2,942			2,995
Deferred income taxes		452			1,741
Non-cash interest on notes receivable from partners		(4	)		(6	)
Interest on notes payable		27			—
Non-cash lease expense		3,488			2,382
Distributions received from investment funds		861			1,765
Cash flows due to changes in operating assets and liabilities:
Receivables and Due from Silvercrest Funds		(2,215	)		207
Prepaid expenses and other assets		(657	)		73
Accounts payable and accrued expenses		4,807			(1,181	)
Accrued compensation		(2,282	)		(9,698	)
Operating lease liabilities		(3,231	)		(2,594	)
Deferred and other liabilities		(2	)		13
Net cash provided by operating activities		21,643			10,105
Cash Flows From Investing Activities
Acquisition of furniture, equipment and leasehold improvements	$	(630	)	$	(453	)
Net cash used in investing activities		(630	)		(453	)
Cash Flows From Financing Activities
Earn-outs paid related to acquisitions	$	(3,045	)	$	(741	)
Repayments of notes payable		(2,700	)		(2,700	)
Principal payments on financing leases		(88	)		(81	)
Distributions to partners		(6,821	)		(6,521	)
Dividends paid on Class A common stock		(4,737	)		(4,570	)
Purchase of shares of Class A common stock of Silvercrest Asset Management Group Inc.		(418	)		—
Payments from partners on notes receivable		228			300
Net cash used in financing activities		(17,581	)		(14,313	)
Net increase (decrease) in cash and cash equivalents		3,432			(4,661	)
Cash and cash equivalents, beginning of period		62,498			52,832
Cash and cash equivalents, end of period	$	65,930		$	48,171


	Customer Relationships			Other Intangible Assets			Total			Customer Relationships			Other Intangible Assets			Total
Cost
Balance, January 1, 2022										$	44,060		$	2,461		$	46,521
Balance, March 31, 2022											44,060			2,461			46,521
Useful lives										10-20 years			3-5 years
Accumulated amortization
Balance, January 1, 2022											(20,136	)		(2,461	)		(22,597	)
Amortization expense											(644	)		—			(644	)
Balance, March 31, 2022											(20,780	)		(2,461	)		(23,241	)
Net book value										$	23,280		$	—		$	23,280
Cost
Balance, January 1, 2021	$	44,060		$	2,461		$	46,521		$	44,060		$	2,461		$	46,521
Balance, September 30, 2021		44,060			2,461			46,521
Balance, December 31, 2021											44,060			2,461			46,521
Useful lives		10-20 years			3-5 years					10-20 years			3-5 years
Accumulated amortization
Balance, January 1, 2021		(17,507	)		(2,461	)		(19,968	)		(17,507	)		(2,461	)		(19,968	)
Amortization expense		(1,971	)		—			(1,971	)		(2,629	)		—			(2,629	)
Balance, September 30, 2021		(19,478	)		(2,461	)		(21,939	)
Net book value	$	24,582		$	—		$	24,582
Cost
Balance, January 1, 2020	$	44,060		$	2,467		$	46,527
Disposal		—			(6	)		(6	)
Balance, December 31, 2020		44,060			2,461			46,521
Useful lives		10-20 years			3-5 years
Accumulated amortization
Balance, January 1, 2020		(14,833	)		(2,408	)		(17,241	)
Amortization expense		(2,674	)		(59	)		(2,733	)
Disposal		—			6			6
Balance, December 31, 2020		(17,507	)		(2,461	)		(19,968	)
Balance, December 31, 2021											(20,136	)		(2,461	)		(22,597	)
Net Book Value	$	26,553		$	—		$	26,553		$	23,924		$	—		$	23,924


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~Large accelerated filer~~	☐	~~Accelerated filer~~	☒
~~Non-accelerated filer~~	☐	~~Smaller reporting company~~	☒
Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☐


Part I	Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Statements of Financial Condition as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021	1
	Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~	2
	Condensed Consolidated Statements of Changes in Equity for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~	3
	Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~	54
	Notes to Condensed Consolidated Financial Statements as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 and for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~	65

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3128
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4943
Item 4.	Controls and Procedures	43
Part II	49
~~Part II~~	Other Information
Item 6.	Exhibits	5044


	Three months ended September 30,						Nine months ended September 30,						Three Months Ended March 31,
	2021			2020			2021			2020			2022			2021
Revenue
Management and advisory fees	$	32,248		$	26,148		$	94,435		$	76,554		$	32,448		$	30,205
Performance fees		86			—			86			—			—			—
Family office services		1,127			1,034			3,278			3,014			1,062			1,032
Total revenue		33,461			27,182			97,799			79,568			33,510			31,237
Expenses
Compensation and benefits		18,758			15,142			54,882			44,217			18,659			17,649
General and administrative		6,522			7,091			21,706			16,431			(588	)		7,900
Total expenses		25,280			22,233			76,588			60,648			18,071			25,549
Income before other (expense) income, net		8,181			4,949			21,211			18,920			15,439			5,688
Other (expense) income, net
Other (expense) income, net		43			8			58			23			8			7
Interest income		1			2			5			12			1			2
Interest expense		(92	)		(120	)		(294	)		(445	)		(78	)		(105	)
Total other (expense) income, net		(48	)		(110	)		(231	)		(410	)		(69	)		(96	)
Income before provision for income taxes		8,133			4,839			20,980			18,510			15,370			5,592
Provision for income taxes		1,779			1,359			4,630			4,558			2,974			1,257
Net income		6,354			3,480			16,350			13,952			12,396			4,335
Less: net income attributable to non-controlling interests		(2,631	)		(1,421	)		(6,740	)		(5,871	)		(4,828	)		(1,783	)
Net income attributable to Silvercrest	$	3,723		$	2,059		$	9,610		$	8,081		$	7,568		$	2,552
Net income per share:
Basic	$	0.38		$	0.22		$	0.99		$	0.85		$	0.77		$	0.26
Diluted	$	0.38		$	0.22		$	0.99		$	0.85		$	0.77		$	0.26
Weighted average shares outstanding:
Basic		9,670,054			9,532,362			9,661,610			9,478,695			9,869,444			9,651,765
Diluted		9,691,103			9,540,604			9,676,639			9,488,259			9,891,148			9,660,007


	Class A Common Stock Shares		Class A Common Stock Amount		Class B Common Stock Shares			Class B Common Stock Amount		Additional Paid-In Capital		Treasury Stock Shares		Treasury Shares Amount		Retained Earnings			Total Silvercrest Asset Management Group Inc.’s Equity			Non- controlling Interest			Total Equity

January 1, 2021		9,651	$	96		4,722		$	46	$	51,039		—	$	—	$	19,498		$	70,679		$	32,720		$	103,399
Distributions to partners		—		—		—			—		—		—		—		—			—			(1,758	)		(1,758	)
Issuance of notes receivable from partners		—		—		—			—		—		—		—		—			—			(475	)		(475	)
Issuance of Class B shares		—		—		56			1		—		—		—		—			1			475			476
Repayment of notes receivable from partners		—		—		—			—		—		—		—		—			—			228			228
Equity-based compensation		—		—		—			—		—		—		—		—			—			469			469
Net Income		—		—		—			—		—		—		—		2,552			2,552			1,783			4,335
Deferred tax, net of amounts payable under tax receivable agreement		—		—		—			—		7		—		—		—			7			—			7
Accrued interest on notes receivable from partners		—		—		—			—		—		—		—		—			—			(2	)		(2	)
Share conversion		8		—		(8	)		—		56		—		—		—			56			(56	)		—
Dividends paid on Class A common stock - $0.16 per share		—		—		—			—		—		—		—		(1,545	)		(1,545	)		—			(1,545	)
March 31, 2021		9,659	$	96		4,770		$	47	$	51,102		—	$	0	$	20,505		$	71,750		$	33,384		$	105,134


January 1, 2022	9,869	$	99	4,594		$	45	$	52,936	33	$	(512	)	$	27,782		$	80,350		$	36,458		$	116,808
Distributions to partners	—		—	—			—		—	—		—			—			—			(2,685	)		(2,685	)
Issuance of notes receivable from partners	—		—	—			—		—	—		—			—			—			—			—
Issuance of Class B shares	—		—	—			—		—	—		—			—			—			0			—
Repayment of notes receivable from partners	—		—	—			—		—	—		—			—			—			157			157
Equity-based compensation	—		—	—			—		—	—		—			—			—			228			228
Net Income	—		—	—			—		—	—		—			7,568			7,568			4,828			12,396
Deferred tax, net of amounts payable under tax receivable agreement	—		—	—			—		1	—		—			—			1			—			1
Accrued interest on notes receivable from partners	—		—	—			—		—	—		—			—			—			(1	)		(1	)
Share conversion	3		—	(3	)		—		24	—		—			—			24			(24	)		—
Dividends paid on Class A common stock - $0.17 per share	—		—	—			—		—	—		—			(1,681	)		(1,681	)		—			(1,681	)
March 31, 2022	9,872	$	99	4,591		$	45	$	52,961	33	$	(512	)	$	33,669		$	86,262		$	38,961		$	125,223

Balance at January 1, 2020	$	15,921
Additions to estimated contingent consideration		—
Payments of contingent consideration		(741	)
Non-cash changes in fair value of estimated contingent consideration		1,222
Balance at December 31, 2020		16,402
Additions to estimated contingent consideration		—
Payments of contingent consideration		(114	)
Non-cash changes in fair value of estimated contingent consideration		2,300
Balance at March 31, 2021		18,588
Additions to estimated contingent consideration		—
Payments of contingent consideration		(260	)
Non-cash changes in fair value of estimated contingent consideration		1,600
Balance at June 30, 2021	$	19,928
Additions to estimated contingent consideration		—
Payments of contingent consideration		(3,370	)
Non-cash changes in fair value of estimated contingent consideration		670
Balance at September 30, 2021	$	17,228

	September 30, 2021				December 31, 2020
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Hierarchy
Financial Assets:
Cash and cash equivalents	$	65,930	$	65,930	$	62,498	$	62,498		Level 1	(1)
Investments	$	53	$	53	$	914	$	914		N/A	(2)

Financial liabilities:
Borrowings under credit facility	$	9,900	$	9,900	$	12,600	$	12,600		Level 2	(3)


Remainder of 2022	$	1,931
2023		2,416
2024		2,289
2025		2,193
2026		1,832
Thereafter		12,619
Total	$	23,280

2021 (remainder of)	$	658
2022		2,575
2023		2,416
2024		2,289
2025		2,193
Thereafter		14,451
Total	$	24,582

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Operating Lease Cost	$	1,531	$	1,532	$	4,603	$	4,591
Financing Lease Cost:
Amortization of ROU assets		30		26		90		89
Interest on lease liabilities		3		3		8		7
Total		33		29		98		96

	Operating Leases		Non-cancellable Subleases			Operating Lease Liabilities
Remainder of 2021	$	1,627	$	(146	)	$	1,481
2022		6,377		(35	)		6,342
									Operating Leases		Non-cancellable Subleases			Operating Lease Liabilities
Remainder of 2022									$	4,805	$	(155	)	$	4,650
2023		5,928		(6	)		5,922			6,068		(6	)		6,062
2024		6,008		—			6,008			6,150		—			6,150
2025		5,933		—			5,933			6,078		—			6,078
2026										5,999		—			5,999
Thereafter		16,134		—			16,134			10,368		—			10,368
Total	$	42,007	$	(187	)	$	41,820		$	39,468	$	(161	)	$	39,307
Weighted-average remaining lease term – operating leases (months)							81.4								74.5
Weighted-average discount rate							4.3	%							4.2	%


	Future Minimum Lease Commitments
Remainder of 2022	$	78
2023		76
2024		43
2025		24
2026		2
Thereafter		—
Total	$	223
Weighted-average remaining lease term – finance leases (months)		31.2
Weighted-average discount rate		3.4	%


	Transaction	# of
	Date	Shares
Class A common stock outstanding - January 1, ~~2021~~2022			~~9,650,692~~9,869,101
Issuance of Class A common stock upon conversion of Class B units to Class A common stock	March ~~2021~~2022		~~7,605~~2,889
~~Issuance of Class A common stock upon vesting of restricted stock units~~	~~May 2021~~		~~856~~
Issuance of Class A common stock upon conversion of Class B units to Class A common stock	~~May 2021~~		~~4,743~~
Issuance of Class A common stock upon conversion of Class B units to Class A common stock	~~June 2021~~		~~5,864~~
Issuance of Class A common stock upon conversion of Class B units to Class A common stock	~~August 2021~~		~~10,651~~
~~Purchase of shares of Class A common stock of Silvercrest Asset Management Group Inc.~~	~~September 2021~~		~~(27,197~~	)
Class A common shares outstanding – ~~September 30, 2021~~March 31, 2022			~~9,653,214~~9,871,990


	Restricted Stock Units Granted
	Units			Fair Value per unit
Total granted at January 1, 2022		192,559		$10.18 – 15.96
Total granted at March 31, 2022		192,559		$10.18 – 15.96

Total granted at January 1, 2021		83,150		$10.18 – 14.54
Granted		21,598		13.89
Vested		(21,598	)		(13.89	)
Total granted at March 31, 2021		83,150		$10.18 – 14.54


	Non-Qualified Options Granted
	Units		Fair Value per unit
Total granted at January 1, 2022		252,904	$10.18 – 14.54
Total granted at March 31, 2022		252,904	$10.18 – 14.54

Total granted at January 1, 2021		252,904	$10.18 – 14.54
Total granted at March 31, 2021		252,904	$10.18 – 14.54

	Restricted Stock Units Granted
	~~Units~~			~~Fair Value per unit~~
~~Total granted at January 1, 2021~~		~~83,150~~		$	~~10.18 – 14.54~~
~~Granted~~		~~152,739~~			~~13.89 – 15.96~~
~~Vested~~		~~(43,330~~	)		~~10.18 – 14.61~~
~~Total granted at September 30, 2021~~		~~192,559~~		$	~~10.18 – 15.96~~

~~Total granted at January 1, 2020~~		~~37,234~~		$	~~13.19 – 14.54~~
~~Granted~~		~~57,358~~			~~10.18 – 11.83~~
~~Vested~~		~~(11,443~~	)		~~13.19 – 14.54~~
~~Total granted at September 30, 2020~~		~~83,149~~		$	~~10.18 – 14.54~~


	For the Three Months Ended March 31,
(in thousands except as indicated)	2022			2021
Revenue	$	33,510		$	31,237
Income before other income (expense), net	$	15,439		$	5,688
Net income	$	12,396		$	4,335
Net income margin		37.0	%		13.9	%
Net income attributable to Silvercrest	$	7,568		$	2,552
Adjusted EBITDA (1)	$	10,250		$	9,656
Adjusted EBITDA margin (2)		30.6	%		30.9	%
Assets under management at period end (billions)	$	31.2		$	29.0
Average assets under management (billions) (3)	$	31.8		$	28.4

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands except as indicated)	2021			2020			2021			2020
Revenue	$	33,461		$	27,182		$	97,799		$	79,568
Income before other income (expense), net	$	8,181		$	4,949		$	21,211		$	18,920
Net income	$	6,354		$	3,480		$	16,350		$	13,952
Net income margin		19.0	%		12.8	%		16.7	%		17.5	%
Net income attributable to Silvercrest	$	3,723		$	2,059		$	9,610		$	8,081
Adjusted EBITDA (1)	$	10,345		$	8,119		$	30,430		$	22,999
Adjusted EBITDA margin (2)		30.9	%		29.9	%		31.1	%		28.9	%
Assets under management at period end (billions)	$	31.0		$	24.4		$	31.0		$	24.4
Average assets under management (billions) (3)	$	31.0		$	24.1		$	29.4		$	24.8


	As of and for the Three Months Ended September 30,						As of and for the Nine Months Ended September 30,						As of and for the Three Months Ended March 31,
(in billions)	2021			2020			2021			2020			2022			2021
AUM concentrated in Discretionary Managed Accounts	$	22.0		$	17.5		$	22.0		$	17.5		$	23.3		$	21.4
Average AUM For Discretionary Managed Accounts	$	22.2		$	17.2		$	21.1		$	17.9		$	24.0		$	20.8
Discretionary Managed Accounts Revenue (in millions)	$	31.2		$	25.0		$	90.9		$	73.1		$	31.6		$	29.0
Percentage of management and advisory fees revenue		97	%		95	%		96	%		95	%		96	%		96	%


	For the Three Months Ended March 31,
(in thousands)	2022		2021
Cash compensation and benefits (1)	$	18,431	$	17,180
Non-cash equity-based compensation expense		228		469
Total compensation expense	$	18,659	$	17,649


	Assets Under Management
(in billions)	Discretionary			Non-Discretionary			Total
As of January 1, 2021	$	20.6		$	7.2		$	27.8
Gross client inflows		1.3			0.1			1.4
Gross client outflows		(1.6	)		—			(1.6	)
Net client flows		(0.3	)		0.1			(0.2	)
Market appreciation/(depreciation)		1.6			(0.2	)		1.4
As of March 31, 2021	$	21.9		$	7.1		$	29.0		(1)

As of January 1, 2022	$	25.1		$	7.2		$	32.3
Gross client inflows		1.4			0.1			1.5
Gross client outflows		(1.5	)		—			(1.5	)
Net client flows		(0.1	)		0.1			—
Market (depreciation)/appreciation		(1.2	)		0.1			(1.1	)
As of March 31, 2022	$	23.8		$	7.4		$	31.2		(1)

	Assets Under Management
				Non-
(in billions)	Discretionary			Discretionary			Total
As of June 30, 2020	$	17.3		$	6.5		$	23.8

Gross client inflows		0.8			0.1			0.9
Gross client outflows		(0.9	)		(0.1	)		(1.0	)
Net client flows		(0.1	)		—			(0.1	)

Market appreciation		0.7			—			0.7
As of September 30, 2020	$	17.9		$	6.5		$	24.4	(1)

As of June 30, 2021	$	22.9		$	8.1		$	31.0

Gross client inflows		1.1			0.1			1.2
Gross client outflows		(1.3	)		(0.1	)		(1.4	)
Net client flows		(0.2	)		—			(0.2	)

Market (depreciation)/appreciation		(0.2	)		0.4			0.2
As of September 30, 2021	$	22.5		$	8.5		$	31.0	(1)

As of January 1, 2020	$	18.8		$	6.3		$	25.1

Gross client inflows		2.6			0.3			2.9
Gross client outflows		(2.4	)		(0.2	)		(2.6	)
Net client flows		0.2			0.1			0.3

Market (depreciation)/appreciation		(1.1	)		0.1			(1.0	)
As of September 30, 2020	$	17.9		$	6.5		$	24.4	(1)

As of January 1, 2021	$	20.6		$	7.2		$	27.8

Gross client inflows		3.6			0.4			4.0
Gross client outflows		(4.2	)		(0.4	)		(4.6	)
Net client flows		(0.6	)		—			(0.6	)

Market appreciation		2.5			1.3			3.8
As of September 30, 2021	$	22.5		$	8.5		$	31.0	(1)

	For the Nine Months Ended September 30,
(in thousands)	2021		2020		2021 vs. 2020 ($)		2021 vs. 2020 (%)
Compensation and benefits (1)	$	54,882	$	44,217	$	10,665		24.1	%
General, administrative and other		21,706		16,431		5,275		32.1	%
Total expenses	$	76,588	$	60,648	$	15,940		26.3	%