Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 18, 2016 | Jun. 30, 2015 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | WESTWOOD HOLDINGS GROUP INC | ||
Entity Central Index Key | 1,165,002 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 380,863,476 | ||
Entity Common Stock, Shares Outstanding | 8,628,067 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 22,740 | $ 18,131 |
Accounts receivable | 19,618 | 14,540 |
Investments, at fair value | 72,320 | 79,620 |
Deferred income taxes | 0 | 4,060 |
Other current assets | 2,926 | 2,413 |
Total current assets | 117,604 | 118,764 |
Goodwill | 27,144 | 11,255 |
Deferred income taxes | 11,042 | 3,792 |
Intangible assets, net | 23,354 | 3,430 |
Property and equipment, net of accumulated depreciation of $3,687 and $2,720 | 2,192 | 2,633 |
Assets | 181,336 | 139,874 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 3,549 | 2,334 |
Dividends payable | 5,749 | 4,868 |
Compensation and benefits payable | 20,264 | 18,504 |
Contingent consideration | 9,023 | 0 |
Income taxes payable | 6,268 | 1,498 |
Total current liabilities | 44,853 | 27,204 |
Accrued dividends | 1,699 | 1,450 |
Deferred rent | 817 | 1,213 |
Total long-term liabilities | 2,516 | 2,663 |
Total liabilities | $ 47,369 | $ 29,867 |
Commitments and contingencies | ||
Stockholders’ Equity: | ||
Common stock, $0.01 par value, authorized 25,000,000 shares, issued 9,425,309 and outstanding 8,630,687 shares at December 31, 2015; issued 9,010,255 and outstanding 8,308,460 shares at December 31, 2014 | $ 94 | $ 90 |
Additional paid-in capital | 143,797 | 119,859 |
Treasury stock, at cost – 794,622 shares at December 31, 2015; 701,795 shares at December 31, 2014 | (34,910) | (29,028) |
Accumulated other comprehensive loss | (4,688) | (1,231) |
Retained earnings | 29,674 | 20,317 |
Total stockholders’ equity | 133,967 | 110,007 |
Total liabilities and stockholders’ equity | $ 181,336 | $ 139,874 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 3,687 | $ 2,720 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 9,425,309 | 9,010,255 |
Common stock, shares outstanding | 8,630,687 | 8,308,460 |
Treasury stock, shares | 794,622 | 701,795 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Advisory fees | |||
Asset-based | $ 99,275 | $ 88,473 | $ 70,027 |
Performance-based | 2,698 | 3,806 | 2,561 |
Trust fees | 28,795 | 20,525 | 18,367 |
Other revenues, net | 168 | 437 | 870 |
Total revenues | 130,936 | 113,241 | 91,825 |
Expenses: | |||
Employee compensation and benefits | 63,562 | 52,847 | 47,864 |
Sales and marketing | 1,839 | 1,673 | 1,252 |
Westwood mutual funds | 3,435 | 2,543 | 2,153 |
Information technology | 5,732 | 3,469 | 2,882 |
Professional services | 5,617 | 4,905 | 4,223 |
General and administrative | 8,531 | 5,768 | 5,266 |
Total expenses | 88,716 | 71,205 | 63,640 |
Income (loss) before income taxes | 42,220 | 42,036 | 28,185 |
Provision for income taxes | 15,115 | 14,787 | 10,348 |
Net income | 27,105 | 27,249 | 17,837 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | (3,457) | (974) | (287) |
Other comprehensive loss | (3,457) | (974) | (287) |
Total comprehensive income | $ 23,648 | $ 26,275 | $ 17,550 |
Earnings per share: | |||
Basic (in dollars per share) | $ 3.49 | $ 3.63 | $ 2.43 |
Diluted (in dollars per share) | $ 3.33 | $ 3.45 | $ 2.32 |
Weighted average shares outstanding: | |||
Basic (in shares) | 7,756,647 | 7,512,348 | 7,331,874 |
Diluted (in shares) | 8,149,399 | 7,906,545 | 7,692,756 |
CONSOLIDATED STATEMENTs OF STOC
CONSOLIDATED STATEMENTs OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Westwood Holdings Group, Inc. Common Stock, Par | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
BALANCE at Dec. 31, 2012 | $ 76,553 | $ 85 | $ 91,299 | $ (18,502) | $ 30 | $ 3,641 |
BALANCE, shares at Dec. 31, 2012 | 8,031,045 | |||||
Net income | 17,837 | 17,837 | ||||
Other comprehensive loss | (287) | (287) | ||||
Issuance of restricted stock, net of forfeitures | $ 3 | (3) | ||||
Issuance of restricted stock, net of forfeitures, shares | 252,015 | |||||
Stock based compensation expense | 11,679 | 11,679 | ||||
Reclassification of compensation liability to be paid in shares | 120 | 120 | ||||
Tax benefit related to stock based compensation | 758 | 758 | ||||
Dividends declared ($2.07 in 2015, $1.82 per share in 2014, $1.64 per share in 2013) | (13,330) | (13,330) | ||||
Stock options exercised | (878) | (878) | ||||
Stock options exercised, shares | (20,251) | |||||
Restricted stock returned for payment of taxes | (3,789) | (3,789) | ||||
Restricted stock returned for payment of taxes, shares | (86,392) | |||||
BALANCE at Dec. 31, 2013 | 88,663 | $ 88 | 103,853 | (23,169) | (257) | 8,148 |
BALANCE, shares at Dec. 31, 2013 | 8,176,417 | |||||
Net income | 27,249 | 27,249 | ||||
Other comprehensive loss | (974) | (974) | ||||
Issuance of restricted stock, net of forfeitures | $ 2 | (2) | ||||
Issuance of restricted stock, net of forfeitures, shares | 231,642 | |||||
Stock based compensation expense | 13,685 | 13,685 | ||||
Reclassification of compensation liability to be paid in shares | 170 | 170 | ||||
Tax benefit related to stock based compensation | 2,153 | 2,153 | ||||
Dividends declared ($2.07 in 2015, $1.82 per share in 2014, $1.64 per share in 2013) | (15,080) | (15,080) | ||||
Purchases of treasury stock | (669) | (669) | ||||
Purchases of treasury stock, shares | (11,476) | |||||
Restricted stock returned for payment of taxes | (5,190) | (5,190) | ||||
Restricted stock returned for payment of taxes, shares | (88,123) | |||||
BALANCE at Dec. 31, 2014 | $ 110,007 | $ 90 | 119,859 | (29,028) | (1,231) | 20,317 |
BALANCE, shares at Dec. 31, 2014 | 8,308,460 | 8,308,460 | ||||
Net income | $ 27,105 | |||||
Other comprehensive loss | (3,457) | |||||
Issuance of common stock for acquisition, shares | 109,712 | |||||
Issuance of common stock for acquisition | 5,292 | $ 1 | 5,291 | |||
Issuance of restricted stock, net of forfeitures | $ 3 | (3) | ||||
Issuance of restricted stock, net of forfeitures, shares | 305,342 | |||||
Stock based compensation expense | 17,574 | 17,574 | ||||
Reclassification of compensation liability to be paid in shares | 338 | 338 | ||||
Tax benefit related to stock based compensation | 1,831 | 1,831 | ||||
Dividends declared ($2.07 in 2015, $1.82 per share in 2014, $1.64 per share in 2013) | (17,748) | (17,748) | ||||
Purchases of treasury stock | (1,327) | (1,327) | ||||
Purchases of treasury stock, shares | (21,818) | |||||
Issuance of treasury stock under employee stock plans, shares | 20,375 | |||||
Issuance of treasury stock under employee stock plans | (1,093) | 1,093 | ||||
Restricted stock returned for payment of taxes | (5,648) | (5,648) | ||||
Restricted stock returned for payment of taxes, shares | (91,384) | |||||
BALANCE at Dec. 31, 2015 | $ 133,967 | $ 94 | $ 143,797 | $ (34,910) | $ (4,688) | $ 29,674 |
BALANCE, shares at Dec. 31, 2015 | 8,630,687 | 8,630,687 |
CONSOLIDATED STATEMENTS OF STO6
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared, per share | $ 2.07 | $ 1.82 | $ 1.64 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 27,105 | $ 27,249 | $ 17,837 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 1,050 | 579 | 410 |
Amortization of intangible assets | 1,546 | 359 | 359 |
Unrealized losses (gains) on trading investments | 613 | (75) | 325 |
Stock based compensation expense | 17,574 | 13,685 | 11,679 |
Deferred income taxes | (3,285) | (2,133) | (937) |
Excess tax benefits from stock based compensation | (1,455) | (1,850) | (696) |
Net sales (purchases) of investments – trading securities | 6,684 | (14,991) | (4,993) |
Other | (58) | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (5,192) | (369) | (5,702) |
Other current assets | (375) | 70 | (887) |
Accounts payable and accrued liabilities | 1,174 | 353 | 450 |
Compensation and benefits payable | 2,912 | 1,307 | 3,598 |
Income taxes payable | 6,890 | 2,406 | 160 |
Other liabilities | 25 | (67) | 102 |
Net cash provided by operating activities | 55,208 | 26,523 | 21,705 |
Cash flows from investing activities: | |||
Acquisition of Woodway, net of cash acquired | (24,133) | 0 | 0 |
Purchases of property, equipment and other | (951) | (478) | (1,201) |
Net cash used in investing activities | (25,084) | (478) | (1,201) |
Cash flows from financing activities: | |||
Purchases of treasury stock | (1,327) | (669) | (878) |
Restricted stock returned for payment of taxes | (5,648) | (5,190) | (3,789) |
Excess tax benefits from stock based compensation | 1,455 | 1,850 | 696 |
Cash dividends paid | (16,619) | (13,962) | (9,330) |
Net cash used in financing activities | (22,139) | (17,971) | (13,301) |
Effect of currency rate changes on cash | (3,376) | (807) | (156) |
Net increase (decrease) in cash and cash equivalents | 4,609 | 7,267 | 7,047 |
Cash and cash equivalents, beginning of year | 18,131 | 10,864 | 3,817 |
Cash and cash equivalents, end of year | 22,740 | 18,131 | 10,864 |
Supplemental cash flow information: | |||
Cash paid during the year for income taxes | 11,639 | 14,418 | 11,031 |
Common stock issued for acquisition | 5,292 | 0 | 0 |
Non-cash accrued contingent consideration | 9,023 | 0 | 0 |
Accrued dividends | $ 7,448 | $ 6,318 | $ 5,201 |
Description of the Business
Description of the Business | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE BUSINESS | DESCRIPTION OF THE BUSINESS: Westwood Holdings Group, Inc. (“Westwood”, “the Company”, we”, “us” or “our”) was incorporated under the laws of the State of Delaware on December 12, 2001 . Westwood manages investment assets and provides services for its clients through its subsidiaries, Westwood Management Corp. and Westwood Advisors, LLC (together, “Westwood Management”), Westwood Trust (“Westwood Trust”) and Westwood International Advisors Inc. (“Westwood International”). Westwood Management and Westwood International provide investment advisory services to institutional clients, a family of mutual funds called the Westwood Funds®, other mutual funds, an Ireland-domiciled fund organized pursuant to the European Union’s Undertakings for Collective Investment in Transferable Securities (“UCITS”), individuals and clients of Westwood Trust. Westwood Trust provides trust and custodial services and participation in self-sponsored common trust funds to institutions and high net worth individuals. Revenue is largely dependent on the total value and composition of assets under management (“AUM”). Accordingly, fluctuations in financial markets and in the composition of AUM impact our revenues and results of operations. Westwood Management is a registered investment adviser under the Investment Advisers Act of 1940. Westwood Trust is chartered and regulated by the Texas Department of Banking. Westwood International is registered as a portfolio manager and exempt market dealer with the Ontario Securities Commission and the Autorité des marchés financiers (“AMF”) in Québec. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Principles of consolidation The accompanying consolidated financial statements include the accounts of Westwood and its subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. We assess each legal entity that we manage to determine whether consolidation is appropriate at the onset of the relationship. We first determine whether the entity is a variable interest entity (“VIE”), or a voting interest entity (“VOE”), under U.S. generally accepted accounting principles (“GAAP”) and then whether we have a controlling financial interest in the entity. Assessing whether or not an entity is a VOE or VIE and if it requires consolidation involves judgment and analysis. Factors considered in this assessment include, but are not limited to, the legal organization of the entity, our equity ownership and contractual involvement with the entity and any related party or de facto agent implications of our involvement with the entity. We reconsider whether entities are a VIE or VOE whenever contractual arrangements change, the entity receives additional equity or returns equity to its investors or changes in facts and circumstances occur that change the investors’ ability to direct the activities of the entity. A VIE is an entity in which (i) the total equity investment at risk is not sufficient to enable the entity to finance its activities without subordinated financial support or (ii) the at-risk equity holders do not have the normal characteristics of a controlling financial interest. That is, the at-risk equity holders do not have the obligation to absorb losses, the right to receive residual returns and/or the right to direct the activities of the entity that most significantly impact the entity’s economic performance. An enterprise must consolidate all VIEs of which it is the primary beneficiary. We determine if a sponsored investment meets the definition of a VIE by considering whether the fund’s equity investment at risk is sufficient to finance its activities without additional subordinated financial support and whether the fund’s at-risk equity holders absorb any losses, have the right to receive residual returns and have the right to direct the activities of the entity most responsible for the entity’s economic performance. For VIEs that are investment companies, the primary beneficiary of the VIE is the party that absorbs a majority of the expected losses of the VIE, receives a majority of the expected residual returns of the VIE, or both. For VIEs that are not investment companies, the primary beneficiary of a VIE is defined as the party who, considering the involvement of related parties and de facto agents, has (i) the power to direct the activities of the VIE that most significantly affect its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. This evaluation is updated continuously. Westwood Investment Funds PLC (the “UCITS Fund”), which was authorized by the Central Bank of Ireland on June 18, 2013 pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, is an Ireland domiciled umbrella-type open-ended self-managed investment company. The UCITS Fund is an umbrella fund with segregated assets and liabilities between sub-funds, and notwithstanding the segregation of assets and liabilities within each sub-fund, the UCITS Fund is a single legal entity and no sub-fund constitutes a legal entity separate from the UCITS Fund. The base currency of the UCITS Fund is the British pound sterling. We determined that the UCITS Fund was a VIE as its at-risk equity holders do not have the ability to direct the activities of the UCITS Fund that most significantly impact the entity’s economic performance. The Company and its representatives have a majority control of the UCITS Fund’s Board of Directors and can influence the UCITS Fund’s management and affairs. The UCITS Fund’s Board of Directors maintains this control through its duties, which are stated in the UCITS Fund’s Memorandum, and Articles of Association, which have no expiration date. We concluded that the Company was not the primary beneficiary of the UCITS Fund because, even though it has the power to direct the activities of the UCITS Fund that most significantly impact the fund’s economic performance, it does not absorb a majority of the UCITS Fund’s expected losses and does not receive a majority of the UCITS Fund’s expected residual returns. Therefore, the results of the UCITS Fund are not included in the Company’s consolidated financial results. We have also evaluated all of our advisory relationships with the Westwood Funds®, collective investment trusts and limited liability companies and our relationship as sponsor of the common trust funds to determine whether or not we qualify as the primary beneficiary based on whether there is an obligation to absorb the majority of expected losses or a right to receive the majority of residual returns. Since all losses and returns are distributed to the shareholders of these VIEs, we are not the primary beneficiary and consequently these VIEs are not included in our consolidated financial statements. We have included the disclosures related to VIEs in Note 11 "Variable Interest Entities". A VOE is an entity that is outside the scope of the guidance for VIEs. Consolidation of a VOE is required when a reporting entity owns a controlling financial interest in a VOE. Ownership of a majority of the voting interests is the usual condition for a controlling financial interest. At December 31, 2015 , none of our sponsored investment entities were VOEs subject to this assessment by the Company. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of money market funds and other short-term, highly liquid investments with maturities of three months or less, other than pooled investment vehicles that are considered investments. We maintain some cash and cash equivalents balances with financial institutions that are in excess of Federal Deposit Insurance Corporation insurance limits . The Company has not experienced losses on uninsured cash accounts. Accounts Receivable Accounts receivable represents balances arising from services provided to customers and are recorded on an accrual basis, net of any allowance for doubtful accounts. Accounts receivable are written off when they are determined to be uncollectible. Any allowance for doubtful accounts is estimated based on the Company’s historical amounts written off, existing conditions in the industry, and the financial stability of the customer. The majority of our accounts receivable balances consist of advisory and trust fees receivable from customers that we believe and have experienced to be fully collectible. Accordingly our consolidated financial statements do not include an allowance for bad debt nor any bad debt expense. Investments Investments are classified as trading securities and are carried at quoted market values on the accompanying consolidated balance sheets. Net unrealized holding gains or losses on investments classified as trading securities are reflected as a component of other revenues. We measure realized gains and losses on investments using the specific identification method. Fair Value of Financial Instruments We determined the estimated fair values of our financial instruments using available information. The fair value amounts discussed in Notes 3 "Investments" and 4 "Fair Value of Financial Instruments" are not necessarily indicative of either the amounts realizable upon disposition of these instruments or our intent or ability to dispose of these assets. The estimated fair value of cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued liabilities, dividends payable, compensation and benefits payable and income taxes payable approximates their carrying value due to their short-term maturities. The carrying amount of investments designated as “trading” securities, primarily U.S. Government and Government agency obligations, money market funds, Westwood Funds® mutual funds and Westwood Trust common trust fund shares, equals fair value based on prices quoted in active markets and, with respect to funds, the reported net asset value of the shares held. Market values of our money market holdings generally do not fluctuate. Goodwill and Other Intangible Assets Goodwill represents the excess of the cost of acquired assets over the fair value of the underlying identifiable assets at the date of acquisition. Goodwill is not amortized but is tested at least annually for impairment. We test more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings or cash flows, or the development of a material adverse change in the business climate. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. We have identified two reporting units, which are consistent with our reporting segments: Advisory and Trust. The Company is not required to calculate the fair value of a reporting unit unless we determine that it is more likely than not that its fair value is less than the carrying amount. We assess goodwill for impairment using either a qualitative or quantitative assessment. The qualitative assessment includes consideration of the current trends in the industry in which we operate, macroeconomic conditions, recent financial performance of our reporting units and a market multiple approach valuation. In performing the annual impairment test during the third quarter, or more frequently when impairment indicators exist, and after assessing the qualitative factors, we may be required to utilize the two-step approach prescribed by ASC 350 “Goodwill and Other Intangible Assets” . We may also elect to skip the qualitative assessment and proceed directly to the quantitative analysis. The quantitative analysis requires a comparison of each reporting unit’s carrying value to the fair value of the respective unit. If the carrying value exceeds the fair value, a second step is performed to measure the amount of impairment loss, if any. The fair value of each reporting unit is estimated, entirely or predominantly, using a market multiple approach. During the third quarter of 2015 , we completed our annual goodwill impairment assessment and determined that no impairment loss was required. No impairments were recorded during any of the periods presented. Our intangible assets represent the acquisition date fair value of the acquired client relationships, trade names and non-compete agreements, as well as the cost of internally-developed software, each of which is reflected net of amortization. In valuing these assets, we made significant estimates regarding the useful lives, growth rates and potential attrition. We periodically review our intangible assets for events or circumstances that would indicate impairment. See Note 5 "Acquisitions, Goodwill and Other Intangible Assets." Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation of furniture and equipment is provided over the estimated useful lives of the assets (from 3 to 7 years ), and depreciation on leasehold improvements is provided over the lesser of the estimated useful life or lease term using the straight-line method. We capitalize leasehold improvements, furniture and fixtures, computer hardware and most office equipment purchases. Revenue Recognition Investment advisory and trust fees are recognized as services are provided. These fees are determined in accordance with contracts between our subsidiaries and their clients and are generally based on a percentage of assets under management. A limited number of our clients have contractual performance-based fee arrangements, which pay us an additional fee if we outperform a specified index over a specific period of time. We record revenue for performance-based fees at the end of the measurement period. Most advisory and trust fees are payable in advance or in arrears on a calendar quarterly basis. Advance payments are deferred and recognized over the periods services are performed. Since billing periods for most of our advance paying clients coincide with the calendar quarter to which payment relates, revenue is fully recognized within the quarter. Consequently no significant amount of deferred revenue is contained in our consolidated financial statements. Deferred revenue is shown on the consolidated balance sheets under the heading of “Accounts payable and accrued liabilities”. Other revenues generally consist of interest and investment income, which are recognized as earned. Stock-Based Compensation We account for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation . Under ASC 718, stock-based compensation expense reflects the fair value of stock-based awards measured at grant date, is recognized over the relevant service period, and adjusted each period for anticipated forfeitures. We expense the fair value of stock-based compensation awards granted to our employees and directors in our consolidated financial statements on a straight-line basis over the period that services are required to be provided in exchange for the award (“requisite service period”), which is typically the period over which the award vests. Stock-based compensation is recognized only for awards that vest, and our periodic accrual of compensation cost is based on the estimated number of awards expected to vest. We measure the fair value of compensation cost related to restricted stock awards based on the closing market price of our common stock on the grant date. For performance-based share awards, we assess actual performance versus the predetermined performance goals and record compensation expense once we conclude it is probable that we will meet the performance goals required to vest the applicable performance-based awards. We have issued restricted stock in accordance with our Third Amended and Restated Westwood Holdings Group, Inc. Stock Incentive Plan (the “Plan”). We apply judgment in developing an expectation of awards of restricted stock that may be forfeited. If actual experience differs significantly from these estimates, stock-based compensation expense and our results of operations could be materially affected. The Share Award Plan of Westwood Holdings Group, Inc. for Service Provided in Canada to its Subsidiaries (the “Canadian Plan”) provides compensation in the form of common stock for services performed by employees of Westwood International. We record compensation costs for these awards on a straight-line basis over the vesting period, once we determine it is probable that the award will be earned. Awards expected to be settled in shares are funded into a trust pursuant to an established Canadian employee benefit plan. Generally, the Canadian trust subsequently acquires Westwood common shares in market transactions and holds such shares until the shares are vested and distributed, or forfeited. Shares held in the trust are shown on our consolidated balance sheet as treasury shares. Until shares are acquired by the trust, we record compensation costs and measure the liability as a cash-based award, which is included in “Compensation and benefits payable” on our consolidated balance sheets. For the years ended December 31, 2015 , 2014 and 2013 , the compensation expense recorded for these awards was $145,000 , $359,000 and $344,000 , respectively. When the number of shares related to an award is determinable, the award becomes an equity award accounted for in a manner similar to restricted stock, which is described in Note 9 "Employee Benefits". Tax benefits realized upon the vesting of restricted shares that exceed the expense previously recognized for reporting purposes are recorded in stockholder’s equity and reflected as a financing activity in our Consolidated Statements of Cash Flows. If the tax benefit upon vesting is less than the expense previously recorded, the shortfall is recorded in stockholder’s equity. If the shortfall exceeds available windfall benefits in equity, they are recorded in our Consolidated Statements of Comprehensive Income and as an operating activity on our Consolidated Statements of Cash Flows. Currency Translation Assets and liabilities of Westwood International, our non-U.S. dollar functional currency subsidiary, are translated at exchange rates as of applicable reporting dates. Revenues and expenses are translated at average exchange rates during the periods indicated. The gains and losses resulting from translating non-U.S. dollar functional currency into U.S. dollars are recorded through other comprehensive income. Income Taxes We file a United States federal income tax return as a consolidated group for Westwood and its subsidiaries based in the US. We file a Canadian income tax return for Westwood International. Deferred income tax assets and liabilities are determined based on temporary differences between the financial statements and income tax bases of assets and liabilities as measured at enacted income tax rates. Deferred income tax expense is generally the result of changes in deferred tax assets and liabilities. Deferred taxes relate primarily to incentive compensation and stock-based compensation expense. We record net deferred tax assets to the extent we believe such assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event we were to determine that we would not be able to realize our deferred income tax assets in the future, we would record a valuation allowance. No valuation allowance has been recorded in our consolidated financial statements. We account for uncertain tax positions by recognizing the impact of a tax position in our consolidated financial statements when we believe it is more likely than not that the tax position would not be sustained upon examination by the appropriate tax authority, based on the merits of the position. We include penalties and interest on income-based taxes, if any, in the “General and administrative” line on our consolidated statements of comprehensive income. At December 31, 2015 , we had $1.6 million of unrecognized tax benefits accrued, net of $607,000 federal deferred tax assets, related to uncertain tax positions. At December 31, 2014 , the Company had not established any reserves for, nor recorded any unrecognized tax benefits related to, uncertain tax positions. See Note 7 "Income Taxes." Business Combinations In allocating the purchase price of a business combination, the Company records all assets acquired and liabilities assumed at fair value, with the excess of the purchase price over the aggregate fair values recorded as goodwill. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill. The Company determines the estimated fair values after review and consideration of relevant information, including discounted cash flows, quoted market prices and estimates made by management. The fair value assigned to identifiable intangible assets acquired is based on estimates and assumptions made by management at the time of the acquisition. The Company adjusts the preliminary purchase price allocation, as necessary, during the measurement period of up to one year after the acquisition closing date as it obtains more information as to facts and circumstances existing as of the acquisition date. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred. The acquired customer accounts, trade names and non-compete agreements are subject to fair value measurements based primarily on significant inputs not observable in the market and thus represent level 3 measurements. The valuation of an acquired customer list utilizes an income approach, which provides an estimate of the fair value of an asset based on discounted cash flows and management estimates, including the estimated growth associated with existing clients, market growth and client attrition. The valuation of acquired trade names uses a relief from royalty method in which the fair value of the intangible asset is estimated to be the present value of royalties saved because the Company owns the intangible asset. Revenue projections and estimated useful lives are used in estimating the fair value of the trade names. The non-compete agreements are calculated using the with-or-without method, which utilizes the probability of these employees competing with the Company and revenue projections to calculate the valuation of non-competition agreements. When an acquisition includes future contingent consideration on achieving certain annualized revenue from the post-closing acquired business over a specified time period, the Company estimates the fair value of the earn-out using overall revenue growth projections combined with existing customer base lost revenue projections, both discounted and probability-weighted. A liability is recorded for the estimated fair value of the contingent consideration on the acquisition date, and the fair value of the contingent consideration is remeasured at each subsequent reporting period with any change in fair value recognized as income or expense within the consolidated statement of comprehensive income. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , which resulted from a joint project by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards ("IFRS"). The issuance of a comprehensive and converged standard on revenue recognition is expected to improve the ability of financial statement users to understand and consistently analyze an entity’s revenue across industries, transactions, and geographies. The standard will require additional disclosures to help financial statement users better understand the nature, amount, timing, and potential uncertainty of the revenue being recognized. In August 2015, in order to amend the effective date of ASU 2014-09, the FASB issued ASU 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date. Under the amendment, the effective date of ASU 2014-09 has been extended by one year for all entities. For public entities, the ASU will be effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Retrospective application is required, with the entity either applying the change to each prior reporting period presented or applying the cumulative effect of each prior reporting period presented at the date of initial application. Early adoption is permitted based on the initial effective date of December 15, 2016. We are currently evaluating the impact that the application will have on our consolidated financial statements and disclosures and expect to adopt the new standard within the required time frame. In February 2015, the FASB issued ASU 2015-02, Consolidation – Amendments to the Consolidation Analysis . This amendment modifies the analysis required to evaluate whether certain legal entities should be consolidated, including variable interest entities. This amendment changes the evaluation of fee arrangements and related party transactions when determining whether to consolidate a variable interest entity. The amendment is effective for annual reporting periods beginning after December 15, 2016 and for interim periods within reporting periods beginning after December 15, 2017, although early adoption is permitted. We are currently evaluating the impact that the application of ASU 2015-02 will have on our consolidated financial statements and disclosures. In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software . This amendment provides guidance about whether a cloud computing arrangement includes a software license. The new guidance clarifies that software licenses included in a cloud computing software should be accounted for in the same manner as other software licenses. If the cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2015, with early adoption permitted. We have elected to early adopt this amendment in the current fiscal year, which did not have a material impact on our consolidated financial statements. In May 2015, the FASB issued ASU 2015-07, Fair Value Measurements – Disclosures for Certain Entities that Calculate Net Asset Value per Share . This amendment updates guidance intended to eliminate the diversity in practice surrounding how investments measured at net asset value under the practical expedient with future redemption dates have been categorized in the fair value hierarchy. Under the updated guidance, investments for which fair value is measured at net asset value per share using the practical expedient should no longer be categorized in the fair value hierarchy. The updated guidance requires retrospective adoption for all periods presented and is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. Except for the disclosure requirements, we do not expect the adoption of this guidance to impact our consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805) - Simplifying the Accounting for Measurement-Period Adjustments. The amendment applies to entities that have reported provisional amounts related to a business combination for which the accounting is incomplete by the end of the reporting period and have an adjustment to provisional amounts previously recognized during a later measurement period. Changes in provisional amounts recorded for acquired assets and liabilities are to be adjusted in the period the adjustment is known, with a corresponding adjustment booked to goodwill. The acquirer is no longer required to revise comparative information from prior years for the effect of changes in provisional amounts. For public business entities, the amendment is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, with early adoption permitted. We have elected to early adopt this amendment in the current fiscal year. This amendment may impact our disclosure of the Woodway acquisition, should we adjust the fair value of the acquired assets and liabilities during the year ended December 31, 2016. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes. The purpose of this amendment is to simplify the presentation of deferred taxes on the statement of financial position and further align the presentation of deferred taxes with IFRS. The amendment requires that deferred tax assets and liabilities be classified as noncurrent in the classified balance sheet, where before they were required to be classified as current and noncurrent based on their nature. This amendment applies to all entities with deferred taxes. The amendment may be applied prospectively or retrospectively. For public business entities, the amendment is affective for interim periods and fiscal years beginning after December 31, 2016, with early adoption permitted. We have elected to prospectively early adopt this amendment in the current fiscal year, and all deferred taxes are classified as noncurrent in our consolidated balance sheet at December 31, 2015. See further discussion in Note 7 "Income Taxes." |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS: Investments are presented below (in thousands). All investments are carried at fair value, and all investments are accounted for as trading securities. Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2015: U.S. Government and Government agency obligations $ 50,972 $ 15 $ (15 ) $ 50,972 Money market funds 9,179 — — 9,179 Equity funds 12,653 — (484 ) 12,169 Marketable securities $ 72,804 $ 15 $ (499 ) $ 72,320 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2014: U.S. Government and Government agency obligations $ 66,761 $ 20 $ (8 ) $ 66,773 Money market funds 8,250 — — 8,250 Equity funds 4,477 223 (103 ) 4,597 Marketable securities $ 79,488 $ 243 $ (111 ) $ 79,620 The following amounts, except for income tax amounts, are included in our consolidated statements of comprehensive income under the heading “Other revenues” for the years indicated (in thousands): 2015 2014 2013 Realized gains $ 283 $ 156 $ 629 Realized losses (43 ) (50 ) (4 ) Net realized gains $ 240 $ 106 $ 625 Income tax expense from gains $ 84 $ 37 $ 225 Interest income – trading $ 143 $ 51 $ 28 Dividend income $ 284 $ 212 $ 541 Unrealized gains/(losses) $ (613 ) $ 75 $ (325 ) As of December 31, 2015 , corporate funds totaling $8.7 million were invested in the Westwood Funds® and Westwood Common Trust Funds and corporate funds aggregating $2.0 million were invested in a UCITS fund. See Note 11 "Variable Interest Entities". |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS: ASC 820, Fair Value Measurements and Disclosures , defines fair value, establishes a framework for measuring fair value and requires additional disclosures regarding certain fair value measurements. ASC 820 establishes a three-tier hierarchy for measuring fair value as follows: • Level 1 – quoted market prices in active markets for identical assets and liabilities, • Level 2 – inputs other than quoted prices that are directly or indirectly observable • Level 3 – unobservable inputs where there is little or no market activity. The following table summarizes the values of our assets as of the dates indicated within the fair value hierarchy (in thousands). Level 1 Level 2 Level 3 Total As of December 31, 2015 Investments in trading securities $ 69,260 $ 3,060 $ — $ 72,320 Contingent consideration — — (9,023 ) (9,023 ) $ 69,260 $ 3,060 $ (9,023 ) $ 63,297 As of December 31, 2014 Investments in trading securities $ 77,327 $ 2,293 $ — $ 79,620 $ 77,327 $ 2,293 $ — $ 79,620 Investments categorized as level 2 assets consist of investments in common trust funds sponsored by Westwood Trust. Common trust funds are private investment vehicles comprised of commingled investments held in trusts that are valued using the Net Asset Value (“NAV”) calculated by us as administrator of the funds. The NAV is calculated using indirectly observed inputs, as the unit price is based on the market value of the underlying investments traded on an active market. We can make withdrawals from the common trust funds on a daily basis, as needed for liquidity, and there are no restrictions on redemption as of December 31, 2015 . Contingent consideration categorized as a level 3 liability is related to the acquisition of Woodway (see Note 5 “Acquisitions, Goodwill and Other Intangible Assets”). As of the acquisition date, the Company estimated that the Earn-Out Amount would be $9.1 million , based on then existing facts and circumstances. The fair value of contingent consideration is measured using the projected payment date, discount rates, probabilities of payment, and projected revenues. The projected contingent payment is discounted back to the current period using a discounted cash flow model. Projected revenues are based on the Company’s most recent internal operational budgets and long-range strategic plans. Increases or decreases in projected revenues, probabilities of payment, discount rates or projected payment dates may result in higher or lower fair value measurements. Fluctuations in any of the inputs may result in a significantly lower or higher fair value measurement. For periods subsequent to the initial measurement of the contingent consideration, changes in the fair value of the contingent consideration are recorded in Other revenues, net on the consolidated statements of comprehensive income. During the fourth quarter of 2015, the Company revised its estimate of the acquisition date Earn-Out Amount to $9.0 million and recorded $78,600 in other revenues. The following table represents the range of the unobservable inputs utilized in the fair value measurement of the contingent consideration classified as level 3: Valuation Technique Unobservable Input Range Weighted Average Rate Discounted Cash Flow Discount rate 6.0 % 6.0% AUM growth rate (7.5)% to 8.1% 0.9 % The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (in thousands): Contingent Consideration Beginning balance, December 31, 2014 $ — Acquisition of Woodway 9,102 Change in carrying value (79 ) Cash payments — Equity payments — Ending balance, December 31, 2015 $ 9,023 |
Acquisitions, Goodwill and Othe
Acquisitions, Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Acquisitions, Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS: Acquisition of Woodway Financial Advisors Westwood completed the acquisition of Woodway on April 1, 2015. The total Merger consideration consisted of (i) $30.6 million in cash and stock, as described below, and (ii) contingent consideration equal to the annualized revenue from the post-closing business of Woodway for the twelve-month period ending March 31, 2016 (the “Earn-Out Period”), adjusted for certain clients or accounts that have terminated, and capped at $15 million (the “Earn-Out Amount”). The Earn-Out Amount will be paid 54.84% in cash and 45.16% in shares of Westwood’s common stock, valued using the average closing price during the last 30 calendar days of the Earn-Out Period. In relation to the Merger, Westwood entered into employment agreements with certain Woodway employees, which, among other things, provided for specified compensation and benefits for the related employees. The Merger consideration of $39.7 million consisted of (i) closing date consideration of $25.3 million paid in cash and issuance of 109,712 shares of Westwood common stock, valued at $5.3 million (discounted from $6.7 million due to certain required holding periods), and (ii) contingent consideration of $9.1 million , based on estimates and assumptions on the closing date of the acquisition, to be paid no later than 75 calendar days after the last day of the Earn-Out Period. The estimated fair value of the Earn-Out Amount was determined by using overall revenue growth projections combined with existing customer base lost revenue projections, both discounted and probability-weighted. The fair value measurement of the Earn-Out Amount was based primarily on significant inputs not observable in the market and thus represents a level 3 measurement as defined in ASC 820. See further discussion in Note 4 "Fair Value of Financial Instruments." The acquisition of Woodway was accounted for using the acquisition method of accounting. Accordingly, the purchase price was allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values as of the acquisition date. As of December 31, 2015 , consideration of $39.7 million has been allocated using Woodway’s historical balance sheet at March 31, 2015 based on valuations of acquired assets and assumed liabilities in connection with the acquisition. The allocation of the purchase price is as follows (in thousands): Cash and cash equivalents $ 1,205 Accounts receivable 936 Other current assets 253 Goodwill (i) 15,889 Identifiable intangibles (ii) 21,334 Property and equipment 197 Accounts payable and accrued liabilities (61 ) Income tax payable (20 ) Purchase price $ 39,733 (i) The excess of the purchase price over the fair value amounts assigned to assets acquired and liabilities assumed represents the goodwill amount resulting from the acquisition. (ii) The fair value of the acquired identifiable intangibles consists of the following (in thousands, except useful lives): Intangible Asset Fair Value Estimated Useful Lives Client relationships $ 20,391 15 years Non-compete agreements 257 3 years Trade name 686 5 years At the time of the acquisition, the Company believed that its enhanced market position and future growth potential were the primary factors that contributed to a total purchase price that resulted in the recognition of goodwill. As of December 31, 2015 , $6.8 million of the goodwill arising from the acquisition is expected to be deductible for tax purposes. We incurred transaction costs of $1.1 million related to the Woodway acquisition, of which $732,000 and $392,000 are included in “Professional services” on our consolidated statements of comprehensive income for the years ended December 31, 2015 and 2014 , respectively. Our consolidated results for the year ended December 31, 2015 included Total revenues and Net income attributable to Woodway of $7.7 million and $2.2 million , respectively. Pro Forma Financial Information The following unaudited pro forma results of operations for the twelve months ended December 31, 2015 and 2014 assume that the Woodway acquisition had occurred on January 1, 2014, after giving effect to acquisition accounting adjustments relating to amortization of the valued intangible assets and to record additional compensation costs related to employment contracts entered into as a result of the acquisition. These unaudited pro forma results exclude one-time, non-recurring costs related to the acquisition, including $1.1 million of transaction costs. This unaudited pro forma information should not be relied upon as being necessarily indicative of the historical results that would have been obtained if the Merger had actually occurred on that date, nor of the results that may be obtained in the future. Year Ended December 31, (in thousands) 2015 2014 Total revenues $ 133,628 $ 123,729 Net income $ 28,080 $ 29,429 Goodwill Goodwill represents the excess of the cost of acquired assets over the fair value of the underlying identifiable assets at the date of acquisition. Changes in goodwill are as follows (in thousands): As of December 31, 2015 2014 Beginning balance $ 11,255 $ 11,255 Acquisition of Woodway (1) 15,889 — Ending balance $ 27,144 $ 11,255 (1) The $15.9 million of goodwill acquired through the acquisition of Woodway is entirely attributable to the Trust segment. Goodwill is not amortized but is tested for impairment at least annually. We completed our annual goodwill impairment assessment during the third quarter of 2015 and determined that no impairment loss was required. No impairments were recorded during the year ended December 31, 2015 , 2014 or 2013 . Other Intangible Assets Our intangible assets represent the acquisition date fair value of acquired client relationships, trade names, non-compete agreements and internally-developed software and are reflected net of amortization. In valuing these assets, we made significant estimates regarding their useful lives, growth rates and potential attrition. The following is a summary of intangible assets at December 31, 2015 and 2014 (in thousands, except years): Weighted Average Amortization Period (years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount 2015 Client relationships 14.8 $ 25,396 $ (2,954 ) $ 22,442 Trade names 4.2 942 (358 ) 584 Non-compete agreements 2.9 283 (91 ) 192 Internally developed software 7.0 136 — 136 $ 26,757 $ (3,403 ) $ 23,354 2014 Client relationships 14.2 $ 5,005 $ (1,575 ) $ 3,430 Trade names 2.0 256 (256 ) — Non-compete agreements 2.3 26 (26 ) — $ 5,287 $ (1,857 ) $ 3,430 Amortization expense, which is included in “General and administrative” expense on our consolidated statements of comprehensive income, was $1.5 million , $359,000 and $359,000 for the years ended December 31, 2015 , 2014 and 2013 , respectively. Estimated amortization expense for intangible assets over the next five years is as follows (in thousands): Estimated Amortization Expense For the year ending December 31, 2016 $ 1,960 2017 1,960 2018 1,896 2019 1,875 2020 1,760 |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS: Property and Equipment The following table reflects information about our property and equipment as of December 31, 2015 and 2014 (in thousands): As of December 31, 2015 2014 Leasehold improvements $ 1,728 $ 2,274 Furniture and fixtures 1,804 1,516 Computer hardware and office equipment 2,116 1,563 Construction in progress 231 — Accumulated depreciation (3,687 ) (2,720 ) Net property and equipment $ 2,192 $ 2,633 Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss were as follows (in thousands): As of December 31, 2015 2014 Foreign currency translation adjustment, net of tax of $102 and $127 $ (4,688 ) $ (1,231 ) Accumulated other comprehensive loss $ (4,688 ) $ (1,231 ) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES: Income Tax Provision Income (loss) before income taxes by jurisdiction is as follows (in thousands): Years ended December 31, 2015 2014 2013 United States $ 27,324 $ 36,104 $ 30,799 Canada 14,896 5,932 (2,614 ) Total $ 42,220 $ 42,036 $ 28,185 Income tax expense differs from the amount that would otherwise have been calculated by applying the U.S. Federal corporate tax rate of 35% to income before income taxes. The difference between the Federal corporate tax rate and the effective tax rate is comprised of the following (in thousands): Years ended December 31, 2015 2014 2013 Income tax provision computed at US federal statutory rate $ 14,777 35.0 % $ 14,712 35.0 % $ 9,864 35.0 % Canadian rate differential (1,287 ) (3.0 ) (520 ) (1.2 ) 222 0.7 Change in uncertain tax positions, net of federal benefit 1,059 2.5 — — — — State and local income taxes, net of federal benefit 465 1.1 442 1.1 386 1.4 Other, net 101 0.2 153 0.3 (124 ) (0.4 ) Total income tax expense $ 15,115 35.8 % $ 14,787 35.2 % $ 10,348 36.7 % Effective income tax rate 35.8 % 35.2 % 36.7 % We include penalties and interest on income-based taxes in the “General and administrative” line on our consolidated statements of comprehensive income. We recorded $119,000 and $16,000 of penalties and interest in 2015 and 2014, respectively. There were no penalties and interest in 2013. Income tax provision (benefit) as set forth in the consolidated statements of comprehensive income consisted of the following components (in thousands): Years ended December 31, 2015 2014 2013 Current taxes: US Federal $ 12,015 $ 16,230 $ 10,683 State and local 2,564 690 602 Foreign 3,821 — — Total 18,400 16,920 11,285 Deferred taxes: US Federal (3,331 ) (3,590 ) (240 ) State and local (156 ) (40 ) (5 ) Foreign 202 1,497 (692 ) Total (3,285 ) (2,133 ) (937 ) Total income tax expense $ 15,115 $ 14,787 $ 10,348 Deferred Income Taxes The tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities are presented below (in thousands): As of December 31, 2015 2014 Deferred tax assets: Share-based compensation expense $ 6,258 $ 5,210 Net operating loss — 166 Deferred rent 51 186 Compensation and benefits payable 5,222 3,280 Federal unrecognized tax benefit 607 — Other 166 112 Total deferred tax assets 12,304 8,954 Deferred tax liabilities: Property and equipment (233 ) (334 ) Intangibles (959 ) (645 ) Unrealized gains on investments (70 ) (123 ) Total deferred tax liabilities (1,262 ) (1,102 ) Net deferred tax assets $ 11,042 $ 7,852 Net deferred tax assets and liabilities are as follows (in thousands): As of December 31, 2015 2014 Net current deferred tax assets (1) $ — $ 6,268 Net current deferred tax liabilities (1) — (2,208 ) Total net current deferred tax assets (1) — 4,060 Net non-current deferred tax assets 12,304 4,782 Net non-current deferred tax liabilities (1,262 ) (990 ) Net non-current deferred tax assets reflected on the balance sheets 11,042 3,792 Total net deferred tax assets $ 11,042 $ 7,852 ________________ (1) We have elected to prospectively early adopt ASU 2015-17 in the current fiscal year. See further discussion in Note 2 "Summary of Significant Accounting Policies." The Company is subject to taxation in the United States and various state and foreign jurisdictions. As of December 31, 2015 , the Company’s 2012, 2013 and 2014 tax years are open for examination by the Internal Revenue Service, and various state and foreign jurisdiction tax years remain open to examination. We are not currently under audit by any taxing jurisdiction. We have not provided U.S. income taxes and foreign withholdings taxes on the undistributed earnings of our foreign subsidiary, Westwood International, because we intend to permanently reinvest such earnings outside the U.S.. If these foreign earnings were to be repatriated in the future, the related U.S. tax liability may be reduced by any foreign income taxes previously paid on these earnings. As of December 31, 2015, the cumulative amount of earnings upon which U.S. income taxes have not been provided is approximately $8 million , and the unrecognized deferred tax liability related to these earnings is approximately $600,000 . As of December 31, 2015, the Company's gross liability related to uncertain tax positions was $1.6 million . A number of years may elapse before an uncertain tax position is finally resolved. To the extent that the Company has favorable tax settlements, or determines that accrued amounts are no longer needed due to a lapse in the applicable statute of limitations or other changes in circumstances, such liabilities, as well as the related interest and penalties, would be reversed as a reduction of income tax expense, net of federal tax effects, in the period such determination is made. We had no liability for uncertain tax positions recorded during the years ended December 31, 2013 and 2014. A reconciliation of the change in recorded uncertain tax positions during the year ended December 31, 2015 is as follows (in thousands): Balance at January 1, 2015 $ — Additions for tax positions related to the current year 492 Additions for tax positions related to prior years 1,137 Balance at December 31, 2015 $ 1,629 Within the next twelve months, it is reasonably possible that the liability for uncertain tax positions could decrease by as much as $1.6 million as a result of settlements with certain taxing authorities |
Regulatory Capital Requirements
Regulatory Capital Requirements | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
REGULATORY CAPITAL REQUIREMENTS | REGULATORY CAPITAL REQUIREMENTS: Westwood Trust is subject to the capital requirements of the Texas Department of Banking and has a minimum capital requirement of $4.0 million . At December 31, 2015 , Westwood Trust had approximately $8.9 million in excess of its minimum capital requirement. Westwood Trust is limited under applicable Texas law in the payment of dividends of undivided profits, which is that part of equity capital equal to the balance of net profits, income, gains and losses since formation minus subsequent distributions to stockholders and transfers to surplus or capital under share dividends or appropriate Board resolutions. At the discretion of its Board of Directors, Westwood Trust has made quarterly and special dividend payments to us out of its undivided profits. Westwood International is subject to the working capital requirements of the Ontario Securities Commission, which requires that combined cash and receivables exceed current liabilities by at least $100,000 CDN. At December 31, 2015 Westwood International had combined cash and receivables that were $21.5 million CDN (or $15.5 million in U.S. Dollars using the exchange rate on December 31, 2015 ) in excess of its current liabilities, which satisfies this requirement. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EMPLOYEE BENEFITS | EMPLOYEE BENEFITS: Stock Based Compensation Restricted Stock Awards We have issued restricted shares to our employees and non-employee directors. The Plan reserves shares of Westwood common stock for issuance to eligible employees, directors and consultants of Westwood or its subsidiaries in the form of restricted stock and stock options. The total number of shares that may be issued under the Plan (including predecessor plans to the Plan) may not exceed 4,398,100 shares. In the event of a change in control of Westwood, the Plan contains provisions providing for the acceleration of the vesting of restricted stock. At December 31, 2015 , approximately 678,900 shares remain available for issuance under the Plan. Canadian Plan As discussed in Note 2, the Canadian Plan provides compensation in the form of common stock for services performed by employees of Westwood International. Under the Canadian Plan, no more than $10 million CDN (or $7.2 million in U.S. Dollars using the exchange rate on December 31, 2015 ) may be funded to the Plan Trustee to fund purchases of common stock with respect to awards granted under the Canadian Plan. At December 31, 2015 , approximately $4.9 million remains available for issuance under the Canadian Plan, or approximately 93,900 shares based on the closing share price of our stock of $52.09 as of the last business day of 2015 . During 2015, the trust formed pursuant to the Canadian Plan purchased in the open market 21,818 Westwood common shares for approximately $1.3 million. On December 15, 2015, 20,375 shares vested at a total fair value of $1.1 million . As of December 31, 2015 , the trust holds 33,174 shares of Westwood common stock. As of December 31, 2015 , unrecognized compensation cost related to restricted stock grants under the Canadian Plan totaled $854,000 , which we expect to recognize over a weighted-average period of 1.8 years . The following table presents the total stock-based compensation expense recorded and the total income tax benefit recognized for stock-based compensation arrangements for the years indicated (in thousands): For the years ended December 31, 2015 2014 2013 Service condition restricted stock expense $ 9,439 $ 7,580 $ 7,602 Performance-based restricted stock expense 7,403 5,718 3,842 Restricted stock expense under the Plan 16,842 13,298 11,444 Canadian Plan restricted stock expense 732 387 235 Total stock based compensation expense $ 17,574 $ 13,685 $ 11,679 Total income tax benefit recognized related to stock-based compensation $ 6,217 $ 5,764 $ 4,384 Restricted Stock Under the Plan, we have granted to employees and non-employee directors restricted stock subject to service conditions, and to certain key employees restricted stock subject to both service and performance conditions. We accrue dividends on unvested restricted stock, which are due and payable upon vesting of restricted stock. Accrued dividends coming due within the next twelve months are included in "Dividends payable" on the consolidated balance sheet, with the remaining noncurrent portion of accrued dividends included in "Accrued dividends" on the consolidated balance sheet. At December 31, 2015, we had recorded $5.7 million and $1.7 million in Dividends payable and Accrued dividends, respectively. At December 31, 2014, we had recorded $4.9 million and $1.5 million in Dividends payable and Accrued dividends, respectively. As of December 31, 2015 , there was approximately $22.3 million of unrecognized compensation cost for restricted stock grants under the Plan, which we expect to recognize over a weighted-average period of 2.5 years . In order to satisfy tax liabilities that employees will owe on their shares that vest, we may withhold a sufficient number of vested shares from employees on the date vesting occurs to cover minimum tax withholding requirements. We withheld 91,384 shares in 2015 for this purpose. Our two types of restricted stock grants under the Plan are discussed below. Restricted Stock Subject Only to a Service Condition For the years ended December 31, 2015 , 2014 and 2013 , we granted restricted stock to employees and non-employee directors. Employee shares generally vest over four years and Director shares vest over one year . We calculate compensation cost for restricted stock grants using the fair market value of our common stock at the date of grant, the number of shares issued, an adjustment for restrictions on dividends and an estimate of shares that will not vest due to forfeitures. This compensation cost is amortized on a straight-line basis over the applicable vesting period. The following table details the status and changes in our restricted stock grants that are subject only to a service condition for the year ended December 31, 2015 : Restricted shares subject only to a service condition: Number of Shares Weighted Average Grant Date Fair Value Non-vested, January 1, 2015 496,457 $ 48.14 Granted 309,932 61.42 Vested (186,330 ) 41.85 Forfeited (39,590 ) 55.38 Non-vested, December 31, 2015 580,469 $ 56.76 The following table shows the weighted-average grant date fair value for shares granted and the total fair value of shares vested during the years indicated: Years ended December 31, Restricted shares subject only to a service condition: 2015 2014 2013 Weighted-average grant date fair value $ 61.42 $ 58.70 $ 43.68 Fair value of shares vested (in thousands) $ 7,797 $ 7,236 $ 7,568 Restricted Stock Subject to Service and Performance Conditions Under the Plan, certain key employees were provided agreements for grants of restricted shares that vest over a five -year period subject to achieving annual performance goals established by the Compensation Committee of Westwood’s Board of Directors. Each year the Compensation Committee establishes a specific goal for that year’s vesting of the restricted shares, which historically has been based upon Westwood’s adjusted pre-tax income, as defined. The date that the Compensation Committee establishes the annual goal is considered to be the grant date and the fair value measurement date to determine expense on the shares that are likely to vest. The vesting period ends when the Compensation Committee formally approves the performance-based restricted stock vesting based on the final calculation of adjusted pre-tax income as derived from the Company’s audited financial statements. If a portion of the performance-based restricted shares does not vest, no compensation expense is recognized for that portion and any previously recognized compensation expense related to shares that do not vest is reversed. In March 2015 , the Compensation Committee established the 2015 goal as adjusted pre-tax income of at least $46 million , representing a five-year compound annual growth rate of 10% over annual adjusted pre-tax income recorded in 2009. Adjusted pre-tax income is determined based on our audited financial statements and is equal to income before income taxes increased by expenses incurred for the year for (i) incentive compensation for all officers and employees, (ii) performance-based restricted stock awards, and (iii) mutual fund share incentive awards, excluding start-up, non-recurring, and similar expense items, at the Committee’s discretion. In the first quarter of 2015 , we concluded that it was probable that we would meet the performance goals required to vest the applicable percentage of the performance-based restricted shares this year and began recording expense related to those shares. Restricted shares subject to service and performance conditions: Number of Shares Weighted Average Grant Date Fair Value Non-vested, January 1, 2015 101,313 $ 58.59 Granted 101,313 61.29 Vested (101,313 ) 58.59 Forfeited — — Non-vested, December 31, 2015 101,313 $ 61.29 The following table shows the weighted-average grant date fair value for shares granted and the total fair value of shares vested during the years indicated: Years ended December 31, Restricted shares subject to service and performance conditions: 2015 2014 2013 Weighted-average grant date fair value $ 61.29 $ 58.59 $ 44.55 Fair value of shares vested (in thousands) $ 5,936 $ 4,143 $ 2,948 The above amounts as of December 31, 2015 do not include 118,939 non-vested restricted shares that potentially vest over performance years subsequent to 2015 , as the annual performance goals for those years have not been set by the Compensation Committee and therefore no grant date has been established. Deferred Share Units We have a deferred share unit (“DSU”) plan for employees of Westwood International. A DSU is an award linked to the value of Westwood’s common stock and is represented by a notional credit to a participant account. The value of a DSU is initially equal to the value of a share of our common stock. DSUs vest 20% , 40% , 60% , and 80% after two, three, four and five years of service, respectively. DSUs become fully vested after six years of service and the liability for these units is settled in cash upon termination of the participant’s service. We record expense for DSUs based on the number of units vested on a straight line basis, which may increase or decrease based on changes in the price of our common shares, and will increase for additional units received from dividends declared on our shares. As of December 31, 2015 , we had an accrued liability of $174,000 for 5,822 deferred share units related to the 2012, 2013 and 2014 awards issued in 2013, 2014 and 2015, respectively, which is based on the $52.09 per share closing price of our common stock on the last trading day of the year ended December 31, 2015 . Mutual Fund Share Incentive Awards Each year we grant mutual fund incentive awards to certain employees based on our mutual funds achieving certain performance goals. Awards granted are notionally credited to a participant account maintained by us that contains a number of mutual fund shares equal to the award amount divided by the net closing value of a fund share on the date the amount is credited to the account. These awards vest after approximately one year of service following the year in which the participant earns the award. We begin accruing a liability for mutual fund incentive awards when we determine it is probable that the award will be earned and record expense for these awards over the service period of the award, which is approximately two years. During the year in which the amount of the award is determined, we record expense based on the expected value of the award. After the award is earned, we record expense based on the value of the shares awarded and the percentage of the vesting period that has transpired. Our liability under these awards may increase or decrease based on changes in the value of the mutual fund shares awarded, including reinvested income from the mutual funds during the vesting period. Upon vesting, participants receive the value of the mutual fund share awards adjusted for earnings or losses attributable to the underlying mutual funds. For the years ended December 31, 2015 , 2014 , and 2013 , we recorded expense of $1.2 million , $863,000 and $1.8 million , respectively, related to mutual fund share incentive awards. As of December 31, 2015 and 2014 , we had an accrued liability of $2.0 million and $844,000 , respectively, related to mutual fund incentive awards. Benefit Plans Westwood has a defined contribution 401(k) and profit-sharing plan that was adopted in July 2002 and covers substantially all of our U.S. employees. Discretionary employer profit-sharing contributions become fully vested after six years of service by the participant. For the 401(k) portion of the plan, Westwood provides a match of up to 6% of eligible compensation. These 401(k) matching contributions vest immediately. The following table displays our profit-sharing and 401(k) contributions for the periods presented (in thousands): Years ended December 31, 2015 2014 2013 Profit-sharing contributions $ 965 $ 816 $ 674 401(k) matching contributions 1,319 928 871 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE: Basic earnings per common share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding. Diluted EPS is computed based on the weighted average shares of common stock outstanding plus the effect of any dilutive shares of restricted stock granted to employees and non-employee directors. There were 323 and 5,993 anti-dilutive restricted shares as of December 31, 2015 and 2014 , respectively. There were no anti-dilutive restricted shares as of December 31, 2013 . The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share amounts): Years ended December 31, 2015 2014 2013 Net income $ 27,105 $ 27,249 $ 17,837 Weighted average shares outstanding – basic 7,756,647 7,512,348 7,331,874 Dilutive potential shares from unvested restricted shares 350,755 394,197 360,882 Dilutive potential shares from contingent consideration 41,997 — — Weighted average shares outstanding – diluted 8,149,399 7,906,545 7,692,756 Earnings per share: Basic $ 3.49 $ 3.63 $ 2.43 Diluted $ 3.33 $ 3.45 $ 2.32 |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2015 | |
Variable Interest Entities [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES: Westwood Trust sponsors common trust funds (“CTFs”) for its clients. These funds allow clients to commingle assets to achieve economies of scale. Westwood Management provides investment advisory services to the Westwood Funds®, a family of mutual funds, and two collective investment trusts (“CITs”). Some clients of Westwood Management hold their investments in ten limited liability companies (“LLCs”). The CTFs, Westwood Funds®, CITs and LLCs (“Westwood VIEs”) are considered VIEs because our clients, who hold the equity at risk, do not have direct or indirect ability through voting or similar rights to make decisions about the funds that may have a significant effect on their economic performance. We receive fees for managing assets in these entities commensurate with market rates. We evaluate all of our advisory relationships and CTFs to determine whether or not we qualify as the primary beneficiary based on whether there is an obligation to absorb the majority of the expected losses or a right to receive the majority of the expected residual returns or both. Since all losses and returns are distributed to the shareholders of the Westwood VIEs, we are not the primary beneficiary and consequently, the Westwood VIEs are not consolidated into our financial statements. In May 2015, the Company provided seed investments of $5.4 million for two new Westwood mutual funds. In both December 2015 and January 2014, the Company provided seed investments of $2.0 million to two common trust funds. In October 2014, the Company provided €1.6 million , or approximately $2.0 million , to the UCITS Fund. These seed investments were provided for the sole purpose of showing economic substance needed to establish the funds or sub-funds. The corporate capital invested in these funds is included in “Investments, at fair value” on our consolidated balance sheet at December 31, 2015 . Otherwise, we have not provided any financial support that we were not previously contractually obligated to provide and there are no arrangements that would require us to provide additional financial support to any of these variable interest entities. Our investments in the Westwood Funds®, the UCITS Fund, and the CTFs are accounted for as investments in accordance with our other investments described in Note 3 "Investments". We recognized fee revenue from the Westwood VIEs of approximately $56.4 million , $48.2 million and $36.2 million for the twelve months ended December 31, 2015 , 2014 and 2013 , respectively. The following table displays the assets under management, amount of corporate money invested that are included in “Investments, at fair value” on the consolidated balance sheets, and the risk of loss in each vehicle (in millions): As of December 31, 2015 Assets Under Management Corporate Investment Amount at Risk VIEs: Westwood Funds® $ 3,617 $ 6 $ 6 Common Trust Funds 2,885 3 3 Collective Investment Trusts 284 — — LLCs 133 — — UCITS Fund 615 2 2 All other assets: Private Wealth 2,375 Institutional 10,853 Total AUM $ 20,762 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS: Some of our directors, executive officers and their affiliates invest their personal funds directly in trust accounts that we manage. There were no amounts due from these accounts as of December 31, 2015 and 2014 . For the years ended December 31, 2015 , 2014 and 2013 , we recorded trust fees from these accounts of $454,000 , $264,000 , and $278,000 , respectively. The Company engages in transactions with its affiliates in the ordinary course of business. Westwood International and Westwood Management provide investment advisory services to the UCITS Fund. Certain members of the Company’s management and board of directors serve on the board of directors of the UCITS Fund, which began operations in August 2013. Under the terms of the investment advisory agreements, the Company earns quarterly fees paid by either clients of the UCITS Fund or directly by the UCITS Fund. The fees are based on negotiated fee schedules applied to AUM. These fees are commensurate with market rates and are negotiated and contracted at arm’s length. For the years ended December 31, 2015 and 2014, we recorded fees from the UCITS Fund of $1.3 million and $1.1 million , respectively, which are included in “Asset-based advisory fees” on our consolidated statement of comprehensive income. As of December 31, 2015 and 2014, $96,000 and $256,000 of these fees were unpaid and included in “Accounts receivable” on our consolidated balance sheet, respectively. For the year ended December 31, 2013, we did not earn or receive any fees from the UCITS Fund. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES: Leases We lease our offices under non-cancelable operating lease agreements with expiration dates that run through 2026 . Rental expense for facilities and equipment leases for years ended December 31, 2015 , 2014 and 2013 aggregated approximately $2.0 million , $1.5 million and $1.6 million , respectively, and is included in general and administrative and information technology expenses in the accompanying consolidated statements of comprehensive income. At December 31, 2015 , the future contractual rental payments for noncancelable operating leases for each of the following five years and thereafter are as follows (in thousands): Year ending: 2016 $ 2,275 2017 1,989 2018 1,812 2019 1,373 2020 1,310 Thereafter 6,800 Total payments due $ 15,559 Litigation On August 3, 2012, AGF Management Limited and AGF Investments Inc. (together “AGF”) filed a lawsuit in the Ontario Superior Court of Justice against Westwood, certain Westwood employees and Warren International, LLC, an executive recruiting firm. The action relates to the hiring of certain members of Westwood’s global and emerging markets investment team previously employed by AGF. AGF is alleging that the former employees breached certain obligations when they resigned from AGF and that Westwood and Warren induced such breaches. AGF is seeking an unspecified amount of damages and punitive damages of $10 million (CAD) in the lawsuit. On November 5, 2012, Westwood issued a response to AGF’s lawsuit with a counterclaim against AGF for defamation. Westwood is seeking $1 million (CAD) in general damages, $10 million (CAD) in special damages, $1 million (CAD) in punitive damages, and costs. On November 6, 2012, AGF filed a second lawsuit against Westwood, Westwood Management and an employee of a Westwood subsidiary , alleging that the employee made defamatory statements about AGF. In this second lawsuit, AGF is seeking $5 million (CAD) in general damages, $1 million (CAD) per defendant in punitive damages, unspecified special damages, interest and costs. The pleadings phase was completed in 2013, and we are currently in the discovery phase. While we intend to vigorously defend both actions and pursue our counterclaims, we are currently unable to estimate the ultimate aggregate amount of monetary gain, loss or financial impact of these actions and counterclaims. Defending these actions and pursuing these counterclaims may be expensive for us and time consuming for our personnel. While we do not currently believe these proceedings will have a material impact, adverse resolution of these actions and counterclaims could have a material adverse effect on our business, financial condition or results of operations. Our policy is to not accrue legal fees and directly related costs as part of potential loss contingencies. We have agreed with our Directors & Officers insurance provider that 50% of the defense costs related to both AGF claims, excluding Westwood’s counterclaim against AGF, will be covered by insurance. We expense legal fees and directly-related costs as they are incurred. We received insurance proceeds of $714,000 and $379,000 during 2015 and 2014, respectively, and had recorded a receivable of $240,000 and $210,000 as of December 31, 2015 and 2014, respectively, which represented our minimum estimate of related incurred expenses that we expect to recover under our insurance policies. This receivable is part of “Other current assets” on our consolidated balance sheets. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING: We operate two segments: Advisory and Trust. These segments are managed separately based on the types of products and services offered and their related client bases. The Company’s segment information is prepared on the same basis that management reviews the financial information for operational decision-making purposes. Our Chief Operating Decision Maker evaluates the performance of our segments based primarily on fee revenues and economic earnings. Westwood Holdings Group, Inc., the parent company of Advisory and Trust, does not have revenues and is the entity in which we record typical holding company expenses including employee compensation and benefits for holding company employees, directors’ fees and investor relations costs. All segment accounting policies are the same as those described in the summary of significant accounting policies. Intersegment balances that eliminate in consolidation have been applied to the appropriate segment. Advisory Our Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals and the Westwood Funds®, as well as investment subadvisory services to mutual funds and our Trust segment. Westwood Management and Westwood International, which provide investment advisory services to clients of similar type, are included in our Advisory segment, along with Westwood Advisors, LLC. Trust Westwood Trust provides trust and custodial services to its clients and to our Advisory segment and sponsors common trust funds to institutions and high net worth individuals. (in thousands) Advisory Trust Westwood Holdings Eliminations Consolidated Year Ended December 31, 2015 Revenues: Net fee revenues from external sources $ 101,973 $ 28,795 $ — $ — $ 130,768 Net intersegment revenues 19,001 — — (19,001 ) — Net interest and dividend revenue 425 1 — — 426 Other revenue (341 ) 83 — — (258 ) Total revenues 121,058 28,879 — (19,001 ) 130,936 Expenses: Depreciation and amortization 773 1,724 99 — 2,596 Other operating expenses 63,658 25,882 15,581 (19,001 ) 86,120 Total expenses 64,431 27,606 15,680 (19,001 ) 88,716 Income (loss) before income taxes 56,627 1,273 (15,680 ) — 42,220 Income tax expense (benefit) 19,330 517 (4,732 ) — 15,115 Net income $ 37,297 $ 756 $ (10,948 ) $ — $ 27,105 Add: Restricted stock expense $ 11,877 $ 2,613 $ 3,084 $ — $ 17,574 Intangible amortization 161 1,385 — — 1,546 Deferred taxes on goodwill 38 233 — 271 Economic Earnings $ 49,373 $ 4,987 $ (7,864 ) $ — $ 46,496 Segment assets $ 183,004 $ 60,459 $ 8,816 $ (70,943 ) $ 181,336 Segment goodwill $ 5,219 $ 21,925 $ — $ — $ 27,144 Expenditures for long-lived assets $ 369 $ 180 $ 267 $ 815 Year Ended December 31, 2014 Revenues: Net fee revenues from external sources $ 92,279 $ 20,525 $ — $ — $ 112,804 Net intersegment revenues 13,527 — — (13,527 ) — Net interest and dividend revenue 261 2 — — 263 Other revenue 173 1 — — 174 Total revenues 106,240 20,528 — (13,527 ) 113,241 Expenses: Depreciation and amortization 603 302 33 — 938 Other operating expenses 51,265 19,867 12,662 (13,527 ) 70,267 Total expenses 51,868 20,169 12,695 (13,527 ) 71,205 Income (loss) before income taxes 54,372 359 (12,695 ) — 42,036 Income tax expense (benefit) 19,057 132 (4,402 ) — 14,787 Net income $ 35,315 $ 227 $ (8,293 ) $ — $ 27,249 Add: Restricted stock expense $ 9,074 $ 1,847 $ 2,764 $ — $ 13,685 Intangible amortization 161 198 — — 359 Deferred taxes on goodwill 38 114 — — 152 Economic Earnings $ 44,588 $ 2,386 $ (5,529 ) $ — $ 41,445 Segment assets $ 144,385 $ 18,133 $ 10,435 $ (33,079 ) $ 139,874 Segment goodwill $ 5,219 $ 6,036 $ — $ — $ 11,255 Expenditures for long-lived assets $ 226 $ 29 $ 223 $ — $ 478 Year Ended December 31, 2013 Revenues: Net fee revenues from external sources $ 72,588 $ 18,367 $ — $ — $ 90,955 Net intersegment revenues 10,402 14 — (10,416 ) — Net interest and dividend revenue 568 1 — — 569 Other revenue 301 — — — 301 Total revenues 83,859 18,382 — (10,416 ) 91,825 Expenses: Depreciation and amortization 468 301 — — 769 Other operating expenses 46,545 16,943 9,799 (10,416 ) 62,871 Total expenses 47,013 17,244 9,799 (10,416 ) 63,640 Income (loss) before income taxes 36,846 1,138 (9,799 ) — 28,185 Income tax expense (benefit) 13,738 408 (3,798 ) — 10,348 Net income $ 23,108 $ 730 $ (6,001 ) $ — $ 17,837 Add: Restricted stock expense $ 7,586 $ 1,803 $ 2,290 $ — $ 11,679 Intangible amortization 161 198 — — 359 Deferred taxes on goodwill 38 114 — — 152 Economic Earnings $ 30,893 $ 2,845 $ (3,711 ) $ — $ 30,027 Segment assets $ 114,871 $ 14,190 $ 6,354 $ (19,365 ) $ 116,050 Segment goodwill $ 5,219 $ 6,036 $ — $ — $ 11,255 Expenditures for long-lived assets $ 962 $ 239 $ — $ — $ 1,201 We are providing a performance measure that we refer to as Economic Earnings. Both our management and Board of Directors review Economic Earnings to evaluate our ongoing performance, allocate resources and review our dividend policy. We also believe that this performance measure is useful for management and investors when evaluating our underlying operating and financial performance and our available resources. In calculating Economic Earnings, we add to net income the non-cash expense associated with equity-based compensation awards of restricted stock, amortization of intangible assets and the deferred taxes related to the tax-basis amortization of goodwill. Although depreciation on property and equipment is a non-cash expense, we do not add it back when calculating Economic Earnings because depreciation charges represent a decline in the value of the related assets that will ultimately require replacement. The following table provides a reconciliation of net income to Economic Earnings (in thousands, except per share and share amounts): For the years ended December 31, 2015 2014 2013 Net Income $ 27,105 $ 27,249 $ 17,837 Add: Restricted stock expense 17,574 13,685 11,679 Add: Intangible amortization 1,546 359 359 Add: Tax benefit from goodwill amortization 271 152 152 Economic Earnings $ 46,496 $ 41,445 $ 30,027 Geographical information Years ended December 31, (in thousands) 2015 2014 2013 Revenues by geographic location of client: U.S. $ 109,816 $ 94,955 $ 83,622 Canada 9,238 8,635 5,567 Europe 6,019 8,146 1,843 Asia 4,538 21 — Australia 1,325 1,484 793 Total $ 130,936 $ 113,241 $ 91,825 As of December 31, (in thousands) 2015 2014 Property and equipment, net, by geographic area: U.S. $ 1,806 $ 2,057 Canada 386 576 Total $ 2,192 $ 2,633 |
Concentration
Concentration | 12 Months Ended |
Dec. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION | CONCENTRATION: For each of the years ended December 31, 2015 , 2014 and 2013 , our ten largest clients accounted for over 20% of our fee revenue. No single customer accounted for 10% or more of our fee revenues in any of these years. Years ended December 31, (in thousands) 2015 2014 2013 Advisory fees from Westwood Management’s largest client: Asset-based fees $ 2,109 $ 2,183 $ 1,729 Performance-based fees 2,206 3,806 2,561 Percent of fee revenue 3.3 % 5.3 % 4.7 % |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS: Dividends Declared On February 3, 2016 , the Board of Directors declared a quarterly cash dividend of $0.57 per share on common stock payable on April 1, 2016 to stockholders of record on March 11, 2016 . Restricted Stock Grants On February 23, 2016 , we issued 248,436 shares of restricted stock to employees. On February 23, 2016 , shares of our stock closed at a price of $47.52 per share. The shares are subject to vesting conditions described in Note 9 "Employee Benefits" of these consolidated financial statements. Share Repurchases On July 20, 2012, our Board of Directors authorized management to repurchase up to $10 million of our outstanding common stock on the open market or in privately negotiated transactions. The share repurchase program has no expiration date and may be discontinued at any time by the Board of Directors. As of December 31, 2015, there had been no repurchases of our common stock under this plan, and $10 million remained available for repurchase. Between January 1, 2016 and February 25, 2016, the Company repurchased 74,121 shares of our common stock at an average price of $ 46.93 , including commissions, under our share repurchase program. |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (Unaudited) | QUARTERLY FINANCIAL DATA (Unaudited): The following is a summary of unaudited quarterly results of operations for the years ended December 31, 2015 and 2014 (in thousands, except per share amounts): Quarter First Second Third Fourth 2015 Revenues $ 29,608 $ 37,311 $ 32,451 $ 31,566 Income before income taxes 8,378 14,752 10,502 8,588 Net income 5,610 9,795 7,013 4,687 Basic earnings per common share 0.74 1.25 0.90 0.60 Diluted earnings per common share 0.71 1.23 0.87 0.58 2014 Revenues $ 25,949 $ 30,905 $ 28,122 $ 28,265 Income before income taxes 8,613 13,356 10,592 9,475 Net income 5,562 8,591 7,118 5,978 Basic earnings per common share 0.74 1.14 0.95 0.79 Diluted earnings per common share 0.72 1.12 0.92 0.77 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Principles of consolidation | Principles of consolidation The accompanying consolidated financial statements include the accounts of Westwood and its subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. We assess each legal entity that we manage to determine whether consolidation is appropriate at the onset of the relationship. We first determine whether the entity is a variable interest entity (“VIE”), or a voting interest entity (“VOE”), under U.S. generally accepted accounting principles (“GAAP”) and then whether we have a controlling financial interest in the entity. Assessing whether or not an entity is a VOE or VIE and if it requires consolidation involves judgment and analysis. Factors considered in this assessment include, but are not limited to, the legal organization of the entity, our equity ownership and contractual involvement with the entity and any related party or de facto agent implications of our involvement with the entity. We reconsider whether entities are a VIE or VOE whenever contractual arrangements change, the entity receives additional equity or returns equity to its investors or changes in facts and circumstances occur that change the investors’ ability to direct the activities of the entity. A VIE is an entity in which (i) the total equity investment at risk is not sufficient to enable the entity to finance its activities without subordinated financial support or (ii) the at-risk equity holders do not have the normal characteristics of a controlling financial interest. That is, the at-risk equity holders do not have the obligation to absorb losses, the right to receive residual returns and/or the right to direct the activities of the entity that most significantly impact the entity’s economic performance. An enterprise must consolidate all VIEs of which it is the primary beneficiary. We determine if a sponsored investment meets the definition of a VIE by considering whether the fund’s equity investment at risk is sufficient to finance its activities without additional subordinated financial support and whether the fund’s at-risk equity holders absorb any losses, have the right to receive residual returns and have the right to direct the activities of the entity most responsible for the entity’s economic performance. For VIEs that are investment companies, the primary beneficiary of the VIE is the party that absorbs a majority of the expected losses of the VIE, receives a majority of the expected residual returns of the VIE, or both. For VIEs that are not investment companies, the primary beneficiary of a VIE is defined as the party who, considering the involvement of related parties and de facto agents, has (i) the power to direct the activities of the VIE that most significantly affect its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. This evaluation is updated continuously. Westwood Investment Funds PLC (the “UCITS Fund”), which was authorized by the Central Bank of Ireland on June 18, 2013 pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, is an Ireland domiciled umbrella-type open-ended self-managed investment company. The UCITS Fund is an umbrella fund with segregated assets and liabilities between sub-funds, and notwithstanding the segregation of assets and liabilities within each sub-fund, the UCITS Fund is a single legal entity and no sub-fund constitutes a legal entity separate from the UCITS Fund. The base currency of the UCITS Fund is the British pound sterling. We determined that the UCITS Fund was a VIE as its at-risk equity holders do not have the ability to direct the activities of the UCITS Fund that most significantly impact the entity’s economic performance. The Company and its representatives have a majority control of the UCITS Fund’s Board of Directors and can influence the UCITS Fund’s management and affairs. The UCITS Fund’s Board of Directors maintains this control through its duties, which are stated in the UCITS Fund’s Memorandum, and Articles of Association, which have no expiration date. We concluded that the Company was not the primary beneficiary of the UCITS Fund because, even though it has the power to direct the activities of the UCITS Fund that most significantly impact the fund’s economic performance, it does not absorb a majority of the UCITS Fund’s expected losses and does not receive a majority of the UCITS Fund’s expected residual returns. Therefore, the results of the UCITS Fund are not included in the Company’s consolidated financial results. We have also evaluated all of our advisory relationships with the Westwood Funds®, collective investment trusts and limited liability companies and our relationship as sponsor of the common trust funds to determine whether or not we qualify as the primary beneficiary based on whether there is an obligation to absorb the majority of expected losses or a right to receive the majority of residual returns. Since all losses and returns are distributed to the shareholders of these VIEs, we are not the primary beneficiary and consequently these VIEs are not included in our consolidated financial statements. We have included the disclosures related to VIEs in Note 11 "Variable Interest Entities". A VOE is an entity that is outside the scope of the guidance for VIEs. Consolidation of a VOE is required when a reporting entity owns a controlling financial interest in a VOE. Ownership of a majority of the voting interests is the usual condition for a controlling financial interest. At December 31, 2015 , none of our sponsored investment entities were VOEs subject to this assessment by the Company. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of money market funds and other short-term, highly liquid investments with maturities of three months or less, other than pooled investment vehicles that are considered investments. We maintain some cash and cash equivalents balances with financial institutions that are in excess of Federal Deposit Insurance Corporation insurance limits . The Company has not experienced losses on uninsured cash accounts. |
Accounts Receivable | Accounts Receivable Accounts receivable represents balances arising from services provided to customers and are recorded on an accrual basis, net of any allowance for doubtful accounts. Accounts receivable are written off when they are determined to be uncollectible. Any allowance for doubtful accounts is estimated based on the Company’s historical amounts written off, existing conditions in the industry, and the financial stability of the customer. The majority of our accounts receivable balances consist of advisory and trust fees receivable from customers that we believe and have experienced to be fully collectible. Accordingly our consolidated financial statements do not include an allowance for bad debt nor any bad debt expense. |
Investments | Investments Investments are classified as trading securities and are carried at quoted market values on the accompanying consolidated balance sheets. Net unrealized holding gains or losses on investments classified as trading securities are reflected as a component of other revenues. We measure realized gains and losses on investments using the specific identification method. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We determined the estimated fair values of our financial instruments using available information. The fair value amounts discussed in Notes 3 "Investments" and 4 "Fair Value of Financial Instruments" are not necessarily indicative of either the amounts realizable upon disposition of these instruments or our intent or ability to dispose of these assets. The estimated fair value of cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued liabilities, dividends payable, compensation and benefits payable and income taxes payable approximates their carrying value due to their short-term maturities. The carrying amount of investments designated as “trading” securities, primarily U.S. Government and Government agency obligations, money market funds, Westwood Funds® mutual funds and Westwood Trust common trust fund shares, equals fair value based on prices quoted in active markets and, with respect to funds, the reported net asset value of the shares held. Market values of our money market holdings generally do not fluctuate. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of the cost of acquired assets over the fair value of the underlying identifiable assets at the date of acquisition. Goodwill is not amortized but is tested at least annually for impairment. We test more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings or cash flows, or the development of a material adverse change in the business climate. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. We have identified two reporting units, which are consistent with our reporting segments: Advisory and Trust. The Company is not required to calculate the fair value of a reporting unit unless we determine that it is more likely than not that its fair value is less than the carrying amount. We assess goodwill for impairment using either a qualitative or quantitative assessment. The qualitative assessment includes consideration of the current trends in the industry in which we operate, macroeconomic conditions, recent financial performance of our reporting units and a market multiple approach valuation. In performing the annual impairment test during the third quarter, or more frequently when impairment indicators exist, and after assessing the qualitative factors, we may be required to utilize the two-step approach prescribed by ASC 350 “Goodwill and Other Intangible Assets” . We may also elect to skip the qualitative assessment and proceed directly to the quantitative analysis. The quantitative analysis requires a comparison of each reporting unit’s carrying value to the fair value of the respective unit. If the carrying value exceeds the fair value, a second step is performed to measure the amount of impairment loss, if any. The fair value of each reporting unit is estimated, entirely or predominantly, using a market multiple approach. During the third quarter of 2015 , we completed our annual goodwill impairment assessment and determined that no impairment loss was required. No impairments were recorded during any of the periods presented. Our intangible assets represent the acquisition date fair value of the acquired client relationships, trade names and non-compete agreements, as well as the cost of internally-developed software, each of which is reflected net of amortization. In valuing these assets, we made significant estimates regarding the useful lives, growth rates and potential attrition. We periodically review our intangible assets for events or circumstances that would indicate impairment. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation of furniture and equipment is provided over the estimated useful lives of the assets (from 3 to 7 years ), and depreciation on leasehold improvements is provided over the lesser of the estimated useful life or lease term using the straight-line method. We capitalize leasehold improvements, furniture and fixtures, computer hardware and most office equipment purchases. |
Revenue Recognition | Revenue Recognition Investment advisory and trust fees are recognized as services are provided. These fees are determined in accordance with contracts between our subsidiaries and their clients and are generally based on a percentage of assets under management. A limited number of our clients have contractual performance-based fee arrangements, which pay us an additional fee if we outperform a specified index over a specific period of time. We record revenue for performance-based fees at the end of the measurement period. Most advisory and trust fees are payable in advance or in arrears on a calendar quarterly basis. Advance payments are deferred and recognized over the periods services are performed. Since billing periods for most of our advance paying clients coincide with the calendar quarter to which payment relates, revenue is fully recognized within the quarter. Consequently no significant amount of deferred revenue is contained in our consolidated financial statements. Deferred revenue is shown on the consolidated balance sheets under the heading of “Accounts payable and accrued liabilities”. Other revenues generally consist of interest and investment income, which are recognized as earned. |
Stock Based Compensation | Stock-Based Compensation We account for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation . Under ASC 718, stock-based compensation expense reflects the fair value of stock-based awards measured at grant date, is recognized over the relevant service period, and adjusted each period for anticipated forfeitures. We expense the fair value of stock-based compensation awards granted to our employees and directors in our consolidated financial statements on a straight-line basis over the period that services are required to be provided in exchange for the award (“requisite service period”), which is typically the period over which the award vests. Stock-based compensation is recognized only for awards that vest, and our periodic accrual of compensation cost is based on the estimated number of awards expected to vest. We measure the fair value of compensation cost related to restricted stock awards based on the closing market price of our common stock on the grant date. For performance-based share awards, we assess actual performance versus the predetermined performance goals and record compensation expense once we conclude it is probable that we will meet the performance goals required to vest the applicable performance-based awards. We have issued restricted stock in accordance with our Third Amended and Restated Westwood Holdings Group, Inc. Stock Incentive Plan (the “Plan”). We apply judgment in developing an expectation of awards of restricted stock that may be forfeited. If actual experience differs significantly from these estimates, stock-based compensation expense and our results of operations could be materially affected. The Share Award Plan of Westwood Holdings Group, Inc. for Service Provided in Canada to its Subsidiaries (the “Canadian Plan”) provides compensation in the form of common stock for services performed by employees of Westwood International. We record compensation costs for these awards on a straight-line basis over the vesting period, once we determine it is probable that the award will be earned. Awards expected to be settled in shares are funded into a trust pursuant to an established Canadian employee benefit plan. Generally, the Canadian trust subsequently acquires Westwood common shares in market transactions and holds such shares until the shares are vested and distributed, or forfeited. Shares held in the trust are shown on our consolidated balance sheet as treasury shares. Until shares are acquired by the trust, we record compensation costs and measure the liability as a cash-based award, which is included in “Compensation and benefits payable” on our consolidated balance sheets. For the years ended December 31, 2015 , 2014 and 2013 , the compensation expense recorded for these awards was $145,000 , $359,000 and $344,000 , respectively. When the number of shares related to an award is determinable, the award becomes an equity award accounted for in a manner similar to restricted stock, which is described in Note 9 "Employee Benefits". Tax benefits realized upon the vesting of restricted shares that exceed the expense previously recognized for reporting purposes are recorded in stockholder’s equity and reflected as a financing activity in our Consolidated Statements of Cash Flows. If the tax benefit upon vesting is less than the expense previously recorded, the shortfall is recorded in stockholder’s equity. If the shortfall exceeds available windfall benefits in equity, they are recorded in our Consolidated Statements of Comprehensive Income and as an operating activity on our Consolidated Statements of Cash Flows. |
Currency Translation | Currency Translation Assets and liabilities of Westwood International, our non-U.S. dollar functional currency subsidiary, are translated at exchange rates as of applicable reporting dates. Revenues and expenses are translated at average exchange rates during the periods indicated. The gains and losses resulting from translating non-U.S. dollar functional currency into U.S. dollars are recorded through other comprehensive income. |
Income Taxes | Income Taxes We file a United States federal income tax return as a consolidated group for Westwood and its subsidiaries based in the US. We file a Canadian income tax return for Westwood International. Deferred income tax assets and liabilities are determined based on temporary differences between the financial statements and income tax bases of assets and liabilities as measured at enacted income tax rates. Deferred income tax expense is generally the result of changes in deferred tax assets and liabilities. Deferred taxes relate primarily to incentive compensation and stock-based compensation expense. We record net deferred tax assets to the extent we believe such assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event we were to determine that we would not be able to realize our deferred income tax assets in the future, we would record a valuation allowance. No valuation allowance has been recorded in our consolidated financial statements. We account for uncertain tax positions by recognizing the impact of a tax position in our consolidated financial statements when we believe it is more likely than not that the tax position would not be sustained upon examination by the appropriate tax authority, based on the merits of the position. We include penalties and interest on income-based taxes, if any, in the “General and administrative” line on our consolidated statements of comprehensive income. |
Business Combinations | Business Combinations In allocating the purchase price of a business combination, the Company records all assets acquired and liabilities assumed at fair value, with the excess of the purchase price over the aggregate fair values recorded as goodwill. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill. The Company determines the estimated fair values after review and consideration of relevant information, including discounted cash flows, quoted market prices and estimates made by management. The fair value assigned to identifiable intangible assets acquired is based on estimates and assumptions made by management at the time of the acquisition. The Company adjusts the preliminary purchase price allocation, as necessary, during the measurement period of up to one year after the acquisition closing date as it obtains more information as to facts and circumstances existing as of the acquisition date. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred. The acquired customer accounts, trade names and non-compete agreements are subject to fair value measurements based primarily on significant inputs not observable in the market and thus represent level 3 measurements. The valuation of an acquired customer list utilizes an income approach, which provides an estimate of the fair value of an asset based on discounted cash flows and management estimates, including the estimated growth associated with existing clients, market growth and client attrition. The valuation of acquired trade names uses a relief from royalty method in which the fair value of the intangible asset is estimated to be the present value of royalties saved because the Company owns the intangible asset. Revenue projections and estimated useful lives are used in estimating the fair value of the trade names. The non-compete agreements are calculated using the with-or-without method, which utilizes the probability of these employees competing with the Company and revenue projections to calculate the valuation of non-competition agreements. When an acquisition includes future contingent consideration on achieving certain annualized revenue from the post-closing acquired business over a specified time period, the Company estimates the fair value of the earn-out using overall revenue growth projections combined with existing customer base lost revenue projections, both discounted and probability-weighted. A liability is recorded for the estimated fair value of the contingent consideration on the acquisition date, and the fair value of the contingent consideration is remeasured at each subsequent reporting period with any change in fair value recognized as income or expense within the consolidated statement of comprehensive income. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , which resulted from a joint project by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards ("IFRS"). The issuance of a comprehensive and converged standard on revenue recognition is expected to improve the ability of financial statement users to understand and consistently analyze an entity’s revenue across industries, transactions, and geographies. The standard will require additional disclosures to help financial statement users better understand the nature, amount, timing, and potential uncertainty of the revenue being recognized. In August 2015, in order to amend the effective date of ASU 2014-09, the FASB issued ASU 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date. Under the amendment, the effective date of ASU 2014-09 has been extended by one year for all entities. For public entities, the ASU will be effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Retrospective application is required, with the entity either applying the change to each prior reporting period presented or applying the cumulative effect of each prior reporting period presented at the date of initial application. Early adoption is permitted based on the initial effective date of December 15, 2016. We are currently evaluating the impact that the application will have on our consolidated financial statements and disclosures and expect to adopt the new standard within the required time frame. In February 2015, the FASB issued ASU 2015-02, Consolidation – Amendments to the Consolidation Analysis . This amendment modifies the analysis required to evaluate whether certain legal entities should be consolidated, including variable interest entities. This amendment changes the evaluation of fee arrangements and related party transactions when determining whether to consolidate a variable interest entity. The amendment is effective for annual reporting periods beginning after December 15, 2016 and for interim periods within reporting periods beginning after December 15, 2017, although early adoption is permitted. We are currently evaluating the impact that the application of ASU 2015-02 will have on our consolidated financial statements and disclosures. In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software . This amendment provides guidance about whether a cloud computing arrangement includes a software license. The new guidance clarifies that software licenses included in a cloud computing software should be accounted for in the same manner as other software licenses. If the cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2015, with early adoption permitted. We have elected to early adopt this amendment in the current fiscal year, which did not have a material impact on our consolidated financial statements. In May 2015, the FASB issued ASU 2015-07, Fair Value Measurements – Disclosures for Certain Entities that Calculate Net Asset Value per Share . This amendment updates guidance intended to eliminate the diversity in practice surrounding how investments measured at net asset value under the practical expedient with future redemption dates have been categorized in the fair value hierarchy. Under the updated guidance, investments for which fair value is measured at net asset value per share using the practical expedient should no longer be categorized in the fair value hierarchy. The updated guidance requires retrospective adoption for all periods presented and is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. Except for the disclosure requirements, we do not expect the adoption of this guidance to impact our consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805) - Simplifying the Accounting for Measurement-Period Adjustments. The amendment applies to entities that have reported provisional amounts related to a business combination for which the accounting is incomplete by the end of the reporting period and have an adjustment to provisional amounts previously recognized during a later measurement period. Changes in provisional amounts recorded for acquired assets and liabilities are to be adjusted in the period the adjustment is known, with a corresponding adjustment booked to goodwill. The acquirer is no longer required to revise comparative information from prior years for the effect of changes in provisional amounts. For public business entities, the amendment is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, with early adoption permitted. We have elected to early adopt this amendment in the current fiscal year. This amendment may impact our disclosure of the Woodway acquisition, should we adjust the fair value of the acquired assets and liabilities during the year ended December 31, 2016. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes. The purpose of this amendment is to simplify the presentation of deferred taxes on the statement of financial position and further align the presentation of deferred taxes with IFRS. The amendment requires that deferred tax assets and liabilities be classified as noncurrent in the classified balance sheet, where before they were required to be classified as current and noncurrent based on their nature. This amendment applies to all entities with deferred taxes. The amendment may be applied prospectively or retrospectively. For public business entities, the amendment is affective for interim periods and fiscal years beginning after December 31, 2016, with early adoption permitted. We have elected to prospectively early adopt this amendment in the current fiscal year, and all deferred taxes are classified as noncurrent in our consolidated balance sheet at December 31, 2015. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Balances | Investments are presented below (in thousands). All investments are carried at fair value, and all investments are accounted for as trading securities. Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2015: U.S. Government and Government agency obligations $ 50,972 $ 15 $ (15 ) $ 50,972 Money market funds 9,179 — — 9,179 Equity funds 12,653 — (484 ) 12,169 Marketable securities $ 72,804 $ 15 $ (499 ) $ 72,320 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2014: U.S. Government and Government agency obligations $ 66,761 $ 20 $ (8 ) $ 66,773 Money market funds 8,250 — — 8,250 Equity funds 4,477 223 (103 ) 4,597 Marketable securities $ 79,488 $ 243 $ (111 ) $ 79,620 |
Other Revenue | The following amounts, except for income tax amounts, are included in our consolidated statements of comprehensive income under the heading “Other revenues” for the years indicated (in thousands): 2015 2014 2013 Realized gains $ 283 $ 156 $ 629 Realized losses (43 ) (50 ) (4 ) Net realized gains $ 240 $ 106 $ 625 Income tax expense from gains $ 84 $ 37 $ 225 Interest income – trading $ 143 $ 51 $ 28 Dividend income $ 284 $ 212 $ 541 Unrealized gains/(losses) $ (613 ) $ 75 $ (325 ) |
Fair Value of Financial Instr27
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Values of Assets Within Fair Value Hierarchy | The following table summarizes the values of our assets as of the dates indicated within the fair value hierarchy (in thousands). Level 1 Level 2 Level 3 Total As of December 31, 2015 Investments in trading securities $ 69,260 $ 3,060 $ — $ 72,320 Contingent consideration — — (9,023 ) (9,023 ) $ 69,260 $ 3,060 $ (9,023 ) $ 63,297 As of December 31, 2014 Investments in trading securities $ 77,327 $ 2,293 $ — $ 79,620 $ 77,327 $ 2,293 $ — $ 79,620 |
Fair Value Inputs, Liabilities, Quantitative Information | The following table represents the range of the unobservable inputs utilized in the fair value measurement of the contingent consideration classified as level 3: Valuation Technique Unobservable Input Range Weighted Average Rate Discounted Cash Flow Discount rate 6.0 % 6.0% AUM growth rate (7.5)% to 8.1% 0.9 % |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (in thousands): Contingent Consideration Beginning balance, December 31, 2014 $ — Acquisition of Woodway 9,102 Change in carrying value (79 ) Cash payments — Equity payments — Ending balance, December 31, 2015 $ 9,023 |
Acquisitions, Goodwill and Ot28
Acquisitions, Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The allocation of the purchase price is as follows (in thousands): Cash and cash equivalents $ 1,205 Accounts receivable 936 Other current assets 253 Goodwill (i) 15,889 Identifiable intangibles (ii) 21,334 Property and equipment 197 Accounts payable and accrued liabilities (61 ) Income tax payable (20 ) Purchase price $ 39,733 (i) The excess of the purchase price over the fair value amounts assigned to assets acquired and liabilities assumed represents the goodwill amount resulting from the acquisition. (ii) The fair value of the acquired identifiable intangibles consists of the following (in thousands, except useful lives): Intangible Asset Fair Value Estimated Useful Lives Client relationships $ 20,391 15 years Non-compete agreements 257 3 years Trade name 686 5 years |
Business Acquisition, Pro Forma Information | This unaudited pro forma information should not be relied upon as being necessarily indicative of the historical results that would have been obtained if the Merger had actually occurred on that date, nor of the results that may be obtained in the future. Year Ended December 31, (in thousands) 2015 2014 Total revenues $ 133,628 $ 123,729 Net income $ 28,080 $ 29,429 |
Changes in Goodwill | Goodwill represents the excess of the cost of acquired assets over the fair value of the underlying identifiable assets at the date of acquisition. Changes in goodwill are as follows (in thousands): As of December 31, 2015 2014 Beginning balance $ 11,255 $ 11,255 Acquisition of Woodway (1) 15,889 — Ending balance $ 27,144 $ 11,255 (1) The $15.9 million of goodwill acquired through the acquisition of Woodway is entirely attributable to the Trust segment. |
Summary of Intangible Assets | The following is a summary of intangible assets at December 31, 2015 and 2014 (in thousands, except years): Weighted Average Amortization Period (years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount 2015 Client relationships 14.8 $ 25,396 $ (2,954 ) $ 22,442 Trade names 4.2 942 (358 ) 584 Non-compete agreements 2.9 283 (91 ) 192 Internally developed software 7.0 136 — 136 $ 26,757 $ (3,403 ) $ 23,354 2014 Client relationships 14.2 $ 5,005 $ (1,575 ) $ 3,430 Trade names 2.0 256 (256 ) — Non-compete agreements 2.3 26 (26 ) — $ 5,287 $ (1,857 ) $ 3,430 |
Estimated Amortization Expense for Intangible Assets over the Next Five Years | Estimated amortization expense for intangible assets over the next five years is as follows (in thousands): Estimated Amortization Expense For the year ending December 31, 2016 $ 1,960 2017 1,960 2018 1,896 2019 1,875 2020 1,760 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property and Equipment | The following table reflects information about our property and equipment as of December 31, 2015 and 2014 (in thousands): As of December 31, 2015 2014 Leasehold improvements $ 1,728 $ 2,274 Furniture and fixtures 1,804 1,516 Computer hardware and office equipment 2,116 1,563 Construction in progress 231 — Accumulated depreciation (3,687 ) (2,720 ) Net property and equipment $ 2,192 $ 2,633 |
Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss were as follows (in thousands): As of December 31, 2015 2014 Foreign currency translation adjustment, net of tax of $102 and $127 $ (4,688 ) $ (1,231 ) Accumulated other comprehensive loss $ (4,688 ) $ (1,231 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income (Loss) Before Income Taxes by Jurisdiction | Income (loss) before income taxes by jurisdiction is as follows (in thousands): Years ended December 31, 2015 2014 2013 United States $ 27,324 $ 36,104 $ 30,799 Canada 14,896 5,932 (2,614 ) Total $ 42,220 $ 42,036 $ 28,185 |
Difference between the Federal Corporate Tax Rate and the Effective Tax Rate | The difference between the Federal corporate tax rate and the effective tax rate is comprised of the following (in thousands): Years ended December 31, 2015 2014 2013 Income tax provision computed at US federal statutory rate $ 14,777 35.0 % $ 14,712 35.0 % $ 9,864 35.0 % Canadian rate differential (1,287 ) (3.0 ) (520 ) (1.2 ) 222 0.7 Change in uncertain tax positions, net of federal benefit 1,059 2.5 — — — — State and local income taxes, net of federal benefit 465 1.1 442 1.1 386 1.4 Other, net 101 0.2 153 0.3 (124 ) (0.4 ) Total income tax expense $ 15,115 35.8 % $ 14,787 35.2 % $ 10,348 36.7 % Effective income tax rate 35.8 % 35.2 % 36.7 % |
Income Tax Provision (Benefit) as Set Forth in the Consolidated Statements of Income | Income tax provision (benefit) as set forth in the consolidated statements of comprehensive income consisted of the following components (in thousands): Years ended December 31, 2015 2014 2013 Current taxes: US Federal $ 12,015 $ 16,230 $ 10,683 State and local 2,564 690 602 Foreign 3,821 — — Total 18,400 16,920 11,285 Deferred taxes: US Federal (3,331 ) (3,590 ) (240 ) State and local (156 ) (40 ) (5 ) Foreign 202 1,497 (692 ) Total (3,285 ) (2,133 ) (937 ) Total income tax expense $ 15,115 $ 14,787 $ 10,348 |
Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities are presented below (in thousands): As of December 31, 2015 2014 Deferred tax assets: Share-based compensation expense $ 6,258 $ 5,210 Net operating loss — 166 Deferred rent 51 186 Compensation and benefits payable 5,222 3,280 Federal unrecognized tax benefit 607 — Other 166 112 Total deferred tax assets 12,304 8,954 Deferred tax liabilities: Property and equipment (233 ) (334 ) Intangibles (959 ) (645 ) Unrealized gains on investments (70 ) (123 ) Total deferred tax liabilities (1,262 ) (1,102 ) Net deferred tax assets $ 11,042 $ 7,852 |
Net Deferred Tax Assets and Liabilities are Reflected on Our Balance Sheet | Net deferred tax assets and liabilities are as follows (in thousands): As of December 31, 2015 2014 Net current deferred tax assets (1) $ — $ 6,268 Net current deferred tax liabilities (1) — (2,208 ) Total net current deferred tax assets (1) — 4,060 Net non-current deferred tax assets 12,304 4,782 Net non-current deferred tax liabilities (1,262 ) (990 ) Net non-current deferred tax assets reflected on the balance sheets 11,042 3,792 Total net deferred tax assets $ 11,042 $ 7,852 ________________ (1) We have elected to prospectively early adopt ASU 2015-17 in the current fiscal year. See further discussion in Note 2 "Summary of Significant Accounting Policies." |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the change in recorded uncertain tax positions during the year ended December 31, 2015 is as follows (in thousands): Balance at January 1, 2015 $ — Additions for tax positions related to the current year 492 Additions for tax positions related to prior years 1,137 Balance at December 31, 2015 $ 1,629 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Total Expense Recorded for Stock Based Compensation | The following table presents the total stock-based compensation expense recorded and the total income tax benefit recognized for stock-based compensation arrangements for the years indicated (in thousands): For the years ended December 31, 2015 2014 2013 Service condition restricted stock expense $ 9,439 $ 7,580 $ 7,602 Performance-based restricted stock expense 7,403 5,718 3,842 Restricted stock expense under the Plan 16,842 13,298 11,444 Canadian Plan restricted stock expense 732 387 235 Total stock based compensation expense $ 17,574 $ 13,685 $ 11,679 Total income tax benefit recognized related to stock-based compensation $ 6,217 $ 5,764 $ 4,384 |
Profit Sharing and 401(k) Contributions for the Periods | The following table displays our profit-sharing and 401(k) contributions for the periods presented (in thousands): Years ended December 31, 2015 2014 2013 Profit-sharing contributions $ 965 $ 816 $ 674 401(k) matching contributions 1,319 928 871 |
Restricted Stock Subject Only to a Service Condition | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Status and Changes in Restricted Stock Grants that Subject to Service Condition | The following table details the status and changes in our restricted stock grants that are subject only to a service condition for the year ended December 31, 2015 : Restricted shares subject only to a service condition: Number of Shares Weighted Average Grant Date Fair Value Non-vested, January 1, 2015 496,457 $ 48.14 Granted 309,932 61.42 Vested (186,330 ) 41.85 Forfeited (39,590 ) 55.38 Non-vested, December 31, 2015 580,469 $ 56.76 |
Weighted-Average Grant Date Fair Value for Shares Granted and the Total Fair Value of Shares Vested | The following table shows the weighted-average grant date fair value for shares granted and the total fair value of shares vested during the years indicated: Years ended December 31, Restricted shares subject only to a service condition: 2015 2014 2013 Weighted-average grant date fair value $ 61.42 $ 58.70 $ 43.68 Fair value of shares vested (in thousands) $ 7,797 $ 7,236 $ 7,568 |
Restricted Shares Subject to Service and Performance Conditions | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Status and Changes in Restricted Stock Grants that Subject to Service Condition | In the first quarter of 2015 , we concluded that it was probable that we would meet the performance goals required to vest the applicable percentage of the performance-based restricted shares this year and began recording expense related to those shares. Restricted shares subject to service and performance conditions: Number of Shares Weighted Average Grant Date Fair Value Non-vested, January 1, 2015 101,313 $ 58.59 Granted 101,313 61.29 Vested (101,313 ) 58.59 Forfeited — — Non-vested, December 31, 2015 101,313 $ 61.29 |
Weighted-Average Grant Date Fair Value for Shares Granted and the Total Fair Value of Shares Vested | The following table shows the weighted-average grant date fair value for shares granted and the total fair value of shares vested during the years indicated: Years ended December 31, Restricted shares subject to service and performance conditions: 2015 2014 2013 Weighted-average grant date fair value $ 61.29 $ 58.59 $ 44.55 Fair value of shares vested (in thousands) $ 5,936 $ 4,143 $ 2,948 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Shares | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share amounts): Years ended December 31, 2015 2014 2013 Net income $ 27,105 $ 27,249 $ 17,837 Weighted average shares outstanding – basic 7,756,647 7,512,348 7,331,874 Dilutive potential shares from unvested restricted shares 350,755 394,197 360,882 Dilutive potential shares from contingent consideration 41,997 — — Weighted average shares outstanding – diluted 8,149,399 7,906,545 7,692,756 Earnings per share: Basic $ 3.49 $ 3.63 $ 2.43 Diluted $ 3.33 $ 3.45 $ 2.32 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | The following table displays the assets under management, amount of corporate money invested that are included in “Investments, at fair value” on the consolidated balance sheets, and the risk of loss in each vehicle (in millions): As of December 31, 2015 Assets Under Management Corporate Investment Amount at Risk VIEs: Westwood Funds® $ 3,617 $ 6 $ 6 Common Trust Funds 2,885 3 3 Collective Investment Trusts 284 — — LLCs 133 — — UCITS Fund 615 2 2 All other assets: Private Wealth 2,375 Institutional 10,853 Total AUM $ 20,762 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Contractual Rental Payments for Non-Cancelable Operating Leases | At December 31, 2015 , the future contractual rental payments for noncancelable operating leases for each of the following five years and thereafter are as follows (in thousands): Year ending: 2016 $ 2,275 2017 1,989 2018 1,812 2019 1,373 2020 1,310 Thereafter 6,800 Total payments due $ 15,559 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Intersegment Balances | (in thousands) Advisory Trust Westwood Holdings Eliminations Consolidated Year Ended December 31, 2015 Revenues: Net fee revenues from external sources $ 101,973 $ 28,795 $ — $ — $ 130,768 Net intersegment revenues 19,001 — — (19,001 ) — Net interest and dividend revenue 425 1 — — 426 Other revenue (341 ) 83 — — (258 ) Total revenues 121,058 28,879 — (19,001 ) 130,936 Expenses: Depreciation and amortization 773 1,724 99 — 2,596 Other operating expenses 63,658 25,882 15,581 (19,001 ) 86,120 Total expenses 64,431 27,606 15,680 (19,001 ) 88,716 Income (loss) before income taxes 56,627 1,273 (15,680 ) — 42,220 Income tax expense (benefit) 19,330 517 (4,732 ) — 15,115 Net income $ 37,297 $ 756 $ (10,948 ) $ — $ 27,105 Add: Restricted stock expense $ 11,877 $ 2,613 $ 3,084 $ — $ 17,574 Intangible amortization 161 1,385 — — 1,546 Deferred taxes on goodwill 38 233 — 271 Economic Earnings $ 49,373 $ 4,987 $ (7,864 ) $ — $ 46,496 Segment assets $ 183,004 $ 60,459 $ 8,816 $ (70,943 ) $ 181,336 Segment goodwill $ 5,219 $ 21,925 $ — $ — $ 27,144 Expenditures for long-lived assets $ 369 $ 180 $ 267 $ 815 Year Ended December 31, 2014 Revenues: Net fee revenues from external sources $ 92,279 $ 20,525 $ — $ — $ 112,804 Net intersegment revenues 13,527 — — (13,527 ) — Net interest and dividend revenue 261 2 — — 263 Other revenue 173 1 — — 174 Total revenues 106,240 20,528 — (13,527 ) 113,241 Expenses: Depreciation and amortization 603 302 33 — 938 Other operating expenses 51,265 19,867 12,662 (13,527 ) 70,267 Total expenses 51,868 20,169 12,695 (13,527 ) 71,205 Income (loss) before income taxes 54,372 359 (12,695 ) — 42,036 Income tax expense (benefit) 19,057 132 (4,402 ) — 14,787 Net income $ 35,315 $ 227 $ (8,293 ) $ — $ 27,249 Add: Restricted stock expense $ 9,074 $ 1,847 $ 2,764 $ — $ 13,685 Intangible amortization 161 198 — — 359 Deferred taxes on goodwill 38 114 — — 152 Economic Earnings $ 44,588 $ 2,386 $ (5,529 ) $ — $ 41,445 Segment assets $ 144,385 $ 18,133 $ 10,435 $ (33,079 ) $ 139,874 Segment goodwill $ 5,219 $ 6,036 $ — $ — $ 11,255 Expenditures for long-lived assets $ 226 $ 29 $ 223 $ — $ 478 Year Ended December 31, 2013 Revenues: Net fee revenues from external sources $ 72,588 $ 18,367 $ — $ — $ 90,955 Net intersegment revenues 10,402 14 — (10,416 ) — Net interest and dividend revenue 568 1 — — 569 Other revenue 301 — — — 301 Total revenues 83,859 18,382 — (10,416 ) 91,825 Expenses: Depreciation and amortization 468 301 — — 769 Other operating expenses 46,545 16,943 9,799 (10,416 ) 62,871 Total expenses 47,013 17,244 9,799 (10,416 ) 63,640 Income (loss) before income taxes 36,846 1,138 (9,799 ) — 28,185 Income tax expense (benefit) 13,738 408 (3,798 ) — 10,348 Net income $ 23,108 $ 730 $ (6,001 ) $ — $ 17,837 Add: Restricted stock expense $ 7,586 $ 1,803 $ 2,290 $ — $ 11,679 Intangible amortization 161 198 — — 359 Deferred taxes on goodwill 38 114 — — 152 Economic Earnings $ 30,893 $ 2,845 $ (3,711 ) $ — $ 30,027 Segment assets $ 114,871 $ 14,190 $ 6,354 $ (19,365 ) $ 116,050 Segment goodwill $ 5,219 $ 6,036 $ — $ — $ 11,255 Expenditures for long-lived assets $ 962 $ 239 $ — $ — $ 1,201 |
Schedule of Economic Earnings | The following table provides a reconciliation of net income to Economic Earnings (in thousands, except per share and share amounts): For the years ended December 31, 2015 2014 2013 Net Income $ 27,105 $ 27,249 $ 17,837 Add: Restricted stock expense 17,574 13,685 11,679 Add: Intangible amortization 1,546 359 359 Add: Tax benefit from goodwill amortization 271 152 152 Economic Earnings $ 46,496 $ 41,445 $ 30,027 |
Revenues by Geographic Location | Years ended December 31, (in thousands) 2015 2014 2013 Revenues by geographic location of client: U.S. $ 109,816 $ 94,955 $ 83,622 Canada 9,238 8,635 5,567 Europe 6,019 8,146 1,843 Asia 4,538 21 — Australia 1,325 1,484 793 Total $ 130,936 $ 113,241 $ 91,825 |
Property and Equipment, Net by Geographic Area | As of December 31, (in thousands) 2015 2014 Property and equipment, net, by geographic area: U.S. $ 1,806 $ 2,057 Canada 386 576 Total $ 2,192 $ 2,633 |
Concentration (Tables)
Concentration (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
Concentration | Years ended December 31, (in thousands) 2015 2014 2013 Advisory fees from Westwood Management’s largest client: Asset-based fees $ 2,109 $ 2,183 $ 1,729 Performance-based fees 2,206 3,806 2,561 Percent of fee revenue 3.3 % 5.3 % 4.7 % |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Results of Operations | The following is a summary of unaudited quarterly results of operations for the years ended December 31, 2015 and 2014 (in thousands, except per share amounts): Quarter First Second Third Fourth 2015 Revenues $ 29,608 $ 37,311 $ 32,451 $ 31,566 Income before income taxes 8,378 14,752 10,502 8,588 Net income 5,610 9,795 7,013 4,687 Basic earnings per common share 0.74 1.25 0.90 0.60 Diluted earnings per common share 0.71 1.23 0.87 0.58 2014 Revenues $ 25,949 $ 30,905 $ 28,122 $ 28,265 Income before income taxes 8,613 13,356 10,592 9,475 Net income 5,562 8,591 7,118 5,978 Basic earnings per common share 0.74 1.14 0.95 0.79 Diluted earnings per common share 0.72 1.12 0.92 0.77 |
Description of the Business (De
Description of the Business (Details Textual) - USD ($) | Apr. 01, 2015 | Jan. 15, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||||
Date of incorporation | Dec. 12, 2001 | ||||
Common stock issued for acquisition | $ 5,292,000 | $ 0 | $ 0 | ||
Contingent consideration | 9,023,000 | ||||
Woodway Financial Advisors | |||||
Business Acquisition [Line Items] | |||||
Date of acquisition agreement | Jan. 15, 2015 | ||||
Assets under management | $ 1,600,000,000 | ||||
Acquisition completion date | Apr. 1, 2015 | ||||
Cash and stock | $ 31,000,000 | ||||
Maximum earn-out amount | 15,000,000 | ||||
Estimated merger consideration | 39,700,000 | ||||
Closing sate consideration paid in cash | $ 25,300,000 | ||||
Closing sate consideration, number of shares issued | 109,712 | ||||
Common stock issued for acquisition | $ 5,300,000 | ||||
Value of shares before discount | 6,700,000 | ||||
Contingent consideration | $ 9,100,000 | $ 9,000,000 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | ||
Dec. 31, 2015USD ($)reporting_units | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Schedule Of Significant Accounting Policies [Line Items] | |||
Number of reporting units | reporting_units | 2 | ||
Goodwill impairment loss | $ 0 | $ 0 | $ 0 |
Valuation allowance | 0 | ||
Uncertain tax position | 1,629,000 | 0 | 0 |
Unrecognized tax benefits | $ 607,000 | 0 | |
Furniture and fixtures | Minimum | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 3 years | ||
Furniture and fixtures | Maximum | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 7 years | ||
Leasehold improvements | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | lesser of the estimated useful life or lease term | ||
Westwood International Advisors Inc | Canadian Plan | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Compensation expense recorded | $ 145,000 | $ 359,000 | $ 344,000 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Investment balances | ||
Cost | $ 72,804 | $ 79,488 |
Gross Unrealized Gains | 15 | 243 |
Gross Unrealized Losses | (499) | (111) |
Investments in trading securities | 72,320 | 79,620 |
U.S. Government and Government agency obligations | ||
Investment balances | ||
Cost | 50,972 | 66,761 |
Gross Unrealized Gains | 15 | 20 |
Gross Unrealized Losses | (15) | (8) |
Investments in trading securities | 50,972 | 66,773 |
Money market funds | ||
Investment balances | ||
Cost | 9,179 | 8,250 |
Investments in trading securities | 9,179 | 8,250 |
Equity funds | ||
Investment balances | ||
Cost | 12,653 | 4,477 |
Gross Unrealized Gains | 0 | 223 |
Gross Unrealized Losses | (484) | (103) |
Investments in trading securities | $ 12,169 | $ 4,597 |
Investments (Details 1)
Investments (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investments, Debt and Equity Securities [Abstract] | |||
Realized gains | $ 283 | $ 156 | $ 629 |
Realized losses | (43) | (50) | (4) |
Net realized gains | 240 | 106 | 625 |
Income tax expense from gains | 84 | 37 | 225 |
Interest income – trading | 143 | 51 | 28 |
Dividend income | 284 | 212 | 541 |
Unrealized gains/(losses) | $ (613) | $ 75 | $ (325) |
Investments (Details Textual)
Investments (Details Textual) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule Of Investments [Line Items] | ||
Corporate Investment | $ 72,320 | $ 79,620 |
Private Equity Funds | ||
Schedule Of Investments [Line Items] | ||
Corporate Investment | 8,700 | |
UCITS Fund | ||
Schedule Of Investments [Line Items] | ||
Corporate Investment | 2,000 | |
Corporate funds investment, fair value | $ 2,000 |
Fair Value of Financial Instr43
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Investments in securities: | ||
Investments in trading securities | $ 72,320 | $ 79,620 |
Contingent consideration | (9,023) | |
Total financial instruments | 63,297 | 79,620 |
Level 1 | ||
Investments in securities: | ||
Investments in trading securities | 69,260 | 77,327 |
Contingent consideration | 0 | |
Total financial instruments | 69,260 | 77,327 |
Level 2 | ||
Investments in securities: | ||
Investments in trading securities | 3,060 | 2,293 |
Contingent consideration | 0 | |
Total financial instruments | 3,060 | 2,293 |
Level 3 | ||
Investments in securities: | ||
Investments in trading securities | 0 | 0 |
Contingent consideration | (9,023) | |
Total financial instruments | $ (9,023) | $ 0 |
Fair Value of Financial Instr44
Fair Value of Financial Instruments (Details 2) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 01, 2015 | |
Business Acquisition [Line Items] | |||||
Contingent consideration | $ 9,023,000 | $ 9,023,000 | |||
Other revenue | (258,000) | $ 174,000 | $ 301,000 | ||
Woodway Financial Advisors | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration | 9,000,000 | $ 9,000,000 | $ 9,100,000 | ||
Other revenue | $ 78,600 |
Fair Value of Financial Instr45
Fair Value of Financial Instruments (Details 3) - Level 3 - Fair Value, Measurements, Recurring - Income Approach Valuation Technique - Liability | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Discount rate | 6.00% |
AUM growth rate, Weighted Average Growth Rate | 0.90% |
Minimum | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
AUM growth rate, Range | (7.50%) |
Maximum | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
AUM growth rate, Range | 8.10% |
Fair Value of Financial Instr46
Fair Value of Financial Instruments (Details 4) - Level 3 - Contingent Consideration $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance, December 31, 2014 | $ 0 |
Acquisition of Woodway | 9,102 |
Change in carrying value | (79) |
Cash payments | 0 |
Equity payments | 0 |
Ending balance, December 31, 2015 | $ 9,023 |
Acquisitions, Goodwill and Ot47
Acquisitions, Goodwill and Other Intangible Assets (Details Textual) - USD ($) | Apr. 01, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||
Common stock issued for acquisition | $ 5,292,000 | $ 0 | $ 0 | |
Contingent consideration | 9,023,000 | |||
Professional services | 5,617,000 | 4,905,000 | 4,223,000 | |
Goodwill impairment loss | 0 | 0 | 0 | |
Amortization expense | 1,546,000 | 359,000 | 359,000 | |
General and Administrative Expense | ||||
Business Acquisition [Line Items] | ||||
Amortization expense | 359,000 | $ 359,000 | ||
Woodway Financial Advisors | ||||
Business Acquisition [Line Items] | ||||
Cash and stock | $ 31,000,000 | |||
Maximum earn-out amount | $ 15,000,000 | |||
Percent of earn-out amount paid in cash | 54.84% | |||
Percent of earn-out amount paid in shares | 45.16% | |||
Estimated merger consideration | $ 39,700,000 | |||
Closing sate consideration paid in cash | $ 25,300,000 | |||
Closing sate consideration, number of shares issued | 109,712 | |||
Common stock issued for acquisition | $ 5,300,000 | |||
Value of shares before discount | 6,700,000 | |||
Contingent consideration | $ 9,100,000 | 9,000,000 | ||
Maximum amount of calendar days | 75 days | |||
Expected tax deductible amount | 6,800,000 | |||
Transaction costs | 1,100,000 | |||
Professional services | 732,000 | $ 392,000 | ||
Revenues | 7,700,000 | |||
Net income | $ 2,200,000 |
Acquisitions, Goodwill and Ot48
Acquisitions, Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | Apr. 01, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 27,144 | $ 11,255 | $ 11,255 | |
Woodway Financial Advisors | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 1,205 | |||
Accounts receivable | 936 | |||
Other current assets | 253 | |||
Goodwill | 15,889 | |||
Identifiable intangibles | 21,334 | |||
Property and equipment | 197 | |||
Accounts payable and accrued liabilities | (61) | |||
Income tax payable | (20) | |||
Purchase price | 39,733 | |||
Client relationships | Woodway Financial Advisors | ||||
Business Acquisition [Line Items] | ||||
Identifiable intangibles | $ 20,391 | |||
Estimated Useful Lives (in years) | 15 years | |||
Non-compete agreements | Woodway Financial Advisors | ||||
Business Acquisition [Line Items] | ||||
Identifiable intangibles | $ 257 | |||
Estimated Useful Lives (in years) | 3 years | |||
Trade names | Woodway Financial Advisors | ||||
Business Acquisition [Line Items] | ||||
Identifiable intangibles | $ 686 | |||
Estimated Useful Lives (in years) | 5 years |
Acquisitions, Goodwill and Ot49
Acquisitions, Goodwill and Other Intangible Assets (Details 1) - Woodway Financial Advisors - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||
Total revenues | $ 133,628 | $ 123,729 |
Net income | $ 28,080 | $ 29,429 |
Acquisitions, Goodwill and Ot50
Acquisitions, Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in goodwill | ||
Beginning balance | $ 11,255 | $ 11,255 |
Acquisition of Woodway | 15,889 | 0 |
Ending balance | $ 27,144 | $ 11,255 |
Acquisitions, Goodwill and Ot51
Acquisitions, Goodwill and Other Intangible Assets (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of intangible assets | ||
Gross Carrying Amount | $ 26,757 | $ 5,287 |
Accumulated Amortization | (3,403) | (1,857) |
Net Carrying Amount | $ 23,354 | $ 3,430 |
Client relationships | ||
Summary of intangible assets | ||
Weighted Average Amortization Period (years) | 14 years 9 months 18 days | 14 years 2 months 12 days |
Gross Carrying Amount | $ 25,396 | $ 5,005 |
Accumulated Amortization | (2,954) | (1,575) |
Net Carrying Amount | $ 22,442 | $ 3,430 |
Trade names | ||
Summary of intangible assets | ||
Weighted Average Amortization Period (years) | 4 years 2 months 12 days | 2 years |
Gross Carrying Amount | $ 942 | $ 256 |
Accumulated Amortization | (358) | (256) |
Net Carrying Amount | $ 584 | $ 0 |
Non-compete agreements | ||
Summary of intangible assets | ||
Weighted Average Amortization Period (years) | 2 years 10 months 24 days | 2 years 3 months 18 days |
Gross Carrying Amount | $ 283 | $ 26 |
Accumulated Amortization | (91) | (26) |
Net Carrying Amount | $ 192 | $ 0 |
Internally developed software | ||
Summary of intangible assets | ||
Weighted Average Amortization Period (years) | 7 years | |
Gross Carrying Amount | $ 136 | |
Accumulated Amortization | 0 | |
Net Carrying Amount | $ 136 |
Acquisitions, Goodwill and Ot52
Acquisitions, Goodwill and Other Intangible Assets (Details 4) $ in Thousands | Dec. 31, 2015USD ($) |
Estimated amortization expense for intangible assets for the next five years | |
2,016 | $ 1,960 |
2,017 | 1,960 |
2,018 | 1,896 |
2,019 | 1,875 |
2,020 | $ 1,760 |
Balance Sheet Components (Detai
Balance Sheet Components (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Property and equipment | ||
Accumulated depreciation | $ (3,687) | $ (2,720) |
Net property and equipment | 2,192 | 2,633 |
Leasehold improvements | ||
Property and equipment | ||
Property and equipment cost | 1,728 | 2,274 |
Furniture and fixtures | ||
Property and equipment | ||
Property and equipment cost | 1,804 | 1,516 |
Computer hardware and office equipment | ||
Property and equipment | ||
Property and equipment cost | 2,116 | 1,563 |
Construction in progress | ||
Property and equipment | ||
Property and equipment cost | $ 231 | $ 0 |
Balance Sheet Components (Det54
Balance Sheet Components (Details 1) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Components of accumulated other comprehensive loss | ||
Foreign currency translation adjustment, net of tax of $102 and $127 | $ (1,231) | |
Accumulated other comprehensive loss | $ (4,688) | (1,231) |
Foreign currency translation adjustment, tax | $ 102 | $ 127 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income (loss) before income taxes by jurisdiction | |||||||||||
United States | $ 27,324 | $ 36,104 | $ 30,799 | ||||||||
Canada | 14,896 | 5,932 | (2,614) | ||||||||
Income (loss) before income taxes | $ 8,588 | $ 10,502 | $ 14,752 | $ 8,378 | $ 9,475 | $ 10,592 | $ 13,356 | $ 8,613 | $ 42,220 | $ 42,036 | $ 28,185 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
U.S. Federal corporate tax rate | 35.00% | 35.00% | 35.00% |
Penalties and interest | $ 119,000 | $ 16,000 | $ 0 |
Foreign Earnings Repatriated | 8,000,000 | ||
Unrecognized deferred tax liability | 600,000 | ||
Uncertain tax position | 1,629,000 | $ 0 | $ 0 |
Reasonably possible maximum decrease in uncertain tax position | 1,600,000 | ||
Decrease in income tax provision | $ 1,000,000 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Difference between the Federal corporate tax rate and the effective tax rate | |||
Income tax provision computed at US federal statutory rate | $ 14,777 | $ 14,712 | $ 9,864 |
Canadian rate differential | (1,287) | (520) | 222 |
Change in uncertain tax positions, net of federal benefit | 1,059 | 0 | 0 |
State and local income taxes, net of federal benefit | 465 | 442 | 386 |
Other, net | 101 | 153 | (124) |
Income tax expense (benefit) | $ 15,115 | $ 14,787 | $ 10,348 |
Income tax provision computed at US federal statutory rate, effective tax rate | 35.00% | 35.00% | 35.00% |
Canadian rate differential, effective tax rate | (3.00%) | (1.20%) | 0.70% |
Change in uncertain tax positions, net of federal income taxes, effective tax rate | 2.50% | 0.00% | 0.00% |
State and local income taxes, net of federal income taxes, effective tax rate | 1.10% | 1.10% | 1.40% |
Other, net, effective tax rate | 0.20% | 0.30% | (0.40%) |
Effective income tax rate | 35.80% | 35.20% | 36.70% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current taxes: | |||
US Federal | $ 12,015 | $ 16,230 | $ 10,683 |
State and local | 2,564 | 690 | 602 |
Foreign | 3,821 | 0 | 0 |
Total | 18,400 | 16,920 | 11,285 |
Deferred taxes: | |||
US Federal | (3,331) | (3,590) | (240) |
State and local | (156) | (40) | (5) |
Foreign | 202 | 1,497 | (692) |
Total | (3,285) | (2,133) | (937) |
Income tax expense (benefit) | $ 15,115 | $ 14,787 | $ 10,348 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Share-based compensation expense | $ 6,258 | $ 5,210 |
Net operating loss | 0 | 166 |
Deferred rent | 51 | 186 |
Compensation and benefits payable | 5,222 | 3,280 |
Federal unrecognized tax benefit | 607 | 0 |
Other | 166 | 112 |
Total deferred tax assets | 12,304 | 8,954 |
Deferred tax liabilities: | ||
Property and equipment | (233) | (334) |
Intangibles | (959) | (645) |
Unrealized gains on investments | (70) | (123) |
Total deferred tax liabilities | (1,262) | (1,102) |
Net deferred tax assets | $ 11,042 | $ 7,852 |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Net deferred tax assets and liabilities are reflected on our balance sheet | ||
Net current deferred tax assets(1) | $ 0 | $ 6,268 |
Net current deferred tax liabilities(1) | 0 | (2,208) |
Total net current deferred tax assets(1) | 0 | 4,060 |
Net non-current deferred tax assets | 12,304 | 4,782 |
Net non-current deferred tax liabilities | (1,262) | (990) |
Net non-current deferred tax assets reflected on the balance sheets | 11,042 | 3,792 |
Net deferred tax assets | $ 11,042 | $ 7,852 |
Income Taxes Income Taxes (Deta
Income Taxes Income Taxes (Details 5) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Balance at January 1, 2015 | $ 0 |
Additions for tax positions related to the current year | 492 |
Additions for tax positions related to prior years | 1,137 |
Balance at December 31, 2015 | $ 1,629 |
Regulatory Capital Requiremen62
Regulatory Capital Requirements (Details) - Dec. 31, 2015 CAD in Thousands, $ in Millions | USD ($) | CAD |
Banking and Thrift [Abstract] | ||
Minimum capital requirement | $ 4 | |
Excess from Minimum capital requirement | 8.9 | |
Required combined cash and receivables | CAD | CAD 100 | |
Combined cash and receivables | $ 15.5 | CAD 21,500 |
Employee Benefits (Details Text
Employee Benefits (Details Textual) $ / shares in Units, CAD in Millions | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($) | Dec. 31, 2015CADshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Amount of shares purchased in the open market | $ 1,327,000 | $ 669,000 | $ 878,000 | ||
Dividends payable | 5,749,000 | 4,868,000 | |||
Accrued dividends | 1,699,000 | $ 1,450,000 | |||
Restricted shares granted to employees vesting period | 4 years | 4 years | |||
Accrued liability | $ 2,000,000 | $ 844,000 | |||
Mutual Fund | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Mutual fund vesting period | 1 year | ||||
Service period of mutual fund share incentive award | 2 years | ||||
Compensation expense recorded | $ 1,200,000 | $ 863,000 | $ 1,800,000 | ||
Benefit Plans | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 6 years | ||||
Percentage of compensation | 6.00% | ||||
Deferred Compensation Share Based Payments | Share-based Compensation Award, Tranche One | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of deferred share units vesting | 20.00% | ||||
Deferred Compensation Share Based Payments | Share-based Compensation Award, Tranche Two | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of deferred share units vesting | 40.00% | ||||
Deferred Compensation Share Based Payments | Share-based Compensation Award, Tranche Three | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of deferred share units vesting | 60.00% | ||||
Deferred Compensation Share Based Payments | Share Based Compensation Award Tranche Four | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of deferred share units vesting | 80.00% | ||||
Restricted Stock | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Total number of shares that may be issued under the stock based compensation Plan (including predecessor plans to the Plan) | shares | 4,398,100 | 4,398,100 | |||
Shares remain available for issuance | shares | 678,900 | 678,900 | |||
Vested, shares | shares | 186,330 | ||||
Remaining unrecognized compensation cost | $ 22,300,000 | ||||
Remaining unrecognized compensation cost recognized over a remaining weighted average period | 2 years 6 months | ||||
Number of vested shares from employees on the date vesting | shares | 91,384 | ||||
Nonvested restricted shares (in shares) | shares | 580,469 | 496,457 | 580,469 | ||
Compensation expense recorded | $ 13,685,000 | $ 11,679,000 | |||
Restricted Stock | Employee | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Restricted shares granted to employees vesting period | 4 years | ||||
Restricted Stock | Director | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Restricted shares granted to employees vesting period | 1 year | 1 year | 1 year | ||
Canadian Plan | Westwood International Advisors Inc | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares remain available for issuance | shares | 93,900 | 93,900 | |||
Fund purchases of common stock | $ 7,200,000 | CAD 10 | |||
Purchases of common stock with respect to awards granted | $ 4,900,000 | ||||
Share price | $ / shares | $ 52.09 | ||||
Number of shares purchased in the open market | shares | 21,818 | ||||
Amount of shares purchased in the open market | $ 1,300,000 | ||||
Vested, shares | shares | 20,375 | ||||
Fair value of vested shares | $ 1,100,000 | ||||
Purchase of treasury stock, shares | shares | 33,174 | ||||
Remaining unrecognized compensation cost | $ 854,000 | ||||
Remaining unrecognized compensation cost recognized over a remaining weighted average period | 1 year 9 months 18 days | ||||
Compensation expense recorded | $ 145,000 | $ 359,000 | $ 344,000 | ||
Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Options exercised | shares | 0 | 0 | |||
Performance Shares | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Restricted shares granted to employees vesting period | 5 years | ||||
Adjusted pre-tax income | $ 46,000,000 | ||||
Compound annual growth | 10.00% | ||||
Performance Based Restricted Shares For Future Performance Years | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Nonvested restricted shares (in shares) | shares | 118,939 | 118,939 | |||
Performance Based Restricted Share Grants | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Restricted shares granted to employees vesting period | 6 years | ||||
Accrued liability | $ 174,000 | ||||
Deferred share units, issued and outstanding | shares | 5,822 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation expense | $ 17,574 | $ 13,685 | $ 11,679 |
Restricted Stock | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Add: Restricted stock expense | 13,685 | 11,679 | |
Total income tax benefit recognized related to stock-based compensation | 6,217 | 5,764 | 4,384 |
Restricted Stock | Service condition restricted stock expense | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Add: Restricted stock expense | 9,439 | 7,580 | 7,602 |
Restricted Stock | Performance-based restricted stock expense | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Add: Restricted stock expense | 7,403 | 5,718 | 3,842 |
Restricted Stock | Restricted stock expense under the Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Add: Restricted stock expense | 16,842 | 13,298 | 11,444 |
Restricted Stock | Canadian Plan restricted stock expense | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Add: Restricted stock expense | $ 732 | $ 387 | $ 235 |
Employee Benefits (Details 1)
Employee Benefits (Details 1) - Restricted Shares Subject Only to a Service Condition | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Restricted shares subject only to a service condition: | |
Non-vested, January 1, 2015 (in shares) | shares | 496,457 |
Granted (in shares) | shares | 309,932 |
Vested (in shares) | shares | (186,330) |
Forfeited (in shares) | shares | (39,590) |
Non-vested, December 31, 2015 (in shares) | shares | 580,469 |
Non-vested, January 1, 2015 (in dollars per share) | $ / shares | $ 48.14 |
Granted (in dollars per share) | $ / shares | 61.42 |
Vested (in dollars per share) | $ / shares | 41.85 |
Forfeited (in dollars per share) | $ / shares | 55.38 |
Non-vested, December 31, 2015 (in dollars per share) | $ / shares | $ 56.76 |
Employee Benefits (Details 2)
Employee Benefits (Details 2) - Service condition restricted stock expense - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Weighted-average grant date fair value for shares granted and the total fair value of shares vested | |||
Weighted-average grant date fair value (in dollars per share) | $ 61.42 | $ 58.70 | $ 43.68 |
Fair value of shares vested (in thousands) | $ 7,797 | $ 7,236 | $ 7,568 |
Employee Benefits (Details 3)
Employee Benefits (Details 3) - Restricted Shares Subject to Service and Performance Conditions - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Restricted shares subject only to a service condition: | |||
Non-vested, January 1, 2015 (in shares) | 101,313 | ||
Granted (in shares) | 101,313 | ||
Vested (in shares) | (101,313) | ||
Forfeited (in shares) | 0 | ||
Non-vested, December 31, 2015 (in shares) | 101,313 | 101,313 | |
Non-vested, January 1, 2015 (in dollars per share) | $ 58.59 | ||
Granted (in dollars per share) | 61.29 | $ 58.59 | $ 44.55 |
Vested (in dollars per share) | 58.59 | ||
Forfeited (in dollars per share) | 0 | ||
Non-vested, December 31, 2015 (in dollars per share) | $ 61.29 | $ 58.59 |
Employee Benefits (Details 4)
Employee Benefits (Details 4) - Restricted Shares Subject to Service and Performance Conditions - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Weighted-average grant date fair value for shares granted and the total fair value of shares vested | |||
Weighted-average grant date fair value (in dollars per share) | $ 61.29 | $ 58.59 | $ 44.55 |
Fair value of shares vested (in thousands) | $ 5,936 | $ 4,143 | $ 2,948 |
Employee Benefits (Details 5)
Employee Benefits (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Profit sharing and 401(k) contributions for the periods | |||
Profit-sharing contributions | $ 965 | $ 816 | $ 674 |
401(k) matching contributions | $ 1,319 | $ 928 | $ 871 |
Earnings Per Share (Details Tex
Earnings Per Share (Details Textual) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Restricted Stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Anti-dilutive restricted shares or options | 323 | 5,993 | 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Computation of Basic and Diluted Shares | |||||||||||
Net income | $ 4,687 | $ 7,013 | $ 9,795 | $ 5,610 | $ 5,978 | $ 7,118 | $ 8,591 | $ 5,562 | $ 27,105 | $ 27,249 | $ 17,837 |
Weighted average shares outstanding – basic (in shares) | 7,756,647 | 7,512,348 | 7,331,874 | ||||||||
Dilutive potential shares from unvested restricted shares (in shares) | 350,755 | 394,197 | 360,882 | ||||||||
Dilutive potential shares from contingent consideration (in shares) | 41,997 | 0 | 0 | ||||||||
Weighted average shares outstanding – diluted (in shares) | 8,149,399 | 7,906,545 | 7,692,756 | ||||||||
Earnings per share: | |||||||||||
Basic (in dollars per share) | $ 0.60 | $ 0.90 | $ 1.25 | $ 0.74 | $ 0.79 | $ 0.95 | $ 1.14 | $ 0.74 | $ 3.49 | $ 3.63 | $ 2.43 |
Diluted (in dollars per share) | $ 0.58 | $ 0.87 | $ 1.23 | $ 0.71 | $ 0.77 | $ 0.92 | $ 1.12 | $ 0.72 | $ 3.33 | $ 3.45 | $ 2.32 |
Variable Interest Entities (Det
Variable Interest Entities (Details Textual) € in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2015USD ($)mutual_fund | May. 31, 2015USD ($)mutual_fund | Oct. 31, 2014USD ($) | Oct. 31, 2014EUR (€) | Jan. 31, 2014USD ($)mutual_fund | Dec. 31, 2015USD ($)Number_of_Limited_PartnershipNumber_of_Limited_Liability_Companies | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Variable Interest Entity [Line Items] | ||||||||
Number of clients in which investment advisory services are provided | Number_of_Limited_Partnership | 2 | |||||||
Number of limited liability companies in which some clients hold their investments | Number_of_Limited_Liability_Companies | 10 | |||||||
Number of new Westwood mutual funds | mutual_fund | 2 | |||||||
Fee revenues from Westwood VIEs | $ 56.4 | $ 48.2 | $ 36.2 | |||||
Westwood Mutual Fund | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Amount provided to fund for the sole purpose of meeting the minimum capital requirements | $ 5.4 | |||||||
Common Trust Funds | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Amount provided to fund for the sole purpose of meeting the minimum capital requirements | $ 2 | $ 2 | ||||||
Number of new Westwood mutual funds | mutual_fund | 2 | 2 | ||||||
UCITS Fund | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Amount provided to fund for the sole purpose of meeting the minimum capital requirements | $ 2 | € 1.6 |
Variable Interest Entities (D73
Variable Interest Entities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Variable Interest Entities | ||
Assets Under Management | $ 20,762,000 | |
Corporate Investment | 72,320 | $ 79,620 |
Westwood Funds | ||
Variable Interest Entities | ||
Assets Under Management | 3,617,000 | |
Corporate Investment | 6,000 | |
Amount at Risk | 6,000 | |
Common Trust Funds | ||
Variable Interest Entities | ||
Assets Under Management | 2,885,000 | |
Corporate Investment | 3,000 | |
Amount at Risk | 3,000 | |
Collective Investment Trusts | ||
Variable Interest Entities | ||
Assets Under Management | 284,000 | |
Limited Liability Company [Member] | ||
Variable Interest Entities | ||
Assets Under Management | 133,000 | |
Corporate Investment | 0 | |
Amount at Risk | 0 | |
UCITS Fund | ||
Variable Interest Entities | ||
Assets Under Management | 615,000 | |
Corporate Investment | 2,000 | |
Amount at Risk | 2,000 | |
Private Wealth | ||
Variable Interest Entities | ||
Assets Under Management | 2,375,000 | |
Institutional | ||
Variable Interest Entities | ||
Assets Under Management | $ 10,853,000 |
Related Party Transactions (Det
Related Party Transactions (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
UCITS Fund | |||
Related Party Transaction [Line Items] | |||
Fees earned from related party | $ 1,300,000 | $ 1,100,000 | |
Fees unpaid from related party | 96,000 | 256,000 | |
Trust | |||
Related Party Transaction [Line Items] | |||
Due from related party | 0 | 0 | |
Fees earned from related party | $ 454,000 | $ 264,000 | $ 278,000 |
Commitments and Contingencies75
Commitments and Contingencies (Details Textual) $ in Thousands, CAD in Millions | Nov. 06, 2012CAD | Nov. 05, 2012CAD | Aug. 03, 2012CAD | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Loss Contingencies [Line Items] | ||||||
Lease agreements expiration dates, description | expiration dates that run through 2026 | |||||
Rental expense for facilities and equipment leases | $ | $ 2,000 | $ 1,500 | $ 1,600 | |||
Percentage of defense costs which will be covered by insurance | 50.00% | |||||
Insurance proceeds | $ | $ 714 | 379 | ||||
Loss contingency, receivable | $ | $ 240 | $ 210 | ||||
First Lawsuit By A G F | ||||||
Loss Contingencies [Line Items] | ||||||
Lawsuit filing date | On August 3, 2012, AGF Management Limited and AGF Investments Inc. (together “AGF”) filed a lawsuit in the Ontario Superior Court of Justice against Westwood, certain Westwood employees and Warren International, LLC, an executive recruiting firm. | |||||
Litigation claim for damages | CAD 10 | |||||
Second Lawsuit by AGF | ||||||
Loss Contingencies [Line Items] | ||||||
Lawsuit filing date | On November 6, 2012, AGF filed a second lawsuit against Westwood, Westwood Management and an employee of a Westwood subsidiary | |||||
General Damage | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation claim for damages | CAD 1 | |||||
General Damage | Second Lawsuit by AGF | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation claim for damages | CAD 5 | |||||
Special Damage | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation claim for damages | 10 | |||||
Punitive Damage | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation claim for damages | CAD 1 | |||||
Punitive Damage | Second Lawsuit by AGF | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation claim for damages | CAD 1 |
Commitments and Contingencies76
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Future contractual rental payments for non-cancelable operating leases | |
2,016 | $ 2,275 |
2,017 | 1,989 |
2,018 | 1,812 |
2,019 | 1,373 |
2,020 | 1,310 |
Thereafter | 6,800 |
Total payments due | $ 15,559 |
Segment Reporting (Details Text
Segment Reporting (Details Textual) | 12 Months Ended |
Dec. 31, 2015Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Net fee revenues from external sources | $ 130,768 | $ 112,804 | $ 90,955 | ||||||||
Net intersegment revenues | 0 | 0 | 0 | ||||||||
Net interest and dividend revenue | 426 | 263 | 569 | ||||||||
Other revenue | (258) | 174 | 301 | ||||||||
Total revenues | $ 31,566 | $ 32,451 | $ 37,311 | $ 29,608 | $ 28,265 | $ 28,122 | $ 30,905 | $ 25,949 | 130,936 | 113,241 | 91,825 |
Expenses: | |||||||||||
Depreciation and amortization | 2,596 | 938 | 769 | ||||||||
Other operating expenses | 86,120 | 70,267 | 62,871 | ||||||||
Total expenses | 88,716 | 71,205 | 63,640 | ||||||||
Income (loss) before income taxes | 8,588 | 10,502 | 14,752 | 8,378 | 9,475 | 10,592 | 13,356 | 8,613 | 42,220 | 42,036 | 28,185 |
Income tax expense (benefit) | 15,115 | 14,787 | 10,348 | ||||||||
Net income | 4,687 | $ 7,013 | $ 9,795 | $ 5,610 | 5,978 | $ 7,118 | $ 8,591 | $ 5,562 | 27,105 | 27,249 | 17,837 |
Restricted stock expense | 17,574 | 13,685 | 11,679 | ||||||||
Amortization of intangible assets | 1,546 | 359 | 359 | ||||||||
Deferred taxes on goodwill | 271 | 152 | 152 | ||||||||
Economic Earnings | 46,496 | 41,445 | 30,027 | ||||||||
Assets | 181,336 | 139,874 | 181,336 | 139,874 | 116,050 | ||||||
Segment goodwill | 27,144 | 11,255 | 27,144 | 11,255 | 11,255 | ||||||
Expenditures for long-lived assets | 815 | 478 | 1,201 | ||||||||
Operating Segments | Advisory | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net fee revenues from external sources | 101,973 | 92,279 | 72,588 | ||||||||
Net intersegment revenues | 19,001 | 13,527 | 10,402 | ||||||||
Net interest and dividend revenue | 425 | 261 | 568 | ||||||||
Other revenue | (341) | 173 | 301 | ||||||||
Total revenues | 121,058 | 106,240 | 83,859 | ||||||||
Expenses: | |||||||||||
Depreciation and amortization | 773 | 603 | 468 | ||||||||
Other operating expenses | 63,658 | 51,265 | 46,545 | ||||||||
Total expenses | 64,431 | 51,868 | 47,013 | ||||||||
Income (loss) before income taxes | 56,627 | 54,372 | 36,846 | ||||||||
Income tax expense (benefit) | 19,330 | 19,057 | 13,738 | ||||||||
Net income | 37,297 | 35,315 | 23,108 | ||||||||
Restricted stock expense | 11,877 | 9,074 | 7,586 | ||||||||
Amortization of intangible assets | 161 | 161 | 161 | ||||||||
Deferred taxes on goodwill | 38 | 38 | 38 | ||||||||
Economic Earnings | 49,373 | 44,588 | 30,893 | ||||||||
Assets | 183,004 | 144,385 | 183,004 | 144,385 | 114,871 | ||||||
Segment goodwill | 5,219 | 5,219 | 5,219 | 5,219 | 5,219 | ||||||
Expenditures for long-lived assets | 369 | 226 | 962 | ||||||||
Operating Segments | Trust | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net fee revenues from external sources | 28,795 | 20,525 | 18,367 | ||||||||
Net intersegment revenues | 0 | 0 | 14 | ||||||||
Net interest and dividend revenue | 1 | 2 | 1 | ||||||||
Other revenue | 83 | 1 | 0 | ||||||||
Total revenues | 28,879 | 20,528 | 18,382 | ||||||||
Expenses: | |||||||||||
Depreciation and amortization | 1,724 | 302 | 301 | ||||||||
Other operating expenses | 25,882 | 19,867 | 16,943 | ||||||||
Total expenses | 27,606 | 20,169 | 17,244 | ||||||||
Income (loss) before income taxes | 1,273 | 359 | 1,138 | ||||||||
Income tax expense (benefit) | 517 | 132 | 408 | ||||||||
Net income | 756 | 227 | 730 | ||||||||
Restricted stock expense | 2,613 | 1,847 | 1,803 | ||||||||
Amortization of intangible assets | 1,385 | 198 | 198 | ||||||||
Deferred taxes on goodwill | 233 | 114 | 114 | ||||||||
Economic Earnings | 4,987 | 2,386 | 2,845 | ||||||||
Assets | 60,459 | 18,133 | 60,459 | 18,133 | 14,190 | ||||||
Segment goodwill | 21,925 | 6,036 | 21,925 | 6,036 | 6,036 | ||||||
Expenditures for long-lived assets | 180 | 29 | 239 | ||||||||
Westwood Holdings | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net fee revenues from external sources | 0 | 0 | 0 | ||||||||
Net intersegment revenues | 0 | 0 | 0 | ||||||||
Net interest and dividend revenue | 0 | 0 | 0 | ||||||||
Other revenue | 0 | 0 | 0 | ||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Expenses: | |||||||||||
Depreciation and amortization | 99 | 33 | 0 | ||||||||
Other operating expenses | 15,581 | 12,662 | 9,799 | ||||||||
Total expenses | 15,680 | 12,695 | 9,799 | ||||||||
Income (loss) before income taxes | (15,680) | (12,695) | (9,799) | ||||||||
Income tax expense (benefit) | (4,732) | (4,402) | (3,798) | ||||||||
Net income | (10,948) | (8,293) | (6,001) | ||||||||
Restricted stock expense | 3,084 | 2,764 | 2,290 | ||||||||
Amortization of intangible assets | $ 0 | 0 | 0 | ||||||||
Deferred taxes on goodwill | 0 | 0 | |||||||||
Economic Earnings | $ (7,864) | (5,529) | (3,711) | ||||||||
Assets | 8,816 | 10,435 | 8,816 | 10,435 | 6,354 | ||||||
Segment goodwill | 0 | 0 | 0 | 0 | 0 | ||||||
Expenditures for long-lived assets | 267 | 223 | 0 | ||||||||
Eliminations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net fee revenues from external sources | 0 | 0 | 0 | ||||||||
Net intersegment revenues | (19,001) | (13,527) | (10,416) | ||||||||
Net interest and dividend revenue | 0 | 0 | 0 | ||||||||
Other revenue | 0 | 0 | 0 | ||||||||
Total revenues | (19,001) | (13,527) | (10,416) | ||||||||
Expenses: | |||||||||||
Depreciation and amortization | 0 | 0 | 0 | ||||||||
Other operating expenses | (19,001) | (13,527) | (10,416) | ||||||||
Total expenses | (19,001) | (13,527) | (10,416) | ||||||||
Income (loss) before income taxes | 0 | 0 | 0 | ||||||||
Income tax expense (benefit) | 0 | 0 | 0 | ||||||||
Net income | 0 | 0 | 0 | ||||||||
Restricted stock expense | 0 | 0 | 0 | ||||||||
Amortization of intangible assets | 0 | 0 | 0 | ||||||||
Deferred taxes on goodwill | 0 | 0 | 0 | ||||||||
Economic Earnings | 0 | 0 | 0 | ||||||||
Assets | (70,943) | (33,079) | (70,943) | (33,079) | (19,365) | ||||||
Segment goodwill | $ 0 | $ 0 | $ 0 | 0 | 0 | ||||||
Expenditures for long-lived assets | $ 0 | $ 0 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Net Income to Economic Earnings (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting [Abstract] | |||||||||||
Net income | $ 4,687 | $ 7,013 | $ 9,795 | $ 5,610 | $ 5,978 | $ 7,118 | $ 8,591 | $ 5,562 | $ 27,105 | $ 27,249 | $ 17,837 |
Restricted stock expense | 17,574 | 13,685 | 11,679 | ||||||||
Amortization of intangible assets | 1,546 | 359 | 359 | ||||||||
Add: Tax benefit from goodwill amortization | 271 | 152 | 152 | ||||||||
Economic Earnings | $ 46,496 | $ 41,445 | $ 30,027 |
Segment Reporting - Revenues by
Segment Reporting - Revenues by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | $ 31,566 | $ 32,451 | $ 37,311 | $ 29,608 | $ 28,265 | $ 28,122 | $ 30,905 | $ 25,949 | $ 130,936 | $ 113,241 | $ 91,825 |
U.S. | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 109,816 | 94,955 | 83,622 | ||||||||
Canada | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 9,238 | 8,635 | 5,567 | ||||||||
Europe | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 6,019 | 8,146 | 1,843 | ||||||||
Asia | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 4,538 | 21 | 0 | ||||||||
Australia | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | $ 1,325 | $ 1,484 | $ 793 |
Segment Reporting - Property an
Segment Reporting - Property and Equipment, Net by Geographic Area (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Net property and equipment | $ 2,192 | $ 2,633 |
U.S. | ||
Segment Reporting Information [Line Items] | ||
Net property and equipment | 1,806 | 2,057 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Net property and equipment | $ 386 | $ 576 |
Concentration (Details Textual)
Concentration (Details Textual) - Sales Revenue, Net - Customer Concentration Risk - Customers | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Concentration Risk [Line Items] | |||
Number of largest clients | 10 | 10 | 10 |
Revenue accounted by major clients | 20.00% | 20.00% | 20.00% |
Concentration (Details)
Concentration (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Concentration Risk [Line Items] | |||
Advisory fees from major client | $ 99,275 | $ 88,473 | $ 70,027 |
Advisory fees from major client | 2,698 | 3,806 | 2,561 |
Sales Revenue, Net | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Advisory fees from major client | 2,109 | 2,183 | 1,729 |
Advisory fees from major client | $ 2,206 | $ 3,806 | $ 2,561 |
Revenue accounted by major clients | 20.00% | 20.00% | 20.00% |
Westwood Management | Sales Revenue, Net | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Revenue accounted by major clients | 3.30% | 5.30% | 4.70% |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) | Feb. 23, 2016 | Feb. 03, 2016 | Feb. 25, 2016 | Dec. 31, 2015 | Jul. 20, 2012 |
Subsequent Event [Line Items] | |||||
Authorized share repurchase amount | $ 10,000,000 | ||||
Repurchase amount remaining available | $ 10,000,000 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividends declared per share | $ 0.57 | ||||
Purchase of treasury stock, shares | 74,121 | ||||
Average share price (in dollars per share) | $ 46.93 | ||||
Restricted Stock | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Restricted stock issued | 248,436 | ||||
Share price | $ 47.52 |
Quarterly Financial Data (Detai
Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 31,566 | $ 32,451 | $ 37,311 | $ 29,608 | $ 28,265 | $ 28,122 | $ 30,905 | $ 25,949 | $ 130,936 | $ 113,241 | $ 91,825 |
Income (loss) before income taxes | 8,588 | 10,502 | 14,752 | 8,378 | 9,475 | 10,592 | 13,356 | 8,613 | 42,220 | 42,036 | 28,185 |
Net income | $ 4,687 | $ 7,013 | $ 9,795 | $ 5,610 | $ 5,978 | $ 7,118 | $ 8,591 | $ 5,562 | $ 27,105 | $ 27,249 | $ 17,837 |
Basic earnings per common share (in dollars per share) | $ 0.60 | $ 0.90 | $ 1.25 | $ 0.74 | $ 0.79 | $ 0.95 | $ 1.14 | $ 0.74 | $ 3.49 | $ 3.63 | $ 2.43 |
Diluted earnings per common share (in dollars per share) | $ 0.58 | $ 0.87 | $ 1.23 | $ 0.71 | $ 0.77 | $ 0.92 | $ 1.12 | $ 0.72 | $ 3.33 | $ 3.45 | $ 2.32 |