Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 14, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | WESTWOOD HOLDINGS GROUP INC | |
Entity Central Index Key | 1,165,002 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 8,888,656 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 30,626 | $ 33,679 |
Accounts receivable | 25,208 | 23,429 |
Investments, at fair value | 44,786 | 56,485 |
Other current assets | 2,386 | 2,364 |
Total current assets | 103,006 | 115,957 |
Goodwill | 27,144 | 27,144 |
Deferred income taxes | 10,860 | 10,903 |
Intangible assets, net | 20,904 | 21,394 |
Property and equipment, net of accumulated depreciation of $4,834 and $4,590 | 4,190 | 4,280 |
Total assets | 166,104 | 179,678 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 2,482 | 2,641 |
Dividends payable | 6,328 | 6,679 |
Compensation and benefits payable | 5,260 | 17,200 |
Income taxes payable | 4,007 | 3,148 |
Total current liabilities | 18,077 | 29,668 |
Accrued dividends | 1,030 | 1,767 |
Deferred rent | 2,161 | 2,174 |
Total liabilities | 21,268 | 33,609 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Common stock, $0.01 par value, authorized 25,000,000 shares, issued 9,989,598 and outstanding 8,888,656 shares at March 31, 2017; issued 9,801,938 and outstanding 8,810,375 shares at December 31, 2016 | 100 | 98 |
Additional paid-in capital | 167,928 | 162,730 |
Treasury stock, at cost - 1,100,942 shares at March 31, 2017; 991,563 shares at December 31, 2016 | (50,868) | (44,353) |
Foreign currency translation adjustment | (4,080) | (4,287) |
Accumulated other comprehensive loss | (4,080) | (4,287) |
Retained earnings | 31,756 | 31,881 |
Total stockholders' equity | 144,836 | 146,069 |
Total liabilities and stockholders' equity | $ 166,104 | $ 179,678 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 4,834 | $ 4,590 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 9,989,598 | 9,801,938 |
Common stock, shares outstanding | 8,888,656 | 8,810,375 |
Treasury stock, shares | 1,100,942 | 991,563 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Advisory fees: | ||
Asset-based | $ 23,789 | $ 21,815 |
Performance-based | 386 | 0 |
Trust fees | 7,795 | 7,465 |
Other, net | 653 | (151) |
Total revenues | 32,623 | 29,129 |
EXPENSES: | ||
Employee compensation and benefits | 17,717 | 16,494 |
Sales and marketing | 477 | 328 |
Westwood mutual funds | 863 | 696 |
Information technology | 1,756 | 1,964 |
Professional services | 1,496 | 1,646 |
General and administrative | 2,544 | 2,355 |
Total expenses | 24,853 | 23,483 |
Income before income taxes | 7,770 | 5,646 |
Provision for income taxes | 1,706 | 2,124 |
Net income | 6,064 | 3,522 |
Other comprehensive income: | ||
Foreign currency translation adjustments | 207 | 1,303 |
Total comprehensive income | $ 6,271 | $ 4,825 |
Earnings per share: | ||
Basic (dollars per share) | $ 0.75 | $ 0.45 |
Diluted (dollars per share) | $ 0.73 | $ 0.44 |
Weighted average shares outstanding: | ||
Basic (shares) | 8,065,825 | 7,862,449 |
Diluted (shares) | 8,311,382 | 8,047,084 |
Cash dividends declared per share (dollars per share) | $ 0.62 | $ 0.57 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2017 - USD ($) | Total | Common Stock, Par | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 711,000 | $ (711,000) | ||||
BALANCE at Dec. 31, 2016 | $ 146,069,000 | $ 98,000 | 162,730,000 | $ (44,353,000) | $ (4,287,000) | 31,881,000 |
BALANCE, shares at Dec. 31, 2016 | 8,810,375 | 8,810,375 | ||||
Net income | $ 6,064,000 | |||||
Other comprehensive income | 207,000 | 207,000 | ||||
Issuance of restricted stock, net of forfeitures | 0 | $ 2,000 | (2,000) | |||
Issuance of restricted stock, net of forfeitures, shares | 187,660 | |||||
Dividends declared | (5,478,000) | (5,478,000) | ||||
Stock based compensation expense | 3,897,000 | 3,897,000 | ||||
Reclassification of compensation liability to be paid in shares | 592,000 | 592,000 | ||||
Purchases of treasury stock | (1,326,000) | (1,326,000) | ||||
Purchases of treasury stock, shares | (23,822) | |||||
Restricted stock returned for payment of taxes | (5,189,000) | (5,189,000) | ||||
Restricted stock returned for payment of taxes, shares | (85,557) | |||||
BALANCE at Mar. 31, 2017 | $ 144,836,000 | $ 100,000 | $ 167,928,000 | $ (50,868,000) | $ (4,080,000) | $ 31,756,000 |
BALANCE, shares at Mar. 31, 2017 | 8,888,656 | 8,888,656 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 6,064 | $ 3,522 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 240 | 258 |
Amortization of intangible assets | 490 | 490 |
Unrealized gains on trading investments | (303) | (248) |
Stock based compensation expense | 3,897 | 4,003 |
Deferred income taxes | 26 | (109) |
Excess tax benefits from stock based compensation | 0 | (165) |
Other Operating Activities, Cash Flow Statement | (7) | 288 |
Change in operating assets and liabilities: | ||
Net sales of investments - trading securities | 12,002 | 27,813 |
Accounts receivable | (1,721) | (5,675) |
Other current assets | (18) | 675 |
Accounts payable and accrued liabilities | (161) | 374 |
Compensation and benefits payable | (11,394) | (15,749) |
Income taxes payable | 859 | 1,666 |
Other liabilities | (33) | 82 |
Net cash provided by operating activities | 9,941 | 17,225 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (150) | (378) |
Net cash used in investing activities | (150) | (378) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Purchases of treasury stock | 0 | (4,411) |
Payment for Repurchases of Stock for Benefit Plan | (1,326) | (614) |
Restricted stock returned for payment of taxes | (5,189) | (3,696) |
Excess tax benefits from stock based compensation | 0 | 165 |
Cash dividends paid | (6,564) | (5,724) |
Net cash used in financing activities | (13,079) | (14,280) |
Effect of currency rate changes on cash | 235 | 1,118 |
NET CHANGE IN CASH AND CASH EQUIVALENTS: | (3,053) | 3,685 |
Cash and cash equivalents, beginning of period | 33,679 | 22,740 |
Cash and cash equivalents, end of period | 30,626 | 26,425 |
Supplemental cash flow information: | ||
Cash paid during the period for income taxes | 828 | 541 |
Payments for (Proceeds from) Tenant Allowance | 0 | 1,128 |
DividendsAccrued | 7,358 | 6,714 |
Capital Expenditures Incurred but Not yet Paid | $ 0 | $ 832 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 3 Months Ended |
Mar. 31, 2017 | |
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 provides investment management services to institutional investors, private wealth clients and financial intermediaries through its subsidiaries, Westwood Management Corp. and Westwood Advisors, LLC (together “Westwood Management”), Westwood Trust (“Westwood Trust”), and Westwood International Advisors Inc. (“Westwood International”). 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 revenues and results of operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and are presented in accordance with the requirements for quarterly reports on Form 10-Q and consequently do not include all of the information and footnote disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The Company’s condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary in the opinion of management to present fairly our interim financial position and results of operations and cash flows for the periods presented. The accompanying condensed consolidated financial statements are presented in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements, and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2016 . Operating results for the periods in these condensed consolidated financial statements are not necessarily indicative of the results for any future period. The accompanying condensed consolidated financial statements include the accounts of Westwood and its subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation. Recent Accounting Pronouncements Recently Adopted In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The purpose of the amendment is to simplify the accounting for share-based payment transactions, and includes changes to the accounting for the classification of awards as either equity or liabilities, classification of certain share-based payment items on the statement of cash flows, the accounting for forfeitures and certain income tax consequences. The amendment is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Amendments related to the presentation of employee taxes paid on the statement of cash flows should be applied retrospectively. The amendment related to forfeitures, where an entity may account for forfeitures as they occur, should be applied retrospectively by means of a cumulative-effect adjustment to equity at the beginning of the period in which the guidance is adopted. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of tax benefits on the statement of cash flows using either a prospective or retrospective transition method. We adopted ASU 2016-09 effective January 1, 2017. The following summarizes the effects of the adoption on our condensed consolidated financial statements: Income taxes - Upon adoption, all excess tax benefits and tax deficiencies, including tax benefits of dividends on share-based payment awards, are recognized as income tax expense or benefit in the consolidated statement of comprehensive income. The tax effects of exercised or vested awards are treated as discrete items in the reporting period in which they occur. As a result, the Company recognized discrete adjustments to income tax expense for the three months ended March 31, 2017 of $1.0 million related to excess tax benefits, decreasing our first quarter 2017 effective tax rate to 22.0% . Without the adjustment, our effective tax rate would have been 34.2% . The Company did not have any unrecognized excess tax benefits as of December 31, 2016, and therefore there was no cumulative-effect adjustment to retained earnings related to income taxes. The Company adopted the amendments related to the recognition of excess tax benefits and tax shortfalls prospectively, with no adjustments made to prior periods. Forfeitures - Prior to adoption, stock-based compensation expense was recognized on a straight-line basis, net of estimated forfeitures, such that expense was recognized for stock-based awards that were expected to vest. A forfeiture rate was estimated annually and revised, if necessary, in subsequent periods if actual forfeitures differed from initial estimates. Upon adoption, the Company no longer applies an estimated forfeiture rate and instead accounts for forfeitures as they occur. The Company applied the modified retrospective adoption approach, resulting in a $711,000 cumulative-effect reduction to "Retained earnings" with the offset to "Additional paid-in-capital" on January 1, 2017. Statements of Cash Flows - The Company historically accounted for excess tax benefits on the consolidated statements of cash flows as a financing activity. Upon adoption of this standard, excess tax benefits are classified along with other income tax cash flows as an operating activity. The change in cash flow classification associated with excess tax benefits was adopted prospectively, resulting in the classification of the $1.0 million excess tax benefit as an operating activity during the three months ended March 31, 2017. No change in classification was necessary for the presentation of restricted stock returned for payment of taxes, as the Company has historically presented such payments as a financing activity. The Company adopted this portion of the standard on a prospective basis, with no adjustments made to prior periods. Earnings Per Share - The Company uses the treasury stock method to compute diluted earnings per share, unless the effect would be anti-dilutive. Under the new standard, the Company is no longer required to estimate the tax effect of anticipated windfall benefits or shortfalls when projecting proceeds available for share repurchases in calculating dilutive shares. The Company utilized the modified retrospective adoption approach, with no adjustments made to prior periods. Not Yet Adopted In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The amendment eliminates step two from the goodwill impairment test in order to simplify the subsequent measurement of goodwill. Under step two, an entity had to perform procedures to determine the fair value of its assets and liabilities at the impairment testing date following procedures required to determine the fair value of assets acquired and liabilities assumed in a business combination. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The amendment is effective, on a prospective basis, for annual or interim periods beginning after December 15, 2019, with early adoption permitted. We do not expect the amendment to have a material impact on our Consolidated Financial Statements and expect to adopt the standard within the required time frame. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of shares outstanding plus the effect of any dilutive shares of restricted stock granted to employees and non-employee directors. There were approximately 20,000 and 94,000 anti-dilutive restricted shares for the three months ended March 31, 2017 and 2016 , respectively. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share amounts): Three Months Ended March 31, 2017 2016 Net income $ 6,064 $ 3,522 Weighted average shares outstanding - basic 8,065,825 7,862,449 Dilutive potential shares from unvested restricted shares 245,557 102,217 Dilutive potential shares from contingent consideration — 82,418 Weighted average shares outstanding - diluted 8,311,382 8,047,084 Earnings per share: Basic $ 0.75 $ 0.45 Diluted $ 0.73 $ 0.44 |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS Investment balances are presented in the table below (in thousands). All investments are carried at fair value and are accounted for as trading securities. Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value March 31, 2017: U.S. Government and Government agency obligations $ 21,627 $ 19 $ (22 ) $ 21,624 Money market funds 10,333 — — 10,333 Equity funds 12,497 373 (41 ) 12,829 Marketable securities $ 44,457 $ 392 $ (63 ) $ 44,786 December 31, 2016: U.S. Government and Government agency obligations $ 30,275 $ — $ (2 ) $ 30,273 Money market funds 14,127 — — 14,127 Equity funds 12,057 204 (176 ) 12,085 Marketable securities $ 56,459 $ 204 $ (178 ) $ 56,485 As of March 31, 2017 and December 31, 2016 , $11.5 million and $11.0 million in corporate funds, respectively, were invested in Westwood Funds®, Westwood Common Trust Funds and Westwood Investment Funds PLC (the "UCITS Fund"). See Note 8 “Variable Interest Entities” |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS We determine estimated fair values for our financial instruments using available information. The fair value amounts discussed in our condensed consolidated financial statements are not necessarily indicative of either 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, the UCITS Fund and Westwood Trust common trust fund shares, equals their fair value based on prices quoted in active markets and, with respect to common trust funds, the net asset value of the shares held as reported by each fund. Market values of our money market holdings generally do not fluctuate. ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value and requires 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 • level 2 – inputs other than quoted prices that are directly or indirectly observable • level 3 – significant unobservable inputs where there is little or no market activity The following table summarizes the values of our assets and liabilities as of the dates indicated within the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Investments Measured at NAV (1) Total As of March 31, 2017: Investments in trading securities $ 41,461 $ — $ — $ 3,325 $ 44,786 Total financial instruments $ 41,461 $ — $ — $ 3,325 $ 44,786 As of December 31, 2016: Investments in trading securities $ 53,319 $ — $ — $ 3,166 $ 56,485 Total financial instruments $ 53,319 $ — $ — $ 3,166 $ 56,485 (1) Comprised of certain investments measured at fair value using net asset value ("NAV") as a practical expedient. These investments were recategorized and are no longer included within Level 2 of the valuation hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on our consolidated balance sheets. |
ACQUISITIONS, GOODWILL AND OTHE
ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS 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. Goodwill is not amortized but is tested for impairment at least annually. We completed our annual goodwill impairment assessment during the third quarter of 2016 and determined that no impairment loss was required. No impairments on goodwill were recorded during the three months ended March 31, 2017 or 2016 . Other Intangible Assets Our intangible assets represent the acquisition date fair value of acquired client relationships, trade names and 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. We periodically review intangible assets for events or circumstances that would indicate impairment. No impairments on intangible assets were recorded during the three months ended March 31, 2017 or 2016 . |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | STOCKHOLDERS' EQUITY Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss were as follows (in thousands): As of March 31, 2017 As of December 31, 2016 Foreign currency translation adjustment $ (4,080 ) $ (4,287 ) Accumulated other comprehensive loss $ (4,080 ) $ (4,287 ) |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2017 | |
Variable Interest Entities [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES We have evaluated all of our advisory relationships with the UCITS Fund, the Westwood Funds®, limited liability companies ("LLCs") and our relationship as sponsor of the Common Trust Funds ("CTFs") to determine whether each of these entities is a variable interest entity ("VIE") or voting ownership entity ("VOE"). Based on our analysis, we determined that the limited liability companies and CTFs were VIEs, as the at-risk equity holders do not have the ability to direct the activities that most significantly impact the entity’s economic performance, and the Company and its representatives have a majority control of the entity's Board of Directors and can influence the entity's management and affairs. Although we have related parties on the UCITS Fund board of directors, the shareholders have rights to remove the current directors with a simple majority vote, so we determined the UCITS Fund is not a VIE. As the Company and its representatives do not have representation on the Westwood Funds'® independent board of directors, which directs the activities that most significantly impact the entity's economic performance, we determined that the Westwood Funds® were not VIEs. Therefore, the UCITS Fund and the Westwood Funds® should be analyzed under the VOE consolidation method. Based on our analysis of our seed investments in these entities for the periods ending March 31, 2017 and December 31, 2016, we have not consolidated the limited liability companies or CTFs under the VIE method or the UCITS Fund or the Westwood Funds® under the VOE method, and therefore the results of these entities are not included in the Company’s consolidated financial results. 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 a seed investment of €1.6 million , or $2.0 million at the then prevailing exchange rate, to the UCITS Fund. These seed investments were provided for the sole purpose of showing the economic substance needed to establish the funds or sub-funds. The Company's seed investments in these funds are included in “Investments, at fair value” on our condensed consolidated balance sheet at March 31, 2017 . Otherwise, we have not provided any financial support 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 entities. Our seed 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 4 “Investments.” We recognized fee revenue from the Westwood VIEs and Westwood VOEs of $12.8 million and $13.0 million for the three months ended March 31, 2017 and 2016 , respectively. The following table displays the assets under management, the amounts of our seed investments that are included in "Investments, at fair value" on our consolidated balance sheets, and the risk of loss in each vehicle (in millions): As of March 31, 2017 Assets Corporate Amount at Risk VIEs/VOEs: Westwood Funds® $ 3,963 $ 6 $ 6 Common Trust Funds 2,621 3 3 LLCs 108 — — UCITS Fund 564 2 2 All other assets: Private Wealth 2,945 Institutional 11,872 Total AUM $ 22,073 |
LONG-TERM INCENTIVE COMPENSATIO
LONG-TERM INCENTIVE COMPENSATION | 3 Months Ended |
Mar. 31, 2017 | |
Employee Benefits and Share-based Compensation [Abstract] | |
LONG-TERM INCENTIVE COMPENSATION | LONG-TERM INCENTIVE COMPENSATION Restricted Stock Awards We have issued restricted shares to our employees and non-employee directors. The Third Amended and Restated Westwood Holdings Group, Inc. Stock Incentive Plan, as amended (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. The total number of shares issuable under the Plan (including predecessor plans to the Plan) may not exceed 4,398,100 shares. At March 31, 2017 , approximately 172,000 shares remain available for issuance under the Plan. The following table presents the total stock-based compensation expense recorded for stock-based compensation arrangements for the periods indicated (in thousands): Three Months Ended March 31, 2017 2016 Service condition stock-based compensation expense $ 2,629 $ 2,550 Performance condition stock-based compensation expense 1,123 1,243 Stock-based compensation expense under the Plan 3,752 3,793 Canadian EB Plan stock-based compensation expense 145 210 Total stock-based compensation expense $ 3,897 $ 4,003 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. As of March 31, 2017 , there was approximately $34.4 million of unrecognized compensation cost for restricted stock grants under the Plan, which we expect to recognize over a weighted-average period of 2.6 years. Our two types of restricted stock grants under the Plan are discussed below. Restricted Stock Subject Only to a Service Condition We calculate compensation cost for restricted stock grants by using the fair market value of our common stock at the date of grant, the number of shares issued, and an adjustment for restrictions on dividends. This compensation cost is amortized on a straight-line basis over the applicable vesting period. As discussed in Note 2 "Summary of Significant Accounting Policies," the Company made an accounting policy election to account for forfeitures as they occur upon the adoption of ASU 2016-09 on January 1, 2017. The following table details the status and changes in our restricted stock grants subject only to a service condition for the three months ended March 31, 2017 : Shares Weighted Average Non-vested, January 1, 2017 607,501 $ 54.67 Granted 131,569 61.56 Vested (168,324 ) 57.23 Forfeited (12,955 ) 55.78 Non-vested, March 31, 2017 557,791 $ 55.50 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 multiple year periods 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. For 2017, the goal is based on Income before income tax from our audited consolidated statement of comprehensive income for fiscal 2017. 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 Income before income tax from the Company’s audited consolidated 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 2017, the Compensation Committee established the fiscal 2017 goal for our Chief Executive Officer and Chief Investment Officer as Income before income tax of $24.0 million for 50% of their respective awards, and an Income before income tax target of $34.0 million (ranging from 25% of target for threshold performance of $30.3 million to 185% of target for maximum performance of $42.5 million) for the remaining 50% of their respective awards. For all other restricted stock grants subject to performance conditions, the Compensation Committee established the fiscal 2017 goal as Income before income tax of at least $24.0 million. At the end of the first quarter of 2017, we concluded that it was probable that we would meet the target performance goals required to vest the applicable percentage of the performance-based restricted shares this year and began recording expense related to those shares. The following table details the status and changes in our restricted stock grants subject to service and performance conditions for the three months ended March 31, 2017 : Shares Weighted Average Non-vested, January 1, 2017 153,620 $ 55.90 Granted 147,557 56.41 Vested (102,367 ) 56.58 Forfeited (45,675 ) 55.86 Non-vested, March 31, 2017 153,135 $ 55.95 The above amounts as of March 31, 2017 do not include 18,422 non-vested restricted shares that potentially vest over performance years subsequent to 2017 inasmuch as the Compensation Committee has not set annual performance goals for later years and therefore no grant date has been established. Canadian Plan 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. Under the Canadian Plan, no more than $10 million CDN ( $7.5 million in U.S. Dollars using the exchange rate on March 31, 2017 ) may be funded to the plan trustee for purchases of common stock with respect to awards granted under the Canadian Plan. At March 31, 2017 , approximately $4.3 million CDN ( $3.2 million in U.S. Dollars using the exchange rate on March 31, 2017 ) remains available for issuance under the Canadian Plan, or approximately 60,400 shares based on the closing share price of our stock of $53.41 as of March 31, 2017 . During the first three months of 2017 , the trust formed pursuant to the Canadian Plan purchased in the open market 23,822 Westwood common shares for approximately $1.3 million . As of March 31, 2017 , the trust holds 55,418 shares of Westwood common stock. As of March 31, 2017 , unrecognized compensation cost related to restricted stock grants under the Canadian Plan totaled $1.2 million , which we expect to recognize over a weighted-average period of 2.1 years. Mutual Fund Share Incentive Awards We grant annually to certain employees mutual fund incentive awards, which are bonus awards based on our mutual funds achieving specific 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. For awards earned prior to 2017, the award vested after approximately one year of service following the year in which the participant earned the award. Beginning in 2017, the award vests after approximately two years of service following the year in which the participant earned the award. We begin accruing a liability for mutual fund incentive awards when we believe 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 or three 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 elapsed. 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 three months ended March 31, 2017 and 2016 , we recorded expense of approximately $288,000 and $262,000 , respectively, related to mutual fund share incentive awards. As of March 31, 2017 and December 31, 2016 , we had an accrued liability of approximately $938,000 and $1.7 million , respectively, related to mutual fund share incentive awards. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2017 | |
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. For the three months ended March 31, 2017 and 2016 , we recorded trust fees from these accounts of $95,000 and $112,000 , respectively. There was $93,000 and $97,000 due from these accounts as of March 31, 2017 and December 31, 2016 , 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 and the Westwood Funds®. Certain members of our management serve on the board of directors of the UCITS Fund, and we have capital invested in three of the Westwood Funds®. Under the terms of the investment advisory agreements, the Company earns quarterly fees paid by clients of the fund or directly by the funds. The fees are based on negotiated fee schedules applied to assets under management. These fees are commensurate with market rates. For the three months ended March 31, 2017 and 2016 , the Company earned approximately $800,000 and $319,000 , respectively, in fees from the affiliated funds. These fees do not include fees paid directly to Westwood International by certain clients invested in the UCITS Fund that have an investment management agreement with Westwood International. As of March 31, 2017 and December 31, 2016 , $292,000 and $270,000 , respectively, of these fees were unpaid and included in “Accounts receivable” on our condensed consolidated balance sheets. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES On August 3, 2012, AGF Management Limited and AGF Investments Inc. (collectively, “AGF”) filed a lawsuit in the Ontario Superior Court of Justice against Westwood, certain Westwood employees and the executive recruiting firm of Warren International, LLC. (“Warren”). 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 CDN in the lawsuit. On November 5, 2012, Westwood responded to AGF’s lawsuit with a counterclaim against AGF for defamation. Westwood is seeking $1 million CDN in general damages, $10 million CDN in special damages, $1 million CDN 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 CDN in general damages, $1 million CDN per defendant in punitive damages, unspecified special damages, interest and costs. The pleadings phase was completed in 2013, and we continue to be 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, as well as 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 and cash flows. 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, are covered by insurance. We expense legal fees and directly related costs as incurred. We did not receive insurance proceeds during the three months ended March 31, 2017 . We received insurance proceeds of approximately $214,000 during the three months ended March 31, 2016 . We had a receivable of $245,000 and $186,000 as of March 31, 2017 and December 31, 2016 , respectively, which represents our current minimum estimate of expenses that we expect to recover under our insurance policy. This receivable is part of “Other current assets” on our condensed consolidated balance sheets. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2017 | |
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. The Company’s chief operating decision maker, our Chief Executive Officer, 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, the Westwood Funds ® , and the UCITS Fund, 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 Trust provides trust and custodial services and participation in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Trust is included in our Trust segment. Advisory Trust Westwood Eliminations Consolidated (in thousands) Three Months Ended March 31, 2017 Net fee revenues from external sources $ 24,175 $ 7,795 $ — $ — $ 31,970 Net intersegment revenues 2,026 51 — (2,077 ) — Net interest and dividend revenue 158 9 — — 167 Other, net 482 4 — — 486 Total revenues $ 26,841 $ 7,859 $ — $ (2,077 ) $ 32,623 Economic Earnings $ 10,787 $ 1,448 $ (1,628 ) $ — $ 10,607 Less: Restricted stock expense 3,897 Intangible amortization 490 Deferred taxes on goodwill 156 Net income $ 6,064 Segment assets $ 178,591 $ 66,166 $ 9,744 $ (88,397 ) $ 166,104 Segment goodwill $ 5,219 $ 21,925 $ — $ — $ 27,144 Three Months Ended March 31, 2016 Net fee revenues from external sources $ 21,815 $ 7,465 $ — $ — $ 29,280 Net intersegment revenues 4,394 — — (4,394 ) — Net interest and dividend revenue 133 2 — — 135 Other, net (3 ) (283 ) — — (286 ) Total revenues $ 26,339 $ 7,184 $ — $ (4,394 ) $ 29,129 Economic Earnings $ 9,076 $ 1,032 $ (2,015 ) $ — $ 8,093 Less: Restricted stock expense 4,003 Intangible amortization 490 Deferred taxes on goodwill 78 Net income $ 3,522 Segment assets $ 184,478 $ 66,794 $ 8,264 $ (95,084 ) $ 164,452 Segment goodwill $ 5,219 $ 21,925 $ — $ — $ 27,144 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 determine 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 tables provide a reconciliation of Net income to Economic Earnings (in thousands, except per share and share amounts): Three Months Ended March 31, 2017 2016 Net income $ 6,064 $ 3,522 Add: Stock-based compensation expense 3,897 4,003 Add: Intangible amortization 490 490 Add: Tax benefit from goodwill amortization 156 78 Economic Earnings $ 10,607 $ 8,093 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Event [Line Items] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Dividend Declared In April 2017, Westwood’s Board of Directors declared a quarterly cash dividend of $0.62 per common share payable on July 3, 2017 to stockholders of record on June 9, 2017 . |
INCOME TAXES (Notes)
INCOME TAXES (Notes) | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 10. INCOME TAXES Our effective income tax rate was 22.0% for the first quarter of 2017 , compared with 37.6% for the first quarter of 2016 . The decrease is primarily related to the adoption of ASU 2016-09 Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting , which requires recognition of excess tax benefits related to employees' restricted stock vesting to be recorded within income tax expense. Prior to adoption of ASU 2016-09, excess tax benefits were recorded through Additional paid-in capital, with no impact to the effective tax rate or our consolidated statement of comprehensive income. See further discussion in Note 2 "Summary of Significant Accounting Policies." As of March 31, 2017 and December 31, 2016 , the Company's gross liability related to uncertain tax positions was $2.1 million and $2.5 million , respectively. 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 any 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. A reconciliation of the change in recorded uncertain tax positions during the three months ended March 31, 2017 is as follows (in thousands): Balance at January 1, 2017 $ 2,462 Additions for tax positions related to the current year 57 Additions for tax positions related to prior years — Reductions for tax positions related to prior years (42 ) Payments for tax positions related to prior years (352 ) Balance at March 31, 2017 $ 2,125 Within the next twelve months, it is reasonably possible that the liability for uncertain tax positions could decrease by as much as $2.1 million as a result of settlements with certain taxing authorities, which, if recognized, would decrease our provision for income taxes by $1.4 million . |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and are presented in accordance with the requirements for quarterly reports on Form 10-Q and consequently do not include all of the information and footnote disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The Company’s condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary in the opinion of management to present fairly our interim financial position and results of operations and cash flows for the periods presented. The accompanying condensed consolidated financial statements are presented in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements, and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2016 . Operating results for the periods in these condensed consolidated financial statements are not necessarily indicative of the results for any future period. The accompanying condensed consolidated financial statements include the accounts of Westwood and its subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The purpose of the amendment is to simplify the accounting for share-based payment transactions, and includes changes to the accounting for the classification of awards as either equity or liabilities, classification of certain share-based payment items on the statement of cash flows, the accounting for forfeitures and certain income tax consequences. The amendment is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Amendments related to the presentation of employee taxes paid on the statement of cash flows should be applied retrospectively. The amendment related to forfeitures, where an entity may account for forfeitures as they occur, should be applied retrospectively by means of a cumulative-effect adjustment to equity at the beginning of the period in which the guidance is adopted. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of tax benefits on the statement of cash flows using either a prospective or retrospective transition method. We adopted ASU 2016-09 effective January 1, 2017. The following summarizes the effects of the adoption on our condensed consolidated financial statements: Income taxes - Upon adoption, all excess tax benefits and tax deficiencies, including tax benefits of dividends on share-based payment awards, are recognized as income tax expense or benefit in the consolidated statement of comprehensive income. The tax effects of exercised or vested awards are treated as discrete items in the reporting period in which they occur. As a result, the Company recognized discrete adjustments to income tax expense for the three months ended March 31, 2017 of $1.0 million related to excess tax benefits, decreasing our first quarter 2017 effective tax rate to 22.0% . Without the adjustment, our effective tax rate would have been 34.2% . The Company did not have any unrecognized excess tax benefits as of December 31, 2016, and therefore there was no cumulative-effect adjustment to retained earnings related to income taxes. The Company adopted the amendments related to the recognition of excess tax benefits and tax shortfalls prospectively, with no adjustments made to prior periods. Forfeitures - Prior to adoption, stock-based compensation expense was recognized on a straight-line basis, net of estimated forfeitures, such that expense was recognized for stock-based awards that were expected to vest. A forfeiture rate was estimated annually and revised, if necessary, in subsequent periods if actual forfeitures differed from initial estimates. Upon adoption, the Company no longer applies an estimated forfeiture rate and instead accounts for forfeitures as they occur. The Company applied the modified retrospective adoption approach, resulting in a $711,000 cumulative-effect reduction to "Retained earnings" with the offset to "Additional paid-in-capital" on January 1, 2017. Statements of Cash Flows - The Company historically accounted for excess tax benefits on the consolidated statements of cash flows as a financing activity. Upon adoption of this standard, excess tax benefits are classified along with other income tax cash flows as an operating activity. The change in cash flow classification associated with excess tax benefits was adopted prospectively, resulting in the classification of the $1.0 million excess tax benefit as an operating activity during the three months ended March 31, 2017. No change in classification was necessary for the presentation of restricted stock returned for payment of taxes, as the Company has historically presented such payments as a financing activity. The Company adopted this portion of the standard on a prospective basis, with no adjustments made to prior periods. Earnings Per Share - The Company uses the treasury stock method to compute diluted earnings per share, unless the effect would be anti-dilutive. Under the new standard, the Company is no longer required to estimate the tax effect of anticipated windfall benefits or shortfalls when projecting proceeds available for share repurchases in calculating dilutive shares. The Company utilized the modified retrospective adoption approach, with no adjustments made to prior periods. Not Yet Adopted In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The amendment eliminates step two from the goodwill impairment test in order to simplify the subsequent measurement of goodwill. Under step two, an entity had to perform procedures to determine the fair value of its assets and liabilities at the impairment testing date following procedures required to determine the fair value of assets acquired and liabilities assumed in a business combination. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The amendment is effective, on a prospective basis, for annual or interim periods beginning after December 15, 2019, with early adoption permitted. We do not expect the amendment to have a material impact on our Consolidated Financial Statements and expect to adopt the standard within the required time frame. |
Earnings Per Share | Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of shares outstanding plus the effect of any dilutive shares of restricted stock granted to employees and non-employee directors. |
Fair Value Measurements | We determine estimated fair values for our financial instruments using available information. The fair value amounts discussed in our condensed consolidated financial statements are not necessarily indicative of either 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, the UCITS Fund and Westwood Trust common trust fund shares, equals their fair value based on prices quoted in active markets and, with respect to common trust funds, the net asset value of the shares held as reported by each fund. Market values of our money market holdings generally do not fluctuate. ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value and requires 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 • level 2 – inputs other than quoted prices that are directly or indirectly observable • level 3 – significant unobservable inputs where there is little or no market activity |
Variable Interest Entities | We have evaluated all of our advisory relationships with the UCITS Fund, the Westwood Funds®, limited liability companies ("LLCs") and our relationship as sponsor of the Common Trust Funds ("CTFs") to determine whether each of these entities is a variable interest entity ("VIE") or voting ownership entity ("VOE"). Based on our analysis, we determined that the limited liability companies and CTFs were VIEs, as the at-risk equity holders do not have the ability to direct the activities that most significantly impact the entity’s economic performance, and the Company and its representatives have a majority control of the entity's Board of Directors and can influence the entity's management and affairs. Although we have related parties on the UCITS Fund board of directors, the shareholders have rights to remove the current directors with a simple majority vote, so we determined the UCITS Fund is not a VIE. As the Company and its representatives do not have representation on the Westwood Funds'® independent board of directors, which directs the activities that most significantly impact the entity's economic performance, we determined that the Westwood Funds® were not VIEs. Therefore, the UCITS Fund and the Westwood Funds® should be analyzed under the VOE consolidation method. Based on our analysis of our seed investments in these entities for the periods ending March 31, 2017 and December 31, 2016, we have not consolidated the limited liability companies or CTFs under the VIE method or the UCITS Fund or the Westwood Funds® under the VOE method, and therefore the results of these entities are not included in the Company’s consolidated financial results. |
Restricted Stock Subject Only To A Service Condition Policy [Text Block] | Restricted Stock Subject Only to a Service Condition We calculate compensation cost for restricted stock grants by using the fair market value of our common stock at the date of grant, the number of shares issued, and an adjustment for restrictions on dividends. This compensation cost is amortized on a straight-line basis over the applicable vesting period. |
Restricted Stock Subject to Service and Performance Conditions | 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 multiple year periods 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. For 2017, the goal is based on Income before income tax from our audited consolidated statement of comprehensive income for fiscal 2017. 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 Income before income tax from the Company’s audited consolidated 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 2017, the Compensation Committee established the fiscal 2017 goal for our Chief Executive Officer and Chief Investment Officer as Income before income tax of $24.0 million for 50% of their respective awards, and an Income before income tax target of $34.0 million (ranging from 25% of target for threshold performance of $30.3 million to 185% of target for maximum performance of $42.5 million) for the remaining 50% of their respective awards. For all other restricted stock grants subject to performance conditions, the Compensation Committee established the fiscal 2017 goal as Income before income tax of at least $24.0 million. At the end of the first quarter of 2017, we concluded that it was probable that we would meet the target performance goals required to vest the applicable percentage of the performance-based restricted shares this year and began recording expense related to those shares. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share amounts): Three Months Ended March 31, 2017 2016 Net income $ 6,064 $ 3,522 Weighted average shares outstanding - basic 8,065,825 7,862,449 Dilutive potential shares from unvested restricted shares 245,557 102,217 Dilutive potential shares from contingent consideration — 82,418 Weighted average shares outstanding - diluted 8,311,382 8,047,084 Earnings per share: Basic $ 0.75 $ 0.45 Diluted $ 0.73 $ 0.44 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Balances | Investment balances are presented in the table below (in thousands). All investments are carried at fair value and are accounted for as trading securities. Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value March 31, 2017: U.S. Government and Government agency obligations $ 21,627 $ 19 $ (22 ) $ 21,624 Money market funds 10,333 — — 10,333 Equity funds 12,497 373 (41 ) 12,829 Marketable securities $ 44,457 $ 392 $ (63 ) $ 44,786 December 31, 2016: U.S. Government and Government agency obligations $ 30,275 $ — $ (2 ) $ 30,273 Money market funds 14,127 — — 14,127 Equity funds 12,057 204 (176 ) 12,085 Marketable securities $ 56,459 $ 204 $ (178 ) $ 56,485 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Values of Assets Within Fair Value Hierarchy | The following table summarizes the values of our assets and liabilities as of the dates indicated within the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Investments Measured at NAV (1) Total As of March 31, 2017: Investments in trading securities $ 41,461 $ — $ — $ 3,325 $ 44,786 Total financial instruments $ 41,461 $ — $ — $ 3,325 $ 44,786 As of December 31, 2016: Investments in trading securities $ 53,319 $ — $ — $ 3,166 $ 56,485 Total financial instruments $ 53,319 $ — $ — $ 3,166 $ 56,485 (1) Comprised of certain investments measured at fair value using net asset value ("NAV") as a practical expedient. These investments were recategorized and are no longer included within Level 2 of the valuation hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on our consolidated balance sheets. |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss were as follows (in thousands): As of March 31, 2017 As of December 31, 2016 Foreign currency translation adjustment $ (4,080 ) $ (4,287 ) Accumulated other comprehensive loss $ (4,080 ) $ (4,287 ) |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | The following table displays the assets under management, the amounts of our seed investments that are included in "Investments, at fair value" on our consolidated balance sheets, and the risk of loss in each vehicle (in millions): As of March 31, 2017 Assets Corporate Amount at Risk VIEs/VOEs: Westwood Funds® $ 3,963 $ 6 $ 6 Common Trust Funds 2,621 3 3 LLCs 108 — — UCITS Fund 564 2 2 All other assets: Private Wealth 2,945 Institutional 11,872 Total AUM $ 22,073 |
LONG-TERM INCENTIVE COMPENSAT27
LONG-TERM INCENTIVE COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 for stock-based compensation arrangements for the periods indicated (in thousands): Three Months Ended March 31, 2017 2016 Service condition stock-based compensation expense $ 2,629 $ 2,550 Performance condition stock-based compensation expense 1,123 1,243 Stock-based compensation expense under the Plan 3,752 3,793 Canadian EB Plan stock-based compensation expense 145 210 Total stock-based compensation expense $ 3,897 $ 4,003 |
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 subject only to a service condition for the three months ended March 31, 2017 : Shares Weighted Average Non-vested, January 1, 2017 607,501 $ 54.67 Granted 131,569 61.56 Vested (168,324 ) 57.23 Forfeited (12,955 ) 55.78 Non-vested, March 31, 2017 557,791 $ 55.50 |
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 | The following table details the status and changes in our restricted stock grants subject to service and performance conditions for the three months ended March 31, 2017 : Shares Weighted Average Non-vested, January 1, 2017 153,620 $ 55.90 Granted 147,557 56.41 Vested (102,367 ) 56.58 Forfeited (45,675 ) 55.86 Non-vested, March 31, 2017 153,135 $ 55.95 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Intersegment Balances | Advisory Trust Westwood Eliminations Consolidated (in thousands) Three Months Ended March 31, 2017 Net fee revenues from external sources $ 24,175 $ 7,795 $ — $ — $ 31,970 Net intersegment revenues 2,026 51 — (2,077 ) — Net interest and dividend revenue 158 9 — — 167 Other, net 482 4 — — 486 Total revenues $ 26,841 $ 7,859 $ — $ (2,077 ) $ 32,623 Economic Earnings $ 10,787 $ 1,448 $ (1,628 ) $ — $ 10,607 Less: Restricted stock expense 3,897 Intangible amortization 490 Deferred taxes on goodwill 156 Net income $ 6,064 Segment assets $ 178,591 $ 66,166 $ 9,744 $ (88,397 ) $ 166,104 Segment goodwill $ 5,219 $ 21,925 $ — $ — $ 27,144 Three Months Ended March 31, 2016 Net fee revenues from external sources $ 21,815 $ 7,465 $ — $ — $ 29,280 Net intersegment revenues 4,394 — — (4,394 ) — Net interest and dividend revenue 133 2 — — 135 Other, net (3 ) (283 ) — — (286 ) Total revenues $ 26,339 $ 7,184 $ — $ (4,394 ) $ 29,129 Economic Earnings $ 9,076 $ 1,032 $ (2,015 ) $ — $ 8,093 Less: Restricted stock expense 4,003 Intangible amortization 490 Deferred taxes on goodwill 78 Net income $ 3,522 Segment assets $ 184,478 $ 66,794 $ 8,264 $ (95,084 ) $ 164,452 Segment goodwill $ 5,219 $ 21,925 $ — $ — $ 27,144 |
DESCRIPTION OF THE BUSINESS (De
DESCRIPTION OF THE BUSINESS (Details Textual) | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |
Date of incorporation | Dec. 12, 2001 |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Provision for income taxes | $ 1,706 | $ 2,124 |
Adoption of ASU 2016-09 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Tax rate excluding ASU 2016-09 adoption | 34.20% | |
Provision for income taxes | $ 1,000 |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Restricted Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive restricted shares | 20,000 | 94,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Computation of Basic and Diluted Shares | ||
Net income | $ 6,064 | $ 3,522 |
Weighted average shares outstanding - basic (shares) | 8,065,825 | 7,862,449 |
Dilutive potential shares from unvested restricted shares (shares) | 245,557 | 102,217 |
Incremental Common Shares Attributable to Dilutive Effect of Contingently Issuable Shares | 0 | 82,418 |
Weighted average shares outstanding - diluted (shares) | 8,311,382 | 8,047,084 |
Earnings per share: | ||
Basic (dollars per share) | $ 0.75 | $ 0.45 |
Diluted (dollars per share) | $ 0.73 | $ 0.44 |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Investment balances | |||
Cost | $ 44,457 | $ 56,459 | |
Gross Unrealized Gains | 392 | $ 204 | |
Gross Unrealized Losses | (63) | (178) | |
Estimated Market Value | 44,786 | 56,485 | |
U.S. Government and Government agency obligations | |||
Investment balances | |||
Cost | 21,627 | 30,275 | |
Gross Unrealized Gains | 19 | 0 | |
Gross Unrealized Losses | (22) | (2) | |
Estimated Market Value | 21,624 | 30,273 | |
Money market funds | |||
Investment balances | |||
Cost | 10,333 | 14,127 | |
Estimated Market Value | 10,333 | 14,127 | |
Equity funds | |||
Investment balances | |||
Cost | 12,497 | 12,057 | |
Gross Unrealized Gains | 373 | 204 | |
Gross Unrealized Losses | (41) | $ (176) | |
Estimated Market Value | $ 12,829 | $ 12,085 |
INVESTMENTS (Details Textual)
INVESTMENTS (Details Textual) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule Of Investments [Line Items] | ||
Estimated Market Value | $ 44,786 | $ 56,485 |
VIE | ||
Schedule Of Investments [Line Items] | ||
Estimated Market Value | $ 11,500 | $ 11,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Investments in securities: | ||
Investments in trading securities | $ 44,786 | $ 56,485 |
Fair Value, Net Asset (Liability) | 44,786 | 56,485 |
Inputs, Net Asset Value [Member] | ||
Investments in securities: | ||
Investments in trading securities | 3,325 | 3,166 |
Level 1 | ||
Investments in securities: | ||
Investments in trading securities | 41,461 | 53,319 |
Fair Value, Net Asset (Liability) | 41,461 | 53,319 |
Level 2 | ||
Investments in securities: | ||
Investments in trading securities | 0 | 0 |
Fair Value, Net Asset (Liability) | 0 | 0 |
Level 3 | ||
Investments in securities: | ||
Investments in trading securities | 0 | 0 |
Fair Value, Net Asset (Liability) | $ 0 | $ 0 |
ACQUISITIONS, GOODWILL AND OT36
ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, Impairment Loss | $ 0 | $ 0 |
BALANCE SHEET COMPONENTS (Detai
BALANCE SHEET COMPONENTS (Details 1) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Components of accumulated other comprehensive loss | ||
Foreign currency translation adjustment | $ (4,080) | $ (4,287) |
Accumulated other comprehensive loss | $ (4,080) | $ (4,287) |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details Textual) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | ||||
May 31, 2015USD ($)mutual_fund | Oct. 31, 2014EUR (€) | Oct. 31, 2014USD ($) | Jan. 31, 2014USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | |
Variable Interest Entity [Line Items] | ||||||
New Westwood mutual funds | mutual_fund | 2 | |||||
Fee revenues from Westwood VIEs | $ 12.8 | $ 13 | ||||
Westwood Mutual Fund | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount provided to fund for the sole purpose of showing economic substance | $ 5.4 | |||||
Common Trust Funds | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount provided to fund for the sole purpose of showing economic substance | $ 2 | |||||
UCITS Fund | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount provided to fund for the sole purpose of showing economic substance | € 1.6 | $ 2 |
VARIABLE INTEREST ENTITIES (D39
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Variable Interest Entities | ||
Assets Under Management | $ 22,073,000 | |
Estimated Market Value | 44,786 | $ 56,485 |
Westwood Funds® | ||
Variable Interest Entities | ||
Assets Under Management | 3,963,000 | |
Estimated Market Value | 6,000 | |
Amount at Risk | 6,000 | |
Common Trust Funds | ||
Variable Interest Entities | ||
Assets Under Management | 2,621,000 | |
Estimated Market Value | 3,000 | |
Amount at Risk | 3,000 | |
UCITS Fund | ||
Variable Interest Entities | ||
Assets Under Management | 564,000 | |
Estimated Market Value | 2,000 | |
Amount at Risk | 2,000 | |
Private Wealth | ||
Variable Interest Entities | ||
Assets Under Management | 2,945,000 | |
Institutional | ||
Variable Interest Entities | ||
Assets Under Management | 11,872,000 | |
LLCs | ||
Variable Interest Entities | ||
Assets Under Management | $ 108,000 |
LONG-TERM INCENTIVE COMPENSAT40
LONG-TERM INCENTIVE COMPENSATION (Details Textual) $ / shares in Units, CAD in Millions | 3 Months Ended | |||
Mar. 31, 2017USD ($)$ / sharesshares | Mar. 31, 2017CADshares | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Provision for income taxes | $ 1,706,000 | $ 2,124,000 | ||
Amount of shares purchased in the open market | $ 0 | 4,411,000 | ||
Remaining unrecognized compensation cost recognized over a remaining weighted average period | 2 years 7 months | 2 years 7 months | ||
Accrued liability | $ 900,000 | $ 1,700,000 | ||
Mutual Fund [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Mutual fund vesting period | 1 year | 1 year | ||
Expense related to mutual fund share incentive awards | $ 288,000 | 262,000 | ||
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 | |||
Shares remain available for issuance | shares | 172,000 | |||
Remaining unrecognized compensation cost | $ 34,400,000 | |||
Nonvested restricted shares | shares | 557,791 | 607,501 | ||
Expense related to mutual fund share incentive awards | $ 3,897,000 | $ 4,003,000 | ||
Canadian Plan | Westwood International Advisors Inc | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares remain available for issuance | shares | 60,400 | |||
Share Based Compensation Arrangement By Share Based Payment Award Available For Grant, Original | $ 7,500,000 | CAD 10 | ||
Fund purchases of common stock | 55,418 | |||
Purchases of common stock with respect to awards granted | $ 3,200,000 | CAD 4.3 | ||
Share price | $ / shares | $ 53.41 | |||
Amount of shares purchased in the open market | $ 1,300,000 | |||
Purchases of treasury stock, shares | shares | 23,822 | 23,822 | ||
Remaining unrecognized compensation cost | $ 1,000,000 | |||
Remaining unrecognized compensation cost recognized over a remaining weighted average period | 2 years 1 month | 2 years 1 month | ||
Performance Based Restricted Shares For Future Performance Years | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Nonvested restricted shares | shares | 18,422 |
LONG-TERM INCENTIVE COMPENSAT41
LONG-TERM INCENTIVE COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
DomesticEmployeeServiceAward [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 2,629 | $ 2,550 |
Performance Shares [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 1,123 | 1,243 |
DomesticServiceAndPerformanceAward [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 3,752 | 3,793 |
CanadianEmployeeServiceAward [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 145 | 210 |
Restricted Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 3,897 | $ 4,003 |
LONG-TERM INCENTIVE COMPENSAT42
LONG-TERM INCENTIVE COMPENSATION (Details 1) - Restricted Shares Subject Only to a Service Condition | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Restricted shares subject only to a service condition: | |
Non-vested, beginning balance, shares | shares | 607,501 |
Granted (shares) | shares | 131,569 |
Vested (shares) | shares | (168,324) |
Forfeited (shares) | shares | (12,955) |
Non-vested, ending balance, shares | shares | 557,791 |
Non-vested, beginning balance, (dollars per share) | $ / shares | $ 54.67 |
Granted (dollars per share) | $ / shares | 61.56 |
Vested (dollars per share) | $ / shares | 57.23 |
Forfeited (dollars per share) | $ / shares | 55.78 |
Non-vested, ending balance, (dollars per share) | $ / shares | $ 55.50 |
LONG-TERM INCENTIVE COMPENSAT43
LONG-TERM INCENTIVE COMPENSATION (Details 2) - Restricted Shares Subject to Service and Performance Conditions | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Restricted shares subject only to a service condition: | |
Non-vested, beginning balance, shares | shares | 153,620 |
Granted (shares) | shares | 147,557 |
Vested (shares) | shares | (102,367) |
Forfeited (shares) | shares | (45,675) |
Non-vested, ending balance, shares | shares | 153,135 |
Non-vested, beginning balance, (dollars per share) | $ / shares | $ 55.90 |
Granted (dollars per share) | $ / shares | 56.41 |
Vested (dollars per share) | $ / shares | 56.58 |
Forfeited (dollars per share) | $ / shares | 55.86 |
Non-vested, ending balance, (dollars per share) | $ / shares | $ 55.95 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
UCITS Fund | |||
Related Party Transaction [Line Items] | |||
Fees earned from related party | $ 800,000 | $ 319,000 | |
Fees unpaid from related party | 292,000 | $ 270,000 | |
Trust | |||
Related Party Transaction [Line Items] | |||
Due from related party | 93,000 | $ 97,000 | |
Fees earned from related party | $ 95,000 | $ 112,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) CAD in Millions | Nov. 06, 2012CAD | Nov. 05, 2012CAD | Aug. 03, 2012CAD | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) |
Loss Contingencies [Line Items] | ||||||
Percentage of defense costs which will be covered by insurance | 50.00% | |||||
Insurance proceeds | $ | $ 214,000 | |||||
Receivable | $ | $ 245,000 | $ 186,000 | ||||
General Damage | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation claim for damages | CAD 1 | |||||
Special Damage | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation claim for damages | 10 | |||||
Punitive Damage | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation claim for damages | CAD 1 | |||||
First Lawsuit by AGF | ||||||
Loss Contingencies [Line Items] | ||||||
Lawsuit filing date | On August 3, 2012, AGF Management Limited and AGF Investments Inc. (collectively, “AGF”) filed a lawsuit in the Ontario Superior Court of Justice against Westwood, certain Westwood employees and the executive recruiting firm of Warren International, LLC. (“Warren”). | |||||
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 | |||||
Second Lawsuit by AGF | General Damage | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation claim for damages | CAD 5 | |||||
Second Lawsuit by AGF | Punitive Damage | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation claim for damages | CAD 1 |
SEGMENT REPORTING (Details Text
SEGMENT REPORTING (Details Textual) | 3 Months Ended |
Mar. 31, 2017Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2014 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||
ReconciliationFromNetIncomeToNonGaapMeasure [Table Text Block] | Three Months Ended March 31, | |||
Net fee revenues from external sources | $ 31,970 | $ 29,280 | ||
Net interest and dividend revenue | 167 | 135 | ||
Other, net | 486 | (286) | ||
Total revenues | 32,623 | 29,129 | ||
Economic Earnings | 10,607 | 8,093 | $ 8,093 | |
Restricted stock expense | 3,897 | 4,003 | ||
Intangible amortization | 490 | 490 | ||
Deferred taxes on goodwill | 156 | 78 | ||
Net income | 6,064 | 3,522 | ||
Segment assets | 166,104 | 164,452 | $ 179,678 | |
Segment goodwill | 27,144 | 27,144 | $ 27,144 | |
Operating Segments | Advisory | ||||
Segment Reporting Information [Line Items] | ||||
Net fee revenues from external sources | 24,175 | 21,815 | ||
Net intersegment revenues | 2,026 | 4,394 | ||
Net interest and dividend revenue | 158 | 133 | ||
Other, net | 482 | (3) | ||
Total revenues | 26,841 | 26,339 | ||
Economic Earnings | 10,787 | 9,076 | ||
Segment assets | 178,591 | 184,478 | ||
Segment goodwill | 5,219 | 5,219 | ||
Operating Segments | Trust | ||||
Segment Reporting Information [Line Items] | ||||
Net fee revenues from external sources | 7,795 | 7,465 | ||
Net intersegment revenues | 51 | 0 | ||
Net interest and dividend revenue | 9 | 2 | ||
Other, net | 4 | (283) | ||
Total revenues | 7,859 | 7,184 | ||
Economic Earnings | 1,448 | 1,032 | ||
Segment assets | 66,166 | 66,794 | ||
Segment goodwill | 21,925 | 21,925 | ||
Westwood Holdings | ||||
Segment Reporting Information [Line Items] | ||||
Net fee revenues from external sources | 0 | 0 | ||
Net intersegment revenues | 0 | 0 | ||
Net interest and dividend revenue | 0 | 0 | ||
Other, net | 0 | 0 | ||
Total revenues | 0 | 0 | ||
Economic Earnings | (1,628) | (2,015) | ||
Segment assets | 9,744 | 8,264 | ||
Segment goodwill | 0 | 0 | ||
Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Net fee revenues from external sources | 0 | 0 | ||
Net intersegment revenues | (2,077) | (4,394) | ||
Net interest and dividend revenue | 0 | 0 | ||
Other, net | 0 | 0 | ||
Total revenues | (2,077) | (4,394) | ||
Economic Earnings | 0 | 0 | ||
Segment assets | (88,397) | (95,084) | ||
Segment goodwill | 0 | 0 | ||
Restricted Stock | ||||
Segment Reporting Information [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 3,897 | $ 4,003 |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - $ / shares | Apr. 26, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Subsequent Event [Line Items] | |||
Dividends declared per share (dollars per share) | $ 0.62 | $ 0.57 | |
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Dividends declared per share (dollars per share) | $ 0.62 | ||
Dividends payable, date to be paid | Jul. 3, 2017 | ||
Dividends payable, date of record | Jun. 9, 2017 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Effective Income Tax Rate Reconciliation, Percent | 37.60% | ||
Unrecognized Tax Benefits | $ 2,125 | $ 2,462 | |
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions | 57 | ||
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions | 0 | ||
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | (42) | ||
Unrecognized Tax Benefits, Increase Resulting from Settlements with Taxing Authorities | 352 | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | 2,100 | ||
Significant Change in Income Tax Provision is Reasonably Possible, Amount of Unrecorded Benefit | $ 1,400 | ||
Adoption of ASU 2016-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Effective Income Tax Rate Reconciliation, Percent | 22.00% |